Telangana High Court

Rohith Canvassing vs Sri Venkateshwara Traders on 19 March, 2025

        HIGH COURT FOR THE STATE OF TELANGANA

                             ********

         CIVIL REVISION PETITION NO.1301 OF 2024


Between :

Rohith Canvassing, rep.by its sole Proprietor
S.Vijay Kumar, s/o. Bheem Rao, Age:42 yrs.,
Occu: Business, r/o.5-3-454, Topkhana,
Begum Bazar, VTC, Hyderabad.

                                                        ...Petitioner
               and

Sri Venkateshwara Traders, rep.by its Proprietor,
T.Rajender Reddy, Aged about 38 yrs.,
Occu:Business, r/o.1-64, Kandivanam,
Mogiligidda, Mahboobnagar district and another.
                                                .... Respondents


DATE OF JUDGMENT PRONOUNCED                  :       19.03.2025


     HON'BLE SRI JUSTICE LAXMI NARAYANA ALISHETTY


1.     Whether Reporters of Local Newspapers :       Yes
        may be allowed to see the Judgments ?

2.     Whether the copies of judgment may be :       Yes
       marked to Law Reporters/Journals

3.     Whether his Lordship wish to              :   Yes
       see the fair copy of the Judgment ?


                              __________________________________
                              LAXMI NARAYANA ALISHETTY,J
                                                                              LNA,J
                                                                CRP No.1301 of 2024
                                       2




   * HON'BLE SRI JUSTICE LAXMI NARAYANA ALISHETTY

          +CIVIL REVISION PETITION NO.1301 OF 2024


%19.03.2025

Between:

# Rohith Canvassing, rep.by its sole Proprietor
S.Vijay Kumar, s/o. Bheem Rao, Age:42 yrs.,
Occu: Business, r/o.5-3-454, Topkhana,
Begum Bazar, VTC, Hyderabad.

                                                                 ...Petitioner
                      Vs.

$ Sri Venkateshwara Traders, rep.by its Proprietor,
T.Rajender Reddy, Aged about 38 yrs.,
Occu:Business, r/o.1-64, Kandivanam,
Mogiligidda, Mahboobnagar district and another.
                                                .... Respondents


!Counsel for the Petitioner                  : Sri Pavan Kumar Jadhav

Counsel for the Respondents                  : Sri Prudhvi Raj, counsel
                                               rep. Sri R.Mangulal


<Gist :

>Head Note:

? Cases referred:

(2017) 1 SCC 568; SLP (C) No.19413 of 2018; AIR 1965 SC 1698; 2023 (6) ALT 210;
 Neutral Citation No.2023/DHC/001110; (2019) 7 SCC 577; (2022) 3 SCC 294;
2025 SCC Online Del 470
                                                                   LNA,J
                                                     CRP No.1301 of 2024
                                3



     HON'BLE SRI JUSTICE LAXMI NARAYANA ALISHETTY

         CIVIL REVISION PETITON NO.1301 OF 2024
ORDER:

This Civil Revision Petition is filed by the petitioner/

plaintiff aggrieved by the order dated 11.03.2024 in I.A.No.38 of

2024 in O.S.No.5999 of 2023 on the file of III Junior Civil Judge,

City Civil Court, Hyderabad.

2. Heard Sri Pavan Kumar Jadhav, learned counsel for the

petitioner and Sri Prudhvi Raj, learned counsel representing Sri

R.Mangulal, learned counsel for respondents.

3. Brief facts relevant for adjudication of the present Civil

Revision Petition are that the petitioner herein is a businessman

engaged in rice trading. The respondents herein placed an order

for supply of rice and the same was supplied to respondents

through M/s. Sri Venkateshwara Traders and M/s. Anjaneya

Rice Industries. However, respondents did not make payment

and on regular follow up, the respondents issued two cheques in

discharge of liability, however, the same were returned on

presentation with remarks 'insufficient funds'. On repeated

requests and persuasion, the respondents issued two more LNA,J

cheques, however, those two cheques were also returned on

presentation for the reason 'insufficient funds'.

4. Subsequently, respondents issued legal notice dated

14.11.2022 to the petitioner herein contending that two cheques,

which were dishonoured, were issued as advance for pending

delivery of rice. Petitioner got issued legal notice dated 09.08.2023

to the respondents for payment of outstanding amounts. When

there was no response from the respondents, petitioner filed

private complaint against the respondents before the II

Additional Chief Metropolitan Magistrate at Nampally,

Hyderabad and the same was referred to P.S. Afzalgunj on

06.10.2023 and the P.S. Afzalgund registered the same as crime

No.503 of 2023 against the respondents on 14.11.2023 under

Sections 405, 415 and 420 of IPC.

5. The petitioner filed summary suit under Order XXXVIII

Rule 2 of CPC vide O.S.No.5999 of 2023 before the III Junior Civil

Judge, City Civil Court, Hyderabad for recovery of

Rs.19,65,000/-; that summons were served on the respondents

and on appearance, summons for judgment were issued.

