Manipur High Court
M/S Bharatia Infra Projects Limited And ... vs Phurailatpam Jilasana Sharma on 3 October, 2025
SHAMURAILATPAM SUSHIL Digitally signed by SHAMURAILATPAM
SUSHIL SHARMA
SHARMA Date: 2025.10.08 17:46:02 +05'30'
Sl. No. 10-12
IN THE HIGH COURT OF MANIPUR
AT IMPHAL
CRP(CRP Art. 227) No. 25 of 2025
M/S Bharatia Infra Projects Limited and Another
Petitioners
Vs.
Phurailatpam Jilasana Sharma
Respondent
Clubbed with MC(CRP(C.R.P. Art. 227)) 34 of 2025
With MC(CRP(C.R.P. Art. 227)) No. 38 of 2025
BEFORE
HON'BLE THE CHIEF JUSTICE MR. M. SUNDAR
ORDER
03.10.2025
[1] A summary suit under Order XXXVII of 'the Code of Civil
Procedure, 1908' ('CPC' for the sake of brevity) was filed by the respondent in
the captioned CRP.
[2] This suit is Original (Money) Suit No. 112 of 2022 on the file of
learned 'Civil Judge (Senior Division), Imphal West' ('said trial court' for the
sake of brevity and convenience). The two revision petitioners before this Court
are the two defendants in the suit. This suit shall be referred to as 'summary
suit' for the sake of convenience and clarity.
[3] In the said summary suit, a sum of a little over Rs. 9.15 cores
(Rs. 9,15,22,678/- to be precise) was claimed.
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[4] The revision petitioners before this Court who are defendants in
the said summary suit took out an application in Judicial Miscellaneous Case
No. 170 of 2023 with a leave to defend prayer. This leave to defend application
was dismissed by the trial court by a short order saying that the court is unable
to understand and appreciate the pleadings and is unable to understand what
the defendants are trying to convey.
[5] Ms. H. Bandana, learned counsel for the revision petitioner
(defendants before the trial court) and Mr. N. Jotendro, learned senior counsel
instructed by Mr. Syed Murtaza Ahmed, learned counsel for the sole respondent
(plaintiff in the trial court) are before this Court.
[6] Captioned matter was taken up with the consent of both sides.
[7] A careful perusal of the leave to defend application under Order
XXXVII Rule 3 (5) brings to light that the defendants have raised very many
points such as blank papers having been signed. This court refrains itself from
dilating further over details and further deems it appropriate to write that this
Court has not expressed any view or opinion on the points raised in the leave
to defend application, owing to the order that is proposed to be made about
which there will be allusion infra.
[8] Be that as it may, the point that the defendants signed in blank
papers is a defence which needs to be examined. The examination in a leave
to defend application is to see whether the same is a moonshine defence and
as to whether it raises triable issues or not.
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[9] In this regard, this Court deems it appropriate to respectfully
refer to Mechelec Engineers And Manufacturers vs M/S. Basic
Equipment Corporation reported in AIR 1977 SC 577 :: (1976) 4 SCC
687, where five parameters/tests qua leave to defend applications in
summary suits was set out. Subsequently, vide IDBI judgment reported in
(2017) 1 SCC 568 the same was superseded and in Kashyap this
supersession was held to be modulation and Hon'ble Supreme Court made it
clear that core theme is denial of leave to defend is an exception. To be noted,
IDBI turns on amendment to Order XXXVII Rule 3 and Kashyap has been
reported in (2022) 3 SCC 294. Articulation of all this is in paragraphs 32 and
33 of Kashyap and the same read as follows :
"32. The High Court took note of the fact that the
trial court relied upon the decision in Mechelec Engineers
and observed that the applicable principles were those
contained in the later decision of this Court in IDBI
Trusteeship. Having regard to the question at hand, it
shall be worthwhile to read together the principles stated
in the said two decisions of this Court.
