ORDERXXXVIISUMMARYPROCEDURE

Rule1:CourtsandclassesofsuitstowhichtheOrderistoapply
(1)ThisOrdershallapplytothefollowingCourts,namely:
(a)HighCourts,CityCivilCourtsandCourtsofSmallCausesand
(b)otherCourts:
ProvidedthatinrespectoftheCourtsreferredtoinclause(b),theHighCourtmay,bynotificationintheOfficial
Gazette,restricttheoperationofthisOrderonlytosuchcategoriesofsuitsasitdeemsproper,andmayalso,from
time to time, as the circumstances of the case may require, by subsequent notification in the Official Gazette,
furtherrestrict,enlargeorvary,thecategoriesofsuitstobebroughtundertheoperationofthisOrderasitdeems
proper.
(2)Subjecttotheprovisionsofsubrule(1),theOrderappliestothefollowingclassesofsuits,namely:
(a)suitsuponbillsofexchange,hundiesandpromissorynotes
(b) suits in which the plaintiff seeks only to recover a debt or liquidated demand in money payable by the
defendant,withorwithoutinterest,arising,
(i)onawrittencontractor
(ii)onanenactment,wherethesumsoughttoberecoveredisafixedsumofmoneyorinthenatureofadebtother
thanapenaltyor
(iii)onaguarantee,wheretheclaimagainsttheprincipalisinrespectofadebtorliquidateddemandonly.

Rule2:Institutionofsummarysuits
(1)Asuit,towhichthisOrderapplies,mayiftheplaintiffdesirestoproceedhereunder,beinstitutedbypresenting
aplaintwhichshallcontain,
(a)aspecificavermenttotheeffectthatthesuitisfiledunderthisOrder
(b)thatnorelief,whichdoesnotfallwithintheambitofthisrule,hasbeenclaimedintheplaintand
(c) the following inscription, immediately below the number of the suit in the title of the suit, namely: "(Under
OrderXXXVIIoftheCodeofCivilProcedure,1908)".
(2)The summons of the suit shall be in Form No. 4 inAppendix B or in such other Form as may, from time to
time,beprescribed.
(3)Thedefendantshallnotdefendthesuitreferredtoinsubrule(1)unlessheentersanappearanceandindefault
ofhisenteringanappearancetheallegationsintheplaintshallbedeemedtobeadmittedandtheplaintiffshallbe
entitledtoadecreeforanysum,notexceedingthesummentionedinthesummons,togetherwithinterestattherate
specified,ifany,uptothedateofthedecreeandsuchsumforcostsasmaybedeterminedbytheHighCourtfrom
timetotimebyrulesmadeinthatbehalfandsuchdecreemaybeexecutedforthwith.]

Rule3:Procedurefortheappearanceofdefendant
(1)InasuittowhichthisOrderapplies,theplaintiffshall,togetherwiththesummonsunderrule2,serveonthe
defendant a copy of the plaint and annexures thereto and the defendant may, at any time within ten days of such
service,enteranappearanceeitherinpersonorbypleaderand,ineithercase,heshallfileinCourtanaddressfor
serviceofnoticesonhim.
(2) Unless otherwise ordered, all summonses, notices and other judicial processes, required to be served on the
defendant, shall be deemed to have been duly served on him if they are left at the address given by him for such
service.

(3) On the day of entering the appearance, notice of such appearance shall be given by the defendant to the
plaintiff'spleader,or,iftheplaintiffsuesinperson,totheplaintiffhimself,eitherbynoticedeliveredatorsentby
aprepaidletterdirectedtotheaddressoftheplaintiff'spleaderoroftheplaintiff,asthecasemaybe.
(4) If the defendant enters an appearance, the plaintiff shall thereafter serve on the defendant a summons for
judgmentinFormNo.4AinAppendixBorsuchotherFormasmaybeprescribedfromtimetotime,returnable
not less than ten days from the date of service supported by an affidavit verifying the cause of action and the
amountclaimedandstatingthatinhisbeliefthereisnodefencetothesuit.
(5)Thedefendantmay,atanytimewithintendaysfromtheserviceofsuchsummonsforjudgment,byaffidavitor
otherwise disclosing such facts as may be deemed sufficient to entitle him to defend, apply on such summons for
leavetodefendsuchsuit,andleaveto"defendmaybegrantedtohimunconditionallyoruponsuchtermsasmay
appeartotheCourtorJudgetobejust:
Provided that leave to defend shall not be refused unless the Court is satisfied that the facts disclosed by the
defendantdonotindicatethathehasasubstantialdefencetoraiseorthatthedefenceintendedtobeputupbythe
defendantisfrivolousorvexatious:
Provided further that, where a part of the amount claimed by the plaintiff is admitted by the defendant to be due
fromhim,leavetodefendthesuitshallnotbegrantedunlesstheamountsoadmittedtobedueisdepositedbythe
defendantinCourt.
(6)Atthehearingofsuchsummonsforjudgment,
(a) if the defendant has not applied for leave to defend, or if such application has been made and is refused, the
plaintiffshallbeentitledtojudgmentforthwithor
(b)ifthedefendantispermittedtodefendastothewholeoranypartoftheclaim,theCourtorJudgemaydirect
himtogivesuchsecurityandwithinsuchtimeasmaybefixedbytheCourtorJudgeandthat,onfailuretogive
suchsecuritywithinthetimespecifiedbytheCourtorJudgeortocarryoutsuchotherdirectionsasmayhavebeen
givenbytheCourtorJudge,theplaintiffshallbeentitledtojudgmentforthwith.
(7) The Court or Judge may, for sufficient cause shown by the defendant, excuse the delay of the defendant in
enteringanappearanceorinapplyingforleavetodefendthesuit.]

