Trial Court’s Discretionary Power to Grant Conditional Leave to Defend Includes Imposition of Security for Onerous Defences.

The respondent/plaintiff filed a recovery suit under Order 37 of the CPC against the petitioner for ₹1,30,000/- plus interest, following the dishonor of cheques allegedly issued for a loan

The petitioner sought leave to defend, claiming the cheques were given as a guarantee to a third party (a mutual friend) during a marriage-related financial dispute and were subsequently misused

The trial court granted leave to defend but conditioned it upon the deposit of ₹1,50,000/- as security

The petitioner challenged this condition as onerous and arbitrary under Article 227 of the Constitution

1. Whether the trial court’s imposition of a monetary security deposit as a condition for granting leave to defend was a valid exercise of discretionary power under Order 37 Rule 3(5) of the CPC

2. Whether the specific quantum of security (₹1,50,000 for a ₹1,30,000 recovery suit) was legally sustainable

The court applied Order 37 Rule 3(5) of the CPC, which grants the court discretionary power to impose conditions on the leave to defend

It relied on the governing principles established by the Supreme Court in IDBI Trusteeship Services Limited v. Hubtown Limited (2017), which categorized the types of defenses—substantial, triable, or improbable—and the corresponding conditions (unconditional leave vs. deposit of the principal sum/interest) applicable to each

The High Court observed that under the IDBI Trusteeship framework, if a defense appears plausible but improbable, or if the court doubts the defendant’s good faith, it may require payment into the court or the furnishing of security to prevent the defeat of expeditious commercial justice

The Court found that the petitioner's narrative—involving a third-party wedding dispute and the indirect transfer of guarantee cheques—was a matter of merit that the petitioner bore the burden of proving

The Court reasoned that the trial court’s decision to require security was a legitimate exercise of discretion aimed at balancing the petitioner’s right to a defense with the plaintiff’s interest in recovery, especially since the suit total including interest justified the security amount

The petition was dismissed, upholding the requirement for the petitioner to deposit ₹1,50,000/- to proceed with his defense