Defendant granted conditional leave to defend suit under Order XXXVII

The court granted the defendant conditional leave to defend the suit under Order XXXVII of the Code of Civil Procedure, 1908. The defendant acknowledged liability for refunding a specific amount, supported by admissions in affidavits and balance-sheet. The court highlighted the significance of admissions in pleadings and granted the defendant the opportunity to defend upon depositing the refund amount within a specified period. Failure to comply would allow the plaintiffs to seek an ex-parte decree.

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Issues Involved:
1. Maintainability of the suit under Order XXXVII of the Code of Civil Procedure, 1908.
2. Alleged acknowledgment of liability by the defendant.
3. Discrepancy between the claims made before NCLT and in the present suit.
4. Entitlement to refund and interest claimed by the plaintiffs.
5. Conditional leave to defend the suit.

Detailed Analysis:

1. Maintainability of the Suit:
The defendant contended that the suit is not maintainable under Order XXXVII of the Code of Civil Procedure, 1908, as it is not based on a written contract for refund or payment of interest. The defendant argued that the plaintiffs selectively interpreted the affidavits filed before NCLT, which allegedly acknowledged liability, warranting an unconditional leave to defend the suit.

2. Alleged Acknowledgment of Liability:
The plaintiffs argued that the defendant's affidavits before NCLT and the audited balance-sheet constituted clear admissions of liability. The defendant admitted to refunding the amount after deducting 25% and service tax, which was evidenced by the repayment of Rs.9,50,000/- through two cheques. The court highlighted that admissions in pleadings stand on a higher pedestal and can form the foundation of rights and liabilities.

3. Discrepancy in Claims:
The defendant pointed out that the plaintiffs' claims before NCLT were based on a "work contract," while the current suit was based on a sale of flats. This inconsistency, according to the defendant, warranted a trial. The court noted that while the plaintiffs' stand appeared materially variant, the pleadings as a whole indicated an acknowledgment of liability by the defendant.

4. Entitlement to Refund and Interest:
The plaintiffs claimed a full refund of the amount paid along with interest. The defendant contended that there was no agreement to pay interest and that the refund was conditional upon the plaintiffs executing a letter of cancellation. The court recognized that the entitlement to a full refund and interest raised triable issues, but the acknowledgment of liability to refund Rs.5,107,767/- was clear from the defendant's own admissions.

5. Conditional Leave to Defend:
Given the acknowledgment of liability, the court granted the defendant leave to defend the suit on the condition of depositing Rs.5,107,767/- within six weeks. If the deposit was made, the suit would proceed to trial, and the defendant would file a written statement. Failure to deposit would entitle the plaintiffs to apply for an ex-parte decree.

Conclusion:
The court balanced the plaintiffs' claims and the defendant's defenses, ultimately granting conditional leave to defend the suit based on the acknowledged liability. The order emphasized the importance of admissions in pleadings and the sanctity of audited balance-sheets in establishing liability.

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