Rule4:Powertosetasidedecree
After decree the Court may, under special circumstances set aside the decree, and if necessary stay or set aside
execution, and may give leave to the defendant to appear to the summons and to defend the suit, if it seems
reasonabletotheCourtsotodo,andonsuchtermsastheCourtthinksfit.
======================
Summary Suits are contemplated under Order XXXVII (Order 37) of Civil Procedure Code of 1908, a very
powerful and expeditious remedy provided under the law for recovering money, which is routinely trapped in
commercialtransactionsandincontracts.

AsobservedbyGujratHighCourtThesheerpurposeofenactingSummarySuitsistogiveimpetustocommerce
and industry by inspiring confidence in commercial population that their causes in respect of money claims of
liquidateamounts(ascertainedamount)wouldbeexpeditiouslydecidedandtheirclaimswillnothangonforyears
blocking their money for a long period. Navinchandra Babulal Bhavsar versus Bachubhai Dhanabhai Shah AIR
1969Gujrat124(128)DB.

TheunderlyingpublicpolicybehindOrder37istheexpeditiousdisposalofsuitsofcommercialnature.BankyagB
GAgarawalversusBhagwantiMehji2001(1)BomLR823(DB)

The procedure contemplated by Order 37 of CPC constitutes a clear departure from usual procedure prescribed
under the CPC.According to usual procedure, every defendant has a right to defend his case in the manner best
suitedtohim.

TheSummaryprocedureisapowerfulweaponinthehandsofCourttoshutoutfrivolousdefenceswhichareraised
incommercialcauseswithaviewtoprolongthelitigation.KocharabhaiishwarbhaipatelversusGopalbhaiCpatel
AIR1973Gujrat29(31)

The provisions of this Order 37 are enacted to ensure that the defendants doesnt prolong the litigation by raising
untenable and frivolous defences. K R Kesavan versus The South Indian Bank Ltd AIR (37) 1950 Madras 226
(228)DB

TheprovisionsofOrder37areenactedbyParliamenttodiscouragelitigantsfromcomingforwardwithuntenable
pleas with the object of delaying admitted liabilities and prolonging the inevitable decree. Dena Bank versus M/s
GladstoneLyall&Co87BombayLawReporter477(480).

DISPUTESWHICHARECOVEREDUNDERSUMMARYSUITS
(a)suitsuponbillsofexchange,hundiesandpromissorynotes
(b) suits in which the plaintiff seeks only to recover a debt or liquidated demand in money payable by the
defendant,withorwithoutinterest,arising,onawrittencontractor
(c) suits in which the plaintiff seeks only to recover a debt or liquidated demand in money payable by the
defendant,withorwithoutinterest,arising,onanenactment,wherethesumsoughttoberecoveredisafixedsum
ofmoneyorinthenatureofadebtotherthanapenaltyor
(d) suits in which the plaintiff seeks only to recover a debt or liquidated demand in money payable by the
defendant,withorwithoutinterest,arising,onaguarantee,wheretheclaimagainsttheprincipalisinrespectofa
debtorliquidateddemandonly.

Widest possible interpretations may be given to the scope of written contracts. The words in Summary Suits,
Written contract doesnt requires that the contract must be signed by the parties concerned. It says the contract
mustbeexpressedandwhenitsexistenceandenforceabilitycanbetracedtoconductofthepartiestothecontract,
althoughtheexpressedcontractmaynotbesignedbythepartiesconcerned.Herearesomeofthecourtrulingsand
observationswhichdefinethescopeofWrittenContracts.

1.Invoices/BillsarewrittencontractwithinthecontemplationofOrder37ofCPC1908.KIGSystelLtd

versusFijitsuICIMLtdAIR2001Del357.
Asaresultofacceptanceofgoodsdeliveredinpursuanceoftheinvoice,thedemandforthepriceofgoods
admittedlyreceivedbythepurchaseronthebasisoftheinvoiceiswrittencontract.
2.
Agreementinwritingdoesnotnecessarilymeandocumentsareformallysignedbytheparties.Documents
exchanged by and between the parties may be construed as agreement in writing. BOI Finance versus
padmaAlloyCastingBomCR218.
3.
Summary Suit can be filed on the basis of confirmed Balance / Khata and the reconciliation statement.
HindustanWiresLtdversusRalsonsTiresLtd90(2001)DelhiLawTimes777.
4.
Where the liability was acknowledged in Balance sheet which was signed by partners of the firm, it was
heldthatitamountedtoapromisewithinthemeaningofsection25(3)oftheContractAct1872.Section
2593)validatesapromisetopayadebtbarredbylimitation.M/sRSureshChandra&CoversusVednere
ChemicalsWorks&OrsAIR1991Bom44(47Para10).
5. The acknowledgment of debt in Balance Sheet amounts to acknowledgment in writing within the
meaningofsection18ofthelimitationAct.RishiPalGuptaversusSJknitting&FinishingMillsPvtLtd
73(1998)DelhiLawTimes593(598para14)AVMurtiveresusBSNagabasavanna2002(1)Supreme
517(520para5)
6. Where a receipt indicates that money was borrowed, it becomes an acknowledgement. M/s Kalyani
Hansraj&OrsversusMrsKamongAAgarwal&Ors1990(1)BombayCasesReporter386(389para10)
7.Wherethesuitwasfiledforrecoveryofpriceofgoodssoldanddelivered,itwasobservedthatPlaintiffs
has delivered the goods to the defendants not intending to do so gratuitously and the defendants had
enjoyed the benefits of them and under the provisions of section 70 of ContractAct, the Defendants are
liabletopaycompensationinrespectofsuchgoodstotheplaintiffs.JaishreeChemicalsversusM/sEsskay
Dyeing&printingWorks,BHCSummonsforJudgmentNo.23of1976inSuitno.1405of1975decided
on19thApril1976.
8.SummarySuitbyBankonentriesPunjabandSindBankRamPrakashJagdishChander(1990)4Del
LT497
9.IfmoneyofadepositorismisappropriatedbytheBank,SummarySuitismaintainable.AIR1996Bom
386
10. There must be necessary averment in the Plaint to give necessary jurisdiction to court under Summary
procedure.AIR2001AP56.
11.AIR2005Del369
12.WrittenContract:BOIFinanceversusPadmaAlloysCastingAIR1999Bom340

