Rajendra Nath Mittal, J. - (1.) THIS order will dispose of Civil Revisions Nos. 2051 to 2053, 2085 to 2087 of 1979. The short question in these civil revision petitions is that if a Court in a summary suit under Order 37, Code of Civil Procedure, comes to a conclusion that the Defendant has a substantial defence to raise and there are triable issues involved in the case, whether it can direct him to furnish security for payment of the amount in suit. The facts in the judgment are being given from Civil Revision Petition No. 2051 of 1979.
(2.) BRIEFLY the facts are that the Plaintiff instituted a suit for recovery of Rs. 19,200 on the basis of a pronote under Order 37 of the Code of Civil Procedure (hereinafter referred to as the Code),, as amended by the Code of Civil Procedure (Amendment) Act, 1976 (hereinafter referred to as Amendment Act). After the service of the summons, the Defendants filed an application under Clause (5) of Rule 3 of the above -said order, for permission to defend the suit They stated that they did not execute the pronote which was a forged one. They further stated that it was without consideration and not binding on them. The application was opposed by the Plaintiff. The learned trial Court after hearing the parties came to the conclusion that the Defendants had a substantial defence to raise and that there were triable issues involved in the case. Consequently, it granted leave to them to defend the case on the condition that they would furnish a bank security for payment of the amount and costs of the suit within a period of ten days. The Defendants have come up in revision against that order to this Court. Order 37 provides a summary procedure for suits upon bills of exchange, hundis, promissory notes and other suits wherein the Plaintiff seeks only to recover a debt or liquidated demand in money payable by the Defendant, with or without interest, arising on a written contract or on an enactment, where the sum sought to be recovered is a fixed sum of money or in the nature of a debt other than a penalty, or on a guarantee, where the claim against the principal is in respect of a debt or liquidated demand only. It has been done with a view to expeditious disposal of such suits. Rule 2 of the said order relates to the procedure for institution of summary suits, Rule 3 to the procedure for the appearance of the Defendant and Rule 4 to the power to set aside decree. In order to determine the question it will be necessary to read relevant portions of Rule 3, before and after amendment of the Code by the Amendment Act, which are in the following terms: Rule 3 before the Amendment Act. 3. (1) The Court shall, upon application by the Defendant, give leave to appear and to defend the suit, upon affidavits which disclose such facts as would make it incumbent on the holder to prove consideration, or such other facts as the Court may deem sufficient to support the application. (2) Leave to defend may be given unconditionally or subject to such terms as to payment into Court, giving security, framing and recording issues or otherwise as the Court thinks fit. Rule 3 after the Amendment Act: 3. Procedure for the appearance of Defendant - - (1) ... ... ... ... ... ... ... ... ... ... (2) ... ... ... ... ... (3) ... ... ... ... ... ... ... ... ... ... (4) If the Defendant enters an appearance, the Plaintiff shall thereafter serve on the Defendant a summons for judgment in Form No. 4 -A in Appendix B or such other Form as may be prescribed from time to time, returnable not less than ten days from the date of service supported by an affidavit verifying the cause of action and the amount claimed and stating that in his belief there is no defence to the suit. (5) The Defendant may, at any time within ten days from the service of such summons for judgment, by affidavit or otherwise disclosing such facts as may be deemed sufficient to entitle him to defend, apply on such summons for leave to defend such suit, and leave to defend may be granted to him unconditionally or upon such terms as may appear to the Court or Judge to be just: Provided that leave to defend shall not be refused unless the Court is satisfied that the facts disclosed by the Defendant do not indicate that he has a substantial defence to raise or that the defence intended to be put up by the Defendant is frivolous or vexatious: Provided further that, where a part of the amount claimed by the Plaintiff is admitted by the Defendant to be due from him, leave to defend the suit shall not be granted unless the amount so admitted to be due is deposited by the Defendant in Court. (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. (7) ... ... ... ... ...
(3.) THE learned Counsel for the Petitioners -Defendants has contended that the learned trial Court has come to a finding that the Defendants have a substantial defence to raise and there are triable issues involved in the case. He urges that in the aforesaid situation, it was incumbent upon the Court to allow the Petitioners to defend the suit without imposing conditions as to furnishing of any bank guarantee. According to the counsel, the permission granted to defend the case has become merely an illusory one in view of the rider that they should furnish bank security. He sought to support his argument from the observations in Santosh Kumar v. Bhai Mool Singh : A.I.R. 1958 S.C. 321, Mechalec Engineers and Manufacturers v. Basic Equipment Corporation : A.I.R. 1977 S.C. 577, Smt. Shila Vati v. Vijay Kumar etc., 1975 C.L.J. 633 and Manjit Singh v. Manohar Lal Peshawaria, 1977 R.L.R. 28. He also submits that there is no material amendment made in Rule 3 of Order 37 by the Amendment Act and the observations in the aforesaid cases hold good even after the amendment of the Code.;