M/s. Shivalik Poultry Form and others vs Indian Bank

J.V. Gupta, J.—This revision petition is directed against the order of the trial Court dated January 15, 1985, whereby the application filed

on behalf of the Defendant-Petitioner under Order XXXVII, Rule 3(5) of the CPC (hereinafter called the Code), for leave to defend the suit was

dismissed and the Plaintiff Respondent''s suit was decreed for the recovery of Rs. 4,15,943 50, under Order XXXVII of the Code.

Shorn of unnecessary details, in paragraph 3 of the plaint, it was inter alla stated that Defendant No. 6 created equitable mortgage over the

agricultural land, jointly owned by him alongwith his wife, Defendant No. 4, in favour of the Plaintiff to secure the due repayment of the credit

facilities, sanctioned and granted by the Plaintiff in the name of Defendant No. 1, i.e., the Petitioner. Not only that, in the prayer clauses, (c) and (f),

of the plaint, it was also stated inter alla that a preliminary decree in respect of the immovable property, equitably mortgaged with the Plaintiff, be

passed against Defendants Nos. 4 and 6. On notice, the Defendant appeared and filed the application under Order XXXVII, Rule 3(5) of the

Code. The said application was contested on behalf of the Plaintiff The learned trial Court dismissed the application with the observations that la

fact the suit of the Plaintiff was mainly based on the various joint and several demand promissory notes executed by the Defendants and also en the

basis of the various agreements hypothecating the livestock, etc. According to it, the suit was not governed by Order XXXIV of the Code, as

argued by the Learned Counsel for the Defendants. The objection raised on behalf of the Defendants that the Court had no territorial jurisdiction to

entertain the suit was also repelled. Ultimately, as observed earlier, the said application filed on behalf of the Defendant was dismissed and the

Plaintiff''s suit was decreed by the impugned order. Dissatisfied with the same, the Defendant has come up in revision to this Court.

A preliminary objection has been raised on behalf of the Plaintiff that since the suit has been decreed under Order XXXVII of the Code, no

revision petition is competent against the order under challenge. The only remedy, according to it, was to file an appeal against it. In support of the

contention, reliance was placed on Khem Chand v. Hart Singh A. I. R. 1979 Del 7. On the other hand, the Learned Counsel for the Petitioner

relied upon the Division Bench judgment of the Delhi High Court in Siri Krishan Bhardwaj Vs. Manohar Lal Gupta and Another, and an

unreported judgment of this Court in Civil Revision Petition No. 218 of 1985 (The Chandigarh State Co-operative Bank Ltd v. The State Bank of

India C. R. 218 of 1985), decided on March 27, 1985, to contend that the revision petition was maintainable even if the trial Court had decreed

the Plaintiff''s suit under Order XXXVII of the Code

It appears, while deciding Khem Chand''s case (supra) the Division Bench judgment in S.K. Bhardwaj''s case (supra) was not brought to the

notice of the learned Single Judge. Besides, the matter has been considered by this Court also and relying upon the abovesaid Division Bench

Judgment, it has been held in Civil Revision No. 218 of 1985, that a revision against the order of the trial Court dismissing the application of the

defended under Order XXXVII, Rule 3(5) and at the same time decreeing the suit of the Plaintiff under the said Order was maintainable.

Order XXXVII, Rule 3(6) of the Code, Inter alia provides that at the hearing of such summons for judgment, if the Defendant has not applied

for leave to defend, or if such application has been made and is refused, the Plaintiff shall be entitled to judgment forthwith. In other words, when

the application made by the Defendant is refused, the judgment is bound to follow thereunder. That being so, the Defendant could not be asked to

file the appeal against the judgment and decree itself and not to challenge the order declining the prayer for defending the suit as such. Under the

circumstances, the preliminary objection raised on behalf of the Plaintiff is overruled.

The Supreme Court, in Meehalec Engineers and Manufacturers v. Basic Equipment Corporation4, has laid down the principles to be followed

in granting leave to defend the suit under Order XXXVII, Rule 3 of the Code. One of the aforesaid principles is, that if the Defendant raises a

triable issue Indicating that he has a fair or bonafide 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. It has also been laid down therein that 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. Keeping these guidelines in view, in the present case, the Defendant was entitled to the leave to defend the suit as

he had raised a triable issue as to the territorial jurisdiction of the trial Court and to pass the decree on the basis of the equitable mortgage.

Under the circumstances, the revision petition succeeds and is allowed. The impugned order is set aside and the Defendant is allowed leave to

defend the suit, The parties have been directed to appear in the trial Court on September 28, 1985 on which date the written statement will be filed

by the Defendant. The trial Court is directed to dispose of the suit within six months thereof. The parties will lead their evidence at their own

responsibility though dasti summons, if desired, be given to them as contemplated under Order XVI, Rule 7-A of the Code. It is also made clear

that the trial Court will be at liberty to impose conditions as to the time or mode of trial of the suit as laid down in Mechalec Engineers &

Manufacturers'' case (supra), and also for furnishing additional security, if any, at any stage of the suit.