SummarySuitisalsomaintainableinfollowingcases
1.ForrecoveryofintercorporateloanonthebasisofreceiptandagreementA2002Bom481,483,484
2. Where amount thereof is not properly quantified or is in excess of what the plaintiff is entitled to,
SummarySuitismaintainableA2004Bom186(2004)2CTC641(2004)106(2)BomLR294(FB)

3.MerelybecauseacounterclaimisfileddoesnotrenderaSummarySuitnotmaintainable.A2001Bom
481,484
4.SuitforrecoveryofmoneyofsaleofequitysharesA2006(NOC)352(Cal)
5.Recoveryofpriceofgoods,interestclaimedA2006(NOC)1094(Cal)
6.Invoice/BillsarewrittencontractsA2001Del357,362
7.RecoveryofmoneypaidtopurchaseAirTicketsA2006(NOC)1042(Del)

SomeJudgmentsexplainingthescopeofSummarySuit
Rule1.ClassesofSuitsLalchandJainversusGheesiAIR1999Raj69
Rule1IndianBankversusMahaStateCoopMarketingFed(1998)5SCC69

SummarySuitNotMaintainableinfollowingcases
ClaimbasedonIndemnityBonds(2002)4SCC736,742

THEVERYCRITICALSUMMONSFORJUDGMENT/LEAVETODEFEND
Once the Summons is served upon the Defendants and he files his appearance in the Court, the Plaintiff has to
move an application to the Court, i.e. called Summons for Judgment.This Summons for Judgment is then served
upontheDefendantsandheiscalledupontomakeanapplicationtotheCourttogranthimtheleavetodefendthe
case,within10daysfromthereceiptofthatSummonsforJudgment.

InanApplicationforleavetodefend,whattheCourtmustdoistofindoutifwhetherthedefendanthasraisedthe
triable issues and whether the defence is not sham and illusory and whether the defendant has raised such issues,
whichifprovedatthetrial,willresultinthedismissaloftheplaintiff'sSuit.Ifitisso,thedefendantisentitledto
leavetodefend.NPrabhakaranversusManagerCITIBANKNAChennai(2001)3MLJ540(542para5)

The jurisdiction to grant leave or refuse the same is to be exercised on the basis of the affidavit filed by the
defendant. That alone at that stage is the relevant document and the inquiry of the court is to be confined to the
averments made in the affidavit by the defendant.At the hearing of Summons for Judgment it is not open to the
plaintifftorequesttheCourttolookintoanyevidence.Adverseinferencecannotbedrawnagainstthedefendantif
documents are not produced in support of statements made in theApplication for leave to defend. Raghavaveera
SonsversusMrsPadmavatiAIR1978Madras81(85,86&87)(Paras12&13)

If there is a triable issue in the sense that there is a fair dispute to be tried as to the meaning of a document on
whichtheclaimisbasedoruncertaintyastotheamountactuallydueorwheretheallegedactsareofsuchanature
astoentitlethedefendanttointerrogatetheplaintiffortocrossexaminehiswitnesses,leavetodefendshouldnot
bedenied.RajduggalversusRameshkumarBansal1991sup(1)SCC191.

InIndianRayon&IndustriesLtdversusM/sSirohyaEnterprisesAIR1992Bombay60(61&62)itwasheldthat
inordertoobtainunconditionalleavetodefend,itisnotsufficienttoraisetriableissues,butheshouldsatisfythe
courtthathehasasubstantialdefence.

InacasetheCourtobservedthatthedefenceofthedefendantbankwaspatentlydishonestandsounreasonablethat
it cannot reasonable be expected to succeed. Leaver to defend refused. R KAgencies Ltd versus Central Bank of
IndiaAIR1992Calcutta193(198,199,Paras24,25&29)

ThePrincipleadoptedbyourConstitutionalCourtstodealwiththedisposalofWindingupPetitionsbyCreditors
mayprofitablybeimportedheretodecideSummonsforJudgment.Therulesasregardsthedisposalofwindingup
Petition based on disputed claims are thus stated by the SC in Madhusudan Gordhandad and Co. versus Madhu
WoolensIndustriesPvtLtd(1972)42ComCases125:AIR1971SC2600

two rules are well settled. First if the debt is bona fide disputed and the defence is a substantial one, the court
willnotwindupthecompany.Wherethedebtisundisputedthecourtwillnotactuponadefencethatthecompany
hastheabilitytopaybutchoosesnottopaythatparticulardebt.Theprincipleonwhichthecourtactare(1)that
the defence of the company is in good faith and one of substance (2) the defence is likely to succeed in point of
law (3) the company adduces prima facie proof of the facts on which the defence depends. ****** Tata Iron &
SteelCoLtdversusMicroForgeIndiaLtd2000CLC1669.

TESTTODETERMINEFORGRANTINGLEAVETODEFEND
PowersconferreduponcourtbyOrderXXXVII(Order37)isasophisticatedanddelicateinstrumentandthesame
must be handled with great care and caution. In reality, it may be sometime, extremely difficult for courts to
identifyfrivolousdefences,Sham&illusorydefencessubstantialdefence,unreasonableordishonestdefence,
soastodecidewhetherleavetodefendtheSuitshouldbegrantedorrefusedtotheDefendant.

