TMI Blog2008 (10) TMI 696X X X X Extracts X X X X X X X X Extracts X X X X ..... ere with the directions given to the appellant herein to deposit in Court 55% of the admitted dues as a pre-condition to grant of leave to defend a suit. The judgment of the High Court impugned in this appeal does not warrant any interference since the trial Court had exercised its jurisdiction under the second proviso to Sub-rule (5) of Rule 3 of Order 37 of the Code. The earlier concept of granting unconditional leave when a triable issue is raised on behalf of the defendant, has been supplemented by the addition of a mandate, which has been imposed on the defendant, to deposit any amount as admitted before leave to defend the suit can be granted. The question as to whether leave to defend a suit can be granted or not is within the discretionary powers of the High Court and it does not appear to us that such discretion has been exercised erroneously or with any irregularity which warrants interference by this Court. Appeal is, therefore, dismissed. - Altamas Kabir And Markandey Katju, JJ. JUDGMENT ALTAMAS KABIR,J. 1. Leave granted. 2. This appeal, which is directed against the order passed by the Karnataka High Court on 26th June, 2008, in a proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the defendant in Court. It may also be profitable to refer to Sub-rule (6) which provides as follows:- (6) At the hearing of such summons for judgment, - (a) if the defendant has not applied for leave to defend, or if such application has been made and is refused, the plaintiff shall be entitled to judgment forthwith; or (b) if the defendant is permitted to defend as to the whole or any part of the claim, the Court or Judge may direct him to give such security and within such time as may be fixed by the Court or Judge and that, on failure to give such security within the time specified by the Court or Judge or to carry out such other directions as may have been given by the Court or Judge, the plaintiff shall be entitled to judgment forthwith. 4. In the instant case, the respondent filed a suit under Order 37 of the Code of Civil Procedure, hereinafter referred to as the Code , for recovery of a sum of Euro 757,885.42 equivalent to ₹ 3,86,52,156.42 in Indian currency. On being served with Summons for Judgment in terms of Rule 3, Sub-rule (4), of Order 37 of the Code, the petitioner filed an affidavit providing various details which made out triable iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , who appeared for the defendant/appellant submitted that this view had been taken by the Calcutta High Court as far back as in 1949 in the case of Kiranmoyee Dassi vs. Dr. J. Chatterjee, [AIR 1949 Calcutta, page 479] and was subsequently reiterated and followed by this Court in the case of Santosh Kumar Vs. Bhai Mool Singh, [1958 SCR 1211], in which this Court set aside the order of the High Court upon holding that the imposition of a condition while granting leave to defend a suit in which a triable issue has been raised was illegal. If the Court was satisfied that there was a genuine triable issue, leave had to be given and given unconditionally to defend the suit. 9. Mr. Ratnam submitted that same view was taken by this Court in Milkhiram (India) Private Ltd. vs. Chamanlal Bros., [AIR 1965 SC 1698] and in M/s. Mechelec Engineers and Manufacturers Vs. M/s. Basic Equipment Corporation, [1976 (4) SCC 687] wherein it was further clarified that it is only in cases where the defence is patently dishonest or so unreasonable that it could not reasonably be expected to succeed, that the exercise of discretion by the trial court to grant unconditional leave to defend may be questioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iso to Sub-rule (5) of Rule 3 of Order 37 as it now stands after the amendment effected with effect from 1st February, 1977. Mr. Sharma urged that there was, therefore, no ground or reason for this Court to interfere with the discretion exercised by the High Court in the impugned order. 14. Having considered the submissions made on behalf of the respective parties and the decisions cited, there appears to be force in Mr. Sharma's submissions regarding the object intended to be achieved by the introduction of Sub-rules (4), (5) and (6) in Rule 3 of Order 37 of the Code. Whereas in the unamended provisions of Rule 3, there was no compulsion for making any deposit as a condition precedent to grant of leave to defend a suit by virtue of the second proviso to Sub- rule (5), the said provision was altered to the extent that the deposit of any admitted amount is now a condition precedent for grant of leave to defend a suit filed under Order 37 of the Code. A distinction has been made in respect of any part of the claim, which is admitted. The second proviso to Sub-rule (5) of Rule 3 makes it very clear that leave to defend a suit shall not be granted unless the amount as admitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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