GUJARAT HIGH COURT
Sandeep N. Bhatt, J.
Dineshbhai Khimjibhai Patel – Petitioner
versus
Pareshbhai Devilal Sankhesara – Respondent
R/Special Civil Application No.4725 of 2021 with R/Special Civil Application No.4681 of 2021 with R/Special Civil Application No.4680 of 2021 with R/Special Civil Application No.3245 of 2021 with R/Special Civil Application No.8524 of 2020 with R/Special Civil Application No.8526 of 2020 with R/Special Civil Application No.8861 of 2020
Decided on 2.5.2023
Civil Procedure Code, 1908 – Order 37 Rules 1 and 2 – Summary Suit – Leave to defend – Imposition of conditions – In a summary suit, if defendant discloses such facts of a prima facie fair and reasonable defence, court may grant unconditional leave to defend – However, in an appropriate case, if court is satisfied of a plausible or probable defence and which defence is not considered a sham or moonshine, but yet leaving certain doubts in mind of court, it may grant conditional leave to defend – Ultimate object of a summary suit is expeditious disposal of a commercial dispute – Discretion vested in court requires it to maintain delicate balance between respective rights and contentions by not passing an order which may ultimately end up impeding speedy resolution of dispute – Direction to deposit 50% of suit amount has been imposed upon defendants-petitioners, as a condition to defend suit, quashed and set aside – Petitioners given liberty to defend suits unconditionally. (Paras 11 and 14)
Result: Petitions allowed.
JUDGMENT (COMMON ORAL)
By way of these petitions, the petitioners-original defendants seek to challenge the orders passed by the learned Principal Senior Civil Judge, Sabarkantha-Idar below the applications for leave to defend in respective Special Summary Suits filed by the original plaintiffs, whereby the direction to deposit 50% of the suit amount has been imposed upon the defendants-petitioners, as a condition to defend the suit.
2. At the joint request of learned advocates for the parties, all these petitions are being disposed of finally by this common oral judgment, as common question of law and facts are involved in all these petitions.
3. Rule. Respective learned advocates waive service of notice of rule in respective petitions.
4. The partnership firm and the partners therein have filed the petitions herein. For the sake of convenience, the facts of Special Civil Application No.4725 of 2021 are referred to, which are as under:—
4.1 The original plaintiff filed summary proceedings under Order 37 of Code of Civil Procedure, 1908 (hereinafter referred to as ‘CPC’ for short) before the learned Principal Senior Civil Court, Idar seeking the decree for the amount mentioned in each of the suits with 18% p.a., towards the claim of refund of deposit, claim for loss of interest on deposit quantified at 18%, claim towards running bill, claim of loss of interest on delayed payments towards running bills quantified at 18% and claim towards the fees for issuance of notice.
4.2 The plaintiff preferred application seeking summons for judgment and upon service of the said application, the present petitioner filed leave to defend, which was admitted with a condition to deposit 50% of the claim amount to defend the suit, vide the impugned orders. Hence, these petitions are filed.
5. Heard learned advocates for the respective parties.
5.1 Learned advocates for the petitioners in the respective petitions submit that the summary suit was filed with the reliefs mentioned therein under Order 37 of the CPC. Referring to the provisions of Order 37 of CPC, learned advocates for the petitioners submit that Order 37 Rule 2(1) of CPC mandates that there must be a specific averment to be made in the plaints that they are filed under Order 37, however, the plaints do not mention any such averment and therefore the suits themselves are not maintainable. They further submit that the plaintiff has maintained the suit claiming deposit and unpaid dues against the running bills along with damages without producing invoices in support of the claim, the claim of interest was admittedly one for damages for breach of the contract between the parties, the claim of interest was of unliquidated damages which did not give rise to a debt until the liability was adjudicated and damages are assessed by a decree or order of the Court. They further submit that the principal agreements/contracts and other multiple contracts with the plaintiff were not produced on the record of the suits and in absence of documents delineating the rights and liabilities or upon which the claim pleaded has arisen, the suit was not maintainable.
5.2. They further submit that the ledger produced by the plaintiff reflects that the said sum has been paid to the petitioner and there is serious dispute with respect to the correctness and accuracy of the ledger and the accounts maintained by the plaintiff; that it is difficult to take into consideration the entries made in the books of accounts at this stage inasmuch as the same are triable issues involved in the suit, which would require elaborate evidence to be led at the time of trial. They therefore, prayed that the impugned conditional orders passed to leave to defend the suit prejudices the present petitioners of their right to leave to defend. They, therefore, prayed to allow these petitions by quashing and setting the impugned orders.
5.3 Learned advocates for the petitioners relied on the following judgments in support of their submissi
B.L. Kashyap and Sons Limited vs. J.M.S. Steels and Power Corporation and Another
In a summary suit, if defendant discloses such facts of a prima facie fair and reasonable defence, court may grant unconditional leave to defend.
Conditional leave to defend in summary suits must be justified by substantive evidence of outstanding dues; mere allegations without proof may warrant unconditional leave to defend.
A defendant in a summary suit is entitled to leave to defend if they raise plausible triable issues, even if the defense is not strong.
Point of Law - Court has considered the issue and confirmed the order passed by the learned trial court granting the application for leave to defend conditionally. All the rights and contentions of t....
The court ruled that leave to defend a summary suit should be granted where defendants raise substantial defenses; however, failure to demonstrate a triable issue leads to dismissal.
(1) Summary suit (Money suit) – Generally, prayer for leave to defend is to be denied in such cases where defendant has practically no defence and is unable to give out even a semblance of triable is....
In summary suits, the trial judge has discretion to grant conditional leave to defend based on triable issues, essential for expediting commercial disputes, unless genuine financial inability is subs....
Point of Law - Order is contrary to the settled principles of law and once a party has given the cheque for setting right the accounts, then in that case, all such contentions which are not raised at....
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