LNA,J

Thereafter, respondents filed application under Order XXXVII

Rule 3 (5) of CPC seeking leave to defend the suit. In the said

application, respondents stated that petitioner herein filed the

suit in order to gain illegally and has suppressed the material

facts. It is further stated that respondents have not issued cheques

towards any liability as alleged by the petitioner and the same

were given as security on false promise made by the petitioner. It

is also stated that there is no business relationship with the

petitioner and that suit was filed basing on fake and fabricated

documents and same would not withstand scrutiny of law.

6. Petitioner filed counter resisting the application and stated

that respondents did not deny the signatures on the cheques

issued by them and it was specifically denied the allegation of

respondents that cheques were issued as security on false

promise made by the petitioner. It is also stated that in the legal

notice dated 14.11.2022 issued by the respondents, they never

mentioned that there was no business transaction and

relationship with the petitioner, however, for the first time in the LNA,J

application filed by the respondents seeking to leave to defend

the said plea and finally, prayed to dismiss the application.

7. The Trial Court, taking into consideration, the contentions

of both the parties as well as material placed on record, has

allowed the application filed by the respondents seeking leave of

the Court to defend the suit unconditionally by the impugned

order mainly on the ground that respondents are able to point out

triable issues, which requires adjudication. The trial Court further

observed that in view of categorical denial of the respondents

that the invoices are not genuine and there were no signatures on

the invoices, the issue requires adjudication and has come to

conclusion that respondents were able to show that they have got

valid defence to defend the suit and, therefore, granted leave to

the respondents to defend the suit without imposing any

condition. The trial Court referred to judgments cited on behalf of

the petitioner herein, wherein the Hon'ble Apex Court held that

even a case where triable issue was raised, the Court still can

impose conditions, however, the trial Court observed that the

same are not applicable to the present case.

LNA,J

8. Learned counsel for petitioner had contended that

petitioner supplied rice basing on the orders placed by the

respondents through M/s.Venkateshwara Traders and

M/s.Anjaneya Rice Industries and invoices were also released to

that effect to a tune of Rs.10,77,500/- and cheques given by the

respondents were returned by the bankers. If there was no

business transaction as contended by the respondents, there is no

necessity for the respondents to issue cheques that too signed

cheques and subsequent plea raised by the respondents that same

were issued as security for the supply of rice on false promises

made by the petitioner is an afterthought. It is further contended

that invoices, cheques, cheque returned memos were placed on

record, however, the trial Court has granted permission to the

respondents to defend the suit without imposing any condition. It

is further contended that respondents have closed the shop and

criminal case was also filed against the respondents by the

petitioner. All these aspects were not considered by the trial

Court and therefore, prayed to allow the revision and set aside LNA,J

the impugned order and further direction to the respondents to

deposit 50% of the suit amount.

9. Learned counsel for the petitioner placed reliance on the

following decisions in support of his contention:

i) IDBI Trusteeship Services Ltd. V. Hubton Ltd., 1

ii) B.L.Kashyap and Sons Ltd. V. M/s.JMS Steels and Power Corporation & another 2;

iii) Milkhiram (India) Pvt.Ltd., and others v. Chamanlal Brothers 3;

iv) Neha International Ltd. V. DBS Bank Ltd., 4

v) Chander Mohan v. Tejinder Singh 5;

vi) Sudin Dilip Talaulikar v. Polycap Wires Pvt.Ltd. and others 6

10. Per contra, learned counsel for respondents had contended

that trial Court has rightly granted leave to the respondents to

defend the suit unconditionally in view of the facts and

circumstances of the case and also in view of valid defence and

triable issues raised by the respondents. It is contended that there

is no business transaction between the respondents and the

(2017) 1 SCC 568

AIR 1965 SC 1698

2023 (6) ALT 210

Neutral Citation No.2023/DHC/001110

(2019) 7 SCC 577 LNA,J

petitioner and even invoices raised by the petitioner are not

signed by the respondents. It is finally contended that revision is

devoid of any merit and the petitioner has failed to point out any

illegality or irregularity in the impugned order and, therefore,

revision is liable to be dismissed.

11. Perusal of the impugned order would disclose that trial

Court, on consideration of the contentions put-forth by the

respondent in the application seeking leave of the Court to

defend the suit and contentions raised by the petitioner by way of

counter, had allowed the application granting permission to the

petitioner to defend the suit unconditionally with an observation

that respondent did not admit any part of the amount claimed by

the petitioner and, therefore, invoking second proviso to Rule 3(5)

of Order XXXVII of CPC does not arise. The trial Court at

paragraph-15 has made the following observation:

"15. In my considered opinion, the contentions which are raised by the defendants constitute valid defence and they are triable issues for the following reason. The question whether the invoices produced by the plaintiff on the basis of the present suit is filed are genuine or LNA,J

fabricated, or the question whether the cheques issued by the defendants are not issue for any legally enforceable debt are matters for consideration which will have to be proved by the plaintiff by adducing evidence - both oral and documentary. Therefore, it cannot be said that the defendants have no defence or that there are no triable issues. In my view, for the purpose of maintaining a petition seeking leave to defend, it is sufficient if the defendant is able to show that he is having valid defence. In this case, since the defendants are able to show that they are having valid defence, they must be permitted to defend the suit."

