This article is written by Shraddha Jain, a law student at the Institute of Law, Nirma University, Ahmedabad. This article seeks to elucidate the concept of a summary suit under Order 37 CPC along with its objective and landmark cases. It also explains various procedures that have to be followed in Order 37.

This article has been published by Sneha Mahawar.

Introduction 

Order 37of the Code of Civil Procedure, 1908, provides for a summary suit or summary procedure for negotiable instruments. A summary suit is a special and fast way of exercising a claim in an efficient way because, in this procedure, judges pronounce decisions without listening to the defence. Though this appears to be a violation of the basic principle of natural justice, ‘audi alteram partem’, that no one should be convicted without a hearing, this method is only applied in circumstances in which the defendant has no defence. 

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The advantage of this ruling is dependent on the defendant. If the defendant does not have a proper substantive defence to defend his case, then the plaintiff is entitled to get the judgement immediately. Summary proceedings are a legal remedy for recovering money, resolving business transactions, and resolving contractual disputes. The scope of its applicability is very narrow. It’s a highly technical procedure. One should understand the proceedings of a case under Order 37 of the Civil Procedure Code (CPC). 

What is an Order 37 suit?

Order 37 of the CPC establishes the summary procedure. The order was created by keeping in mind some specific suits in order to avoid the undue hindrance imposed by the defendant, who has no defence. In contrast to other civil claims, the trials in summary procedure begin after the judge grants leave to the defendant to challenge the case. The judge dealing with summary suits can pass judgement in favour of the plaintiff if:

  • The defendant has not tried to apply for leave to defend, or if such a request has been made but rejected, or 
  • The defendant who is allowed to defend fails to abide by the terms and conditions upon which leave to defend has been conferred.

Object of Order 37 suit

The goal of summary proceedings is to eliminate undue interference by defendants who don’t have a defence and to aid in the rapid disposition of cases.

The provision was maintained to guarantee that the defendant does not unduly extend litigation and hinder the plaintiff from getting a judgement by asserting unsustainable and ridiculous defences in a type of matter where quick decisions are essential for the benefit of economic transactions.

In Navinchandra Babulal Bhavsar v. Bachubhai Dhanabhai Shah (1967), the Gujarat High Court outlined the objective of summary suits. The Court stated that the sole objective of implementing the summary procedure is to give motivation to businesses and industry by inspiring confidence in the industrial community that their reasons with regard to financial claims of liquidating sums (ascertained amount) would have been speedily determined and that their claims would not stay on for decades, preventing their money for a long period.

Constituents of Order 37 CPC

Rule 1: Application of Order

Rule 1 of Order 37 talks about the courts and types of lawsuits to which Order 37 applies. It states that a matter filed under summary process may be brought before a civil judge, an additional district judge, a judge of the high court, or any other court with financial authority.

Rule 1(2) applies to all suits based on bills of exchange, hundies, and promissory notes, or those in which a claimant aims only to revive a debt or liquidated demand in funds payable on a written agreement, an enactment, in which the amount to be retrieved is a fixed amount of money or in the essence of any debt apart from fines, and a guarantee with regard to a debt or liquidated demand.

Rule 2: Institution of summary suits upon bills of exchange, etc.

Rule 2(1) basically deals with the plaintiff and the plaint. The plaintiff must provide all the relevant details to the court in his plaint. The plaintiff must provide a particular averment that the complaint is being filed in accordance with this Order.

Rule 2(2) provides that the summons should be in the format as prescribed in Form No. 4 in Appendix B or in any other form as prescribed from time to time.

Rule 2(3) specifies that if the defendant fails to appear within ten days of the summons being served upon him, the claim is presumed acknowledged, and the plaintiff is entitled to a decision in an amount not exceeding the sum specified in the summons.

Rule 3: Defendant showing defence on merits to have leave to appear

Rule 3(1) provides that in a claim in which this Order applies, the plaintiff must provide the defendant with the notice to appear and a copy of the plaint. The defendant’s appearance must take place within ten days of the summons being served upon him.

Rule 3(2) provides that all summons, notifications, and other legal proceedings must be delivered to the defendant at the address provided by him.

Rule 3(3) states that on the day when the defendant appears in the court, he must notify such attendance to the plaintiff’s pleader or the plaintiff personally either by notice delivered or by prepaid letter.

Rule 3(4) says that if the defendant appears, the plaintiff must then issue a summons for judgement in Form number 4A in Appendix B on the defendant. It must contain an affidavit certifying the basis of action and the sum claimed and indicating that there is no defence to the suit in his opinion.

Rule 3(5) says that the defendant may apply for leave to defend within ten days of the delivery of such notice to appear for judgement by affidavit or otherwise reveal such factual information as may be deemed sufficient to enable him to justify, and it might be given to him unquestioningly or on such conditions as the court deems fit. Furthermore, the provision states that permission to defend will not be denied unless the court is convinced that the facts revealed do not suggest a significant defence or that the defence is absurd or unreasonable.

