If Any Part Of Amount Claimed Is Admitted, Leave To Defend In Summary Suit Can't Be Granted Unless Admitted Amount Is Deposited: J&K&L High Court

The petitioners premised the challenge on the ground that the trial court has overlooked the parameters laid down for grant of leave to defend and that it has exercised its jurisdiction illegally and with material irregularity causing failure of justice. Petitioners further contended that the conditional leave to defend granted by the trial court to the petitioners/defendants was causing grave injustice to them, particularly when the petitioner No.1 has clearly denied the execution of hundi/promissory note.

Perusal of the record revealed that the Respondent/plaintiff had filed a suit for recovery of Rs.12.00 lacs from the Petitioner/defendants under the provisions of Order 37 of the Civil Procedure Code.

The Petitioner/defendants contested the suit by submitting that he has not executed any document that would warrant filing of a suit under Order 37 of the CPC as he is neither alleged to have executed any hundi or promissory note nor he is alleged to have executed any written agreement etc. It was further contended that defendant No.2 has neither issued any hundi nor has he executed the promissory note on the basis of which the suit has been filed by the plaintiff.

The trial court, after hearing the parties and considering the defense came to the conclusion that the plea raised by the defendants that they have not executed the hundi and that the same is fabricated, is illusory and not real. Accordingly the trial court, granted leave to the defendants to defend the suit subject to the condition that they shall deposit Rs.11,50,000/ in the Court or subject to the condition of furnishing of bank guarantee for the aforesaid amount. It was this order which was the subject matter of challenge before the bench.

In order to adjudicate upon the matter Justice Dhar took recourse to supreme court guidelines in IDBI Trusteeship Services Limited vs. Hubtown Limited, (2017) in terms of which the Supreme Court observed that if any part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit cannot be granted under O 37 CPC unless the amount so admitted to be due is deposited by the defendant in the court.

Deliberating further on the issue Justice Dhar observed that in the application for leave to defend filed by the Petitioner/defendants before the trial court they have not denied the receipt of money from the plaintiff and the only contention that has been raised by the petitioner/defendants is that the promissory note, on the basis of which the suit has been filed, is for an amount of Rs.10.00 lacs whereas only an amount of Rs.9.70 lacs was advanced by the Respondent/plaintiff to Petitioner/defendant No.1.

Applying the position of law in vogue to the matter in controversy the bench observed that the defence put up by the defendants in the application for leave to defend boarders on peripheral issues and not on main issue relating to the question as to whether they owe money to the plaintiff. In this regard, the defendants have kept a mysterious silence in their application for leave to defend and therefore, the trial court is right in observing that the defence put up by the defendants in their application for leave to defend appears to be illusory.

"In the instant case, the defendants have not specifically raised any dispute with regard to the receipt of money from the plaintiff nor have they claimed that after receipt of the money, they have repaid the same to the plaintiff" the court said, adding "Therefore, the learned trial court has rightly refused to grant unconditional leave to defend to the defendants/petitioners".

For the foregoing reasons the court did not find any illegality having been committed by the trial court while passing the impugned order. The petition was dismissed accordingly.

Case Title : Abdul Rashid Dar & Anr Vs Reyaz Ahmad Kuchay

Citation : 2022 LiveLaw (JKL) 211

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