Therefore, let us look at some cases wherein the Courts granted or refused leave to defend. It is necessary to
understandtheprinciplesonwhichthecourtmayidentifywhetheradefenceraisedbytheDefendantisfrivolousor
illusoryorifitmaybegenuine.

In all the cases listed below, it may be noted that, the cases in which where the leave to defend was granted, the
defendanthasplacedsuchfactsbeforecourt,thatifproved,willdislodge/washoutthecaseofthePlaintiff.
ILLUSTRATIONSFORGUIDANCEOFTHECOURT

In a Case before the Hon'ble Delhi high Court, a Summary Suit was filed on the basis of dishonoured cheque of
Rs.27,000/allegedtohavebeenissuedinpaymentofsomecomputerhardwareandsoftwaresoldbyPlaintiffand
wheretheDefendantallegedthathehasissuedapostdatedchequeontheassurancefromthePlaintiffthatthesaid
chequewillbedepositedafterthedeliveryofthesaidhardwareandsoftware.TheChequewashowevercametobe
deposited without the said supply of computer hardware and softwares. It was held that the plea raised by the
defendant raises a triable issue inasmuch as the material on record it cannot be said that the defence of the
Defendantismalafideorvexatiousandisnotbonafide.TheDefendantwasgrantedunconditionalleavetodefend.
International Computers Consultants versus Home Computer Services (P) Ltd 68 (1997) Delhi Law Times 407
(413Paras23&24)(DB)

Wherethedefendantappliedforsettingasideexpartedecreeinsummarysuitbasedondishonouredchequeonthe

groundthattheplaintiffhadsuppressedmaterialfactstotheeffectthattheplaintiffhadnotdisclosedhiscomplaint
under section 138 of the Negotiable Instruments Act, in the plaint and that plaintiff had received a sum of
Rs.90,000/ascompensationoutoffineimposedonthedefendantinthesaidcriminalcomplaint,itwasheldthat"
the suppression of the material facts has to be such which would materially affect the decision of case. The
pendency of criminal complaint could have no bearing on the merits of the claim of the plaintiff in the summary
suit. The law permits the plaintiff to take out both civil and criminal proceedings. Both proceedings can be
continuedsimultaneously.Bothremediesareindependentofeachother.TheCourtdeclinedtosetasidetheexparte
decree.VijayKumarversusGovindBhai1999(4)LJ14(para5)

In cases where the defendant raises a prima facie case of fraud, including details as contemplated in the CPC, the
Courtoughttoactonthatandgranthimleavetodefendwithoutimposinganyconditionthatheshouldpaymoney
intotheCourt.(1932)2KB353(358&359)

WheretheDefendantdescribesthedocumentsrelieduponbytheplaintiffsasforgeddocuments,thematterrequires
atrialinviewofthenatureofdefence.AmarjeetSinghversusMrs.SavitriDeviBhalla70(1997)DelhiLawTimes
655(Paras4&7)

In Jivaram Ramchand Fegade Group versus T Udha Ram Fruit Co and Ors, the Division Bench of Delhi High
Court observed that where the Defendant alleged forgery and fabrication of documents by the Plaintiffs, it would
betoomuchtosaythatthedefendantmustproduceasuretybeforetheycandefendtheSuit.29(1986)DelhiLaw
Times305(para4)

Where the Defendant alleged that the Plaintiff did not act in accordance with the terms of the agreement and
thereforethedefendanthasstoppedpaymentofchequesandstatedthatdefendanthasalreadyfiledsuitforSpecific
performance of agreement. It was held that the defence raised triable issues and defendant was granted
unconditionalleavetodefend.RadheyShyam&OrsversusJaibirSingh67(1997)DelhiLawTimes875(877)

Leavetodefendwasrefusedwherethedefendantinvariouslettersadmittedthecorrectnessoftheamountclaimed
bytheplaintiff.CorporateVoicePvtLtdversusUnionLeatherIndiaLtd60(1995)DelhiLawTimes321(323para
8).

If tenor of defences raised by the defendants blows hot and cold and is self contradictory, he forfeits his right to
defend.VinodKumarversusKeshavAnand2002AIHC1621(1624Para12)

In a case it was held that a claim for unliquidated (unascertained) damages does not gives rise to a debt until the
liabilityisadjudicated.KSL&IndustriesLtdversusNathSeeds2001(4)AllMR134(137Para6)

Where the defendant alleged that two cheques relied upon by the plaintiff were stolen cheques and the defendants
neverborrowedanymoneyandneverissuedanychequetotheplaintiffandoneofthetwochequesrelieduponby
theplaintiffbearssignatureofthepartnerofthedefendantwhohadexpiredmuchpriortodatementionedonthe
cheque,itwasheldthatthedefencetakenbythedefendants1to3couldnotbesaidtobefalseorfrivolousonthe
face of it did raise triable issues. Unconditional leave to defend was granted in respect of one cheque and
conditionallyleavetodefendwasgrantedinrespectofanothercheque.DhaliwalTradingAgencyversusVarindar

Singh2002(1)BankJ205(209para8)

Whereasummarysuitwasfiledtorecovertheamountdueoncreditcardfacilityandwherethetrialcourtrejected
applicationforleavetodefendandpasseddecreeforRs.2,22,644.92bytreatingthecomputerisedbankstatement
asconclusiveproofthroughthesaidstatementwasneitheracertifiedcopyoftheentriescontainedinbank'sbooks
nor it carried a certificate as contemplated under the Bankers Book of Evidence Act and where the defendant
contendedthatonlyRs.29,906.00waspayablebyhimandplacedastatementofaccountonrecordtoshowthatRs.
1,10,0007waspaidbyhimtoliquidateliability,itwasheldthatthedefendanthadmadeapointanditappeared
that his approach was fair. Leave to defend was granted on condition of the defendant's depositing Rs. 50,000/.
BipinNarainKarnversusBankOfBaroda89(2001)DelhiLawTimes763.

