S. Rangaraju Naidu vs D.J. Keymer and Co. Ltd.

Horwill, J.—This is an appeal against the order of Yahya Ali J. imposing a condition before permitting the appellant to defend the suit

brought against him by the respondents.

The principal contention of the learned advocate for the appellant is that it was not open to the learned Judge to go into the merits of the defence

and to judge the material placed before him to arrive at a conclusion whether or not there was any truth in the case put forward by the defendant.

According to this argument, the learned Judge should confine himself to the pleadings. If in the written statement a case is put forward which, if

proved, would be a successful answer to the plaint claim, then leave should be granted unconditionally. In support of this argument the learned

advocate for the appellant relies on the decision in the House of Lords in Jacobs v. Booth''s Distillery Co, (1902) 85 L. T. 260 : 50 W. R. 49, a

decision of Beasley C. J. and King J. in Sundaram Chettyiar v. Valliammal, 58 Mad. 116 : A. I. R. 1935 Mad. 43 and a recent decision of

Satyanarayana Rao and Viswanatha Sastri JJ. in K.R. Kesavan Vs. The South Indian Bank Ltd., .

In the House of Lords case two judgments were delivered, one by the Lord Chancellor (Lord Halsbury) and the other by Lord James of

Hereford. We do not find anything in the judgment of the Lord Chancellor which affords any support for this argument, though there are remarks in

the very short judgment of Lord James of Hereford which afford a basis for such an argument. This House of Lords case has, however, come up

for consideration in a number of cases in this Court. The two cases of this Court relied on by the learned advocate for the appellant discuss the

House of Lords case in some detail. Sundaram Chettiar v. Valliammal, 58 Mad. 116: A. I. R. 1985 Mad. 43, certainly affords support for the

argument that it is not permissible for the Court to consider the truth or otherwise of the defence put forward. In Ebrahim Sait v. South India

Industrials Ltd., I. L. R. (1939) Mad. 36 : A. I. R. 1938 Mad. 962, the learned Judges had to consider Sundaram Chettiar v. Valliammal, 58

Mad. 116 : A. I. R. 1935 Mad. 43 and Madhavan Nair Offg. C. J. said of that case:

it appears to us that in stating the rule the learned Judges, if we may say so respectfully, have not sufficiently emphasised the qualification that, in

order to bring the defendant within the rule which entitles him to ask for leave to defend without any condition, the defence should be a bona fide

one and not a mere attempt to prolong or delay the case . . . ."" The learned Judges later went on to say:

It is not necessary that the Court should enter fully into the merits of the ease and decide, but it should be satisfied that the defences raised show

that there is a fair issue to be tried by a competent tribunal before leave to defend is given unconditionally.

This was very much the view expressed in Periya Miyana Marakayar & Sons v. Subramania Iyer, 46 M. L. J. 255 : A. I. R. 1924 Mad. 612,

where the learned Chief Justice said :

it is not enough for instance, to say, ''I have got a good defence'' but the defendant must say what the defence is, and, as a rule, bring something

before the Court to show that it is a bona fide defence and not a mere attempt to gain time by getting leave to defend.

This remark was dissented from by Beasley C. J. in Sundaram Chettiar v. Valliammal, 58 Mad. 116 : A. I. R. 1935 Mad. 43, but, as pointed out

in Ebrahim Sait v. South India Industrials Ltd., I. L. R. (1939) Mad. 36 : A. I. R. 1938 Mad. 962, the learned Chief Justice and King J. in

considering the case before them, did not ignore the merits of the case; for Madhavan Nair Offg. C. J. after the first of the two passages above

cited, said :

it may be said that this aspect (whether the defence was a bona fide one or not) cannot be said to have been altogether overlooked (in Sundaram

Chettiar v. Valliammal, 58 Mad. 116 : A. I. R. 1935 Mad. 43, because reliance has been placed by him on the decision of this Court in Periya

Miyan Marakayar v. Subramania Iyer, 46 M. L. J. 255 : A. I. R. 1924 Mad. 612.

The latest case in which this question has been dealt with is K.R. Kesavan Vs. The South Indian Bank Ltd., , where the general tenor of the

argument of Satyanarayana Rao J. does afford some support for the argument of the learned advocate for the appellant; but even there the learned

Judges said at the bottom of p. 71:

In coming to a conclusion (whether such a test (whether the defence is a sham or plausible one) is satisfied or not the Court should have taken into

consideration all the circumstances of the case as disclosed in the plaint and in the affidavits and other material that is available), as was laid down

by Bowen L. J. in Blaiberg v. Abrams, (1898) 77 L. T. 255.

The learned Judges also refer to Periya Miyan Marakayar v. Subramania Aiyar, 46 M. L. J. 255 : A. I. R. 1924 Mad. 612 and did not express

dissent from the remarks of Schwabe C. J. as to the criterion to be adopted in cases of this kind. It does not appear, therefore, from the decisions

above cited that this High Court has gone so far as to say that one should decide the question as to whether leave to defend uncondionally should

be granted or not upon a consideration of the pleadings only. If that were indeed the case, then if the framing of the written statement were in the

hands of a competent advocate, there never need be a case in which unconditional leave to defend should not be granted.

If we are to consider the case for the defence put forward on the merits by Mr. N. S. Raghvan, there is no doubt something to be said on both

sides on the question whether the defence put forward by the defendant is a bona, fide one or not; but sitting in appeal as we do, we do not find

sufficient reason for disagreeing with the order of the learned trial Judge, passed in the exercise of his discretion.

The appeal is dismissed with costs. A further three weeks'' time will be given to the appellant for fulfilling the terms of the condition laid down by

the learned trial Judge. Two weeks thereafter will be allowed for the filing of the written statement.