Conditional leave to defend in a summary suit was treated as appealable, while security for leave was upheld on the facts.

An order refusing leave to defend, or granting conditional leave in a summary suit where non-compliance leads to an immediate decree, affects a defendant's valuable right and was treated as a judgment appealable under Clause 15 of the Letters Patent. On the facts, the security condition was upheld because the defence did not disclose a bona fide dispute; the record showed separate accounts, admissions of liability, and no convincing basis to treat third-party payments as extinguishing the claim. The commentary also notes that the issue was left for consideration by a larger Bench in view of conflicting authorities.

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Issues: (i) Whether an order granting conditional leave to defend in a summary suit is appealable as a judgment under Clause 15 of the Letters Patent. (ii) Whether the order directing security for grant of leave to defend was justified on the facts.

Issue (i): Whether an order granting conditional leave to defend in a summary suit is appealable as a judgment under Clause 15 of the Letters Patent.

Analysis: The amended scheme of Order 37 was treated as materially similar to the procedure under Chapter XIIIA of the Original Side Rules, where conditional leave orders had been held appealable. The reasoning proceeded on the basis that an order refusing leave or granting conditional leave directly affects the defendant's valuable right to defend and, where non-compliance results in an immediate decree, the order bears the character of finality. Earlier Calcutta decisions taking the contrary view were considered in light of the later amendment and the broader tests for determining a judgment under Clause 15.

Conclusion: The order granting conditional leave to defend was held to be appealable under Clause 15 of the Letters Patent.

Issue (ii): Whether the order directing security for grant of leave to defend was justified on the facts.

Analysis: The defence was found not to disclose a bona fide dispute sufficient to unsettle the plaintiff's claim. The materials showed separate accounts, admissions of liability, and no convincing basis for treating payments to a third concern as extinguishing the respondent's claim. In those circumstances, imposing security as a condition for leave to defend was treated as a proper exercise of discretion.

Conclusion: The conditional order requiring security for leave to defend was upheld.

Final Conclusion: The challenge to the conditional leave order succeeded on the question of appealability, but the substantive direction imposing security was sustained, and the matter was left for consideration by a larger Bench on the conflict of authorities.

Ratio Decidendi: An order refusing leave to defend or granting leave subject to a condition that, on non-compliance, a decree follows immediately, affects a valuable right and is a judgment appealable under Clause 15 of the Letters Patent.

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