State Bank of Hyderabad Vs. Rabo Bank
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Head Note
The Code of Civil Procedure, 1908 - Order XXXVII Rule (3)
Summary Suit - Leave to Defend - Bill of exchange - Non-payment of proceeds - Material on record including the FIR registered by the CBI at the instance of Chief Vigilance Officer, SBH and also the Charge Sheet filed by the CBI indicated the involvement of Chief Manager of the appellant Bank - Charge sheet further alleges that these officers were not authorized to issue such co-acceptances and the motive behind their illegal and unauthorized action was to enable the constituent of the respondent to get their bills discounted by jeopardizing the interests of the appellant Bank - It is also on record that the trial of the said case was at the stage of evidence as on 13th November, 2014 - Held that there are certain triable issues for adjudication and the defendant/appellant is entitled to defend the Suit - Defendant/appellant has made out a prima facie case of triable issues in the Suit which needs to be adjudicated - Appellant/defendant entitled to defend the Suit and liable to be granted unconditional leave to defend the Summons for Judgment in Summary Suit.
The Code of Civil Procedure, 1908 - Order XXXVII Rule (3)
Summary Suit - Leave to Defend - Held that in cases where the defendant has raised a triable issue or a reasonable defence, the defendant is entitled to unconditional leave to defend - Leave is granted to defend even in cases where the defendant upon disclosing a fact, though lacks the defence but makes a positive impression that at the trial the defence would be established to the plaintiff's claim - Only in the cases where the defence set up is illusory or sham or practically moonshine, the plaintiff is entitled to leave to sign judgment.
The Code of Civil Procedure, 1908 - Order XXXVII Rule (3)
Summary Suit - Leave to Defend - Held that where the applicability of Order 37 itself is in question, grant of leave to defend may be permissible - Court before passing a decree is entitled to take into consideration the consequences therefor -Courts dealing with summary trials should act very carefully taking note of the interests of both the parties - Merely on the ground that the defendant may resort to prolonged litigation by putting forth untenable and frivolous defences, grant of leave to defend cannot be declined - At the same time, the Court must ensure that the defendant raises a real issue and not a sham one - Court cannot reject the defence on the ground of implausibility or inconsistency.
Topic(s)-Summary Suit - Leave to Defend granted