12. Learned counsel for petitioner specifically referred to legal

notice dated 14.11.2022 issued by the respondent no.2, wherein it

is admitted that respondent accepted the request of the petitioner

herein and placed order on different times and accordingly, the

same was supplied and respondent paid the due amounts. In the

notice dated 14.11.2022, it is further mentioned that on insistence

of petitioner, respondent had issued two advance cheques

bearing Nos.010250 dated 01.05.2022 and 010251 dated

01.07.2022.

13. It is pertinent to refer to the application filed by the

respondent under Order XXXVII Rule 3(5) of CPC seeking leave LNA,J

of the Court to defend the suit, wherein it is specifically

contended that the cheques referred to in the legal notice are not

issued in discharge of any debt and are not supported with any

consideration and it was also contended that blank cheques were

issued as security basing on false promise made by the petitioner,

but in fact, the respondent did not have any business relations

nor done any transactions with the petitioner. Thus, the

respondent had taken two contradictory stands in the notice

dated 14.11.2022 and the application filed under Order XXXVII

Rule 3(5) of CPC.

14. It is appropriate to refer to latest judgment of the Hon'ble

Apex Court in B.L. Kashyap & Sons Ltd. v. JMS Steels & Power

Corpn., 7 wherein certain principles have been laid down while

adjudicating the application filed under Order XXXVII Rule 3(5)

of CPC seeking leave of the Court to defend the suit. The Hon'ble

Apex Court held as under:

"33. It is at once clear that even though in IDBI Trusteeship [IDBI Trusteeship Services Ltd. v. Hubtown Ltd., (2017) 1 SCC 568 : (2017) 1 SCC (Civ) 386] , this Court has observed that the

(2022) 3 SCC 294 LNA,J

principles stated in para 8 of Mechelec Engineers case [Mechelec Engineers & Manufacturers v. Basic Equipment Corpn., (1976) 4 SCC 687] shall stand superseded in the wake of amendment of Rule 3 of Order 37 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 bona fide 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 appears 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, LNA,J

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 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 LNA,J

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.

15. The Hon'ble Division Bench of Delhi High Court in

Chandar Bhalla v. Rajeev Bhatnagar 8, while following the

decision of the Hon'ble Supreme Court in B.L.Khashyap (supra),

held that it is apparent from the aforesaid ratio that if the

defendant raises defence which appear to be plausible but

improbable, strict conditions as to the time or mode of trial as also

payment into the Court or furnishing securities or both extending

to the entire principal sum with just and requisite interest may be

directed by the Court.

16. At this stage, it is apt to refer to the legal notice dated

14.11.2022, wherein the respondents have taken a stand that

there were business relationships between the petitioner and the

respondents and all the amounts payable for the supplies made

2025 SCC Online Del 470 LNA,J

by the petitioner have been paid. However, in the application

filed under Order XXXVII Rule 3(5) of CPC seeking leave of the

Court to defend the suit, a specific stand has been taken that there

was no business relationship between the petitioner and the

respondents and that cheques were issued only as security for the

supplies to be made by the petitioner, which is contrary to the

stand taken in the notice dated 14.11.2022.

17. It is the specific contention of the petitioner that supplies

were made to the respondent on orders and cheques were issued

for the supplies made, however, the said cheques were

dishonoured on presentation. On repeated requests and

persuasion, the respondent issued two more cheques and those

cheques were also dishonoured on its presentation. It is pertinent

to refer to the contention of the petitioner that criminal case has

also been filed vide Crime No.503 of 2023 against the respondents

under Sections 405, 415 and 420 of IPC.

18. In view of the contradictory stand taken in the notice and

the written statement, the contention of the respondent that there

was no relationship between the petitioner and the respondent LNA,J

and that no supplies were made and further, cheques have been

issued as security for the supply to be made, are unbelievable.

19. At this stage, it is appropriate to refer to the principle

formulated by the Hon'ble Apex Court in B.L.Khashyap (supra)

at paragraph 33.2, which reads as under:

"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."

20. The trial Court while granting unconditional leave has held

that the respondent could able to raise valid defence and triable

issues and further, observed that respondent did not admit any

part of the amount claimed by the petitioner. However, the trial

Court had failed to consider the contradictory stand taken by the

respondent in the notice and the written statement and thus,

come to erroneous conclusion that respondent could able to raise

valid defence and triable issues.

21. In the light of above discussion, facts and circumstances of

the case, in considered view of this Court, the trial Court has LNA,J

rightly granted leave to the respondents to defend the suit,

however, erred in not imposing any condition. Therefore, the