Rule 3(6) provides that if the defendant does not ask for permission to plead, then-

  1. The plaintiff has the right to judgement immediately, or
  2. The court may order the defendant to provide such assurance as it deems appropriate. 

Rule 3(7) provides that if sufficient cause is proven, the postponement of entering an appearance or seeking permission to defend the action may also be allowed.

Rule 4: Power to set aside decree

The court has the authority to set aside the ex-parte decree entered in summary litigation under Rule 4 of Order 37. If it is fair to the court, the court may set aside the decree, give a stay of execution, or give any other permit to the defendant to attend to the summons and defend the claim.

Rule 13 of Order IX of the CPC deals with setting aside the ex parte rulings. The defendant must show that the summons was not properly served or that he was prohibited from attending the hearing for whatever reason.

Rule 5: Power to order bills, etc., to be deposited with the officer of court.

Under Rule 5 of Order 37, the court may direct that the disputed negotiable instrument be submitted by a court official.

The court may also ask the plaintiff or defendant to pay some security in the form of expenses to assure the plaintiff or defendant’s good faith.

Rule 6: Recovery of cost of noting non-acceptance of dishonoured bills or notes

Rule 6 of the Order 37 provides that the possessor of any dishonoured bills of exchange or promissory note may have the rights under this Order for the restitution of the costs incurred in the recovery of the value of such bill or note.

Rule 7: Procedure in suits

Rule 7 of Order 37 says that, except as provided in the order, the procedure for an ordinary civil suit also applies to summary procedures. 

Procedure in summary suits

There is a proper procedure that has to be followed while bringing a suit under Order 37 of the CPC. The procedure followed in a summary suit is as follows:

  1. The plaintiff files a complaint.
  2. Summons are given to the defendant to be present in court. Summons must include the sum of money that is claimed in the litigation as well as a copy of the plaint.
  3. The defendant must appear within 10 days of receiving the summons.
  1. If the defendant fails to attend, the claim is presumed acknowledged, and the plaintiff is entitled to a decision in an amount not exceeding the sum specified in the summons.
  2. If the defendant appears within 10 days, he must provide notice of his attendance to the plaintiff’s counsel or to the plaintiff himself, and he must also submit in court an address for service of notices on him.
  1. After receiving the defendant’s notification of presence, the plaintiff issues him with a summons for judgement.
  2. The defendant should ask for permission to defend within 10 days of receiving the summons, and such permission will be given only if the defendant’s declaration reveals information that the court thinks is adequate to allow him to defend.

Procedure for the appearance of a defendant

The defendant does not have any right to defend his or her case under summary procedure. The defendant must produce his presence by itself or through pleaders, within 10 days of receiving the summons. The defendant must notify such attendance to the plaintiff’s pleader or the plaintiff personally on the day of making the presence. If the defendant makes an appearance, the plaintiff must then issue a summons for judgement on the defendant.

The defendant may apply for notice to defend such a suit by affidavit or disclose such factual information as may be deemed fit to enable him to protect at any time within 10 days of the delivery of such summons; such defence shall not be denied unless the court believes that the facts revealed by the defendant are ineffective.

How Order 37 CPC benefits the plaintiff

The main advantage of an Order 37 suit is that the plaintiff is entitled to a judgement immediately if the defendant fails to establish that he has a significant defence in his case. Summary proceedings are legal remedies for recovering money, resolving business transactions, and resolving contractual disputes. In comparison to a regular suit, such proceedings are often easier to establish the plaintiff’s case and more difficult for the defendant’s side.

Jurisdiction of summary procedure

Claims can be brought in the following cases:

  1. Where the defendant resides;
  2. The defendant runs a business or works for a living, or
  3. The action’s cause originates entirely or partially.

Pecuniary jurisdiction might be determined according to the value of the lawsuit. A claim can be brought in either the high court or the district court, depending on the pecuniary jurisdiction.

If anybody brings a claim in court under Order 37 of CPC, the court has a legal responsibility to inquire into the details of the situation and to analyse the documents submitted in addition to the plaint to ensure that it meets the requirements of Order 37 of CPC. If the hon’ble judge believes that the claim cannot be heard under summary process, he may issue an order treating the plaint as a regular civil complaint.

What distinguishes summary suits from ordinary suits

Point of differenceSummary suitOrdinary suit
ProvisionsOrder 37 of CPC provides for summary litigation.An ordinary suit is registered under Section 26, Order VI, Rule 1 of the CPC.
Time limitIn a summary suit, the defendant has 10 days to prove his case.The time limit for submitting a written statement in an ordinary suit is 30 days.
PurposeSummary suits can only be brought in two types of cases: Suits based on bills of exchange, hundies, promissory notes, and promissory notes, and to recover a debt, liquidated demand payable in money by the defendant on a written contract and on a guarantee.Ordinary suits can be brought for any reason and are not confined to any specific type of suit.
Right to defendThe defendant does not have any right to defend the summary suit unless the court gives conditional or unconditional authorization to defend.In ordinary litigation, the defendant has the right to defend the claim and no leave to defend is required.
Ex-parte decreeAn ex-parte decree can be issued to the plaintiff in summary proceedings if the defendant fails to appear in court or refuses to defend the matter.In ordinary suits, several summons are sent to the defendant when an ex-parte decree is issued.

