2023 CLC 880...


The authority to grant leave to contest such suit, unconditionally or subject to terms as to the payment in the Court, or security is conferred upon the learned trial Court, by Order XXXVII, Rule 3(2) of the Code.


A reading of Order XXXVII, Rule 3(2) of the Code clearly reflects that imposing a condition of security or payment into the Court or granting unconditional leave is within the discretion of the learned trial Court, which is required to be exercised keeping in view the facts and circumstances of each case. Sub-Rule (1) of Rule (3) above, provides that defender of the suit, based on instruments mentioned in Order XXXVII, upon affidavit is required to disclose such facts that would make it incumbent on the holder to prove consideration or such other facts which are sufficient to support his contention in the application for leave. Combined reading of sub-rule (1) and sub-rule (2) the Order suggests that leading factor, when considering the question as to grant of leave, on condition or without imposing condition, is the quality of the defense and the plausibility of facts on the basis of which challenge is raised to the claim in the suit or consideration of the instrument involved.  


An analysis of judicial precedents reflects that the Courts have considered it undesirable, and indeed impossible, to settle down any hard and fast rule in the matters that affect discretion of the trial Court, however, it is also deemed imperative to understand the reason of a special procedure provided in Order XXXVII of the Code and the discretion conferred therein. One of the main objects of having this procedure is to ensure restricting the defender from unduly prolonging the litigation, based on negotiable instrument, by raising untenable and frivolous defense, which is undesirable in the interest of trade and commerce. To achieve this purpose, the learned Courts have been empowered to impose condition(s) to prevent the defenders from derailing desirable speedy trial or to evade the liability by further prolonging the execution of the decree.      When leave application is based on merely bald and vague allegations or baseless defense, having no plausibility, the defender is not even entitled to the grant of conditional leave...