Judgment:
Dalip K. Kapur, J.
(1) The learned single Judge trying suit No. 282/84 passed an order in I.A. No. 5238/84 which is an application for leave to defend the suit whereby leave to defend was granted but on the condition that the defendant furnishes a Bank Guarantee in the sum of Rs. 2,00,000.00 which would tentatively cover the entire suit amount and costs and future interest. Against this judgment the defendant has appealed and at the stage ofd admission of the appeal notice of the same was accepted by the plaintiff-respondents after the admission of the appeal. We also stayed the operation of the order.
(2) In view of the fact that the only question in the appeal was the direction regarding furnishing of the Bank-guarantee, thereforee, we decided to hear the appeal extremely expeditiously, as it was pointless to stay further trial of the suit. The real question in this case arose because this is not a suit of the old type under Order 37 Civil Procedure Code . i.e. it is not a suit on a promissory note or other negotiable instruments. This is a suit for recovery of an amount stated to have been paid to the defendant for getting a supply of banranas. There were a large number of transactions between the parties and acceding to the plaintiff an account was drawn up which showed that the defendants were indebted to the extent of about Rs. l,30,000.00 . According to the plaintiff this amount had been acknowledged by some writing and that writing has been filed in court. This is also the case of the plaintiff that there is a written agreement, in fact, it is claimed that there are two written agreements. The suit was filed under Order 37 Civil Procedure Code on the contention that it is a suit arising out of a written agreement and was, a claim for a liquidated sum payable in furtherance of a number of transactions made between the parties in accordance with the written agreements.
(3) An application for leave to defend was filed by the defendants which was supported by an affidavit being an affidavit of Shri Digamber Ram Chand Fegade. This deponent is one of the defendants in the suit who Stated that the defendants had not drawn Rs. 2,00,000.00 from the plaintiffs under the agreement and in fact, there had been an over supply of Bananas. The real point of the affidavit, leaving aside the details, is the fact that the so-called admission of the balance in the account is described as forged and not binding on the defendants. It is specifically denied that any liability to pay had been admitted or accepted by the defendants. It is further stated that there has been a fraud, as the plaintiff by means of that alleged acknowledgement had sought to bring the suit within,limitation. There is further claim that the suit is barred by time, and certain details are given. The next result was that as there was a denial of liability and a denial about documents in fact, a dispute about the nature of the agreement between the parties. Leave to defend had to be given in the suit, but the question is on what terms were the defendants to be given such leave This question has been one of the disputed points in many reported judgments, The question as to whether leave is to be granted or refused or granted on conditions has been discussed in many learned judgments both by the English courts and by other courts including the Supreme Court. The net effete of these judgments has been that the law has during the years crystalised and is almost settled. The law is that leave to defend is to be granted where a triable issue is disclosed by the affidavit filed in response to the suit. When the defendant shows that a trial is necessary to establish the correctness of the plaintiff's stand, then leave is to be granted. However, sometimes, the defense showing a triable issue may not appear to be bonafide, or may be such as is intended only to delay the suit, and then the question has arisen whether leave should be given on conditions or without conditions and if on conditions, what conditions. In the present case, the learned single Judge described the defense as moonshine and probably, that is why he thought that conditions had to be imposed.
(4) On the other hand, in a case like the present we have even serious doubt whether the case can fall within the provisions of Order 37 Cpc because it is based on many transactions between the parties. According to the defendants the amount claimed in the suit is not the true amount. The plaintiffs have no doubt insisted that their account is correct and relied on an acknowledgement in writing in Marathi at the bottom of the account. This writing is described as forgery by the defendant. We do not want to comment on whether this is or is not an obvious forgery but the matter certainly requires a (rial in view of the nature of the defense. By no means can it be said that the defense is malafide or sham. It would be too much to say that if plaintiffs produces a document that is alleged by the defendant to be a forgery or a fabrication then the defendants must produce a surety for the suit amount before they can defend the suit. This is certainly a case in which leave to defend should have been granted unconditionally. We accordingly accept the appeal and modify the order under appeal to the extent that the leave will be granted unconditionally to the defendants. We grant a period of four weeks to the defendants to file the written statement. We leave the parties to bear their own costs in this appeal.