ANIL FABRICS Vs. KHANNA SALES CORPORATION

JUDGEMENT

(1.) [Ed facts: Pff. filed summary suit of recovery of more then Rs. 13 lakh for goods supplied and hundies issued against bis bills. The Deft. applied for permission to defend on the plea that hundies were without consideration and were given to accommodate pff. That Deft. is a wholesaler and never bought goods from pff. and latter has sued him fraudulently.] After detailing above, judgment is :

(2.) Learned Counsel for Deft. has cited two Supreme Court cases to show in what circumstances conditional or un-conditional leave can be granted by the Court. It will be quite instructive first to understand the principles laid down by these authorities. In Santosh Kumar vs. Bhai Moot Singh, AIR 1958 SC 321, their Lordship ruled.

(3.) In the aforesaid case the deft. had admitted the execution of the cheque, on the basis of which the suit was filed but pleaded that it was only given as collateral security for the price of the goods which the pff. supplied to the deft. They further said that those goods were paid for by cash payments made from time to time and by other cheques and that therefore the cheque in suit had served its end and should now be returned. The defts. also set out the exact dates on which, according to them, the payments had been made and gave the numbers of the cheques. Therefore, it was held that, "such a defence at once raised an issue of fact, the truth and good faith of which could only be tested by going into the evidence The second case is of M/s Mechalec Eng. & Mfs. vs. Basic Equipment Corp. AIR 1977 SC 577 [1977. Rajdhani L.R. 184]. The various considerations carved out in Sm. Kiranmoyee Dassi vs. Dr. J. Chaterjee (1945)49 Calcutta WN 246 applicable to such a case were quoted with approval as follow :-