Inderjit Sehdev vs Ram Singh
1980 Latest Caselaw 23 Del

JUDGMENT

Charanjit Talwar, J.

(1) In this revision petition the petitioner challengesthe order of the learned Subordinate Judge refusing leave to the defendant todefend the suit filed by the plaintiff for recovery of Rs. 3,100.00. The suit hadbeen filed under 0. 37 of the Civil P.C. on the plea that the defendant issueda cheque for Rs. 3000.00 on 7/07/1978, in full and final settlement to theplaintiff who is a building contractor, after the completion of the house of thedefendant which cheque, on presentation on 15/07/1978 was dishonouredand as per the endorsement by the bank it was referred to the drawer. Thedefense taken on merits by the defendant in his application was that on 7/07/1978 when the cheque in question was issued to the plaintiff he had still tocomplete the building work to the tune of about Rs. 4,000.00. The said chequefor Rs. 30CO.00 had been paid on account by the defendant to the plaintiff onthe undertaking that the unfinished work would be completed by 15/07/1978 and that the cheque was not to be presented till the work was completed.-In support of his plea that some work was still outstanding, an agreementgiving the details of the outstanding work signed on 15/07/1978 had beenannexed with the application seeking grant of leave.

(2) The learned Trial Court, while rejecting the application seekingleave to defend the suit, had found that the cheque in question was issued bythe defendant for the work already done by the plaintiff. On the defenseraised in the application, it has been observed : "Ifind that the story made by the defendant-applicant is an afterthought and merely just to avoid the payment as there is no substanceor merit in it and therefore the application is liable to be dismissed".

(3) Only two questions arise for consideration in this revision petition.Firstly, whether the order refusing leave to defend in a suit filed under 0. 37of the Civil P. G. can be revised under S. 115 of the Civil P. G. and secondlywhether the Trial Court has exercised its jurisdiction illegally or with materialirregularity in refusing to give leave to the defendant.

(4) In Shri Krishan Bhardwaj v. Manohar Lal Gupta, , a Division Bench of this Court has answered the first question in the affirmative. The conflict of opinion in this Court has -now been authoritativelyresolved. Prakash Narain, J., speaking for the Division Bench, after analysing the amended provisions of S. 115 of the Civil P.C., held that revisionpetition was competent against an order refusing to grant leave to appear anddefend the suit although consequent to the impugned order a decree had tofollow. It was further held that the view of D.K. Kapur, J. in Civil Revn.No. 355 of 1973 (Delhi) (Ramesh Chander Jain v. Sarvedeshik Arya PratinidhiSabha), that a decree having been passed, the order refusing to appear anddefend could not be revised, was not correct.

(5) It has been. brought to my notice that D.K. Kapur, J. in ajudgmentreported in Khem Chand v. Hari Singh, , has held that theprovisions of Sub-section (2) of S. 115 of the Code of prohibit interference inRevision if an appeal against order or decree sought to bereversed lies to theHigh Court or any Court Subordinate thereto. In the said case also leave hadbeen refused to the defendant to defend the suit filed under 0. 37 of the Codeand consequently a decree for Rs. 7,000.00 with costs had been passed. Arevision petition had been filed challenging the composite order decreeing thesuit while refusing to grant leave to the defendant to appear and defend thesuit. It appears from the reported judgment of D. K. Kapur, J. that theDivision Bench authority of this Court had not been brought to his notice. Iam bound to follow the Division Bench authority and accordingly hold thatthe present revision petition is maintainable.

(6) The principles which have to be followed while considersing anapplication seeking leave to appear and defend the suit, are well-settled. TheirLordships of the Supreme Court in Mechalec Engineers & Manufacturers v.Basic Equipment Corporation, have re-affirmed them inparagraph 8 of their judgment. One of the propositions approved by theirLordships is as under : "(E)If the defendant has no defense or the defense is illusory orsham or practically moonshine then a although ordinarily theplaintiff is entitled to leave to sign judgment, the Court, mayprotect the plaintiff by only allowing the defense to proceedif the amount claimed is paid into Court or otherwise securedand give leave to the defendant on such condition and there-by show mercy to the defendant by enabling him to try toprove a defense."

(7) The finding by the Trial Court that the story put forth by thedefendant was an afterthougt and merely to avoid payment and that thedefense raised had no substance or merit in it, even if upheld, is a defensewhich is covered by the proposition quoted above. The defense may seem tobe illusory or sham Or practically moonshine still the defendant can begranted leave on terms. I agree with Mr. Bhargava, learned counsel for thedefendant, that on dishonouring of the cheque no reply to the notice sent bythe plaintiff had been given by the defendant. The cheque was obviouslydishonoured as the defendant did not have sufficient funds in the bank andthat is why the endorsement on the memo by the bank is, "Referred todrawer." Nevertheless, the defense being put forth that the amount of thecheque was on account and the writing of 15/07/1978 is a proof of the saidfact, may seem to be illusory but the defendant in the facts of the present caseought to be enabled to prove it. I accordingly grant leave to the defendantto appear and defend the suit on the condition that he furnishes a bankguarantee for Rs. 3.000.00 in the Trial Court within a month from today.

(8) The result is that the impugned order dated the 5th of may, 1979consequent decree for Rs. 3,000.00 in favor of the plaintiff (respondent herein)and against the defendant (petitioner herein), are set aside but with no orderas to costs. Parties to appear before the Trial Court on 7th Feb., 1980.