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Issues involved: Appeal against order dismissing leave to defend suit under Order 37, Rule 2, Code of Civil Procedure.
Summary: 1. The Supreme Court heard both parties and granted special leave to appeal against the High Court's order dismissing Civil Review No. 3067 of 1989, which affirmed the Sub-Judge's order declining leave to defend the suit under Order 37, Rule 2. 2. The Court emphasized that leave should not be granted if it would only prolong litigation with frivolous defenses. Leave should be given if a real issue is raised, indicating a plausible defense. Summary judgment should not be granted in cases of serious factual conflicts or legal issues. The Court should not reject a defense solely based on implausibility or inconsistency. 3. After examining the defense and previous criminal complaints, the Court found a triable issue present, allowing the Appellant to defend the suit. Citing English law, the Court noted that a defense more than "shadowy" but less than "probable" warrants leave to defend. 4. The appeal was allowed, granting the Appellant leave to defend the suit with the condition that the deposited amount of Rs. 20,000 be paid to the Plaintiff during the suit's pendency, to be restituted if the Plaintiff fails in the suit. The High Court and trial Court orders were set aside. 5. Leave to defend was granted on specified terms, and the Court addressed the issue of deposits made during the trial, allowing the Appellant to withdraw certain sums while the Plaintiff could withdraw the Rs. 20,000 deposited in the Court registry. The appeal was disposed of with no costs incurred.
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