Bombay High Court Grants Unconditional Leave to Defend in Summary Suit Case

Conditional order requiring deposit of 50% claim amount quashed; court emphasizes leniency and pragmatic approach.

Nagpur, October 16, 2025 - In a significant ruling, the Nagpur Bench of the Bombay High Court quashed a trial court's order that imposed a condition on defendants to deposit 50% of the claim amount for leave to defend in a summary suit. The order was delivered by Justice Prafulla S. Khubalkar in the case of Sanjay Mahadeoprasad Trivedi and others versus Housing Development Finance Corporation Bank Limited.

The case stemmed from a dispute over a loan sanctioned by the respondent bank to the petitioners for purchasing a rowhouse from Sahara Prime City. The project faced severe setbacks, leaving the rowhouses unconstructed and the petitioners embroiled in legal battles. The bank had filed a summary suit for recovery of the loan amount based on a home loan agreement and promissory note, while the petitioners sought leave to defend under Order XXXVII Rule 3 of the Civil Procedure Code, 1908.

The trial court initially granted conditional leave to defend, demanding a deposit of 50% of the claim amount. However, the petitioners challenged this decision, arguing that they had raised triable issues and bona fide defenses, entitling them to unconditional leave.

Justice Khubalkar, upon reviewing the facts and legal arguments, emphasized that once defendants raise triable issues or a bona fide defense, they are entitled to unconditional leave to defend. The imposition of conditions must be based on rational criteria, favoring leniency and a pragmatic approach over harshness. The court found that the petitioners had indeed raised substantial issues, including the validity of the equitable mortgage and the non-joinder of necessary parties, which required adjudication.

In delivering the judgment, Justice Khubalkar referred to precedents, including the Supreme Court's ruling in B.L. Kashyap and Sons Limited v. JMS Steels and Power Corporation, which underscores that denial of leave to defend is an exception, not the rule, in cases presenting triable issues.

The court concluded that the petitioners were entitled to unconditional leave to defend, setting aside the trial court's condition of depositing 50% of the claim amount. This decision reinforces the judiciary's commitment to ensuring fairness and justice in the adjudication of summary suits.

The ruling is expected to have significant implications for similar cases, offering clarity on the principles governing conditional leave to defend in summary suits.

Bottom Line:

Conditional leave to defend in a summary suit under Order 37 CPC cannot be imposed if the defendants raise triable issues or demonstrate a bona fide and substantial defence.

Statutory provision(s): Civil Procedure Code, 1908 Order 37 Rule 3, Transfer of Property Act, 1882 Section 58(f)

Sanjay Mahadeoprasad Trivedi v. Housing Development Finance Corporation Bank Limited, (Bombay)(Nagpur Bench) : Law Finder Doc Id # 2799933