M/s. Krishnanath Balkrishna and Co. vs Rai Bahadur Seth Ram Ratan

N.A. Mody, J.—This is a summary suit for disposal. In this suit the defendant was granted leave to defend but on certain conditions. The defendant has failed to carry out those conditions and the suit has, therefore, been set down for judgment.

Mr. Thakkar appears for the defendant and states that he wants to apply for installments. Mr. Chhaya, the learned counsel for the plaintiffs, raises a preliminary objection that Mr. Thakkar is not entitled to appear at all in this suit inasmuch as the leave granted to the defendant to defend has become infructuous as the conditions on which that leave was granted have not been fulfilled.

In support of his argument Mr. Chhaya has relied upon the judgment in the ease of Pestonji Shapurji Narelwalla Vs. Jamshedji Nowroji Gamadia, In that case it was held that in a summary suit Drought under the provisions of 0. XXXVII of the Civil Procedure Code, the defendant, who has obtained no leave to defend, cannot appear at the hearing and ask the Court to make the decretal amount payable by installments and that the only way open to such a defendant is to apply for installments either under O. XX, r. 11 (2), or under O. XXXVII, r. 4 of the Civil Procedure Code. What is to be noted in this connection is, however, that the relevant provisions of the law at the time when that judgment was given were substantially different in this respect from those applying at the present time. That judgment was given in 1925 and what applied then were the provisions of O. XXXVII, r. 3, of the Civil Procedure Code. Under O. XXXVII, r. 3, it was not open to a defendant not only to defend the suit but even to appear in the suit except with the leave of the Court. So far as this High Court is concerned, this High Court has, under the provisions of s. 122 of the Civil Procedure Code, made certain amendments in the Civil Procedure Code. Those amendments were made in 1936 i.e. after the said judgment in Pestonji Shapurji Narelwalla Vs. Jamshedji Nowroji Gamadia, After the said amendments the provision as now contained in O. XXXVII, r. 3 is substantially different from that contained in the original r. 3 of O. XXXVII of the Code of Civil Procedure. Under the provisions of the said r. 3 as amended by this High Court it is now not necessary for the defendant to obtain the leave of the Court for filing his appearance, although it continues to be necessary for him to obtain the leave of the Court to defend the suit. Therefore, there is a material distinction between the original rule as applicable to this High Court before 1936 and the amended rule as now applicable to this High Court after 1936. Under the old provisions not only could the defendant not defend the suit but he could not even appear in the suit without the leave of the Court. Under the new provisions the leave of the Court is not necessary for appearing in the suit but it is necessary only for the purpose of defending the suit. Sub-rule (4) of r. 3 as amended provides that if the defendant be permitted to defend as to the whole or any part of the claim the Judge shall direct (on the summons for judgment) that on failure to complete the security (if any) or to carry out such other directions as the Judge may have given within the time limited in the order, the plaintiff shall be entitled to judgment forthwith. In this case there were conditions imposed by the order which granted leave to the defendant to defend. Those conditions have not been fulfilled. Under that order, therefore, the plaintiffs have become entitled to a judgment forthwith. The defendant cannot, therefore, now be allowed to urge any defence whatever. What the defendant is now applying for however is not for being heard in his defence but he is making an application on the footing that a decree may be passed as applied for by the plaintiffs but that that decree be made payable by installments.

In my opinion, therefore, the defendant is at this stage entitled to appear. The ratio of the judgment in Pestonji v. Jamshedji AIR 1929 Bom. 250 : (1925) 28 Bom. L. R. 138 : ILR 50 Bom. 262 is that as the defendant who had not obtained leave to defend or who had been granted leave to defend but only on conditions and who had failed to fulfill the conditions was not entitled even to appear in the suit, he could not appear at the final hearing of the suit and as he could not at all appear he could not apply for installments at such hearing. Under the amended provisions, however, he is entitled to appear without leave. Although he has not fulfilled the conditions on which he was granted leave to defend, he can still appear and he has to be heard. The points on which he can be heard, however, must be other than those urged by way of his defence. The defendant cannot now be heard on anything which can be said to be by way of his defence to the claim in the suit. In my opinion, therefore, as the application for installments is not by way of a defence but as a matter of fact proceeds on the footing that a decree be passed as asked for by the plaintiffs, it is open to the defendant to appear at this hearing and to apply for installments under the provisions of O. XX, r. 11, of the Code of Civil Procedure.

On the facts placed before me I am satisfied that I should grant to the defendant installments which I will presently order.

Decree as prayed. The defendant to pay the decretal amount in installments of Us. 10,000 each per month. The first of such monthly installments to be paid on or before January 15, 1961 and the subsequent of such monthly installments to be paid on or before the 15th day of each succeeding month thereafter. In default of payment of any two installments the whole of the decretal amount or the unpaid balance thereof, as the case may be, to become payable forthwith. Two-thirds of the institution fee to be repaid to the plaintiffs.