ORDER
P.S. Narayana, J.
1. CRP No. 4381/2003 had been preferred as against an order in I.A. No. 244/2001 in O.S. No. 517/99 on the file of VIII Additional Chief Judge, City Civil Court, Hyderabad and CRP No. 4383/2003 as against an order in I.A. No. 243/2001 in O.S.No. 517/99. These applications were moved by Defendants 1 and 2 in the suit under Order 37 Rule 3 of the Code of Civil Procedure, hereinafter in short referred to as “Code” praying to grant leave to them to defend the suit O.S. No. 517/99 on the file of VIII Additional Chief Judge, City Civil Court, Hyderabad. The learned Judge by order dated 18-8-2003 allowed the aforesaid applications on condition of the petitioners depositing a sum of Rs. 10 lakhs, subject to the result of the suit, in Civil Court on or before 2-9-2003 along with their written statements and on failure to comply with the said conditions, the petitions shall stand dismissed. Aggrieved by the imposition of the condition instead of granting unconditional leave to defend, the petitioners had preferred the present civil revision petitions.
2. Sri Sudershan Reddy, the learned Counsel representing the petitioners in these Civil Revision Petitions had straight away pointed out that the learned Judge having specifically observed that there is a serious question as to law of limitation coupled with the fact of alleged acknowledgement by part payment and by acknowledgement in writing, definitely had erred in imposing the condition instead of granting unconditional leave. The learned Counsel had placed strong reliance on Raj Duggal v. Ramesh Kumar Bansal, , in this regard.
3. Sri CH. Ramesh Babu, the learned Counsel representing the respondent M/s. Nagarjuna Finance Limited, a Company incorporated under the Companies Act, 1956, submitted that as can be seen from the respective affidavits filed in support of the applications filed, it is clear that this plea of limitation is raised only as a vague plea just to have a contest and nothing more. The learned Counsel also commented that there are several transactions between the parties and the defence that the alleged payment of Rs. 10 lakhs on 30-11-1996 would not save the period of limitation is just a sham or an illusory defence and most probably in the light of the peculiar facts, the learned Judge had just exercised discretion in a particular way and had directed deposit of a sum of Rs. 10 lakhs subject to the result of the suit. The Counsel also pointed out that the suit itself is instituted for recovery of Rs. 92,91,000/-together with future interest and costs and the suit is instituted on the strength of a promissory note dated 24-12-1992 and cheques dated 15-3-1995 and 15-6-1995 and a deed of guarantee dated 27-12-1994 executed by 2nd defendant and on the basis of a part payment of Rs. 10 lakhs on 30-11-1996 with a covering letter dated 29-12-1996, the learned Counsel also pointed out that the suit in fact was instituted after issuance of notice and no reply was given thereto and this aspect also may have to be taken into consideration. The learned Counsel placed strong reliance on Thota Kanakadurga Varaprasad Rao v. Madapati Chandra Sekhara Reddi, , and also State Bank of Saurashtra v. Ashit Shipping Services (P) Limited, 2002 (3) ALD 83 (SC), in this regard. While concluding, the learned Counsel in all fairness submitted that these are all discretionary orders and the learned Judge exercised the discretion in a particular way which need not be disturbed by this Court.
4. Heard both the Counsel and perused the material available on record.
5. The Common Order made in I.A. Nos. 243/2001 and 244/2001 in O.S. No. 517/ 99 dated 18-8-2003 by the VIII Additional Chief Judge, City Civil Court, Hyderabad is impugned in these two Civil Revision Petitions. As can be seen from the respective affidavits filed in support of the applications, the stand taken by the revision petitioners is that the loan had been contracted, but however agreed interest alone had been denied. The allegation of payment of Rs. 10 lakhs on 30-11-1996 had been denied and specific stand was taken that the suit is barred by limitation. No doubt, the learned Judge had arrived at a conclusion that in view of the denial of part payment of Rs. 10 lakhs on 30-11-1996 and the covering letter on 29-12-1996, serious question as to law of limitation and also alleged acknowledgement by part payment and acknowledgement in writing would arise and there is a triable issue and it is not a sham plea taken to prolong the proceedings. The contention advanced by the Counsel for the revision petitioner is that having observed so the learned Judge had definitely gone wrong in granting relief conditionally instead of granting unconditional leave. In the decision referred Raj Duggal v. Ramesh Kumar Bansal (supra), the Apex Court had observed that where a triable issue arises in a case, leave to defend has to be granted. In Santosh Kumar v. Bhai Mool Singh, , the Apex Court held:
“Though the Court is given a discretion by Order 37 Rule 3(2) it must be exercised along judicial lines, and that in turn means, in consonance with the principles of natural justice that form the foundations of our laws. Those principles, so far as they touch the matter, are well known. Wherever the defence raises a “triable issue”, leave must be given, and when that is the case it must be given unconditionally, otherwise the leave may be illusory. If the Court is of opinion that the defence is not bona fide, then it can impose conditions and is not tied down to refusing leave to defend.”
