A Single Bench of Justice Javed Iqbal Wani has held that on failure of defendant to comply with the condition upon which the leave to defend in a suit under Order XXXVII CPC was granted, a court has power to pass the decree forthwith in favor of Plaintiff.

The Trial Court had in a summary suit filed under Order XXXVII CPC granted  a conditional Leave to defend requiring the defendants to deposit 10% of the amount in question before the court, which amount, however, was not deposited by the defendants/appellants, as a consequence whereof the trial court passed the judgment and decree in favor of plaintiff. The said judgment and decree was challenged in an appeal.

The Counsel for the Appellants argued that the decree is bad in law on the ground that the trial court while granting leave to defend in terms of said order opined that the defendants/appellants have averred that there are triable issues involved in the case yet granted conditional leave to the defendants/appellants, non- fulfilment of which condition could not have weighed with the trial court to proceed further in the suit and pass the impugned judgment and decree.

Learned counsel for the respondent/plaintiff arguedthat the issue qua the grant of conditional leave by the trial court to the defendants appellants herein in terms of said order was never called in question by the defendants appellants herein and the same assumed finality, as such the defendants/appellants herein are precluded in law from raising any issue qua the validity of the said conditional leave. 

The Court while analysing the scope of Order XXXVII CPC observed that the underlying public policy behind Order 37 CPC is expeditious disposal of suits of commercial nature. In this regard Order 37 CPC provides for such disposal as expeditiously as possible by prescribing timeframe therefor. 

The court further held that a bare reading of Sub-Rule (5) of Rule (3) of Order 37 supra would clearly indicate that leave to defend may be granted to a defendant in a suit filed under Order 37 CPC unconditionally or upon such terms as may appear to the court to be just, manifestly suggesting that discretion is left to the court to put the defendant on terms in the facts and circumstances of a particular case on compliance whereof the defendant is entitled to defend the suit. While relying upon various judgments of the Supreme Court in “MechelecEngineers and Manufacturers v. Basic Equipment Corporation reported in (1976) 4 SCC 687” , “M/S Sunil Enterprises and another v. Sbi Commercial and International Bank Ltd. reported in (1998) 4 SCC 354 and “Sify Limited v. First Flight Couriers Limited reported in (2008) 4 SCC 246” observed that that an imposition of the condition to deposit an amount in the court before proceeding further is justifiable and that grant of leave by a court under Order 37 CPC to the defendants to defend the case is discretionary in nature. 

The court while taking note of the fact that while the order of grant of leave to defend was never put to challenge observed that the same has attained finality and thus upon failure Of Defendant To Comply With The Conditions Upon Which The Leave to Defend Is Granted, A Court Trying A Suit Under Order 37 CPC is Within its Powers To Pass A Decree Under Rule (3) (6) of Order 37 CPC In Favour Of Plaintiff Forthwith.

The appeal was accordingly dismissed.