The central legal point established is that the nature of the suit should be determined based on the basis of the claim, and a suit under Order 37 should be maintainable for a lesser amount than the invoices, after adjusting the payments made.

1. This first appeal under Section 96 of the Code of Civil Procedure, 1908 (CPC) impugns a decree dated 30th May, 2015 of the Court of the Additional District Judge (ADJ)-03 (Central), Tis Hazari Courts, Delhi for recovery of Rs.4,79,371/- along with interest at 12% per annum from the date of filing of the suit i.e. from 13th October, 2014 till realisation in Suit No.290/2014 under Order 37 of the CPC filed by the respondent, for recovery of Rs.5,49,678/- with pendente lite and future interest @ 24% per annum, as a consequence of dismissal of the application filed by the appellant for leave to defend.

2. Notice of the appeal was issued and subject to the appellant depositing a sum of Rs.3,18,183/- with this Court and which is reported to have been deposited, execution stayed. Vide subsequent order dated 22nd February, 2016 the Trial Court record was requisitioned, the ad interim order made absolute and the appeal admitted for hearing and considering the fact that in the event of the appeal being allowed the matter will have to be remanded the appeal posted for hearing on 11th May, 2016.

3. The counsels were heard on 11th May, 2016. However certain proposals for settlement were also exchanged on that date; hence the matter adjourned to 16th May, 2016. No settlement could be arrived at between the parties and on 16th May, 2016 judgment was reserved.

4. The respondent instituted the suit from which this appeal arises, for recovery of Rs.5,49,678/-, as aforesaid under Order 37 of the CPC pleading (i) that the respondent/plaintiff is in the business of stainless steel pipes, pipe fittings and industrial valves and the appellant/defendant had been placing orders on the respondent/plaintiff from time to time and the respondent/plaintiff supplying the said goods to the appellant/defendant as per the orders placed; (ii) that a sum of Rs.4,79,371/- was outstanding from the appellant/defendant as per bills/invoices/ledger accounts maintained by the respondent/plaintiff; (iii) that in lieu of the aforesaid outstanding and for discharge of his legal liability, the appellant/defendant issued cheques for Rs.1,50,000/-, Rs.68,183.20p and Rs.1,00,000/- in favour of the respondent/plaintiff; (iv) that the respondent/plaintiff presented the said cheques for clearance but the same were returned unpaid for the reason “payment stopped by the drawer”; (v) though the appellant/defendant had been meting out assurances to make payment but had not paid; and, (vi) that besides the principal amount of Rs.4,79,371/-, a sum of Rs.70,307/- was also due from the appellant/defendant to the respondent/plaintiff towards interest at 24% per annum w.e.f. 21st February, 2014 till filing of the suit.

5. The appellant/defendant entered appearance in the suit and thereafter applied for leave to defend pleading (i) that the respondent/plaintiff was the regular supplier of stainless steel raw material and pipes to the appellant/defendant and payment was done on account basis; (ii) dispute arose when the goods supplied by the respondent/plaintiff to the appellant/defendant were rejected by the appellant/defendant due to their inferior quality; (iii) the rejected material was negotiated to be returned to the respondent/plaintiff with a Debit Note which was accepted by the respondent/plaintiff; (iv) the balance amount was paid through two cheques which were dishonoured by the appellant/defendant?s banker as the balance material supplied by the respondent/plaintiff was also rejected and the payment of the cheques stopped; (v) that the suit was not maintainable under Order 37 of the CPC; (vi) the Courts at Delhi had no territorial jurisdiction; and, (vii) that the plaint does not conform to the requirements of Order 37 of the CPC.

6. Though a reply of the respondent/plaintiff to the application of the appellant/defendant for leave to defend as well as the rejoinder of the appellant/defendant thereto are on the record of the Trial Court but neither did the counsels durin