In Mechelec Engineers and Manufacturers v. Basic Equipment Corporation, , the Apex Court had followed the decision in Kiranmoyee Dassi v. J. Chatterjee, AIR 1949 Cal. 479 = ILR (1945) 2 Cal 145-49 CWN 246, and at Para-8 of the judgment the propositions laid down by the Calcutta High Court had been specified which are as hereunder:
(a) If the defendant satisfies the Court that he has a good defence to the claim on its merits the plaintiff is not entitled to leave to sign judgment and the defendant is entitled to unconditional leave to defend.
(b) If the defendant raises a triable issue indicating that he has a fair or bona fide or reasonable defence although not a positively good defence the plaintiff is not entitled to sign judgment and the defendant is entitled to unconditional leave to defend.
(c) If the defendant discloses such facts as may be deemed sufficient to entitle him to defend, that is to say, although the affidavit does not positively and immediately make it clear that he has a defence, yet, shows such a state of facts as leads to the inference that at the trial of the action he may be able to establish a defence to the plaintiff’s claim the plaintiff is not entitled to judgment and the defendant is entitled to leave to defend but in such a case the Court may in its discretion impose conditions as to the time or mode of trial but not as to payment into Court or furnishing security.
(d) If the defendant has no defence or the defence set up is illusory or sham or practically moonshine then ordinarily the plaintiff is entitled to leave to sign judgment and the defendant is rot entitled to leave to defend.
(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 to the 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.”
Reliance also was placed on K.I. Patel v. G.C. Patel, and also Fateh Lal v. Sunder Lal, .
6. It is no doubt true that the question of limitation always necessarily need not be considered to be a pure question of law. It can be a mixed question of fact and law as well. It is also true that in the present matter, the learned Judge had observed that the question of limitation is a triable issue. It is pertinent to note that the denial of part payment prima facie appears to be with a view to raise the defence of limitation as a question falling under “triable issue”. In K.S. Meenakshi Ammal v. M. Subbalakshmi Ammal, , while dealing with the aspect held that though defendant had not raised any triable issue, the Court can still grant leave to defend on condition of the defendant depositing in Court the amount claimed in the suit. It was further held :
“In a suit to recover money on the basis of a pronote leave to defend the suit can be granted by the Court even if no substantial defence or triable issue is raised by the defendant and the defence is practically illusory. But in such cases while granting leave to defend the Court can impose a condition to sufficiently safeguard the interest of the plaintiff by calling upon the defendant to pay into Court the amount claimed in the suit or furnish security for the same. When the Court grants leave to defend that right cannot be made illusory by imposing condition which cannot be performed by the defendant. Therefore, where the Trial Court granted leave to defend even though no triable issue was raised on condition of defendant depositing in Court the entire sum of Rs. 95,000/- claimed in the suit on the basis of the pronote in order to protect the interests of the plaintiff, the High Court being of the view that the defendant may not be in a position to deposit the entire sum and would not be able to avail of the opportunity to defend given by the Trial Court directed the defendant to deposit half the amount claimed in the suit as that would sufficiently safeguard the interests of the plaintiff.”
