MONEY DEPOSIT AS CONDITION TO HEAR SUIT LEGAL

The Supreme Court in its judgment in case of Southern Sales & Services Vs Sauermilch Design & Handels GMBH ruled that in a suit for money decree, a party defending the claim may be asked to deposit part of the admitted amount as a condition to hear his petition. In this case, the foreign company filed a suit against the Indian firm for recovery of Rs. 4 crore. The latter moved the civil judge in Bangalore who imposed a condition to hear the suit. The Indian firm moved the Karnataka High Court against this order. The high court ruled that the firm should deposit 55 per cent of the undisputed amount before hearing it. In the appeal, the Supreme Court confirmed high court order, quoting Order 37 of the Civil Procedure Coe. It explained that earlier, the code granted hearing
without any condition, but after an amendment to the code in 1977, a condition to deposit part of the
undisputed amount can be imposed by the civil court.