Law:

Section:

(a) Civil Procedure Code (V of 1908)--O.XXXVII, R.3(2)---Grant of leave to defend suit---Discretion of Court--­Scope---Record showed that borrower did not dispute execution of cheques issued in favour of loanee but expressed that said cheques were not intended to be encashed/honoured---Initial order conditionally granting leave to defend the suit on furnishing Bank guarantee passed by Trial Court did not suffer from any material defect in circumstances. Order XXXVII, Rule 3(2), C.P.C. enjoins upon the Court reasonable discretion for granting permission to defend on such terms as deemed fit in circumstances of each case. Record clearly discloses that borrower without disputing execution of cheques issued in favour of lender had expressed that same were not intended to be encashed/honoured. Therefore, on proper scrutiny of all the aspects relating to claim in suit, initial order conditionally granting leave to defend the proceedings passed by Trial Court, did not suffer from any material defect. Mian Rafique Saigal and another v. Bank of Credit and Commerce International (Overseas) Ltd. and another PLD 1996 SC 749 ref. (b) Civil Procedure Code (V of 1908)--­ ----O. XXXVII, Rr. 2(2) & 3---Failure of defendant to appear or to obtain leave to defend suit or to fulfil conditions on which leave was granted and the Court refuses to grant leave---Consequences---Duty of Court---Where the defendant had failed to fulfil conditions specified in conditional order granting leave to defend suit, Trial Court was justified in passing the decree against the defendant. If a defendant fails appear is to obtain leave to defend in response to a summon served in Form No.4 provided in Appendix B to the C.P.C. or fails to fulfil the condition on which leave was granted or where the Court refuses to grant leave, the Court is to pass a decree in terms of sub­rule (2) of Rule 2, of Order XXXVI, C.P.C., it has been provided if a defendant fails to appear or defaults in obtaining leave, the allegations in the plaint shall be deemed to be admitted and the plaintiff shall be entitled to a decree, but no such consequences are provided for in Rule 3 of the above Order in a case where the…

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