- (1.) Leave granted. Defendants in a suit for recovery for a sum of Rs. 2,66,39,028/- are before us aggrieved by and dissatisfied with a judgment and order dated 08.05.2009 passed by the High Court of Judicature at Bombay in Writ Petition No. 8234 of 2008. Respondent herein filed the aforementioned suit inter alia on the premise that the cheques issued by the appellants herein for the said amounts, when presented to the bank stood dishonoured. The suit was filed in terms of Order XXXVII of the Code of Civil Procedure. Appellants filed an application praying for leave to defend in the said suit. The learned trial judge framed the following question for its consideration. "Whether prima facie triable issue exists in defendant's favour for granting leave to defend If yes, whether conditional or unconditional -
(2.) In a very detailed judgment, it was opined that for all intent and purpose the defendants-appellants have no defence. The learned trial judge rejected a contention raised on behalf of the defendants even with regard to maintainability of account as a summary suit. It was opined:- "Further more apart from the cheques in question there are statements of accounts and the document of balance confirmation in the form of acknowledgement of indebtedness followed by categorical admissions in the notice reply Exh-3/20. If at all these facts are cumulatively taken into consideration in all its seriousness, there appears not even a little scope to find out any sort of such questions which would be required to be decided on the strength of evidence. On the contrary all the aforesaid documents undoubtedly point out towards categorical admissions on defendant's part for which no inference prevails in a fashion of availability of plausible, good or reasonable defence. It is in such a situation the case in hand is squarely covered by a situation of total absence of any plausible defence and the contentions claiming availability of defence are nothing but sham and illusory pretending that whatever questions in concern with maintainability of summary suit, misjoinder of parties, locus standi of plaintiff, want of cause of action and no forms a triable issues in the matter. Being so, the conclusion emerges only in a fashion of non entitlement of leave to defend the suit." Despite arriving at the aforementioned finding, it was held : "But considering the facts that series of transactions had taken place in between parties to suit and that defendant No. 1 on various occasions had also made repayment of the loan amount, transferred his individual liability in the loan account of defendant No. 1 company, the contentions in concern with helplessness of defendants to make repayment because of financial crunch and so on, there appears reason to give an opportunity to defend out of mercy so that they may attempt to prove and establish their respective contentions. But at the same time as the transaction has its nexus with advancement of loan amount and as the plaintiff has been deprived of the money blocked in the hands of defendants, who must have derived undue advantage of the situation in the form of unjust, enrichment, plaintiff's rights need to be adequately protected, while showing such mercy, by granting leave to defend. Hence, the point is replied accordingly with the order to follow: ORDER 1) Application is allowed subject to condition of depositing an amount of Rs. 2,00,00,000/_(Two crores) out of total suit claim of Rs. 2,66,39,028/- (Two crores sixty six lacs thirty nine thousand and twenty eight) in this proceeding within a period of two months, failing in which order granting liberty to defend shall stand automatically revoked, and plaintiff shall be entitled to sign the judgment. 2) Defendants are further directed to furnish on record written statement within the aforesaid period. 3) In the event of compliance of the order Asstt. Superintendent would invest the said amount in a fixed deposit in any Nationalised bank for a period of one year."
(3.) On the aforementioned premise, it was directed the appellants to deposit a sum of Rs. 2,00,00,000/-(two crores) out of a total suit claim of Rs. 2,66,39,028/- in the proceeding within a period of two months from the date of passing of the said order. A writ petition was filed by the appellants questioning the legality and/or validity of the said order. The High Court noticed all the contentions raised on behalf of the appellants. It, furthermore, also noticed a decision of this Court in Sunil Enterprises & Anr. v. SBI Commercial & International Bank Ltd., 1998 5 SCC 354 where the law has been laid down in the following terms:- "(a) If the defendant satisfies the court that he has a good defence to the claim on merit, the defendant is entitled to unconditional leave to defend. (b) If the defendant raises a tribal issue indicating that he has fair and bona fide or reasonable defence, although not a possibly good defence, the defendant is entitled to unconditional leave to defend. (c) If the defendant discloses such facts as may be deemed sufficient to entitle him to defend, that is, if the affidavit discloses that at the trial he may be able to establish a defence to the plaintiff's claim, the court may impose conditions at the time of granting leave to defend - the conditions being as to time of trial or mode of trial but not as to payment into court or furnishing security. (d)If the defendant has no defence, or if the defence is sham or illusory or practically moonshine, the defendant is not entitled to leave to defend." Holding that the learned trial judge has granted conditional leave having regard to the facts and circumstances of this case as the same was voluntary not reasonable or fair defence. The High Court opined that the learned trial judge has not committed any error in passing the said condition or order.;