Critical analysis of Order 37 CPC

The Supreme Court ruled in Neebha Kapoor v. Jayantilal Khandwal (2008) that “summary cases are an instrument of speedy remedy”. However, it is also a well-known fact that “justice hurried is justice buried”. Also, in reality, it is difficult to differentiate between frivolous and significant defence. Therefore, the power provided by the aforementioned order must be used with care and caution.

Furthermore, the idea of “audi alteram partem” is a key notion in natural justice and a fundamental aspect of the Constitution. However, under summary procedure, the presentation of the defendant’s case is omitted, favouring the plaintiff over the defendant. Also, in summary suit, the right to defend in a case is not a right; rather, it must be claimed to the satisfaction of the court.

Landmark cases under summary suits

M/S. Sunil Enterprises and Anr. v. SBI Commercial and International Bank Ltd. (1998)

The essence of the different rulings of Order 37 CPC was described in M/S. Sunil Enterprises and Anr. v. SBI Commercial and International Bank Ltd., where the conclusion was as follows:

  1. If the defendant has proved to the court that he has a strong defence to the allegation, then the defendant may be granted unconditional leave to defend.
  2. The defendant is eligible for unconditional permission to defend if he presents a summary issue suggesting that he has a reasonable, genuinely, or acceptable defence but not a good defence.
  3. If the defendant reveals facts adequate to enable him to protect, that is, if the affidavit reveals that during prosecution he may be able to provide a defence to the complainant’s claim, the court may issue a situation at the time of awarding leave to defend.
  4. The defendant may not seek leave to defend if he or she has no defence or if the defence is false, fictitious, or completely worthless.
  5. If the defendant has no defence or the defendant’s defence is merely an illusion, then the court may show kindness to the defendant by allowing him to attempt to establish a defence while also protecting the plaintiff by enforcing the condition that the sum claimed be paid into court or otherwise protected.

Neebha Kapoor v. Jayantilal Khandwala (2008)

The Supreme Court said in Neebha Kapoor v. Jayantilal Khandwala that the primary public interest behind Order 37 CPC is the quick disposition of economic litigation. It specifies a time range to ensure that such disposal is completed as soon as practicable. However, if the validity of Order 37 CPC itself is at issue, which seems to be the main reason underlying the assailed judgement, we believe that leave may be granted. Before issuing a decree, the court has the authority to examine the consequences.

S.S. Steel Industry v. Guru Hargobind Steels (2019)

In S.S. Steel Industry v. Guru Hargobind Steels, the Delhi High Court stated that Order 37 Rule 2(3) CPC expressly states that the defendant shall not defend the civil case unless he makes his appearance, and in the absence of his presence, the assertions in the plaint will be deemed admitted, and the plaintiff is entitled to a declaration for the total amount not exceeding the amount noted in the summons.

Given the precise restrictions of Order 37 Rule 2(3) CPC, it is not within the trial court’s jurisdiction to determine whether the suit fulfils the requirements of Order 37 CPC or not. Once a summons in the specified format has been issued and formally delivered, the defendant is required to enter an appearance within the time limit; if the defendant fails to appear within the time frame, the averments in the plaint are deemed accepted, and the plaintiff is granted a decree immediately.

Conclusion

To conclude, summary suits are a one-of-a-kind method for preventing undue impediments by the defendant. Summary cases are advantageous to commercial enterprises because the claimant is eligible for a judgement if the defendant lacks a strong defence. Order 37 CPC guarantees that the defendant does not drag out the proceedings. The defendant in these instances can seek permission to defend if he possesses the necessary defence to demonstrate that his position is substantive in character; otherwise, the plaintiff has a stronger hand in the case. It also creates a suitable mechanism to guarantee that the defendant does not extend the lawsuit, especially as time is of the essence in business situations, and furthers the goal of justice.

Frequently Asked Questions (FAQs)

What is the limitation of using a summary procedure?

The litigation must be brought within three years of the emergence of the cause of action. The aforementioned limited time cannot be condoned.

What is the time limit for summary procedure?

In a summary suit, the defendant has a 10 days time period to prove his case.

What is the benefit of Order 37 CPC?

The main advantage of an Order 37 suit is that the plaintiff is eligible for a judgement quickly, except if the defendant establishes that he has a significant defence in his case. All that a plaintiff needs to prove is that the matter comes under the purview of Order XXXVII.

References

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