MUSLIM COMMERCIAL BANK LTD. vs TAYAB SHARIF
This petition for special leave to appeal arose from an order of the High Court granting unconditional leave to defend a summary suit filed under Order XXXVII of the Code of Civil Procedure 1908. The petitioner-Bank sought recovery of Rs. 64,986.72 based on a promissory note. The respondent had successfully argued before the High Court that the loan was secured by a pledge of goods, specifically bills of lading and insurance policies, and that the Bank had cleared these goods at the destination port but failed to account for them or credit their value against the debt. The core legal question was whether the High Court erred in granting unconditional leave to defend rather than imposing conditions such as depositing the suit amount or furnishing security. The Supreme Court dismissed the petition, holding that the High Court exercised its discretion reasonably. The Court affirmed that where a defendant raises a bona fide triable issue regarding the satisfaction of the debt, granting unconditional leave to defend is justified, as the imposition of conditions remains a matter of judicial discretion based on the specific facts and circumstances of the case.
- Is the grant of unconditional leave to defend in a summary suit a matter of judicial discretion?
- Does a claim that a debt has been satisfied by the creditor's possession of pledged goods constitute a bona fide triable issue?
- Can a court grant unconditional leave to defend a suit based on a promissory note if the defendant alleges the debt was satisfied through other means?
- Order XXXVII, Code of Civil Procedure 1908
1. ' HAMOODUR RAHMAN, C. J.-This is a petition for special leave to appeal from an order of a learned Single Judge of the Sind & Baluchistan High Court granting unconditional leave to defend in a suit under Order XXXVII, C. P. C. For the recovery of Rs, 64,986.72 on the basis of a promissory note.
2. ' In this case, the grounds on which leave to defend was sought was that the money was not advanced on the personal security of the drawer of the promissory-note but on the pledge of goods by delivery to the petitioner-Bank of the documents of title to the goods, namely, bills of lading and insurance policies in the name of the petitioner-Bank ; that the goods covered by these documents were far in excess of the advances made and that the goods bad actually been cleared by the plaintiff-Bank at the port of destination which was Chittagong. It was the bank that had thereafter failed to account for the goods to the petitioner or to give credit for the price of the goods to the respondent.
3. On this plea the High Court thought that prima facie, a bona fide allegation of a triable issue had been raised and, therefore, the respondent was entitled to unconditional leave to defend.
4. ' The petitioner-Bank now seeks special leave to appeal and it has been contended on its behalf that in a suit under Order XXXVII on the basis of a promissory-note, the respondent should have been granted leave to defend only on depositing the amount in Court or, at least, furnishing security for the claim.
5. We are unable to agree. This was eminently a fit case for grant leave and no just exception can be taken to the grant of leave to defend by the High Court. Whether conditions should have been imposed or not was in the discretion of the High Court and depended on the facts and circumstances of the case. The facts of this case if true, raised the plea of the debt being fully satisfied. In this view of the matter the grant of unconditional leave cannot be said to be unjustified or unreasonable.
6. ' This petition is, accordingly, dismissed.
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