32.1. In the case of Mechelec Engineers, the
principles for consideration of a prayer for leave to defend
in a summary suit were laid down by this Court in the
following terms: -
"8. In Kiranmoyee Dassi Smt v. Dr J. Chatterjee
[AIR 1949 Cal 479 :49 CWN 246, 253 : ILR (1945) 2
Cal 145.] Das, J., after a comprehensive review of
authorities on the subject, stated the principles
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applicable to cases covered by Order 17 CPC in the
form of the following propositions :
'.......(a) If the defendant satisfies the court that he
has a good defence to the claim on its merits the plaintiff
is not entitled to leave to sign judgment and the defendant
is entitled to unconditional leave to defend.
(b) If the defendant raises a triable issue indicating
that he has a fair or bona fide or reasonable defence
although not a positively good defence the plaintiff is not
entitled to sign judgment and the defendant is entitled to
unconditional leave to defend.
(c) 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, shews such a state
of facts as leads to the 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 but not as to payment into court
or furnishing security.
(d) If the defendant has no defence or the defence
set-up is illusory 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.
(e) If the defendant has no defence or the defence is
illusory or sham or practically moonshine then although
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ordinarily the plaintiff is entitled to leave to sign judgment,
the court may protect 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."
32.2. In the case of IDBI Trusteeship (supra), this
Court modulated the aforementioned principles and laid
down as follows: -
"17. Accordingly, the principles stated in para 8 of
Mechelec case will now stand superseded, given the
amendment of Order 37 Rule 3 and the binding decision of
four Judges in Milkhiram (India) (P) Ltd. v. Chamanlal
Bros., AIR 1965 SC 1698 : (1966) 68 Bom LR 36], as
follows:
17.1. If the defendant satisfies the court that he has
a substantial defence, that is, a defence that is likely to
succeed, the plaintiff is not entitled to leave to sign
judgment, and the defendant is entitled to unconditional
leave to defend the suit.
17.2. If the defendant raises triable issues indicating
that he has a fair or reasonable defence, although not a
positively good defence, the plaintiff is not entitled to sign
judgment, and the defendant is ordinarily entitled to
unconditional leave to defend.
17.3. Even if the defendant raises triable issues, if a
doubt is left with the trial Judge about the defendant's good
faith, or the genuineness of the triable issues, the trial
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Judge may impose conditions both as to time or mode of
trial, as well as payment into court or furnishing security.
Care must be taken to see that the object of the provisions
to assist expeditious disposal of commercial causes is not
defeated. Care must also be taken to see that such triable
issues are not shut out by unduly severe orders as to
deposit or security.
17.4. If the defendant raises a defence which is
plausible but improbable, the trial Judge may impose
conditions as to time or mode of trial, as well as payment
into court, or furnishing security. As such a defence does
not raise triable issues, conditions as to deposit or security
or both can extend to the entire principal sum together
with such interest as the court feels the justice of the case
requires.
17.5. If the defendant has no substantial defence
and/or raises no genuine triable issues, and the court finds
such defence to be frivolous or vexatious, then leave to
defend the suit shall be refused, and the plaintiff is entitled
to judgment forthwith.
17.6. If any part of the amount claimed by the
plaintiff is admitted by the defendant to be due from him,
leave to defend the suit, (even if triable issues or a
substantial defence is raised), shall not be granted unless
the amount so admitted to be due is deposited by the
defendant in court."
(emphasis in original)
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33. It is at once clear that even though in the case of
IDBI Trusteeship, this Court has observed that the
principles stated in paragraph 8 of Mechelec Engineers
case shall stand superseded in the wake of amendment of
Rule 3 of Order XXXVII but, on the core theme, the
principles remain the same that grant of leave to defend
(with or without conditions) is the ordinary rule; and
denial of leave to defend is an exception. Putting it in other
words, generally, the prayer for leave to defend is to be
denied in such cases where the defendant has practically
no defence and is unable to give out even a semblance of
triable issues before the Court.
33.1. As noticed, if the defendant satisfies the Court
that he has substantial defence, i.e., a defence which is
likely to succeed, he is entitled to unconditional leave to
defend. In the second eventuality, where the defendant
raises triable issues indicating a fair or bonafide or
reasonable defence, albeit not a positively good defence,
he would be ordinarily entitled to unconditional leave to
defend. In the third eventuality, where the defendant raises
triable issues, but it remains doubtful if the defendant is
raising the same in good faith or about genuineness of the
issues, the trial court is expected to balance the
requirements of expeditious disposal of commercial causes
on one hand and of not shutting out triable issues by
unduly severe orders on the other. Therefore, the trial court
may impose conditions both as to time or mode of trial as
well as payment into the Court or furnishing security. In
the fourth eventuality, where the proposed defence appear
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to be plausible but improbable, heightened conditions may
be imposed as to the time or mode of trial as also of
payment into the court or furnishing security or both,
which may extend to the entire principal sum together with
just and requisite interest.
