Civil Procedure Code, 1908, Order 37, Rule (3)(5)

Civil Procedure Code, 1908—Order 37, Rule (3)(5)—Indian Contract Act, 1872, Section 139——Plaintiff, in the present case, filed a suit for realisation of its dues against defendant No.1 (borrower) and the two respondents (defendant Nos.2 & 3)  who were guarantors to the loan—Defendant No.1 did not appear in the suit despite notice—The two defendants-respondents, however, appeared before the trial court and filed separate applications under Order 37 Rule 3 sub-rule (5) of the CPC for permission to defend the suit on the ground that since the plaintiff-appellant had got a promissory note executed in its favour by the borrower-defendant No.1 and had further made the borrower create an equitable mortgage in its favour by deposit of title deeds, they would be absolved of their liability in terms of Section 139 of the Contract Act—According to the respondents, their plea gave rise to a triable issue and they, accordingly, sought permission to file their written statements and contest the suit--The trial court by its judgment and order examined all the pleas, including the one based on Section 139 of the Contract Act and found and held that none of the pleas raised by the defendants gave rise to any substantial defence against the claim of the plaintiff--Accordingly, it dismissed the petitions filed by the defendants-respondents and proceeded to decree the suit of the appellant-plaintiff—In appeal the High Court, however, set aside the order and decree passed by the trial court and directed it to allow the defendants-respondents to file their written statement and proceed to try the suit from that stage on the ground that respondents were able to make out a triable issue on the basis of Section 139 of the Contract Act—Held, the High Court was completely wrong in holding that the respondents were able to make out a triable issue on the basis of Section 139 of the Contract Act.


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