M/s. Gujarat Lease Financing Ltd. Vs. M/s. Abdulla Akbarali & Co. & Ors.
EmailAppeal: Civil Appeal Nos. 115-116 of 2002
(Arising out of S.L.P. (C) Nos. 720-721 of 2001)
(Arising out of S.L.P. (C) Nos. 720-721 of 2001)
Petitioner: M/s. Gujarat Lease Financing Ltd.
Respondent: M/s. Abdulla Akbarali & Co. & Ors.
Apeal: Civil Appeal Nos. 115-116 of 2002
(Arising out of S.L.P. (C) Nos. 720-721 of 2001)
(Arising out of S.L.P. (C) Nos. 720-721 of 2001)
Judges: B.N. KIRPAL, K.G. BALAKRISHNAN & ARIJIT PASAYAT, JJ.
Date of Judgment: Jan 09, 2002
Head Note:
CIVIL LAW
Civil Procedure Code, 1908
Order 37, rule 3(5) – Leave to defend – Grant of unconditional leave to defend – Loan obtained – Shares of a company purchased – Said company becoming sick – Injunction granted to debar the defendants from transfering shares – Leave granted on that ground – Loan amount not payable by company. Held that grant of injunction was no ground to grant unconditional leave. There was no triable issue. Orders set aside. (Para 4)
JUDGEMENT:
ORDER
1. Special leave granted.
2. In the instant case, the appellant had filed a suit under order 37 CPC against the respondents for recovery of money. As per the appellant, loan had been granted to the respondents and when they failed to repay the same, the suit had to be filed for recovery thereof along with interest on the principal amount. The respondents filed an application for leave to defend. Curiously enough, the trial court granted unconditional leave by holding that an injunction had been issued, restraining the respondents from transferring the shares of M/s. Volvo Steels Ltd. and, therefore, that was a ground for granting unconditional leave. It may here be noticed that according to the respondents, the loan so obtained was used for purchasing the shares of M/s. Volvo Steels Ltd. It is stated by Mr. R.P. Bhatt, learned senior counsel for the respondents that the company-M/s. Volvo Steels Ltd. has become sick and is before the B.I.F.R. The shares of the said company are more or less of no value. The challenge to the order granting unconditional leave failed before the High Court. Hence, these appeals.
3. It was sought to be contended in this Court that the loan was in effect given to M/s. Volvo Steels Ltd. and not to the three respondents in their individual capacity. On 29th November, 2001, order was passed directing to place on record the balance sheets of M/s. Volvo Steels Ltd. in order to ascertain whether in the said balance sheets, this amount was shown as due and payable by the company to the appellant herein.
4. Mr. Bhatt states that the balance sheets do not disclose such state of affairs. This being so, it is quite evident that the loan was taken by the respondents in their individual capacity. The mere fact that an injunction had been granted restraining the disposal of valueless shares of M/s. Volvo Steels Ltd. cannot be a reason for granting unconditional leave. There does not appear to be any triable issue and there was no occasion for the court to show any indulgence.
5. We, accordingly, allow these appeals, set aside the orders of the trial court and the High Court whereby unconditional leave has been granted. The trial court will now proceed in accordance with law.
6. No costs.
1. Special leave granted.
2. In the instant case, the appellant had filed a suit under order 37 CPC against the respondents for recovery of money. As per the appellant, loan had been granted to the respondents and when they failed to repay the same, the suit had to be filed for recovery thereof along with interest on the principal amount. The respondents filed an application for leave to defend. Curiously enough, the trial court granted unconditional leave by holding that an injunction had been issued, restraining the respondents from transferring the shares of M/s. Volvo Steels Ltd. and, therefore, that was a ground for granting unconditional leave. It may here be noticed that according to the respondents, the loan so obtained was used for purchasing the shares of M/s. Volvo Steels Ltd. It is stated by Mr. R.P. Bhatt, learned senior counsel for the respondents that the company-M/s. Volvo Steels Ltd. has become sick and is before the B.I.F.R. The shares of the said company are more or less of no value. The challenge to the order granting unconditional leave failed before the High Court. Hence, these appeals.
3. It was sought to be contended in this Court that the loan was in effect given to M/s. Volvo Steels Ltd. and not to the three respondents in their individual capacity. On 29th November, 2001, order was passed directing to place on record the balance sheets of M/s. Volvo Steels Ltd. in order to ascertain whether in the said balance sheets, this amount was shown as due and payable by the company to the appellant herein.
4. Mr. Bhatt states that the balance sheets do not disclose such state of affairs. This being so, it is quite evident that the loan was taken by the respondents in their individual capacity. The mere fact that an injunction had been granted restraining the disposal of valueless shares of M/s. Volvo Steels Ltd. cannot be a reason for granting unconditional leave. There does not appear to be any triable issue and there was no occasion for the court to show any indulgence.
5. We, accordingly, allow these appeals, set aside the orders of the trial court and the High Court whereby unconditional leave has been granted. The trial court will now proceed in accordance with law.
6. No costs.
