B. L. KASHYAP AND SONS LTD versus M/S JMS STEELS AND POWER CORPORATION & ANR.

Citation: [2022] 1 S.C.R. 1024 · Decided: 18-01-2022 · Supreme Court of India · Bench: VINEET SARAN · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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1024
SUPREME COURT REPORTS
[2022] 1 S.C.R.
[2022] 1 S.C.R. 1024
1024
B. L. KASHYAP AND SONS LTD.
v.
M/S JMS STEELS AND POWER CORPORATION & ANR.
(Civil Appeal No. 379 of 2022)
JANUARY 18, 2022
[VINEET SARAN AND DINESH MAHESHWARI, JJ.]
Code of Civil Procedure, 1908 – Or. XXXVII – Summary Suits
– Leave to defend – Plaintiff-respondent no.1 is registered
partnership firm, manufacturer and supplier of iron and steel
products – It had supplied 200 tons of steel to defendant no.1
which was a real estate firm – Supply was made in terms of two
purchase orders as raised by appellant-defendant No.2, who was
contractor working with defendant no. 1 – On failure to make
requisite payment, plaintiff filed summary suit by making the
defendants jointly and severally liable – Trial Court declined to
grant “leave to defend” to both the defendants – Appellant-
defendant no.2 challenged the judgment of trial court – High Court
observed that appellant- defendant no.2 was not entitled to “leave
to defend” because the defenses raised were frivolous and
vexatious and did not give rise to genuine triable issue – High
Court further observed that there was no such requirement that
the cheque ought to be dishonored for filing summary suit and
held the suit to be maintainable – On appeal, Held: As per the
plaint averment , the matter is based on written contract arising
out of written purchase orders issued by the appellant on the
instruction and on behalf of defendant No. 1 – Contention against
maintainability of the summary suit in terms of Or. XXXVII cannot
be accepted – There is no reason to consider any interference in
the decision of the High Court – Grant of leave to defend (with or
without conditions) is the ordinary rule; and denial of leave to
defend is an exception – Even in the case of raising of triable
issues, with the defendant indicating his having a fair or
reasonable defence, he is ordinarily entitled to unconditional leave
to defend unless there be any strong reason to deny the leave –
On facts, no reason as to why and how the defence of the appellant
(defendant No. 2) was treated as frivolous or vexatious – Appellant
had indeed raised triable issues, particularly concerning its
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1025
liability and the defence of the appellant cannot be said to be
frivolous or vexatious altogether – Appellant-defendant No. 2
ought to have been granted the leave to defend the claim made in
the suit concerning its liability.
Allowing the appeal, the Court
HELD: 1. Two principal points call for determination in this
appeal: one, as to whether the plaintiff was entitled to maintain a
summary suit under Order XXXVII CPC for the claim in question;
and second, as to whether the appellant-defendant No. 2 has
rightly been declined the leave to defend? [Para 13][1036-C-D]
2. As per the plaint averment, the matter is based on written
contract arising out of written purchase orders issued by the
appellant on the instructions and on behalf of defendant No. 1;
and the plaintiff had raised the invoices against such supplies
under the purchase orders. In the overall facts and circumstances
of the case, the contention against maintainability of the summary
suit in terms of Order XXXVII CPC cannot be accepted and to
that extent, there is no reason to consider any interference in
the decision of the High Court. [Paras 14 and 14.2][1036-E;
1037-B]
3. Grant of leave to defend (with or without conditions) is
the ordinary rule; and denial of leave to defend is an exception.
The prayer for leave to defend is to be denied in such cases where
the defendant has practically no defence and is unable to give out
even a semblance of triable issues before the Court. In the case
of substantial defence, the defendant is entitled to unconditional
leave; and even in the case of a triable issue on a fair and
reasonable defence, the defendant is ordinarily entitled to
unconditional leave to defend. In case of doubts about the intent
of the defendant or genuineness of the triable issues as also the
probability of defence, the leave could yet be granted but while
imposing conditions as to the time or mode of trial or payment or
furnishing security. Thus, even in such cases of doubts or
reservations, denial of leave to defend is not the rule; but
appropriate conditions may be imposed while granting the leave.
It is only in the case where the defendant is found to be having
B. L. KASHYAP AND SONS LTD. v. M/S JMS STEELS AND POWER
CORPORATION & ANR. [DINESH

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