Shri Narendra Mefatlal Mehta t/a N. Mehta & Co v. Syed Abdul Cader t/a Efficient Enterprise

HCA006010/1980

Same principles for granting conditional leave to defend in an application for summary judgment under Order 14, Rules of Supreme Court apply to an application for setting aside a default judgment under Order 13 rule 9, Rules of Supreme Court.

BETWEEN

______________________________

Coram: Hon. Liu. J. in Chambers

Date: 12 February 1982

On appeal from Master's Order made on 21st January, 1982.

___________

JUDGMENT

___________

1. I have perused the papers in these proceeding with considerable care, and I have had the advantage of counsel's arguments advanced on behalf of the defendant. In the end. I do not find it necessary to call upon Mr. Burns.

2. This is a claim by the plaintiff against the defendant as drawee of a Bill of Exchange which the defendant duly accepted. It is true that the Bill was presented, dishonoured and thereupon duly protested some ten months after maturity, but this is not a matter of any great importance, which would reflect adversely on one party or another. However, the defendant sought to make capital of the much postponed presentment of this Bill of Exchange for payment, especially in his absence from Hong Kong. It was submitted that such inordinate delay was indicative of some unusual arrangement, illegal by nature, whereby diamonds were entrusted to the defendant in Hong Kong for one Mr. Arvind Mehta through the arrangement of another man, Mr. Kautham in Bombay. In substance, the defendant claimed that diamonds were to be sent out to him in Hong Kong for the benefit of Mr. Mehta also of Bombay to evade governmental regulations against sale of diamonds to merchants within the territories of India.

3. Illegality was raised by the defendant who endeavoured, as a layman, to explain the alleged prohibition, but it was not particularized nor corroborated by any expert. Counsel submitted that it would be a matter for the trial. I find myself at variance with counsel's submission. I am prepared to accept that a triable issue on illegality has been raised, but the defendant has not condescended upon particulars. The Indian legislation alleged to have been circumvented was not disclosed if only to afford the plaintiff an opportunity to refute it.

4. Counsel further submitted that on an application to set aside a judgment in default of appearance under Order 13 rule 9, a different criterion would apply by virtue of the fact that under Order 14 the plaintiff's belief of there being no defence to his claim need be verified. Such prerequisite, counsel submitted, is absent from an application for setting a default judgment under Order 13 rule 9.

5. In an application under Order 13 rule 9, it is incumbent upon a defendant to disclose a defence on the merits, but to no more an extent than a triable issue, and in acceding to the application the Master has evidently power to impose such terms as he thinks just. I can detect no appreciable difference in the Master's power to order terms either under Order 13 rule 9 or under Order 14.

6. The defendant further alleged that he received no consideration for his acceptance of the Bill of Exchange. It seemed to have been suggested that he undertook such chores of accepting a Bill of Exchange, rendering himself liable for the payment of the amount thereon and taking possession of diamonds in Hong Kong allegedly for Mr. Mehta of Bombay gratuitously. It is inconceivable in this day and age that such burdens would have been shouldered and such liability assumed without any benefit to be derived therefrom. There was no further explanation by the defendant save for his bare assertion that the Bill of Exchange was accepted without any consideration. Clearly, in my view, there has not been a full disclosure by the defendant in the light of the circumstances relevant to his case.

7. I take the view, therefore that "there is something suspicious in the defendent's mode of presenting his case" in raising illegality on a layman's understanding without specifying the regulations which were said to have been infringed and making a bare assertion of want of consideration without any further explanation warranted by the admitted activities of the defendant. If in fact the learned Master had commented on the Defence put forward by the defendant as shadowy, I, for one, would share his impression.

8. It is said that in an application under Order 14, the strict rule that the defendant should be allowed unconditionally leave to defend once a triable issue is shown "is nowadays somewhat relaxed". Terms for granting leave to defend is more readily imposed to-day, particularly when, as in this application, there is something suspicious in the defendant's mode of revelation. The defendant sought to raise triable issues on his application to set aside the default judgment, and the guiding principles for imposing terms on acceding to his application are not, in my view, dissimilar.

9. Despite the defendant's allegations raising what appear to be prima facie issues, I am in full agreement with the Master's terms for setting aside the default judgment.

10. For all these reasons, I dismiss the appeal with costs to the plaintiff, and the order of the Master granting leave to defend conditional upon payment into court is therefore affirmed.

Representation:

Mr. Van Buuren instructed by H.H. Lau & Co. for Defendant/Appellant.

Mr. Burns of Johnson, Stokes & Master for Plaintiff/Respondent.