PREMCHAND JAIN AND ORS. Vs. GANPAT RAM MAHAJAN

JUDGEMENT

(1.) Heard counsel for the petitioners-defendants (hereafter 'the defendants') and perused the impugned order dated 4.1.2018 whereby in a suit laid by the respondent-plaintiff (hereafter 'the plaintiff') under Order 37 Rule 1 and 2 CPC, 1908 for a sum of Rs. 13,36,354/- in the aggregate constituted of Rs. 9,37,000/- as principal amount and Rs. 3,99,354/- as interest thereon, the defendants on their application have been granted leave to defend on the condition of furnishing a bank guarantee of 50% of the aforesaid amount i.e. about Rs. 7,00,000/-. Aggrieved, the defendants are before this Court in this petition under Article 227 of the Constitution of India before this Court.

(2.) Mr. Alok Chaturvedi, counsel appearing for the defendants submitted that albeit leave to defend in terms of Order 37 Rule 3 (5) and (6) (b) of CPC 1908 can be granted conditionally yet the condition ought not to be harsh lest the defendants being incapable of complying therewith, the leave to defend granted is negated. Mr. Alok Chaturvedi further submitted that in passing the impugned order dated 4.1.2018, the trial court has also not taken into consideration the fact that on an application filed under Order 38 Rule 5 CPC at the instance of the plaintiff, an interim injunction restraining the defendants from alienating, disposing or otherwise parting with their immovable property has been passed on 29.5.2017. Mr. Alok Chaturvedi submitted that the order of interim injunction aforesaid having secured by the plaintiff to recover the decretal amount from the defendants' property if the occasion so arose at all, leave to defend the suit ought to have been granted unconditionally. Not so doing, the trial court has exercised the jurisdiction irregularly and perversely.

(3.) Per contra, Mr. Mohit Gupta appearing for the plaintiff submitted that it is the discretion of the trial court to grant leave to defend the suit under Order 37 Rule 3(5) CPC both conditionally and unconditionally. The trial court on the application filed by the defendants in the context of the facts of the case where the suit is based on a promissory note has exercised its discretion requiring a bank guarantee for a sum of Rs. 7,00,000/-, which is approximately 50% of the total amount of Rs. 13,36,354/- on a condition for leave to defend the suit. Mr. Mohit Gupta further submitted that the restrain on the defendants by the interim order dated 29.5.2017 from alienating, transferring, disposing of their property is another matter and has no relevance whatsoever to the grant of leave to defend the suit under Order 37 Rule 3 (5) CPC.