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Raj Duggal v. Ramesh Kumar Bansal .
Factual and Procedural Background
The plaintiff filed Suit No. 256 in the Court of the Sub-Judge, 1st Class, Chandigarh under Order 37 Rule 2 of the Code of Civil Procedure (CPC), a procedure that permits summary judgment unless the defendant is granted leave to defend. The trial court, by order dated 24 July 1989, refused the defendant-appellant such leave. A subsequent Civil Review (No. 3067 of 1989) was dismissed by the High Court of Punjab and Haryana on 17 October 1989, thereby affirming the trial court’s refusal. The present appeal before the Supreme Court challenges those orders.
Legal Issues Presented
- Whether the appellant-defendant demonstrated a “real” or “triable” defence warranting leave to defend the summary suit under Order 37 Rule 2 CPC, thereby rendering the trial court’s and High Court’s denial of leave erroneous.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Supreme Court reiterated the governing principles for granting leave to defend in summary suits:
- Leave should be refused only when the proposed defence is “untenable,” “frivolous,” or “sham.”
- Conversely, where the defence raises a genuine factual dispute, uncertainty regarding the amount due, or questions requiring interrogation or cross-examination, leave must be granted.
- Even a defence that is “more than shadowy but less than probable” suffices to warrant leave, referencing analogous principles under Order 14 of the Rules of the Supreme Court (England) as discussed in the Supreme Court Practice, 1988.
Applying these standards, the Court reviewed the appellant’s proposed defence together with an earlier criminal complaint and concluded that a bona fide, triable issue existed. Consequently, summary judgment would be inappropriate.
Holding and Implications
ALLOWED – LEAVE TO DEFEND GRANTED.
The Supreme Court set aside both the High Court’s order dated 17 October 1989 and the trial court’s order dated 24 July 1989. Leave to defend the suit was granted on the condition that the respondent-plaintiff may retain the Rs 20,20,000 already deposited in the Supreme Court registry during the pendency of the suit, subject to restitution to the appellant with 9% interest should the respondent ultimately fail. The appellant may withdraw any sums previously deposited in the trial court. The appeal was disposed of with no order as to costs.
No broader legal precedent was announced; the decision’s immediate effect is confined to permitting a full trial on the merits between the present parties under the stipulated financial safeguards.
Order
1. We have heard learned counsel for both the parties. Special leave granted.
2. The appeal is against the order made by the High Court of Punjab and Haryana dismissing Civil Review No. 3067 of 1989 affirming the order dated July 24, 1989 in Suit No. 256 in the Court of Sub-Judge, 1st Class, Chandigarh, declining leave to the appellant to defend the suit which was brought under Order 37 Rule 2, CPC.
3. Leave is declined where the court is of the opinion that the grant of leave would merely enable the defendant to prolong the litigation by raising untenable and frivolous defences. The test is to see whether the defence raises a real issue and not a sham one, in the sense that if the facts alleged by the defendant are established there would be a good or even a plausible defence on those facts. If the court is satisfied about that leave must be given. If there is a triable issue in the sense that there is a fair dispute to be tried as to the meaning of a document on which the claim is based or uncertainty as to the amount actually due or where the alleged facts are of such a nature as to entitle the defendant to interrogate the plaintiff or to cross-examine his witnesses leave should not be denied. Where also, the defendant shows that even on a fair probability he was a bona fide defence, he ought to have leave. Summary judgments under Order 37 should not be granted where serious conflict as to matter of fact or where any difficulty on issues as to law arises. The court should not reject the defence of the defendant merely because of its inherent implausibility or its inconsistency.
4. On a consideration of the material in this case — we have looked into the defence sought to be raised and the criminal complaint earlier lodged — we think that a triable issue arises. On the analogous provisions of Order 14 of the Rules of Supreme Court in England it was held that where the defence can be described as more than “shadowy” but less than “probable” leave to defend should be given. [See pages 146 and 147 of the Supreme Court Practice, 1988].
5. The appeal is, accordingly, allowed and the appellant granted leave to defend the suit on condition that the amount of Rs 2020,000 deposited in this case pursuant to the earlier orders made in this proceeding shall, during the pendency of the suit, be paid to and retained by the respondent-plaintiff subject to the condition that if ultimately respondent-plaintiff fails in his suit he shall be liable to restitute the said sum of Rs 2020,000 to the appellant defendant with interest thereon at 9 per cent per annum.
6. The order of the High Court dated October 17, 1989 and of the trial court dated July 24, 1989 are both set aside and leave to defend granted on the aforesaid terms.
7. We must advert to one another submission made on behalf of the appellant. It was stated that the appellant had from time to time during the pendency of the matter at the trial court deposited in that court certain sums towards the suit claim. If that be so the appellant shall be entitled to withdraw those deposits. However, plaintiff-respondent shall be entitled to withdraw the sum of Rs 2020,000 deposited in the Registry of this Court.
8. The appeal is disposed of accordingly. No costs.
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