WheresummarysuitwasfiledonthebasisofdishonouredchequeforRs.5croresandwrittencontractcontaining
terms of inter corporate deposit and where the defendants had handed over shares of listed company as collateral
security with right to plaintiff to dispose off the said shares in case of default in repayment and where the
defendants contended that the defendants were entitled to claim set off and counter claim as the plaintiff should
have sold the shares when the defendants committed default as the shares would have fetched more than Rs. 10
croresatthattimeandthatthoughtheplaintiffshaddecidedtogiveupthesecurity,theshareswerenotphysically
handedovertothedefendants,itwasheldthatthedefendantshadraisedsubstantialdefenceandtriableissuesbutin
viewofclearcutadmissionanddisputedfacts,leavetodefendwasgrantedonthedefendantsdepositingasumof
Rs.5crores.LeelaCapitalFinanceLtdModiluftLtd2001(2)BomCR110(115Paras12&13)

In State Industrial & Investment Corp of Maharashtra ltd versus Hargovind Vithaldas & Ors, the Court observed
that where the defend to leave was granted conditionally, it need not necessarily be an order of deposit as such.
Insteadofdeposit,therecouldbevariousotheritemssuchastimeboundschedueforthehearingofthesuit,oran
orderofrestraintonthedisposalofdefendant'spropertyoranordertofurnishanysuretyetc.1990MahLJ74.

WherethepriceofthegoodswerepayableonthebasisofCashonDeliveryandwherethedefendantacceptedthe
delivery of the goods without any reservation and the defendant has dealt with the goods after taking delivery, it
was held that trial court was justified in refusing leave to defend. MMTC Ltd versus Dimple Overseas LtdAIR
2001Delhi427

Whereinasuitonpromissorynotethedefendantadmittedhissignatureonpromissorynotebutallegedthathehad
executed blank promissory note in favour of one broker who did not return the said promissory note after the
defendant cleared his liability and where he alleged that he had never seen the plaintiff and never borrowed any
money from plaintiff and where the trial Court refused to grant leave to defend the suit, it was held that the trial
Court was justified in refusing the leave to defend the suit as the defendant had not taken any such plea in first
instance which he could have very easily done by replying the registered notice. SAnand versus SAruna 2000
AIHC4372

Wherethedefendantadmittedexecutionofchequebutpleadedthatitwasonlygivenascollateralsecurityforthe
priceofgoodswhichtheplaintiffsuppliedtothedefendantsandcontendedthatthesegoodswerepaidforbycash
payments made from time to time and by other cheques and set out the exact dates on which according to the
defendantsthepaymenthadbeenmadeandgavenumbersofcheques,theSupremeCourtheldthatthefactsgiven
in the affidavit were clear and precise. The Supreme Court found fault with the trial Judge's observation to the
effect that "In the absence of those documents, the defence of the defendants seems to be vague consisting of

indefinite assertions.The Supreme Court held that the stage of proof can only come after the defendant has been
allowed to enter an appearance and defend the suit and that the nature of the defence has to be determined at the
timewhentheaffidavitisputin.AtthatstageallthattheCourthastodetermineiswhether"ifthefactsallegedby
the defendant are duly proved" they will afford a good, or even a plausible, answer to the plaintiff's claim. Once
theCourtissatisfiedaboutthat,leavecannotbewithheldandnoquestionaboutimposingconditionscanariseand
onceleaveisgranted,thenormalprocedureofasuit,sofarasevidenceandproofgo.AtthehearingofSummons
forJudgmentitisnotopentotheplaintifftorequesttheCourttolookintoanyevidence.Adverseinferencecannot
bedrawnagainstthedefendantifdocumentsarenotproducedinsupportofstatementsmadeintheApplicationfor
leavetodefend.RaghavaveeraSonsversusMrsPadmavatiAIR1978Madras81(85,86&87)(Paras12&13)

InM/s.AganallTradersLtd.v.ShyarnAhuja,thesuitwasfiledonthebasisofdishonouredchequeandpromissory
noteandwrittenagreement.InleavetodefendapplicationthedefendantinteraliapleadedthatasumofRs.5lacs
waswithdrawnfrombankandpaidincashtotheplaintiffforwhichnoreceiptwasissuedbytheplaintiff.Itwas
held that the defence taken by the defendant by no stretch of imagination can be said to be fair, bona fides or
reasonable and that the defence was totally frivolous, false, illusory or sham or practically a moonshine. Leave to
defendwasrefusedandthedecreewaspassedagainstthedefendant.AIR1999Delhi369(371)

WherethesummarysuitwasfiledfortherecoveryofhotelchargesamountingtoRs.22,02,555.87andwherethe
defendant did not dispute her stay in the hotel, the invoice amount, the legal notice and her reply to the notice
whereinsheadmittedherliabilityandwherethedefendantinteraliaallegedintheapplicationforleavetodefend
that the admission of liability was made under duress and that a third party was liable to make payment of hotel
charges in respect of the defendant's stay in the said hotel, it was held that it was a case of setting up a defence
whichwasillusoryorshamorpracticallyamoonshineandhencethedefendantwasnotentitledforleavetodefend.
IndianHotelsCoLtdversusMrsVPSingh59(1995)DelhiLawTimes301(304&306,Paras5,6&9)

