2026 Supreme(Del) 479

IN THE HIGH COURT OF DELHI AT NEW DELHI
Neena Bansal Krishna, J.
Sandeep Goel, S/o Late Satish Chand Goel - Appellant
Versus
M/S Zavenir Developers Private Limited - Respondents
RFA 361 of 2024, RFA 718 of 2024
Decided On : 05-06-2026

A signed confirmation of accounts constitutes a written contract for summary suits. The award of pendente lite and future interest under Section 34 of the Code of Civil Procedure is a judicial discretion based on equity, allowing the court to modify rates to ensure fair compensation.

Headnote:(A) Code of Civil Procedure, 1908 - Order XXXVII - Summary Suit - Maintainability - Whether a signed confirmation of accounts constitutes a written contract for the purpose of summary proceedings - Held, a document signed by the parties acknowledging debt amounts to a written contract where there is consensus on terms, consideration, and acceptance - Failure to provide a substantive defence beyond bare denials renders the application for leave to defend a 'sham and moonshine'. (Paras 54, 57, 60)

(B) Civil Procedure Code, 1908 - Section 34 - Interest - Pendente lite and future interest - Discretion of Court - Court possesses discretion to grant pendente lite and future interest which is distinct from contractual interest - Such discretion must be exercised fairly and equitably rather than arbitrarily - Awarding future interest is intended to compensate for the time-value of money withheld during litigation - Modification of interest rates is permissible when the court deems the contractual rate disproportionate or when applying equitable principles. (Paras 65, 71, 73)

Facts of the case:
A corporate entity filed a summary suit for recovery of a loan amount along with interest based on a signed confirmation of accounts. The defendant contended that the transaction was not a loan but a repayment for an earlier cash arrangement facilitated for the plaintiff's directors, though no evidence was provided to substantiate these claims. The trial court dismissed the application for leave to defend and passed a decree against the defendant, granting interest at a reduced rate. Both parties appealed the judgment; the defendant challenged the denial of leave to defend, and the plaintiff challenged the reduction of pendente lite interest and the exclusion of future interest.

Findings of Court:
The court noted that the signed confirmation of accounts, acknowledging the principal amount and interest rate, served as a valid written obligation. The defendant's claim of a prior cash-based arrangement was found to be legally unsubstantiated and inherently implausible, constituting a mere 'sham'. Consequently, the refusal to grant leave to defend was upheld. Regarding interest, the court affirmed that under Section 34 of the Code of Civil Procedure, the awarding of pendente lite and future interest is a discretionary exercise grounded in equity. While the trial court correctly exercised its discretion to lower the pendente lite rate, the omission of future interest was corrected to compensate for the time-value of the withheld funds.

Issues: The primary issues were whether a signed confirmation of accounts qualifies as a written contract under summary suit provisions and whether the court has the discretion to modify interest rates under Section 34 of the Code of Civil Procedure.

Ratio Decidendi: An acknowledged debt via a signed balance confirmation serves as a 'written contract' sufficient for summary proceedings. Furthermore, the court has the discretionary authority under Section 34 of the Code of Civil Procedure to modify interest rates to balance equitable considerations, provided the exercise of such discretion is not arbitrary.

Result: Defendant’s appeal dismissed; Plaintiff’s appeal partly allowed. The decree is modified to include future interest at 9% simple interest per annum.