Sannidi Kasi Viswanadham vs Gade Annapurnamma and Another

In both these Civil Revision Petitions common question is involved under similar facts and therefore they can be disposed of under a common order.

The petitioner is the same in both the revision petitions though the respondent are different. The respondents have filed suit against the petitioner on the strength of some promissory notes, invoking the summary procedure as provided under Order 37 of the CPC with regard to suits on negotiable instruments. The learned District Munsiff while granting leave to defend the suits as provided under O, 37, R. 3 (2) has imposed upon the petitioner a condition that he should give third party immovable security for the suit claims. These revision petitions have been referred against the condition imposed by there lower court in granting leave to defend the suits.

In the fact of Cl. (2), O. 37, R. 3 it cannot seriously be disputed that in a suit under Order 37 the court has jurisdiction to impose conditions when granting leave to defend. But the question is whether, under the circumstances of the present case, the lower court has properly imposed the condition in question.

It is provided in Cl. (1) O, 37 R. 3 that the court shall, upon application by the defendant, give leave to appear and to defend the suit, upon affidavits which disclose such facts as would make it incumbent on the holder to prove consideration, or such other facts as the court may deem sufficient to support the application. According to the allegations made by the petitioner in the affidavits filed in support of the applicant for leave to defend the suits it is incumbent on the respondents to prove consideration for the promissory notes. Therefore as per this provision. the petitioner is entitled to leave to defend the suits. In Cl. (20 O, 37, R. 3 it is provided that leave to defend may be given unconditionally or subject to such terms as to does not say under what circumstances leave has to be granted unconditionally or subject to terms. Therefore the courts, having regard to the circumstances of the particular case, using their discretion having to grant leave conditionally or unconditionally.

The question came to be considered by the Supreme Court in the decision Santosh Kumar Vs. Bhai Mool Singh, . In that case the Supreme Court held as follows:---------

"Though the court is given a discretion by Order 37, Rule 3 (2) it must be exercised along judicial lines, and that in turn means, in consonance with the principles of natural justice that form the foundations of our laws. Those principles, so far as they touch the matter, are well known. Wherever the defence raises a "tribal issue", leave must be given and when that is the case it must be given unconditionally, otherwise the leave may be illusory. If the court is of opinion that the defence is not bona fide. then it can impose conditions and is not tried down to refusing leave to defend. But it cannot reach the conclusion that the defence is not bona fide arbitrarily. It is as much bound by judicial rules and judicial procedure in reached a conclusion of the kind as in any other matter, one, conditions cannot be imposed. The power to impose conditions is only there to ensure that there be a speedy trial. If there is reason to believe that the defendant is trying to prolong the litigation and leave a speedy trial. the conditions can be imposed. But that conclusion cannot be reached simply because the defendant does not adduce his evidence even before he is told that he may defend the action."

Therefore it has to be seen whether there are sufficient grounds, in these cases, for imposing any conditions for granting leave to defend the suits.

The case of the petitioner is that he nerve executed the suit promissory notes in favour of the respondents and he never borrowed any moneys from them as there was no need for him to borrow. There suit promissory notes are connected. In Marteru village the son of the respondent in C. r. R. P. No. 1422 called Bhaskara Rao and others were running a cards club and attracting youngsters like the petitioner and others for cards play and that he was attending that club. Taking advantage of that they have taken his signatures on some papers and latter on crated some promissory notes. The promissory notes in question are some of them. In the counter filed by the respondents of course they have denied the running of the club by Bhaskara Rao and other and taking the signatures of the petitioner by them on blank papers and fabricating promissory notes on those blank papers and added that there are no bona fides in the application made by the petitioner for leave to defend. From the allegations made by the petitioner it is clear that there is a triable issue in the suits. The lower court in a very short and similar order in both the applications said alike this:

"Having gone through the contents of the affidavit I consider that the allegations made therein do not stand to any reason. They are all vague and as such do not merit any consideration. This is a case where permission can be granted on some terms. The petitioner is therefore directed to furnish 3rd party immovable security for the suit amount as a condition precedent for him to be given permission."

So far as the allegations made by the petitioner go, there is a triable issue in the suits. Of course, the allegations were denied in the counters filed by the respondents. But the truth or otherwise of the allegations made by the petitioner can be gone into and decide only after the petitioner is given an opportunity to adduce evidence in support of his allegations. Except the denial made by the respondents in their counters. there is no other material for the court below to trying that the petitioner is either trying to prolong the litigation and case a speedy trial or to come to a conclusion that the defence set up by the petitioner is not bona fide.

In the decision referred to above the Supreme Court reiterated the same observations made in the decision Sangram Singh Vs. Election Tribunal, Kotah, Bhurey Lal Baya, which are as follows:---------

"there must be ever presented to the mind the fact that our laws of procedure are grounded on a principle of natural justice which requires that men should not be condemned unheard, that decisions should not be reached behind their backs, that proceedings that affect their lives and property should not continue in their absence and that they should not be precluded from participating in them. Of course, there must be exceptions and where they are clearly defined they must be given effect to. But taken by and large and subject to that proviso, our laws of procedure should be construed, wherever that is reasonably possible, in the light of that principle."

Therefore as a rule leave must be granted unconditionally without imposing conditions to defend a suit where the defence raise a triable issue as otherwise leave granted may become illusory. For instance, on the materials placed before the court, if it can come to a conclusion that the defence raised is not bona fide or if there is reason to believe that the real object of the defendant in raising the defence is to prolong the litigation and evade a speedy trial, then conditions can be imposed. Taken by and large the object is to see that the defendant does not unnecessarily prolong the litigation and prevent the plaintiff from obtaining an early decree by raising untenable and frivolous defences in a class of a cases where speedy decisions are desirable. In the present cases, there is no material placed to come to any conclusion that the defence raised is not bona fide or that the petitioner is trying to prolong the litigation and evade a speedy trial for imposition of any conditions for granting leave to defend.

Accordingly the revision petitioners are allowed and the orders of the lower court are set aside and the petitioner is granted leave to defend the suits unconditionally. In direct the parties to bear their respective costs in both in revision petitions.

Petitions allowed.