Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | r.3 (unamended and as amended in 1976) - Summary Suit - Principles for grant of leave to defend - Change in law pre & post-amendment Code of Civil Procedure 1908: Or. XXXVII |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Allowed |
Headnote | Code of Civil Procedure, 1908: Or. XXXVII, r.3 (unamended and as amended in 1976) - c Summary Suit - Principles for grant of leave to defend - Change in latt pre & post-amendment - Effect of the amendment on the ratio contained in Mec/1e/ec's case (pre-amendment) - Pre-amendment, there ll'as no compulsion for making any deposit as a condition precedent to grant of leave to defend a suit - Plea of defendant D that post-amendment the only change in law was that deposit of any admitted amount was now a condition precedent for grant of leave to defend - However, plaintiff pleaded that post-amendment even if the Court thinks that a triable issue is raised by defendant, the plaintiff ought to be secured in monetary terms as a condition for leave to defend - Held: 01: XXXVII has suffered a change in E 1976, and that change has made a difference in the law laid down in Meclte/ec's case (pre-amendment) - The position in !all' now is that the trial Judge is vested with a discretion which has to result in iustice being done on the facts of each case - Thus, post-amendment even if the defendant raises triable issues, if a doubt is left with the F trial judge about the defendants good faith, or the genuineness of the triable issues, the trial judge may impose conditions both as to time or mode of trial, as well as payment into Court or fi1rnishing security - Further, Mecltelec's case (3 Judges) did not consider the binding decision of 4 judges in Milkltiram's case lt'hich is a direct authority on the amended provision in Or. XXXVIJ, r.3 - Therefore, G by virtue of amendment in law and the binding decision of four iudges in Milkltiram's case, principles stated in Mechelec's case governing 01: XXXVIl will noll' stand superseded.Or. XXXVIl, r.3 - Summary suit by appellant - Grant of unconditional leave to defend the suit, to respondent - Propriety of- FMO, a Dutch company invested in 'V' (subsidiary of defendant) - 'V' invested said money in OPCDs (Optionally Partially Convertible Debentures) issued by 'A' & 'R' - Debenture Trust Deed executed in relation to this investment - Plaintiff appointed as Debenture Trustee under the Debenture Trust Deed - Defendant issued an unconditional, irrevocable Corporate Guarantee in favour of plaintiff on behalf of 'V' - Default in payments - Corporate Guarantee invoked - Summary suit by plaintiff to enforce its rights arising out of said Corporate Guarantee - Defendant alleged that the amount invested by 'V' in OPCDs issued by 'A' & 'R' was to circumvent FEMA Regulations and thus, the Corporate Guarantee was part of a larger illegal transaction - High Court allowed unconditional leave to defend holding that defendant raised a triable issue - On appeal, held: The suit was filed only on invocation of Corporate Guarantee and it is not the defendant :S case that the said Guarantee was wrongly invoked - Even if a triable issue may be said to arise on the application of FEMA Regulations, nevertheless, there is a real doubt about the defendants good faith and the genuineness of such a triable issue - Therefore, it cannot be said that the defendant raised a substantial defence to the claim made in the suit - Rather the defence raised appears to be in the realm of being 'plausible but improbable' - This being the case, the plaintiff needs to be protected - Defendant to be granted leave to defend the suit only if it deposits the principal sum invested by FMO, or gives security for the said amount - Impugned judgment set aside - Suit to be tried expeditiously by High Court - FEMA Regulations - regns. 4 & 5. |
Judge | Hon'ble Mr. Justice R.F. Nariman |
Neutral Citation | 2016 INSC 1027 |
Petitioner | Idbi Trusteeship Services Ltd. |
Respondent | Hubtown Ltd. |
SCR | [2016] 11 S.C.R. 660 |
Judgement Date | 2016-11-15 |
Case Number | 10860 |
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