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Civil Revision No. 538 of 1985, decided on 22nd September, 1985.

---S. 115 & 0. XXXVII, R. 3(2)--Leave to defend suit conditional--Order of Appellate Court, not disclosing application of judicial mind--No reasons forthcoming to show dispassionate and objective attention of Court on question of leave--Discretion conferred on Courts, being a judicial discretion, held, ought to be exercised on sound judicial principles and not arbitrarily--Arbitrary exercise of discretion would be subject to revisional scrutiny--Order of appellate Court was, therefore, set aside, in circumstances.

Waman Vasudeo Wagh v. Messrs Pratapnal Dipaji & Co. A I R 1960 Bom. 520; Rawalpindi Theatres Private Ltd. v. Messrs Film Group, Bombay 60 Bom. LR 1373; Abdul Karim Jaffarani v. United Bank Ltd, and 2 others 1984 S C M R 568 and Abidur Rehman Khan v. Razi Ghazali 1983 C L C 1434 ref.

Asif Saeed Khan Khosa for Petitioner.

Faqir Hussain Baluch for Respondent.

Date of hearing: 22nd September, 1985.

This is an application for revision of order dated 23-7-1985 of learned Additional District Judge, Dera Ghazi Khan, granting leave to the petitioner to defend civil suit instituted in summary jurisdiction under Order XXXVII of the Code of Civil Procedure subject to the defendants furnishing bank guarantee to the extent of plaintiff's claim in the civil suit for recovery of Rs.1,00,000 on the basis of a promissory note dated 21-11-1984 was instituted by plaintiff against defendant in the Court of District Judge, Dera Ghazi Khan. It was entrusted to Additional District Judge, D. G. Khan. Defendant, after service, appeared in Court and applied for leave to defend the suit. In petition for leave to defend, the defendant denied the claim of the plaintiff. He also denied the receipt of the amount in dispute and also the execution of promote and receipt, which are basis of the plaintiff's suit. Learned Additional District Judge vide impugned order, granted leave though subject to a bank guarantee of the amount claimed.

2. It is contended for the petitioner that learned Additional District Judge without examining whether the defence was plausible and raised triable issues, has in a very brief order not disclosing application of judicial mind burdened the right of the defendant to defend the suit. No reasons are forthcoming from the impugned order to, how that the question of leave had engaged dispassionate and objective attention of the Court in the light of principles of law laid down by the superior Courts in this behalf. Learned counsel submitted that right of defence has been virtually refused in subjecting the same to extremely onerous conditions. Mr. Faqir Hussain Baloch Advocate who appeared for the respondent did not offer much resistence and agreed to have the case remanded to the learned trial Judge for its reconsideration. He submitted that though order under sub-rule, (2) of Rule 3 of Order XXXVII of the Code of Civil Procedure is passed in discretionary jurisdiction, yet if the exercise of discretion was not regulated by relevant considerations, revisional Court can legitimately interfere. He submitted that he would have no objection if the impugned order was set aside and the case remitted to learned Additional District Judge for its re-decision on the question of "leave".

3. Material question in this case is whether the petitioner should have been granted leave conditional or unconditional and if conditional leave was granted, what should have been the nature of the conditions imposed on the right of defence. In Waman Vasudeo Wagh v. Messrs Pratapmal Dipaji & Co. A I R 1960 Bom. 520 Mudholkar, J. of Bombay High Court observed: "The matter is undoubtedly in the discretion of the Court but the order of the Court is open to revision by this Court. In order to enable this Court to, consider whether the Court below had applied its mind to the various matters raised before it while making an order of this kind, it is essential that the order, on the face of it, must show that the Court had done so. This is only possible if the Court gives its reasons for passing the particular order. This Court has laid down in Rawalpindi Theatres Private Ltd. v. Messrs Film Group, Bombay 60 Bom. LR 1373, that in a summary suit the Court must grant leave to the defendant to defend that suit unconditionally if the affidavit filed by the defendant discloses a triable issue. From the order of the learned Judge it is not possible to ascertain whether he had at all considered the question as to whether the affidavit filed by the petitioner discloses a triable issue. Where a Court deals with a matter of this kind it is desirable that it should set out in its order the substance of the defence made by the defendant and then give its reasons for its conclusion that the defence discloses a triable issue or that it does not disclose one. It is undoubtedly true that the Court has been given discretion to grant or not to grant leave to defend a summary suit and that the revisional Court or the appellate Court will not lightly interfere with it. But in order to enable the superior Court to discharge its duty it must know the reasons, which led the subordinate Court to exercise its discretion in a particular way. Unquestionably the discretion conferred on the Court is a judicial discretion and ought to be exercised on sound judicial principles. It cannot be exercised in an arbitrary manner. Where a Court exercised its discretion arbitrarily, this Court will certainly interfere with it in revision. Since the order of the learned Judge does not disclose any reasons in support of his discretion it 'is not possible to say whether in making it he exercised his discretion judicially. 1, therefore, set it aside and remit the matter to it for passing a fresh order with advertance to the above remarks." Since the order of learned Judge did not disclose reasons in support of exercise of discretion, the order was set aside and the case was remitted for passing a fresh order with advertance to the remarks made in the decision of the learned High Court Judge. Rule 3 of Order XXXVII, Code of Civil Procedure also fell for consideration before their Lordships of the Supreme Court in Abdul Karim Jaffarani v. United Bank Ltd. pnd 2 others 1984 S C M R 568. After a survey of the precedent case law, their Lordships of the Supreme Court in paragraph 8 of the report observed:-

