The Court held that the failure of the defendants to comply with the condition imposed while granting leave to defend within the stipulated period justified the trial court in decreeing the suit. The Court dismissed the Civil First Appeal, finding no perversity or illegality in the impugned judgment and decree.

The Court was hearing a Civil First Appeal preferred by the Union Territory of Jammu and Kashmir and others against the judgment and decree passed by the Additional District Judge (Bank Cases), Srinagar, in a summary suit. The trial court had decreed the suit in favour of the respondents for an amount of Rs. 57.23 lacs along with interest and costs, in terms of Order XXXVII of the Code of Civil Procedure.

The appeal was heard by Justice Moksha Khajuria Kazmi, who observed,

“Indisputably, the appellants failed to comply with the condition imposed by the learned trial Court vide order dated 21.12.2022, within the stipulated period. The deposit of the balance amount of Rs. 18,81,000/- on 25.07.2025, much after passing of the impugned judgment and decree dated 12.08.2023, cannot be construed as compliance with the direction retrospectively so as to revive the right to defend the suit.”

Background

The respondents/plaintiffs claimed to have executed electrical works at the MLA Hostel, Srinagar, to the tune of Rs. 37.82 lacs. The funds were stated to have been contributed by the Legislative Assembly Secretariat, J&K, and released in favour of the Directorate of Estates for meeting the expenditure incurred. It was stated that no public tenders were invited for the execution of the said works. The plaintiffs instituted a suit under Order XXXVII CPC seeking recovery of Rs. 57.32 lacs on account of the works allegedly executed by them.

The Estates Department filed an application seeking leave to defend the suit. The trial court, upon consideration of the rival submissions, allowed the application seeking leave to defend, subject to the appellants depositing an amount of Rs. 37.82 lacs before the Court. The appellants challenged the order before the High Court through a petition, which was dismissed.

Following the dismissal of the petition, the appellants deposited an amount of Rs. 19.01 lacs through a cheque. In respect of the remaining amount, the appellants requested the Treasury Officer to furnish details of the funds available so that the balance amount could be deposited. Since the appellants failed to satisfy the condition imposed by the trial court within the stipulated time, the trial court decreed the suit in favour of the plaintiffs/respondents for an amount of Rs. 57.23 lacs along with interest and costs.

The appellants contended before the High Court that a substantial portion of the amount directed to be deposited had already been deposited, and the trial court failed to take into consideration the peculiar circumstances which occasioned the delay in depositing the remaining amount.

Per contra, the respondents contended that the appellants, in their application seeking leave to defend, had admitted that the works to the extent of Rs. 37.82 lacs had been executed by them. It was further contended that the appellants failed to comply with the condition within the stipulated time, and the balance amount was deposited only in the year 2025, much after the passing of the impugned judgment and decree.

Court's Observation

The Court observed that the learned trial Court had granted leave to defend the suit to the appellants, subject to the deposit of an amount of Rs. 37.82 lacs and the filing of a written statement within thirty days. In compliance with the said direction, the appellants deposited an amount of Rs. 19,01,000 on 26.03.2023. The remaining amount of Rs. 18,81,000 came to be deposited on 25.07.2025.

The Court noted,

“It is an admitted position that the suit instituted by the respondents under Order XXXVII CPC came to be decided and decreed in their favour on 12.08.2023, much prior to the deposit of the balance amount of Rs. 18,81,000/- on 25.07.2025.”

The Court held that the appellants failed to comply with the condition imposed by the trial court within the stipulated period. The Court observed,

“The appellants have also failed to place on record any cogent explanation justifying their failure to deposit the balance amount within the time granted by the learned trial Court.”

The Court further held,

“In such circumstances, the learned trial Court cannot be said to have committed any illegality in decreeing the suit on account of non-fulfilment of the condition imposed while granting leave to defend the suit in terms of order dated 12.08.2023.”

The Court held that the deposit of the balance amount by the appellants after the passing of the decree could not be construed as retrospective compliance to revive their right to defend the suit. The Court thus found no perversity or illegality in the order impugned and upheld the decree passed by the trial court.

The Civil First Appeal was accordingly dismissed.