Andhra HC (Pre-Telangana)
T.C.I. Finance Ltd. vs Sree Vani Printers Pvt. Ltd. And Anr. on 5 September, 2000
Equivalent citations: 2000(5)ALT793
ORDER T. Ch. Surya Rao, J.
1. The petitioner assails the order dated 13-7-1999 passed by the I Additional Chief Judge, City Civil Court. Secunderabad in I.A. No. 1847 of 1998 in O.S. No. 78 of 1998.
2. The impugned order is a common order passed in I.A. No. 1146 of 1998 and I.A. No. 1847 of 1998. The former interlocutory application had been filed seeking attachment before judgment in respect of the movable and immovable properties of the first defendant in the suit and the latter interlocutory application had been filed seeking leave to defend the suit. In I.A. No. 1146 of 1998 under the impugned order, the Court below raised the attachment ordered earlier and in I.A. No. 1847 of 1998 the Court below ordered the petition thereby granting leave to defend the suit. Having been aggrieved by that order granting leave to defend the suit the plaintiff revision petitioner filed the present revision petition.
3. The suit O.S. No. 78 of 1998 was filed for recovery of an amount of Rs. 42 lakhs on the premise that the defendants had availed bill discounting facility from the plaintiff company and in connection therewith they have become due on the said amount.
4. Pursuant to the summons issued in the suit the defendants respondents appeared before that Court, and sought leave to defend after having filed the written statement. In the written statement inter alia they pleaded that they were not liable to pay any amount to the plaintiff and that, on the other hand, the plaintiff itself was due to the respondents in a sum of Rs. 73 lakhs and that the defendants had business dealings with the plaintiff and the signed papers given in connection therewith might have been used in support of the suit claim and that therefore the defendants were not liable to pay any amount to the plaintiff.
5. After having heard both sides and considered the respective pleas the Court below under the impugned order has come to the conclusion that although there cannot be any serious dispute about the defendants availing financial assistance to a tune of Rs. 30/- lakhs from the plaintiff it cannot be said that there is no reasonable defence available to the defendants in the suit in the above circumstances. In the circumstances, the Court felt that the defendants are entitled to leave to defend.
6. Sri Niranjan Reddy, learned Counsel for the petitioner contends that in view of the plea taken by the defendants in the written statement, Messrs Eminent Publications Private Limited becomes a necessary party to the suit and in the absence of necessary party there cannot be any valid defence and therefore leave ought not to have been granted to the defendants.
7. Sri Satyanarayana Prasad, learned Counsel appearing for the respondents herein, on the other hand contends that the Managing Director of the plaintiff company is the Managing Director of the firms floated by him and in his capacity as such acted with the defendants on behalf of Eminent Publications Private Limited and that firm has become due in a sum of Rs. 73 lakhs to the defendants. The learned Counsel further contends that for the purpose of granting leave under Rule 5 of Order 37 C.P.C. what is necessary to be seen by the Court is as to whether there is any triable issue. The falsity or otherwise of the issue is not germane for consideration at that stage, which has to be considered only at the time of the trial of the suit and therefore the Court below, after having applied its mind to the facts of the case, satisfied itself about the requirement of the existence of a triable issue, exercised its discretion and therefore this Court exercising the revisional jurisdiction cannot ordinarily interfere with such finding. The learned Counsel so as to buttress his contention seeks to place reliance upon the judgment of the Apex Court in Santosh Kumar v. Mool Singh, AIR 1958 SC 321. The Apex Court in para 10 of the judgment held as follows:
"It is always undesirable and indeed impossible to lay down hard and fast rules in matters that affect discretion. But it is necessary to understand the reason for a special procedure of this kind in order that the discretion may be properly exercised. The object is explained in Kesavan v. South India Bank Limited (K) and is examined in greater detail in Sundaram Chettiar v. Valli Animal (F) (supra) to which we have just referred. Taken by and large, the object is to see that the defendant does not unnecessarily prolong the litigation and prevent the plaintiff from obtaining an early decree by raising untenable and frivolous defences in a class of cases where speedy decisions are desirable in the interests of trade and commerce. In general therefore the test is to see whether the defence raises a real issue and not a sham one, in the sense that if the facts alleged by the defendant are established, there would be a good or even a plausible defence on those facts."