Extraneous Controversies: Here the principal filed suit under Order XXXVII of C.P.C. on the basis of hundis
executedbyhisagentandwheretheagentclaimedcommissionallegedtobedueonsaleofgoods,itwasheldthat
theagentwasnotentitledtopermissiontodefendthesuitonthegroundofallegedclaimofcommissionasthetwo
claims constituted different causes of action.The Court held that extraneous controversies and different causes of
actioncannotjustifyenlargementofscopeandpurposeofsummaryactionbroughtunderOrderXXXVIIofC.P.C.
M/sBrameSuriPvtLtdSuriSmithChemicals&AsbestosPvtLtd19(1981)DelhiLawTimes(SN)12

Therefore,thetesttodeterminewhetherDefendantdeservesaleavetodefendthecaseiswhethertriableissuesare
raised in the defense of the defendant. Issues arise when material proposition of fact asserted by one party is
disputed by the other and it may further be appreciated that issues can only be framed where the party adduces
evidencesinsupportofhispleaandwherethedefendantmerelypleads,withoutsupportingevidence,itcannotbe
saidthattriableissueshavearisen.

SomeJudgmentsonAppealfiledinSummonsforJudgment:
MadanlalversusKedarnathAIR1930Bom364
RamanlalversusChunilalAIR1932Bom163
VSSainiversusDCMLtdAIR2004Del219
SimruthmullversusJagrajAIR1954Mad334
ASChettiarfirmversusVTVeerappaAIR1935Rang245
BanwarilalversusSohanlal(1955)1ILRCal299

HiralalversusSalilkumarAIR1973Cal320
MohammadunissaversusFayazAli1958Punj437
DShanlalversusBankofMahaAIR1989Bom150(DB)

REASONEDORDER
In Sudeshkumar B. Dhawan v. J.S. Sood & ors. the High Court refused to interfere with the impugned order of
conditional leave to defend stating that the District Judge had given cogent reasons and the discretion was not
exercisedarbitrarily.
WamanVasudeoversusPratapmalDipajiAIR1960Bom520

InsufficientlyStampedInstruments
The failure to appropriately stamp a document has necessary consequences as envisaged in the Indian StampAct
1899.At the same time regard must be had to what was observed inAIR 1969 SC 1238 to the effect that Stamp
Act is not enacted to arm a litigant with a weapon of technicality to meet the case of his opponent. The leave to
defend was granted upon condition that the defendant will deposit the amount in the Court of first two bills of
exchangepayableonDemand.
WhostenholmeInternationalltdversusTwinStarsIndustrialCorp&Ors2001(4)BomCR114(120&121,Paras
12&15)

Where the defendant pleaded that his signature were obtained on Blank proforma, the court held that the Defence
did not raise any triable issue. The Court observed that u/s 20 of the Negotiable InstrumentsAct, 1881, when a
person signs and delivers to another a paper stamped in accordance with law relating to Negotiable instruments,
eitherwhollyblankorhavingwrittenthereonanincompleteinstrument,heprimafacietherebygivestheauthority
to the holder of such an instrument to complete upon it a negotiable instrument for any amount which may be
coveredbytheamountofstampaffixedonit.Punjab&SindBankversusRamPrakashJagdishChander40(1990)
DelhiLawTimes497(500para7)
In a case where the wife of plaintiff had supported the application for Summons for Judgment on the basis of
SpecialPowerofAttorneygrantedtoherbyplaintiffandwhenitturnedoutthatPowerofAttorneywasnotduly
stamped, the Court held that the plaintiff could be directed to pay the stamp duty and penalty.The said power of
Attorneybecomesadmissibleonsuchpayment.LtColRKJainversusColSKMehta29(1986)DelhiLawTimes
140(142para6)

Adverse inference cannot be drawn against a party for non producing books of account in Court where no notice
wasgiventothepartyforproducingbooksofaccountsfortheperusaloftheCourtornoappropriateproceedings
were adopted for necessary direction from the Court for giving inspection of books of account. Summary Suit
No.2014 of 1985, Summons for Judgment No.451, Bombay High Court. Refrigeration & Machinery Corp versus
DenaBank.

A delay in taking out summons for Judgment beyond the period of six months does not automatically entitle the

defendanttounconditionalleavetodefendthesuit,butitisrelevantfactortobeconsideredinconjunctionwiththe
natureofthedefencewhilegrantingconditionalorunconditionalleavetodefendthesuitorrefusingapplicationfor
leavetodefend.BankeyBihariBAgarwalversusBhagwanjiMeghji2001(2)BomCR86(109Para54)

WherethetrialCourtdismissedtheapplicationforleavetodefendfordefaultofappearance,itwasheldthatfrom
the first proviso to sub rule (5) of Rule 3 of Order XXXVII of C.P.C. It is clear that leave to defend can not be
refusedunlesstheCourtissatisfiedthatthefactsdisclosedbythedefendantdonotindicatethathehasasubstantial
defence to raise or that the defence intended to be put up by the defendant is frivolous or vexatious and for this
purpose the presence of the defendant or his advocate was not necessary and as such the application filed by the
defendant seeking leave of the Court to defend the suit, could not be ignored by trial Court while passing the
Judgment.Thedecreewassetasideandmatterwasremandedtothetrialcourt.SatPalSinghversusHarjitSingh
1999AIHC1455(1457para7)

The reasons offered to explain special circumstances should be such that a person absolutely had no possibility of
appearingbeforethecourtontherelevantday.Forinstancetherewasastrikeandallthebuseswerewithdrawnand
there was no other mode of transport, so as to go from the place where he resides to the place where the court is
situated may constitute" special circumstances." The' reason' or 'cause' found' in special circumstances ' is more
strictormorestringentthenin"sufficientcause."Whatwouldconstitutespecialcircumstanceswoulddependupon
thefactsofeachcase.KarumiliBharathiversusPrichikalaVenkatachallamAIR1999AP427(431,434paras8&
12)

