115-NLR-NLR-V-66-VALLIAPPA-CHETTIAR-Appellant-and-VISUVANATHAN-Respondent.pdf
WEERASOORIYA, J.—Valliappa Chettiar v. Visuvanathan
481
1961Present: Weerasooriya, J., and H. N. G. Fernando, J.VALLIAPPA CHETTIAR, Appellant, and VISUVANATHAN,
Respondent
S. G. 92 (Inty.) with S. G. 409 (F)—D. G. Chavakackcheri, 1767
Liquid claim—Summary procedure—Prima facie defence as regards a part only ofclaim—Appropriate order as to leave to appear and defend—Civil ProcedureCode, s. 704 (2).
In an action by way of summary procedure for the recovery of Ra. 25,200upon three cheques X, Y and Z, each for Rs. 8,400, the defendant applied forleave to appear and defond unconditionally. There was no admission of anyliability by the defendant. The Court was of opinion that the defendanthad no prima facie defence in respect of cheques X and Y but that the defencein respect of chequo Z was prima facie sustainable.
Held, that the defendant should be allowed to file answer unconditionallyas against the claim on cheque Z only. In respect of the other two cheques,an order to give security as a condition of his being allowed to appear anddefend was valid. As the defendant failed to furnish security in respect ofthe claims on cheques X and Y, the entering up of the judgment for thoseclaims ,ihould be deferred until adjudication upon the claim on cheque Z.
Jssadeen & Co., Ltd. v. Wimalasuriya (62 N. L. K. 299) distinguished.
Appeal from a judgment of the District Court, Chavakachcheri.
G. Ranganathan, with S. G. Grossette-Thambiah, for defendant-appellant.
E. B. Wikramanayalce, Q.C., with S. Sharvananda, for plaintiff-respondent.
Cur. adv. vult.
September 22, 1961. Weerasooriya, J.—
This is an action by way of summary procedure for the recovery ofRs. 25,200 with legal interest and costs, on three causes of action basedon three cheques issued by the defendant-appellant in favour of theplaintiff-respondent, each for Rs. 8,400, and, filed with the plaint asX, Y and Z.
The appellant applied for leave to appear and defend the actionunconditionally. After inquiry the District Judge made order on the22nd June, 1959, permitting him to file answer only on his furnishing,
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WEERA900RTYA, J.—Valliappa Chettiar v. Visuvanathan
ozi or before the 21st July, 1959, security in Rs. 16,000 cash orRs. 20,000 in immovable property. Appeal No. 92 is the interlocutoryappeal filed by the appellant against this order. As he failed to furnishthe required security, judgment was subsequently entered against himas prayed for. Appeal No. 409 is from this judgment and the decreeentered in accordance therewith.
Section 704 (2) in Chapter LIII of the Civil Procedure Code providesthat the defendant “ shall not be required, as a condition of his beingallowed to appear and defend, to pay into court the sum mentioned inthe summons, or to give security therefor, unless the court thinks hisdefence not to be prima facie sustainable, or feels reasonable doubt asto its good faith.” The order of the learned District Judge dated the22nd J une, 1959, appears to have proceeded on the basis that the appellanthad no prima facie sustainable defence on the first and second causesof action, which are based on cheques X and Y. In our opinion, too, noprima facie sustainable defence is disclosed on these causes of action.
Cheque Z has been specially indorsed by the plaintiff in favour of acompai.y styled The United Tractor and Equipment, Ltd., which isnot a party to this action. One of the defences taken to the claim ontins cheque is that the United Tractor and Equipment, Ltd., as theindorsee to whom or whose order the cheque is payable, is the “ holder ”thereof as defined in section 2 of the Bills of Exchange Ordinance (Cap.68) and, therefore, the proper party to sue on it, and not the plaintiff.As there is no averment in the plaint or in the supporting affidavit filedby the plaintiff that, subsequent to the indorsement, the United *Tractorand Equipment, Ltd. had transferred back the cheque to the plaintifffor value, we were not inclined to hold that this defence is not primafacie sustainable, and the only point on whioh we leserved our judgmentwas as to the appropriate order that should be made under ChapterLIII of the Civil Procedure Code. Mr. Ranganathan for the appellant,relying on the case of Issadeen & Co., Ltd. v. Wimalanuriya1, contendedthat his client should have been given leave to appear and defend theaction unconditionally. The defendant in that case admitted liabilityin a sum of Rs. 7,600 out of a claim for Rs. 20,000. He sought leave-to defend the action only as regards the balance of the claim. Althoughthe District Judge did not consider as lacking in good faith the defencethat not more than Rs. 6,700 was due, he ordered the defendant to givesecurity in that sum as a condition of his being allowed to appear anddefend the action. This Court held that the defendant should beallowed to file answer without giving any socruity. The answer whichthe defendant was allowed to file would necessarily have been limitedto so much of the claim as was hi dispute. In my judgment in thatcase, in referring to the absence of any provision in Chapter LIII (unlike
1{196G) 62N.L. B. 299.
WEER ASOORITA, J.—Vatliappa Chettiar v. Visuvanathan
483
in English law) enabling judgment to ho given in favour of the plaintifffor a part of his claim which is admitted and the defendant allowed todefend as to the residue of it, I stated as follows : “ But, in my opinion,this does not mean that where, as against a part of the claim, a primafacie sustainable defence is disclosed, the good faith of which is not indoubt, the defendant should be ordered to deposit the sum which isadmitted to be due, or give security in respect of it, as a conditionprecedent to his filing answer. As pointed out by Mr. Ranganathan,such an order would virtually prevent the defendant from defendinghimself unconditionally, as he is entitled to do under section 704 (2),against that part of the claim in respect of which he has a prima faciesustainable defence.”
The above observations do not, however, fully apply to the presentcase since there is no admission of any liability by the appellant, and whathe seeks to obtain is leave to appear and defend the action in its entirety.The present case is, therefore, distinguishable from that of Issadeen &Co., Ltd. v. Wimalasuriya (supra). As the appellant has no prima faciesustainable defence on the first and second causes of action he wouldnot be entitled to file answer as against the claims on cheques X and Yexcept on his paying into Court the sum of Rs 16 800 or giving securitytherefor. The order of the District Judge requiring him to give securityin Rs. 16,000 was, in this respect, more favourable to him. The onlyground of complaint which the appellant can have is that on his failingto furnish the security ordered, judgment was entered against himeven on the third cause of action, in regard to which he would appearto have a prima facie sustainable defence.
I would, therefore, set aside the judgment and decree appealed fromand send the case back to the District Court with a direction that theappellant be allowed tc file answer unconditionally as against the claimon cheque Z, which forms the subject of the third cause of action. Asthe appellant failed to furnish security in terms of the order of the DistrictJudge dated the 22:ul June, 1959, the plaintiff will in any event beentitled to judgment for the sums claimed on the first and second causesof action. The entering up of such iu lgment will however be deferredtill an adjudication has been given in regard to the claim on the thirdcause of action.
I think that in all the circumstances there should be no order asregards costs.
H. N. G. Fernando. J.—I agree.
Case sent bach for further proceedings.