The central legal point established in the judgment is the requirement of a debt or a liquidated demand of moneys arising on a written contract for a suit to be maintainable under Order XXXVII CPC, and the importance of considering the suit's maintainability before addressing non-appearance under the same order.

Valmiki J. Mehta, J. (Oral):--

1. Challenge by means of this petition under Section 115 of the Code of Civil Procedure, 1980 (CPC) is to the impugned order of the trial court dated 29.5.2004 by which the trial court dismissed the application under Order XXXVII Rule 4 CPC filed by the petitioner/defendant. By the application under Order XXXVII Rule 4 CPC, the petitioner/defendant prayed for setting aside of the judgment and decree dated 07.4.2003 which was passed in default of non-filing of appearance within 10 days as required under Order XXXVII CPC.

2. A reading of the impugned order shows that the trial court has relied upon the judgment of the Supreme Court in the case of Rajni Kumar v. Suresh Kumar Malhotra 2003 (2) UJ 810 (SC), which holds that the petitioner besides pleading good cause for non-appearance had to plead merits of the case, but since no merits of the case were pleaded and which were sine qua non for an application to be considered under Order XXXVII Rule 4 CPC, the application was to be dismissed.

3. I do not find any error in the reasoning of the order of the trial court because the Supreme Court in the judgment in the case of Rajni Kumar (supra) categorically states that the cause of action for filing of an application under Order XXXVII Rule 4 CPC is besides giving reasons for non-appearance, that the applicant/defendant must also state grounds on merits by which the plaintiff would not have been entitled to a decree.

4. However, in my opinion, the present petition is liable to be allowed on a totally separate ground, and which goes to the root of the matter because the subject suit which is filed and treated under Order XXXVII CPC could not have been filed and treated under Order XXXVII CPC. The reasons for the same are that the respondent/plaintiff by the suit claimed recovery of earnest money deposited with the petitioner/defendant, and which earnest money was given with respect to a tender which was submitted by the respondent/plaintiff to the petitioner/defendant. The suit was filed under Order XXXVII CPC stating that the earnest money amount was not refunded, and therefore the same was liable to be refunded to the respondent/plaintiff. For the suit to be considered under Order XXXVII CPC, the respondent/plaintiff stated the following in para 6 of the plaint:--

“That the present suit is under order XXXVII of CPC and the plaintiff desires to file the same under the said order. The suit is based on written contract entered into between the parties vide notice inviting tenders and depositing the earnest money with them and the same was confirmed by the defendant vide their various letters as well as reply to the request for refund of the earnest money thereby confirming the aforesaid refund of earnest money amounting to Rs. 2,31,000/-. However, the defendant failed to honour the contract and on the day of filing the present suit, the defendant is in arrears for a sum of Rs. 2,31,000/-. However the plaintiff is claiming the interest @ 17.25% per annum for which the defendant is liable to pay.”

5. A suit under Order XXXVII CPC lies in terms of Order XXXVII Rule 1 Sub-Rule (2) (b) (i) CPC if the amount claimed is a debt or a liquidated demand of moneys arising on a written contract i.e. for a suit to be maintainable under Order XXXVII CPC it is not enough if there is a document evidencing payment by the plaintiff to the defendant, but in fact the document must contain a liquidated demand and an acknowledgment of debt. This is because it is only a promise to pay which creates a liquidated demand or a debt. A simple document showing payment by the plaintiff to the defendant will not be a written contract as is contemplated by Order XXXVII Rule 1 Sub Rule (2) (b) (i) CPC.

6. I am supported in my conclusion by the judgment of a learned Single Judge of this Court in case of Syed Moosa Emami v. Sunil Kumar Gilani & Anr., AIR 1982 Delhi 590, which holds that no suit lies under Order XXXVII CPC where the plaint