Bansal Vs. Anup Mehta & Ors  Insc 41 (16 January 2007)
Sinha & Markandey Katju (Arising out of Slp(C) No. 10166/2006) S.B. Sinha, J.
appeal is directed against a judgment and order dated 30.01.2006 passed by a
learned Single Judge of the High Court of Delhi whereby and whereunder an
application filed under Article 227 of the Constitution of India filed by the
respondents herein against a judgment and order dated 27.05.2005 passed by a
learned Civil Judge, Karkardooma, Delhi was allowed.
herein filed a suit which was marked as Suit No. 303 of 2004 for recovery of a
sum of Rs. 2,93,987/- with interest on account of dishonoured cheques. The said
suit was filed in terms of Order XXXVII of the Code of Civil Procedure (Code).
The respondents filed an application purported to be under Order XXXVII, Rule 3
(5) of the Code praying for grant of leave to defend the said suit. The learned
Civil Judge refused to do so by an order dated 27.05.2005 opining:
am convinced with the plaintiff's contention that the defence as disclosed by
defendant in their application is sham and illusory and in my considered
opinion, the defendants are not entitled for leave to defend the present suit
and the plaintiff is entitled to have the judgment signed.
the application under Order 37, Rule 3(5) CPC of the defendants is devoid of
any merits. The same is hereby dismissed.
is disposed of accordingly." On the said date itself, a final judgment and
decree was passed for a sum of Rs. 2,83,987/- with interest at the rate of 12%
It is contemplated under Order 37, Rule 3(5) CPC that if any application for
leave to defend the suit has been made by the defendant and is refused, the
plaintiff shall be entitled to judgment everywhere. Since the application under
Order 37, Rule 3(5) CPC of the defendants has been dismissed as the defendants
failed to raise any triable issue or disclose any defence in their application,
in my considered opinion, the plaintiff has become entitled to have the
suit of the plaintiff is hereby decreed with cost plaintiff is entitled for a
decree to recover a sum of Rs. 2,83,987/- from the defendants.
since the plaintiff has failed to establish his claim of interest @ 18% per
annum which he has claimed is the market rate for commercial transaction, I am
inclined to award the interst at the prevailing rate only which is @ 12% per
annum on the decretal amount from the date of institution of the present suit
till realization. Decree sheet be prepared" An application filed thereagainst
by the respondents has been allowed by the impugned judgment. The appellant is,
thus, before us.
short contention raised by Mr. Jitender Sharma, learned senior counsel
appearing on behalf of the appellant, is that keeping in view of the fact that
an appeal was maintainable under Section 96 of the Code against the judgment
and decree passed by the learned Civil Judge, the application under Article 227
of the Constitution of India was not maintainable.
contention of Mr. V.L. Madan, learned counsel appearing on behalf of the
respondents, on the other hand, is that the writ petition was maintainable as
the respondents could not have been put to undue hardship of depositing the
entire decretal amount in terms of Order XLI Rule 1 of the Code of Civil
Procedure although it had made out a good case for obtaining leave to defend
XXXVII, Rule 3(5) of the Code reads, thus:
The defendant may, at any time within ten days from the service of such summons
for judgment, by affidavit or otherwise disclosing such facts as may be deemed
sufficient to entitle him to defend, apply on such summons for leave to defend
such suit, and leave to defend may be granted to him unconditionally or upon
such terms as may appear to the Court or Judge to be just :
that leave to defend shall not be refused unless the Court is satisfied that
the facts disclosed by the defendant do not indicate that he has a substantial defence
to raise or that the defence intended to be put up by the defendant is
frivolous or vexatious :
further that, where a part of the amount claimed by the plaintiff is admitted
by the defendant to be due from him, leave to defend the suit shall not be
granted unless the amount so admitted to be due is deposited by the defendant
in Court." A "decree" is defined under Section 2 (2) of the Code
means the formal expression of an adjudication which, so far as regards the
Court expressing it, conclusively determines the rights of the parties with
regard to all or any of the matters in controversy in the suit and may be
either preliminary or final. It shall be deemed to include the rejection of a
plaint and the determination of any question within section 144, but shall not
include (a) any adjudication from which an appeal lies as an appeal from an
order, or (b) any order of dismissal for default." A "judgment"
is defined under Section 2(9) of the Code to mean "the statement given by
the Judge on the grounds of a decree or order".
order refusing to grant leave is a judgment within the meaning of Letters
Patent of the Chartered High Courts. [See Shah Babulal Khimji v.
D. Kania and Another, (1981) 4 SCC 8] A decree passed in a summary suit where
leave to defend the suit has been refused is almost automatic. The consequence
of passing a decree cannot be avoided.
an application under Article 227 of the Constitution of India would not be
maintainable where an appeal lies. An appeal lay from the decree under Section
96 of the Code. When an appeal could be filed, ordinarily, an application under
Article 227 of the Constitution of India would not be entertained.
decree passed subsequent to the refusal of leave to defend could either be
under Order XXXVII Rule 3(6) of the Code or it could be based on the affidavit
evidence on the side of the plaintiff and the documents produced or even based
on oral evidence formally proving, say, the execution of a promissory note by
the defendant. It may not be proper or necessary to apply the theory of
"dependent order" in such circumstances.
one, the theory may not apply. Even if this Court were to set aside the order
of the court below and give the defendant leave to defend the suit, the decree
that is passed may not go automatically. It may have to be set aside.
the defendant can always go to the court which passed the decree and move under
Rule 4 of Order XXXVII of the Code to reopen the decree.
of "dependant order" may not apply in a case of this nature because
even if this Court were to set aside the order refusing leave to defend, the
decree subsequently passed may not fall by itself. It has still to be set aside
either by resort to Order XXXVII Rule 4 or by way of an appeal, or by some
other mode known to law. In a given case like the present one as it may not be
proper to interfere with the decree merely because in an appeal against an
order refusing leave to defend, this Court is inclined to take a different
view. [See V.S. Saini & Anr. v. D.C.M. Ltd., AIR 2004 Delhi 219.] The defendant in such a case
can also be left to appeal against the decree and therein challenge the order
refusing leave to defend in terms of Section 105(1) of the Code.
contentious issue, viz., maintainability of writ petition without challenging
the decree has been raised. We, however, in this case, do not intend to go into
the said issue, inter alia, for the reason that the learned Judge has not
assigned any reason in support of the impugned judgment. It merely directed the
respondents to deposit a sum of rupees two lakhs. We are informed at the bar
that such deposit has been made. What remains to be deposited is, therefore, a
sum of Rs. 83,987/-. We are further informed that certified copy of the
impugned order has been filed. The certified copy of the judgment and decree
may also be filed.
aforementioned situation, we are of the opinion that interest of justice would
be met if we direct the writ petition to be converted into a first appeal. The
respondents may file certified copy of the judgment and decree.
court fee, if any, should also be paid by the respondents. Filing of such
certified copy and deposit of court fee, if any, must be completed within eight
weeks from date. Indisputably, it would be open to the appellant to raise the
contention that it was a fit case where the learned Civil Judge could have
granted leave to defend the suit. All the contentions of the parties shall,
however, remain open.
the reasons aforementioned, the impugned judgment is set aside.
appeal is allowed with the aforementioned directions. No costs.