TaxTMI 
TaxTMI 
2019 (7) TMI 818
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....Rule 5 of Rule 3 of Order XXXVII of the Code, the condition for deposit of Rs. 30,00,000/could not have been ordered in absence of any admissible dues. The fact that there may have been a commercial transaction between the parties in the past, cannot ipso facto be construed as an admission of debt merely because the respondent may have so claimed in the suit. The respondent had unconditionally withdrawn the prosecution instituted by him earlier under Section 138 of Negotiable Instruments Act (hereinafter referred to as "the Act"), for the same dues. All legitimate dues have been paid. The defective goods were returned, the balance of five lacs was also paid, and the accounts cleared, after which no further transactions had taken place betwe....
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....Section 138 read with Section 142 of the Act lodged for Rs. 34,24,633/on 30.04.2014 with regard to the former instrument and on 01.08.2014 with regard to the latter instrument. Different dates have been mentioned in different documents placed before us. 6. While the prosecution under the Act was pending, the respondent instituted the present summary suit on 24.11.2015 for a cumulative sum of Rs. 36,13,410/, being the total amount of two dishonored instruments, with an additional claim for Rs. 28,05,199/as interest at the rate of 18% per annum amounting to a total of Rs. 64,18,609/. The Suit expressly referred to the pendency of the prosecution under the Act. 7. In Summons for Judgment No. 105 of 2016 dated 16.03.2016, in the summary sui....
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....gh Court acknowledged that there was no admission by appellant about its liability to repay any amount, but because the appellant had not disputed a commercial relationship and purchase of goods from the respondent, and in absence of any material to show sufficient payment, the order for conditional leave to defend required no interference. 10. Order XXXVII, Rule 3 of the Code dealing with the procedure for summary suit, in the relevant extract provides as follows: "3. Procedure for the appearance of defendant XXXXX (4) if the defendant enters an appearance, the plaintiff shall thereafter serve on the defendant a summons for judgement in Form No. 4A in Appendix B or such other Form as may be prescribed from time to time, returnab....
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....s not considered a sham or moonshine, but yet leaving certain doubts in the mind of the court, it may grant conditional leave to defend. In contradistinction to the earlier subjective satisfaction of the court, in the latter case there is an element of discretion vested in the court. Such discretion is not absolute but has to be judiciously exercised tempered with what is just and proper in the facts of a particular case. The ultimate object of a summary suit is expeditious disposal of a commercial dispute. The discretion vested in the court therefore requires it to maintain the delicate balance between the respective rights and contentions by not passing an order which may ultimately end up impeding the speedy resolution of the dispute. ....
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....is not defeated. Care must also be taken to see that such triable issues are not shut out by unduly severe orders as to deposit or security. 17.4. If the defendant raises a defence which is plausible but improbable, the trial Judge may impose conditions as to time or mode of trial, as well as payment into court, or furnishing security. As such a defence does not raise triable issues, conditions as to deposit or security or both can extend to the entire principal sum together with such interest as the court feels the justice of the case requires. 17.5. If the defendant has no substantial defence and/or raises no genuine triable issues, and the court finds such defence to be frivolous or vexatious, then leave to defend the suit shall be....
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.... was a more efficacious remedy for recovery of any specified amount of a dishonoured instrument raising a presumption against the drawer, as in a summary suit the possibility of leave to defend could not be completely ruled out, in which case the recovery gets delayed and protracted. 15. Significantly on 29.10.2015, in the prosecution instituted by the respondent under the Act, the court required the respondent to file certain additional documents because the appellant denied the existence of any legal liability for any sum due. It is only thereafter that the Summary Suit was instituted on 24.11.2015. The prosecution under the Act was subsequently unconditionally withdrawn on 14.12.2015. These facts are not in dispute and are clearly disc....