Where an application for leave to defend was dismissed for default of the counsel, it was held that the defendant
cannotbepenalizedthereforeashewaspreventedbysufficientcausefromgettingleavetodefend.LRrajaversus
ShaRikhabdasSureshKumar1986(1)MadrasLJ108(110para4)

A litigant seeks justice from the court and he should not be punished for his no fault. Rafiq & another versus
MunshiLal&another.AIR1981SC1400.PrabhatiLalGurmukhSingh29(1986)DelhiLawTimes342(343)

By questioning the maintainability of suit as a summary suit under Order XXXVII, the very jurisdiction of the
Courttotrythesuitasasummarysuitischallenged.M/sKalyaniHansrajversusMrsKaminiAgarawal1990(1)
BombayCaseReporter348(354&358,paras6&12)

TheOrdergrantingconditionalleavetouchesuponthejurisdictionaspect,andifaCourtfailstoexercisethesaid
jurisdictionlegallyorcommitsmaterialirregularitythenHighCourtcaninterfere.

IftheconclusionoftrialCourtisbasedonnomaterialatall,thenitnotonlyamountstoamanifestillegalityinthe
exerciseofthetrialCourt'sjurisdiction,butitalsoamountstoawrongassumptionofjurisdiction,forthepurpose
ofimposingconditionforleavetodefend.Anyconclusionasregardstheexistenceofbonafidesormalafidesofa
particularpleawithoutgoingintothemeritsofthecase,cannotbereachedinanarbitraryfashion.Thequestionof
usingdiscretionwouldobviouslyariseincaseswheretwoalternativeviewsarepossible.Theviewwhichismerely
arbitrary or fanciful is vitiated by a patent illegality and therefore results in exercise of jurisdiction not vested in
law.

Where the trial Court without first deciding as to whether there was a triable issue and the defendant has got
reasonable bona fide defence, directed the defendant to produce security, it was held that impugned judgment
sufferedfromaseriouserrorofjurisdictionandsetasidetheJudgment.

Where the trial Court imposed condition of furnishing security for grant of leave to defend without deciding the
questionastowhethertherewasatriableissueinthesuitorwhethertheclaimmadebythedefendantwasmoon
shine,theHighCourtsetasidethesaidOrder.

WherethetrialCourtgrantedleavetodefendonthedefendant'sfurnishingsecurityinthesumofRs.25,000/=but
didnotgiveanyreason,theHighCourtheldthatleavetodefendthesuitshouldhavebeengrantedunconditionally
unlessthetrialCourtcametotheconclusionthatthedefenceraisedbythedefendantwasshamormoonshine.

WherenoinfirmityisfoundinthefindingsoftrialCourtthatthedefencesoughttoberaisedbythedefendantswas
notsubstantial,theHighCourtwouldnotinterferewiththetrialCourt'sdecision.

lnM/s.MechalecEngineers&Manufactures,theSupremeCourtsetasidetheorderofconditionalleavetodefend
passedbyHighCourt.InthiscasethetrialCourthadgrantedunconditionalleavetodefendthesuitaftersettingout
notlessthansevencontentionsonwhichthepartieswerenotatissue.InRevisionPetitiontheHighCourtheldthat
triableissuesaroseforadjudication,nevertheless,concludedthatthedefenceswerenotbonafide.TheHighCourt
setasidetheorderoftrialCourtandgrantedconditionalleavetodefend.TheSupremeCourtheldthatanydecision
onsuchaquestionoffactwhetherthedefencecouldbehonestandbonafide,evenbeforeevidencehasbeenledby
twosides,isgenerallyhazardous.Itisnotfairtopronounceacategoricalopiniononsuchamatterbeforeevidence
ofthepartiesistakensothatitseffectcouldbeexamined.Itisonlyincaseswherethedefenceispatentlydishonest
orsounreasonablethatitcouldnotreasonablybeexpectedtosucceedthattheexerciseofdiscretionbytrialCourt
tograntleaveunconditionallymaybequestioned.

SpecialLeavePetitionagainstorderofrefusingleavetodefend:
In Raj Duggal v. Ramesh Kumar Bansal, the Supreme Court set aside order refusing leave to defend and granted
leave to defend on condition that the amount of Rs. 20,0007 deposited in that case pursuant to an earlier order
madeintheproceedingbepaidtotheplaintiffsubjecttoconditionthatifultimatelyrespondentplaintifffailsinhis
suitheshallbeliabletorestitutethesaidsumofRs.20,0007todefendantwithinterestthereonat9%p.a.Itwas
held that leave is declined where the Court is of the opinion that the grant of leave would merely enable the
defendanttoprolongthelitigationbyraisinguntenableandfrivolousdefences.

SpecialLeavePetitionagainstdecree:
InSunilEnterprisesandanr.v.S.B.I.CommercialandInternational!BankLtd.5thetrialJudgemadesummonsfor
judgmentabsoluteagainsttheAppellantsandpassedadecreeforsumofRs.57,51,519=43withinterestandcertain
otherincidentalcharges.TheHighCourtaffirmedtheorder.InthiscasethesuitwasfiledbytheRespondentBank
onthebasisofbillsofexchangeinrespectofwhichtheAppellantswereacceptors.M/s.KhannaSalesCorporation
were the drawers of the bills and they had discounted the said bills of exchange with the Respondent Bank. The
AppellantcontendedthattheBillsofExchangewereexecutedwithoutconsiderationasneitherthegoodsweresold
nor supplied in the transactions in question. The Appellant alleged fraud, collusion and connivance between the
officersoftheRespondentBankandthesaidKhannaSalesCorporation.Itwasheldthatitcannotbesaidthatthe//

defenceraisedbytheAppellantwastotallydefenselessormoonshineorillusory.TheSupremeCourtsetasidethe
decreepassedbyHighCourtandgrantedunconditionalleavetodefendanttodefendthesuit.

