Avtar Singh Vs. Singh Finance - Court Judgment

Excerpt:
- ashutosh mohunta, j.1. the petitioner has filed the present revision against the order dated 19.11.2003, passed by civil judge (sr. divn.), chandigarh, by which the petitioner was granted leave to defend subject to the condition that he furnishes bank guarantee for the amount in dispute.2. the plaintiff-respondent has filed a suit for recovery of rs. 1,60,000,'- on the basis of loan agreement and a promissory note dated 24.08.1999. the petitioner filed an application, wherein, it was prayed that he be granted leave to defend the suit on the ground that the plaintiff has not complied with the provisions of order 37 c.p.c. and also on the ground that no documents were supplied to the petitioner along with the plaint. the trial court granted permission to the petitioner to defend the suit subject to the condition that he furnishes bank guarantee for the amount in dispute.3. in the revision petition it is contended by the petitioner that the leave to defend should have been granted unconditionally as the petitioner had a triable case.4. in m/s mechanlec engineers and manufacturers v. basic equipment corporation, 0043/1976 : [1977]1scr1060 , the hon'ble apex court has laid down the principles which are to be followed while considering the question for granting leave to defend. one of the conditions is:-(e) if the defendant has no defence or the defence is illusory or sham or practically moonshine then although ordinarily the plaintiff is entitled to leave to sign judgment, the court may protect the plaintiff by only allowing the defence to proceed if the amount claimed is paid into court or otherwise secured and give leave to the defendant on such condition, and thereby show mercy to the defendant by enabling him to try to prove a defence.5. however, a perusal of the impugned order shows that rs. 1,50,000/- was given on loan to the petitioner through a loan agreement and a promissory note dated 24.08,1999. the amount was given by way of cheque, which was duly encashed by the petitioner. in these circumstances, the petitioner is liable to furnish security for the amount in dispute.6. in view of the above, the order dated 19.11.2003 passed by the civil judge (senior division), chandigarh is modified to the extent that the petitioner shall furnish security for rs.1,60,000/- instead of bank guarantee.7. the revision stands disposed of.8. the security shall be furnished on or before 31.10.2005, before the trial court.