Relying on the said judgment in a recent judgment reported in Sunil Enterprise v. S.B.I. Commercial and International Bank Limited, the Apex Court in para 4 of the judgment reiterated the principle laid down by it in the former judgment in Santosh Kumar's case (1 supra). In another judgment rendered earlier thereto in Messrs Mechalee Engineering and Manufacturers v. Messrs Basic Equipment Corporation, . the Apex Court laid down certain principles to be followed by the Courts either for granting relief or for refusing the same. The Apex Court in para 8 of the judgment held as follows:
"The following principles are to be followed while considering the question of granting leave to defend.
(a) if the defendant satisfies the Court that he has a good defence to the claim on its merits the plaintiff is not entitled to leave to sign judgment and the defendant is entitled to unconditional leave to defend.
(b) if the defendant raises a triable issue indicating that he has a fair or bona fide 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."
The conspectus of the above judgments reveal that if the defendant in the suit has raised a triable issue indicating that he has a fair or bona fide defence although not a positively good defence the plaintiff is not entitled to sign the judgment and the defendant is entitled to an unconditional leave to defend. It is further obvious that at that stage of consideration by the Court as to whether the leave shall be granted or not what is germane is whether the defendant has any bona fide defence to offer and the truth or otherwise of the issue is not at all germane for consideration.
8. Keeping in view this position of law in mind it is now to be seen whether the impugned order is correct, legal and proper or not. Before proceeding further it may be mentioned here that it is the discretion left to the Court to exercise, of course on some sound lines. The criteria laid down by the Apex Court in this regard would provide necessary guidelines to be followed by the Courts.
9. The plea taken by the defendants in the written statement inter alia is that the suit is bad for misjoinder and non-joinder of parties and that Messrs Eminent Publications Private Limited, Hyderabad is a proper and necessary party as the plaintiff company has discounted the bill of exchange addressed to the said Messrs Eminent Publications the Vice-Chairman of which is floating different companies in 18 different names and Messrs Eminent Publications Private Limited is one such company of which one Mr. M.K. Agarwal the Vice-Chairman of the plaintiff is the Chairman and therefore the suit is bad. It is the further contention of the defendants that in connection with the business with the said Eminent Publications, the second defendant had given signed papers which might have been utilized by the plaintiff and finally the defendants denied of having executed any pronote or a bill of discount. In view of the specific plea taken in the written statement denying the execution of the bill of discounting and the pronote it cannot be said that there is no bona fide triable issue to be tried in the suit. After having gone through the respective pleadings in this case, the Court below exercised its discretion and granted leave to defend in favour of the respondents herein. There are no compelling reasons for this Court to come to a different conclusion than what has been arrived at by the Court below in having granted leave.
10. The learned Counsel for the revision petitioner Mr. Niranjan Reddy contends that at any rate the Court below ought not have granted an unconditional leave. The judgment of the Apex Court in Mechalee Engineering case (3 supra) is totally an answer to the said contention of the learned Counsel. That apart, as observed by me supra here is a case where the Court below after having applied its mind to the respective pleadings of the parties decided to exercise its discretion in favour of granting relief. Unless there are strong circumstances, which can afford necessary basis to form a view that the said discretion is vitiated by any element of illegality or irregularity certainly such discretion cannot ordinarily be interfered with. As observed by me above, I see no compelling circumstances to come to a different conclusion in the light of the respective pleas taken by the parties in this case. Instead of pursuing these matters in higher forums it is always expedient to allow the matters to be disposed of as expeditiously as possible by the trial Court.
11. For the foregoing reasons, I see no illegality in the order impugned against and therefore the revision must fail. It is accordingly dismissed but in the circumstances, no order as to costs. The Court below is directed to dispose of the suit as expeditiously as possible preferably within a period of three months from the date of receipt of a copy of this order.