InRafiqandanr.v.Munshilalandanr.,2theSupremeCourtsetasidetheorderofdismissalofAppealanddirected
theHighCourttodisposeofthesaidappealinaccordancewithlaw.Thesaidappealwasdismissedfordefaultof
appellant'scounsel.TheSupremeCourtheldthatapartyshouldnotsufferfortheinaction,deliberateomission,or
misdemeanorofhisagent.

Settingasideexpartedecree.Howtoexercisesuchpowers.O.37R.4.66BLR277.

Liquidateddemand/liquidatedamount
AIR1989Bom264.
AIR2005Del369

Judicialexerciseofdiscretion2012(1)AllMRPara10
pricefofgoodssoldHetalEntversusNewIndiaAssurance2012(1)AllMR252Para4
IALLogisticsversusQuantumInternational2012(1)AllMR305Paras25,26
GauravSinghaniaversusMatrixAgri2012(1)AllMR129Para6

Harilal&CoversusGammonIndia2010(1)AllMR408
InfraStructureLeasingversusPrabhu(2010)5BomCR251
VodafoneEssarversusNitinGoel(2010)3BomCR782
Bank of India versus Shashank P Ingle Necessary averments not in the Plaint nor in the Affidavit curable
defectsnotagroundforleavetodefend2010(4)AIRBomR279:2010AllMR(Supp)355
Conditional grant of leave conditions should not be onerous Fixity Packaging versus Udyen Jain 2010AIR
SCW489
Leave granted on condition triable issues discretion cannot be exercised disregarding law Smita Yahwant
versusSuryakantSadashiv2010(3)AllMR338
(1998)5SCC354
2011(1)AIRBomR759(Nagpur)WP:5258/2009

2011(1)AIRBomR770(Nagpur)WP56645364/2010Paras8,12,16,17.
(1976)4SCC687

(2010)5BomCR208
DefianceKnittingIndustriesPvtLtdVsJayArts20064MLJ939SC
ONGCVsSBIOverseasBranchBombayAIR2000SC2548
RajDuggalVsRameshKumarBansalAIR1990SC2218
RajniKumarVsSureshKumarMalhotraandAnrAIR2003SC1322
SunilEnterprisesandAnrVsSBICommercialandInternationalBankLtdAIR1998SC2317
O.372012(2)AllMR901Paras21,22

STEPS AFTER INSTITUTION OFSUITS

a.ObtainingcopiesofSummonsfromtheCourtO.37R.2(2)FormNo.4inAppendixB
b.ServiceofSummons:Sections28,29andOrder5
c. Taking out Notice of Motion for Interim / Adinterim Reliefs, if any: [S. 94, Order 38 (Arrest /
Attachment before Judgment) Service of Motion filing of Affidavit of Service and hearing of the
Motion]
d.OncetheSummonsalongwiththecopyofPlaintisserveduponthedefendants,defendanthastofilehis
appearance, personally or through Advocate, in the court within 10 days from the receipt of summons,
withaNoticetothePlaintiffs(O.37R.3)
e.Ifthedefendantfailstofilehisappearancewithin10days,theallegationsintheplaintshallbedeemed
tobeadmittedandtheplaintiffshallbeentitledtoadecreeforanysum,notexceedingthesummentioned
in the summons, together with interest at the rate specified, if any, up to the date of the decree and such
sumforcostsasmaybedeterminedbytheHighCourtfromtimetotimebyrulesmadeinthatbehalfand
suchdecreemaybeexecutedforthwith.[O.37,R.2(3)]
f.Ifthedefendantentersanappearance,theplaintiffshallthereafterserveonthedefendantasummonsfor
judgment in Form No. 4A inAppendix B or such other Form as may be prescribed from time to time,
returnablenotlessthantendaysfromthedateofservicesupportedbyanaffidavitverifyingthecauseof
actionandtheamountclaimedandstatingthatinhisbeliefthereisnodefencetothesuit.[O.37R.3(4)]
g. Adjudication of preliminary issue by the trial Court (Section 9A for Maharashtra / Order 14), if any,
raised by the Defendant, challenging the maintainability of the Suit or seeking rejection of the Plaint
underO.7R.11orchallengingtheSuitonanyotherground.
Thegroundsforchallengemaybeof
(a)Limitation(Section3ofLimitationAct,1963)
(b)Suitbarredbyanylaw[O.7R.11(d)]
(c)NoncompliancetoO.4R.1(3),i.e.defectsinPleadings,
(d)Failuretodisclosecompletecauseofaction[O.7R.11(a)r/wO.7R.1(e)]
(e)Wherethereliefclaimedisundervalued,andtheplaintiff,onbeingrequiredbytheCourttocorrectthe
valuationwithinatimetobefixedbytheCourt,failstodoso[O.7R.11(b)]
(f)Wherethereliefclaimedisproperlyvaluedbuttheplaintiswrittenuponpaperinsufficientlystamped,
and the plaintiff, on being required by the Court to supply the requisite stamppaper within a time to be

fixedbytheCourt,failstodoso[O.7R.11(c)]
(g)TheCourtinwhichtheSuitisinstitutedlacksjurisdictionintermsofpecuniary,territorialorsubject
matteroftheSuit.[Sections9,15to20]