LexDEFIANCE KNITTING INDUSTRIES PVT. LTD. versus JAY ARTS
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DEFIANCE KNITTING INDUSTRIES PVT. LTD. A v. JAY ARTS AUGUST 30, 2006 [AR!JlT PASA Y AT AND LOKESHWAR SINGH PANT A, JJ.] B Code of Civil Procedure, 1908-0rder XXXVll Rule 3-Unconditional leave to defend, grant of-Rejection of, by trial court-High Court directing applicant to deposit Rs. 20 lakhs to. show his bonafides and in case he C succeeded in application for leave to defend, withdrawal of amount allowed- Trial court allowed the application and directed additional deposit of Rs. 50 lakhs-Upheld by High Court-Correctness of-Held: Order not maintainable since there was no indication in the earlier order of High Court that in case amount was more, applicant was to pay the differential amount-Maximum deposit directed was fixed at Rs. 20 /akhs. D Respondent filed summary suit for recovery of certain amount Appellant filed an application under order XXXVll Rule 3(5) CPC for leave to defend unconditionally which was rejected. Appellant filed civil revision application. High Court directed the appellant to deposit Rs. 20 lakhs and entitled him to take out application for leave to defend, which if allowed, he could withdraw E the amount deposited. Trial Court allowed the application on the condition that the appellant would deposit additional amount of Rs. 50 lakhs in two installments. Appellant challenged the order. High Court dismissed the writ petition. Hence the present appeal. Appellant contended that the earlier order passed by High Court laid F down that the quantum of deposit to be directed could not be more than Rs.20 lakhs and without noticing the same, the trial court directed deposit of Rs. 70 lakhs and High Court upheld the same. Respondent contended that according to the correspondences and the G statements filed by the appellant the admitted amount was more than R~. 90 lakhs and, therefore, after taking note of the deposit of Rs.20 lakhs made earlier, trial court and High Court directed deposit of Rs.SO lakhs more. Allowing the appeal, the Court 625 H 626 SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R. A HELD: A bare reading of.the order of High Court on the earlier occasion B shows that the High Court took the view on the consent of parties that Rs.20 lakhs was to be deposited and on deposit being made certain follow up action were to be taken. The fact that tile High Court wanted the quantum to be pinned at Rs.20 lakhs and not more than that is clear from the fact that the High Court directed refund in case the trial court on consideration of merits came to conclusion that the amount to be deposited was less than Rs.20 lakhs. There is no indication that in case the amount was to be more, then the appellant would pay the differential amount. The stand of the appellant that the maximum deposit that could have been directed was fixed at Rs.20 lakhs is on a sound footing. The order of the trial court as well as that of the High Court cannot C be maintained. However, this Court has stayed the operation of High Court's order subject to deposit of Rs.20 lakhs. The amount already deposited need not be refunded. [633-B-E) Mecha/ec Engineers and Manufactures v. Basic Equipment Corporation, AIR (1977) SC 577 and Mrs. Raj Dugga/ v. Ramesh Kumar Bansal, AIR (1990) D SC 2218, referred to. E F CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3846 of2006. From the Final Judgment and Order dated 20.4.2005 of the High Court of Judicature at Bombay in Writ Petition No. 2521/2005. C.A. Sundaram, Mahesh Agarwal, Rishi Agrawal, E.C. Agarwala and Dhrupad Kashyap for the Appellant. V.A. Bobde, Nikhil M. Sakhardande, Niranjan Pandit and Rekha Palli for the Respondents. The Judgment of the Court was delivered by ARIJIT PASAYA T, J. Leave granted. Challenge in this appeal is to the judgment rendered b;· a learned Single G Judge of the Bombay High Court dismissing the writ petition No. 2521 of2005 filed by the appellant. By the impugned judgment the High Court upheld the view of the trial court in Summary Suit No. I 0 of 200 I that the appellant has not made out a case for unconditional leave to defend in terms of Order XXXVII Rule 2 of the Code of Civil Procedure, 1908, ( in short the 'CPC'). H The factual background in a nutshell are as follows: DEFIANCE KNITTING INDUSTRIES PVT. LTD. v. JAY ARTS [PASAYA T..l.] 627 Summary Suit No. I 0 of 200 I has been filed by the respondent before A the learned Civil Judge (Senior Division) at Kalyan for recovery of an amoun
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