KOMFORT PLASTICS Vs. CANARA BANK

JUDGEMENT

(1.) This revision petition has been directed against the order of the trial Court dated 13.10.1989. Canara Bank Body Corporate, a Nationalised Bank, filed a suit for recovery of Rs. 6,84,571.55 Paise plus future interest against the petitioner and its partners under Order 37 of the Civil Procedure Code. Leave to defend was sought by the petitioner on several grounds. Learned Subordinate Judge, after holding that there was force in the argument of the counsel for the plaintiff-Bank that there was no need to file separate suits for the recovery of the amount given to the petitioner under different schemes, has granted leave to defend by observing that Mr. Jagga, learned counsel for the plaintiff, could not satisfy the Court that the suit of the plaintiff was within time. Ultimately in the concluding part of the judgment under challenge before this Court, the defendants have been allowed leave to contest the suit on their furnishing surety bond in the sum of Rs. 8,00,000/-. The defendant-firm has challenged the order of the trial Court on several grounds, primarily being that the direction of the execution of surety bond is illegal.

(2.) It has been argued that once the Court was satisfied that the suit was barred by time, leave to contest should have been granted unconditionally. In support of the argument, the counsel has referred to M/s Mechalec Engineers & Manufacturers v. M/s Basic Equipment Corporation, 1977 AIR(SC) 580, which lays down five propositions of law. The Hon'ble Supreme Court has in certain circumstances directed that leave should be granted unconditionally, whereas in other circumstances the leave should be granted conditionally. After going through the judgment of the Apex Court and the impugned order, this Court has reached a firm conclusion that the trial Court should be directed to write the order disposing of the application for leave to defend. The trial Court must specify as under which principle, as has been laid down by the Apex Court, the case of the defendants falls. It was sought to be argued and it was not contested by the counsel for the Bank that leave to defend was sought on several grounds. The ground mentioned in the impugned order is only one i.e. of limitation on the basis of which leave to defend has been granted. May be the trial Court, after appreciating all the defence, might have thought it appropriate to grant leave to defend unconditionally or the trial Court must have thought it appropriate to hold that the case of the defendants falls under one principle of law or the other as has been laid down by the Apex Court in M/s Mechalec Engineer's case . Since the order is not intelligible, the better course would be to remand the case so that a well-reasoned order be written after examining all the defences in the light of the judgment of the Apex Court in M/s Mechalec Engineer's case . The case is accordingly to pass a fresh order in the light of the observations made above and in the light of the observations made by the Apex Court in M/s Mechalec Engineer's case . In the meanwhile the defendants would not alienate the properties which they own or possess today.

(3.) This Court has been informed that the trial Court was presided by Shri A.K. Suri who is unwell and is on long leave. The case is accordingly ordered to be withdrawn from the Court of Shri A.K. Suri and the same would be handled by Shri G.C. Suman, Senior Sub Judge, Chandigarh. The counsel for the parties are directed to appear before the Senior Sub Judge, Chandigarh, on March 9, 1990.