Order 37 Rule 3(5) of the Code specifies as hereunder :
“The defendant may, at any time within ten days from the service of such summons for judgment, by affidavit or otherwise disclosing such facts as may be deemed sufficient to entitle him to defend, apply on such summons for leave to defend such suit, and leave to defend may be granted to him unconditionally or upon such terms as may appear to the Court or Judge to be just:
Provided that leave to defend shall not be refused unless the Court is satisfied that the facts disclosed by the defendant do not indicate that he has a substantial defence to raise or that the defence intended to be put up by the defendant is frivolous or vexatious:
Provided further that, where a part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit shall not be granted unless the amount so admitted to be due is deposited by the defendant in Court.”
In the said Rule 3(5) of Order 37 of the Code, the words “…..leave to defend may be granted to him unconditionally or upon such terms as may appear to the Court or Judge to be just” assume some importance. Similarly, in the first proviso of the said rule, the words “….has a substantial defence to raise,…….” also may have to be read carefully along with the words “………upon such terms as may appear to the Court or Judge to be just” appearing in the sub-rule. The second proviso of the said rule specifies that where a part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit shall not be granted unless the amount so admitted to be due is deposited by the defendant in Court.
7. It is pertinent to note that prior to the institution of the suit, notice had been given and it is not in controversy that no reply thereto had been issued. This aspect also can be taken as a circumstance relating to the nature of defence which is being putforth by the petitioners. In the decision referred Thota Kanakadurga Varaprasad Rao v. Madapati Chandra Sekhara Reddi (supra), where a suit was filed as a summary suit for recovery of amount due under a promissory note and application for leave to defend was filed and the same was dismissed on the ground that the defendant did not reply the suit notice, this Court held that such an order need not be disturbed in revision. In the decision referred Bank of Saurashtra v. Ashit Shipping Services (P) Limited (supra), the Apex Court held that in a summary trial under Order 37 of the Code where the question is whether the suit document is a guarantee bond or indemnity bond, leave has to be granted. It is no doubt true that when a reply is not issued, in all cases it cannot be taken that the suit claim had been admitted, but this aspect also may be taken into consideration as one of the aspects while exercising discretion in a particular way, especially while trying suits under Order 37 of the Code. Mere denial of the part payment as reflected from the respective affidavits filed in support of the applications, in my considered opinion, appears to be only with a view to raise the question of limitation for the purpose of contesting the matter and nothing more especially in the light of the peculiar facts and circumstances. While canvassing this question, the learned Counsel for the revision petitioners also had been submitting that whether the payment made on a later date would save the limitation or not, and whether the party who made the payment is competent to represent the party who is expected to make the payment, are contentions which may have to be tried by the learned Judge while trying the summary suit in question.
It is no doubt true that normally when the Court arrives at a conclusion that there is a triable issue, unconditional leave has to be granted. But, definitely there may be certain exceptional cases where the Court is satisfied that a vague plea in a half hearted way had been taken and prima facie the Court is satisfied that there is no substantial defence and virtually the claim is otherwise admitted. I am therefore of the considered opinion that definitely the Court can exercise the discretion of issuing suitable directions of making deposit of certain amounts in this regard.
8. Evidently, in the light of the fact that a notice had been issued even prior to the institution of the suit to which there was no reply and also in the light of the fact that part payment made which should be taken advantage by the petitioners for the purpose of deducting the suit claim, taking a stand denying the said part payment would definitely go to show that though the same is put under the head of triable issue – question of limitation, I am thoroughly satisfied that it is not such a clear or a specific plea and taking the over all facts and circumstances into consideration the learned Judge had made an order to make the deposit of amounts specified in the operative portion of the order impugned. In view of the peculiar facts and circumstances, I do not see any illegality warranting interference with the order impugned.
9. Hence, the civil revision petitions shall stand dismissed being devoid of merit. However, since the date for making deposit of the amounts directed by the Court below had lapsed, the revision petitioners/defendants are given two months time from today to comply with the direction made by the learned Judge relating to deposit of the amounts. It is needless to say that the suit being a summary suit, after expiry of the two months time granted for making deposit, immediately subsequent thereto the learned Judge shall make an endeavour to dispose of the matter within a period of three months thereafter. It is also needless to say that the petitioners/defendants are expected to file their written statements and proceed with the matter without asking for any further adjournments in this regard. No order as to costs.