Conditional leave to defend is granted in summary suits when substantial triable issues exist, ensuring both the plaintiff's claim is safeguarded and the defendants have opportunity to substantiate their defense at trial.

JUDGMENT :

Purushaindra Kumar Kaurav, J.

I.A. 33665/2024 (By D-1 and 2 under Order XXXVII Rule 3(5)- for grant of unconditional leave to defend to D-1 to 5)

The instant application has been filed on behalf of the Defendants seeking leave to defend the present suit.

Brief facts

2 As per the plaint, the facts manifest that in August 2021, the Plaintiff was approached by one late Mr. Surender Malik, who requested a short-term financial loan of Rs. 5,00,00,000. Pursuant to the said request, on 18.08.2021, the parties entered into a formal Loan Agreement dated 18.08.2021, whereby the Plaintiff advanced the aforesaid sum, to late Mr. Malik, carrying an agreed interest @ 12% per annum, for a fixed tenure of one year commencing from 18.08.2021 and ending on 17.08.2022.

3 The contractual stipulation required that monthly interest payments be made by the 7^th day of each succeeding month through RTGS, NEFT, or IMPS. The loan was disbursed through two cheques, aggregating to the principal sum of Rs. 5,00,00,000, and the same was duly secured by a Demand Promissory Note of even date executed by late Mr. Malik in favour of the Plaintiff.

4 Between 25.11.2021 to 13.07.2022, late Mr. Malik availed five successive short-term loans from the Plaintiff, each secured by corresponding loan agreements and promissory notes. All loans carried 12% interest p.a., repayable in monthly instalments on identical terms. The loans were disbursed via cheques on the respective agreement dates.

5 On 18.08.2022, late Mr. Malik sought an extension for the repayment of the first loan dated 18.08.2021. A "Renewed Term Sheet" was executed on the same date, extending the repayment deadline to 17.08.2023. In furtherance thereof, late Mr. Malik executed a fresh Demand Promissory Note dated 18.08.2022 for Rs.5 crores in favour of the Plaintiff.

6 In partial discharge of his obligations, on 10.04.2023, the Plaintiff received a payment of Rs.1,50,00,000/- from late Mr. Malik towards the principal, through RTGS. Thereafter, on 09.05.2023, the Plaintiff received the last recorded interest payment from late Mr. Malik’s account, amounting to Rs.7,70,000/- for the month of April 2023, against a total interest due of Rs.8,95,000/-.

7 On 09.06.2023, late Mr. Surender Malik passed away. Subsequent to his demise, on 19.10.2023, the Plaintiff received Rs.50,00,000/- towards the outstanding principal, remitted in five equal tranches of Rs.10,00,000/- each, through RTGS/NEFT.

8 On 10.11.2023, the Plaintiff addressed a detailed written communication to Defendant No. 1, i.e., the wife of late Mr Malik, setting out the complete chronology of the loan transactions with late Mr. Malik, along with particulars of repayments made, and called upon Defendant No. 1 to liquidate the remaining principal sum together with accrued interest.

9 Pursuant to the aforesaid notice, on 21.11.2023, Defendant No. 1 remitted a sum of Rs.75,00,000/- towards the principal amount through RTGS. Thereafter, on 04.03.2024, a further sum of Rs.50,00,000/- was received from Defendant No. 1 towards principal repayment via RTGS.

10 It is the case of the Plaintiff that she is a senior citizen and at this juncture of her life, her only source of income was the interest on the loan granted by her to late Mr. Surender Malik. It is also the case of the plaintiff that she has not received even a single penny for the last 1.5 years and is struggling to make ends meet. Thus, she has instituted the present suit under Order XXXVII of the Code of Civil Procedure, 1908 (hereinafter referred to ‗CPC'), seeking recovery of a sum of Rs.7,75,21,689/- from the Defendants.

Submissions

11 Mr Sandeep Sharma, learned senior counsel for Defendants, at the inception, points out that Defendants No. 3 and 5 have not yet been served with summons in the present suit, as recorded vide order dated 16.07.2024 passed by the Joint Registrar. He contends that without prejudice, the said