33.2. Thus, it could be seen that in the case of
substantial defence, the defendant is entitled to
unconditional leave; and even in the case of a triable issue
on a fair and reasonable defence, the defendant is
ordinarily entitled to unconditional leave to defend. In
case of doubts about the intent of the defendant or
genuineness of the triable issues as also the probability of
defence, the leave could yet be granted but while imposing
conditions as to the time or mode of trial or payment or
furnishing security. Thus, even in such cases of doubts or
reservations, denial of leave to defend is not the rule; but
appropriate conditions may be imposed while granting the
leave. It is only in the case where the defendant is found to
be having no substantial defence and/or raising no
genuine triable issues coupled with the Court's view that
the defence is frivolous or vexatious that the leave to
defend is to be refused and the plaintiff is entitled to
judgment forthwith. Of course, in the case where any part
of the amount claimed by the plaintiff is admitted by the
defendant, leave to defend is not to be granted unless the
amount so admitted is deposited by the defendant in the
Court.
33.3. Therefore, while dealing with an application
seeking leave to defend, it would not be a correct approach
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to proceed as if denying the leave is the rule or that the
leave to defend is to be granted only in exceptional cases
or only in cases where the defence would appear to be a
meritorious one. Even in the case of raising of triable
issues, with the defendant indicating his having a fair or
reasonable defence, he is ordinarily entitled to
unconditional leave to defend unless there be any strong
reason to deny the leave. It gets perforce reiterated that
even if there remains a reasonable doubt about the
probability of defence, sterner or higher conditions as
stated above could be imposed while granting leave but,
denying the leave would be ordinarily countenanced only
in such cases where the defendant fails to show any
genuine triable issue and the Court finds the defence to be
frivolous or vexatious."
[10] It may not be necessary to dilate more on the tests and it will
suffice to say that in a leave to defend application filed by the defendants in a
summary suit, it is imperative for the trial court to examine the points raised
and test whether it passes muster qua ratios/principles about which there is
allusion supra. In the instant case, trial court has not done the same.
[11] The point that the defendants have signed on blank papers has
been raised in the leave to defend application and therefore, the conclusion
that the trial court is unable to understand what the defendants are conveying
is clearly unacceptable.
[12] Be that as it may, as the trial court has not applied
IDBI/Kashyap tests and taken a decision as to whether the defence is
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moonshine or not and as to whether triable issues arise, this case necessitates
a remand.
[13] Therefore, this Court deems it appropriate to remand the matter
to the trial court with a direction to the trial court to consider the leave to
defend application filed by the defendants as expeditiously as the business of
the trial court would permit and decide the same by applying IDBI/Kashyap
principles laid down by the Hon'ble Supreme Court for testing leave to defend
applications.
[14] As already alluded to supra, it is made clear that this Court has
not expressed any view or opinion on the leave to defend application of the
petitioners and therefore, the trial court shall now consider leave to defend
application in the aforesaid manner on its own merits and in accordance with
law.
[15] The impugned order of the trial court is set aside for the purpose
of denovo adjudication of the leave to defend application.
[16] While adjudicating the leave to defend application afresh, trial
court shall consider the submissions of the defendants as well as the plaintiff
who is entitled to oppose the leave to defend plea.
[17] Impugned order is set aside. Matter is remanded back to the trial
court for denovo legal drill in the leave to defend application.
[18] Captioned CRP disposed of in the aforesaid manner. There shall
be no order as to costs.
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[19] Though obvious, further proceedings in the main suit will be
subject to the outcome of the leave to defend application.
[20] Consequently, the two captioned MCs are also disposed as
closed. There shall be no order as to costs.
CHIEF JUSTICE
Sushil
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