"The review of the cases, therefore, reveals that no hard and fast rule can be laid down for determining the question as to how the discretion vesting in the Court to subject the order for grant of leave to defend to conditions, ought to be exercised as this question depends on the facts and circumstances of each case. It would be improper to lay down a rule of thumb for the 7 exercise of power in matters of discretion vesting in a Court, when even the statute had left it unfettered. However, we would" point out that in order to correctly exercise the discretion vesting in a Court under the provisions in question, it is necessary to examine the scope and object underlying such provisions providing for special procedure of the kind. In view of the legislative history of these provisions, the overall object envisaged by the Legislature was to provide for expeditious disposal of litigation involving commercial transactions of particular nature by a summary procedure so that the defendant does not have the means open to exploitation in the ordinary procedure for trial of suits to prolong the litigation and prevent the plaintiff from obtaining an early decision by raising untenable and frivolous defences. It is in this context that the discretion to impose conditions is to be exercised. If, therefore, the Court is of the opinion that the defendant is trying to prolong the litigation and impeding a speedy trial, although on the allegations made in the application a triable issue has been raised then the Court would be justified to impose conditions. But as already pointed out, it will be improper exercise of discretion to impose conditions simply because, at the leave granting stage the defendant is unable to adduce his evidence on the pleas raised in his defence. The proper stage for substantiating his defence by evidence would be at the trial subsequently."

In Abidur Rehman Khan v. Razi Ghazali 1983 C L C 1434 a learned Single Judge of this Court interfered in revision against the order of trial Judge who had granted the leave in the words "the application for leave to defend is granted subject to deposit of the amount in dispute in the Court within 15 days". It, was observed:

"Now whether the order as passed by the learned Additional District Judge can be interfered with in the scope of section 115, C.P.C. it is sufficient to observe in this case that the learned Additional District Judge has not said anything as to the prima facie strength of the suit as brought and as to the merit of the defence proposed to be offered. He can make the leave granting order as conditional only if he tentatively assesses that the case set up by the defence is vague or unsatisfactory as against the suit as has been observed in the above-said decision, therefore, this case cannot De regarded as one in which the jurisdiction has been exercised in a legally becoming manner.

The order as passed by the learned Additional District Judge is set aside and the case is remanded to him to pass the order as to the attaching of the condition afresh in the light of the above-referred Supreme Court decision. Since this petition has succeeded on a legal question, therefore, the parties are left to bear their own costs."

Order of learned Additional District Judge when read and seen in the light of principles laid down by the superior Courts, did not show proper application of judicial mind as to exercise of discretion in granting conditional leave subject to a Bank guarantee of the amount claimed.

Both the learned counsel have agreed that the impugned order be set aside and the case be remitted to Additional District Judge to decide the question of leave with advertence to the principles of law laid down in the judgment of the Supreme Court. Revision accordingly is allowed, impugned order is set aside and the case is remitted to the learned Additional District Judge to re-decide the question of leave in accordance with law. No order as to costs. Parties are directed to appear before the learned trial Judge on 24-10-1985. . ,

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