- (1.) This petition is directed against the order of the trial Court dated 7th October, 1988, whereby an application seeking leave to defend the suit filed under Order 37 Rule 3(5) of the Civil Procedure Code was declined.
(2.) The plaintiff bank filed a suit under Order 37 of the Civil Procedure Code. After service of the defendants, application was moved by the defendants for leave to defend that suit, inter alia, on the grounds that the suit does not fall under Order 37 of the Code and that the amount claimed is not due to the respondent-bank from them. According to the defendants, they should be given leave to defend the suit. The said application was contested on behalf of the plaintiff-bank on the ground that the suit has been properly filed under Order 37 of the Code; the suit falls under the said provisions and that the plaintiff-bank has claimed the amount due as is evident from the statement of account placed and filed by the plaintiff-bank. The learned trial Court refused to grant permission to defend the suit on the grounds that "I do not find any merit in the arguments advanced by the learned counsel for the defendant in this regard. The demand pronotes were executed by the defendants, the original of which are placed on the file. The defendants were given facility of working capital. The defendants used to draw money and deposit the same. Now the plaintiff is still within its rights to use the defendants for balance sum as is evident from the statement of account." Thus, according to the trial Court, no ground of leave to defend the suit was wade out in favour of the defendants. Since permission to defend the suit was not granted, the trial Court decreed the plaintiff's suit for recovery of Rs. 2,80,817.84 with costs and future interest that very day.
(3.) Learned counsel for the petitioner submitted that leave to defend has been declined arbitrarily without recording any finding that the facts disclosed by the defendants do not indicate that they have substantial defence to raise and that the defence intended to be put up by the defendants was frivolous or vexatious, as required by proviso to sub-rule (5) of Rule 3 of Order 37 of the Civil Procedure Code. Thus argued the learned counsel for the petitioners, in the absence of any such finding referred to leave to contest could not be declined. In support of his contention, he referred to M/s. Mechalec Engineers & Manufacturers v. M/s. Basic Equipment Corporation, 1977 AIR(SC) 577(580) and M/s. Talwar Spinners, Kashmir Road, Amritsar etc. v. Veena Tandon,1980 CurLJ 179(Civil) . On the other hand, the counsel for the plaintiff-bank submitted that even though no such finding was recorded by the trial Court but from the facts on the record, it is quite evident that the defendants have no substantial defence to raise and their intention is only to delay the proceedings, in any case, argued the learned counsel, the defendants be directed to furnish a bank guarantee before they are allowed to contest the present suit. In support of his contention, he referred to Electronics components (India) and others v. Indian Bank,1987 1 PunLR 505Sector 7, Chandigarh through its Zonal Manager, and M/s. Mohali Forge SAS Nagar (Mohali) v. State Bank of India,1989 PunLR 276.;