HIGH COURT OF JAMMU AND KASHMIR AT SRINAGAR
Mohammad Yaqoob Mir, J.
Gh. Ahmad Wani -Appellant
Versus
Gulzar Ahmad Guroo -Resopndent
CIA No. 72-2010 and CMP No. 268-2010
Decided On : 13-06-2014
Order XXXVII - Recovery Suit - Code of Civil Procedure - Order XXXVII
Fact of the Case:
The plaintiff filed a suit under Order XXXVII of the Code of Civil Procedure for recovery of an amount with interest, based on returned cheques. The trial court decreed the suit, but the defendant appealed, arguing that the trial court did not follow the prescribed procedure under Order XXXVII.
Finding of the Court:
The court found that the trial court had not followed the prescribed procedure under Order XXXVII, causing prejudice to the defendant. The judgment and decree passed by the trial court were set aside, and the case was remanded to the trial court with directions to decide the application seeking leave to defend the suit and proceed further in accordance with Order XXXVII of the Code of Civil Procedure.
Issues: The main issue was whether the trial court followed the prescribed procedure under Order XXXVII of the Code of Civil Procedure in a suit for recovery based on returned cheques.
Ratio Decidendi: The court held that when a suit is tried under Order XXXVII, the prescribed procedure must be followed in its true spirit. Failure to follow the procedure can cause serious prejudice to the defendant and render the judgment and decree unsustainable.
Final Decision: The appeal succeeded, and the judgment and decree dated 01.02.2010 were set aside. The case was remanded to the trial court with directions to decide the application seeking leave to defend the suit and proceed further in accordance with Order XXXVII of the Code of Civil Procedure.
2. Respondent (hereinafter referred to as plaintiff) has instituted a suit under Order XXXVII of the Code of Civil Procedure (for short the Code) for recovery of an amount of Rs. 7.00 lacs (seven lacs) with interest @14%. The appellant (hereinafter referred to as the defendant) is alleged to have issued various cheques for an amount of Rs. 1.50 lacs (cheque No. 18678120 dated 13.7.2007), Rs. 2.00 lacs (cheque No. 18678140 dated 22.7.2007), Rs. 1.50 lacs (cheque No. 189678141 dated 27.7.2007) and Rs. 2.00 lacs (cheque No. 18678142 dated 28.07.2007), drawn on J&K Bank Ltd. Branch office, Pulwama. The cheques were presented before the concerned Bank but were returned for want of sufficient funds. Thereafter on repeated requests when the amount was not paid, the plaintiff filed the suit on the strength of said cheques, same has been decreed.
3. According to learned counsel for the defendant, the suit is styled to have been tried under Order XXXVII of the Code but, in effect, procedure prescribed, therefore, has not been followed at all. Buttressing the submission, referred to the interim orders recorded by the trial court. On 04.09.2008 suit has been presented, notice issued to the defendant. Then after various routine orders on 18.11.2008, it has been recorded that the counsel for the plaintiff is present, defendant be summoned in accordance with XXXVII of the Code. On 27th December, 2008, it has been recorded that the defendant has presented an application seeking leave to defend the suit. As against said application objections are shown to have been filed by the plaintiff on 26th March, 2009. Then on 14th May, 2009, it is recorded that the parties are perhaps trying to settle the dispute amicably. On 31st August, 2009, the defendant has been set in exparte. On 12th January, 2010 arguments in exparte are shown to have been heard and finally suit has been decreed in exparte on 01.02.2010.
4. The argument of the learned counsel for the defendant (appellant) has substance. Trial court, in fact, initially has proceeded in the matter in accordance with the procedure other than what is prescribed under Order XXXVII of the Code. Order XXXVII provides a summary procedure. The mechanism i.e. procedure prescribed has been observed in breach. When a particular mechanism is prescribed, same has an intent and object. Departure there from would mean trial of the suit in regular mode.
5. Contention of the learned counsel for the plaintiff is that since defendant has entered appearance, he has filed application seeking leave to defend, objections have been filed by the plaintiff, non-observance of procedure prescribed under Rule 2 and 3 of Order XXXVII now pales into insignificance.
6. Admittedly, the suit has been instituted under Order XXXVII CPC because order applies to the suits upon bills of exchange. Cheque is a bill of exchange as defined under Section 6 of the Negotiable Instruments Act. The trial court on the presentation of the suit was required to issue summon in Form 4 Appendix B of CPC. Sub-rule (3) of Rule 2 provides that after such service if the defendant does not appear, the allegation in the plaint shall be deemed admitted and the plaintiff shall be entitled to decree. Rule 3 provides that the defendant may at any time within ten days of such service enter appearance in person or by pleader. Sub-rule(3) of Rule 3 provides that on the day of entering the appearance of the defendant, notice of such appearance shall be given to the plaintiffs pleader or the plaintiff himself. Thereafter plaintiff in accordance with sub-rule(4) of Rule 3 has to serve for the defendant a summon for the judgment in Form 4-A of Appendix B. Then in terms of sub-rule (5) of said Rule, within ten days the defendant has to apply for leave to defend the suit, which is to be granted only when defendant indicates that he has a
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