Rajendra Nath Mittal, J. - (1.) THIS order will dispose of Civil Revisions Nos 2051 to 2055, 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 No. 201(sic) of 1979.
(2.) BRIEFLY the facts are that the Plaintiff instituted a suit for recovery of Rs 1820/ - on the basis of a promote 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 Amended Act). After the service of the summons, the Defendants filed an application under Clause (5) of the Rule 3 of the above said Order, for permission to defend the suit They stated that they did not execute the promote which was a forged one. They further stated that it was without consideration 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 often days, The Defendants have come up in revision against that order of this Court. Order 37 provides a summary procedure for suits upon bills of exchange hundis, promissory notes and ether 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 contact 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 gurantee, 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 sel 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. (i) 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 at 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. (0.................. (2) ;;; '.v. (3) - ...... ......... (4) If the Defendant enters an appearance, the Plaintiff shall thereafter serve on the Defendant a summons for judgment la Form No. 4 A in Appendix B or such other Form as may be prescribed from time to time, returnable not less than tea 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 much 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 toe 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 applicatien 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 tine 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) ......... 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 on 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 permission granted to defend the case has become merely an illusory one in view of the rider that they should finish 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 M/s Mechalec. Engineers & Manufacturers v. M/s Basic Equipment Corporation, : A. I. R. 1977 S C. 577 Smt Shila Vad(sic) v. Vijay Kumar etc, 1975 Cur. L. J. 633 and Manjit Singh v, Manohor Lal Peshwaria, (1977) 78 P. L. R. 10 S. N.:, 1977 Rev. 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 tven after the amendment of the Code - I have given a due consideration to the argument of the learned Counsel but regret may inability to accept it. The Code has been amended by the Amendment Act were by new provisions have been introduced in Rule 3 It is true that while interpreting the old Rule 3 of Order 37 of the Code, the Supreme Court held in Santosh Kumari's cases ( Supra) that that whereever the defence raises a triable issue, leave must be given and when that is the case, it must be given unconditionally, otherwise, the leave may be illusory. If the Court is of the opinion that the defence is not bona fide, than it can impose conditions and is not tied down to refusing leave to defend. But it cannot reach the conclusion that the defence is not bona -fide arbitrarily. It is as much bound by judicial rules end judicial procedure In reaching a conclusion of this kind it in any other matter Where the defence is a good and valid one, conditions cannot be imposed. The Power to impose condition is only there to ensure that there be a speedy trial If the it ft reason to relieve that the Defendant is trying to prolong the litigation and evade a speedy trial, then conditions can be imposed It is further held that conclusion cannot be reached because the Defendant does not adduce his evidence even before he is told that he may defend the action A similar matter came up before me in Shrimatt Sheila Aatt's case (supra), wherein I followed the aforesaid view The same view was taken by P C. Jain, J , in Manjit Singh's case (supra). The Supreme Court reaffirmed(sic) the said view in M/s Mechalec Engineer's Manufacturer's case (supra) Beg, J. (as he then was) speaking for the Court approved the principles laid down by Calcutta High Court in, (1945) 49 Cal. W.N. 246, which are as follows: (1) If the Defendant satisfied the Court that he has a good defence to the claim on the merits the Plaintiff is not entitled to leave to sign judgment and the Defendant is entitled to unconditional leave to defend (2) If the Defendant raises a triable issue indicating that he has a fair or bona fide or reasonable defence although not positively good defence the Plaintiff is not entitled to sign judgment and the Defendant is entitled to unconditional lea e to defend. (3) If the Defendant discloses such facts as may be deemed sufficient to entitle him to defend, that is to say although the affidavit does not positively and immediately make it clear that he has a defence, yet shows such a stare of facts as leads to he inference that at the trial of the action he may be able to establish a defence to the Plaintiff's claim the Plaintiff is not entitled to judgment and the Defendant is entitled to leave to defend but in such a case the Court may in its discretion impose conditions as to the time or mode of trial on furnishing security (4) If the Defendant has no defence or the defence set up is illusory(sic) or sham or practically moonshine then ordinarily the Plaintiff is entitled to leave to sign judgment and the Defendant is not entitled to leave to defend (5) If the Defendant has no defence or the defence is illusory or sham or practically moonshine then although ordinarlly the Plaintiff is entitled to leave to sign judgment, the Court may pro tect the Plaintiff by only allowing the defence to proceed if the amount claimed is paid into Court or otherwise secured and give leave to the Defendant on such condition, and thereby show mercy to the Defendant by enabling him to try to prove a defence. These pronouncements were made on the basis of Rule 3 as it existed prior to the Amendment Act Now, the position has changed Clause 1 of Old Rule 3, which provided that if the affidavit disclosed such facts which would make incumben upon the Plaintiff to prove consideration or some such other facts, which the Court deemed sufficient to support the application, it should grant the Defendant leave to defend the suit, is no longer there. On the other hand, it has been provided in Clause 5 that leave to defend a suit shall be granted to the Defendant unconditionally or upon such terms as may appear to the Court to be just. From the above Rule the intention of the Legislature is clear that it wanted to give wider powers to the Court regarding furnishing the securities while granting the Defendant permission to defend No doubt it is true that simitar language was used in Clause 2 of Rule 3, before its amendment, but that clause was to be read subject to Clause 1. As clause is no longer there, therefore, the whole complexion of Clause 2 stands changed 3 The legislature, it appears, while amending Rul -3, took into consideration an amendment of the Bombay High Court made in that Rule. The relevant amendment is comprised in Clause 3 of the Rule which is as follows: (3) 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. Leave to defend may be granted to him unconditionally or upon such terms as to the Court or Judge appear just,
(3.) FROM a pesusal(sic) of the aforesaid clause, it is evident that its language is similar to that of Clause 5 of Rule 3 after the amendment, that clause was interpreted by a Bench of the Suprome Court consisting of four Hon'ble Judges, after noticing Santosh Kumar,s case supra) in Milkhi Ram (India) Private Ltd and Ors. v. Chaman Lal Bros. : AIR. 1965 S.C. 1698, Mudholkar, J , speaking for the Court observed thus: It is indeed not easy to say in many cases whether the defence is a genuine one or not and therefore it should be left to the discretion of the trial Judge who has,experience of such matters ooth at the bar and the bench to form his own tentative conclusion about the quality or nature of the defence sad determine the conditions upon which leave to defend may be granted. If the Judge is of opinion that the case raises a triable issue, then leave should ordinarly be granted unconditionally. On the other hand, of he is of opinion that the defence raised is frivolous, or false or sham, he should refuse leave to defend altogether. Unfortunately, however. the majority of cases cannot be dealt within a clear cut way like this and the Judge may entertain a genuine doubt on the question as to whether the defence is genuine or sham or in other words whether it raises a triable issue or not It is to meet such cases that the amendment to 0.37, R 2 made by the Bombay High Court contemplates that even in cases where an apparently triable issue is the Judge may impose conditions in granting leave to defend. Thus this is a matter in the discretion of the trial Judge and in dealing with it, is ought to exercise his discreation judiciously. Care must be taken to see that the object of the rule to assist the expeditious disposal of commercial clauses to which the Order applies, is not defeated Care must also be taken to see that real and genuine triable issue are not shut out by unduly severe orders as to deposit. In a matter of this kind, it would be undesirable and inexpendient to lay down any rule of general application.;