summary suit limitation
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This article is written by Siddhant Khanna, here he has discussed on the summary suit and remedies available to the defendants.

Summary Suits- What are they?

Summary suits or summary procedure is a term which is defined under order XXXVII of the Code of Civil Procedure, 1908 whose main aim is to give a summary or in other words summarize the procedure of a suit in case the defendant is not having any defence.

The question that now comes is, what is the scope of this suit or order. This order is applicable under 2 situations: –

  1. All the suits upon bills of exchange, hundies, and promissory notes.
  2. The suits wherein the plaintiff seeks to recover a debt payable by the defendant, arising either on a written contract or on an enactment where the sum sought to be recovered is fixed or on a guarantee where the claim against the principal is in respect of a debt.

Such suits are to be or can be instituted in the various High Courts, City Civil Court, Court of small causes or any other court which is authorised or notified by the High Court for the given jurisdiction.

In other words, we can say that Order XXXVII provides a summary procedure in suits based on negotiable instruments or where the plaintiff seeks to recover the debt or liquidated amount. The essence of summary suits is that the defendant is not, as in an ordinary suit, entitled as of right to defend the suit. He must apply for leave to defend within the stipulated period of ten days. Such leave will be granted only if the affidavit filed by the defendant discloses such facts as will make it incumbent upon the plaintiff to prove consideration or such other facts as the court may deem sufficient. The provisions of Order 37 are merely rules of procedure. They do not alter the nature of the suit or jurisdiction of courts. The provisions of Order 37 are constitutional.

Institution of a Summary suit under Order 37

As per Rule 2 of Order 37, to file a suit, an affirmation or an allegation is required and no relief which is not falling under the suit or its ambit will be allowed or will be claimed. For getting a suit to be decreed under Order 37, there are 2 stages to follow-

  1. This falls under Rule 2(3) which states that a procedure is required wherein the defendant has to appear within 10 days from the date of summons being served. Once done, the defendant is served with a summons for the judgement within 10 days from the date of issue by an affidavit, verifying the cause of action, amount claimed and that he beliefs that there is no defence to the suit being claimed.
  2. This falls under Rule 2(6) which states that if the defendant is unable to or doesn’t apply for leave to defend, the plaintiff will immediately be able to claim the judgment, in other words, would be eligible for the judgement. Not only this, but the court will also have the power to charge the defendant with a fee which it deems fit for the situation. But as per Sub-clause 7, if there is a sufficient cause shown for the delay, then it shall be excused.
  3. Rule 2(5) states that the defendant within 10 days of the summons being served upon him for the judgement by the issue of an affidavit has the right to disclose facts for the same which would enable him to apply for leave, defend or whichever the court deems fit. The proviso of the rule further explains that the court cannot refuse the leave if the facts disclosed are not substantial facts or are frivolous.

Decree Being Passed In Case of Summary Suits

For summary suits, a decree will be passed in the following scenarios: –

  • If the defendant fails to appear for the suit, the plaintiff’s allegation will stand true against the defendant and a decree will be passed in his favour. This decree will also enable him to get a sum of money along with the interest mentioned which would not be more than that written or specified in the summon.
  • If the defendant is made or allowed to defend the case he has in front against the plaintiff, the court shall ask him to submit security prior to fix the time and if he fails to do so then the plaintiff will have decree passed in his favour.
  • If both the scenarios are fulfilled by the defendant, then he can file a statement under Order VIII.

In the case of Sunil Enterprises and Anr. V. SBI Commercial and International Bank Ltd. It was held that –

  • if the defence put forward by the defendant on his part or merit is good and satisfactory to the court, then he has full right of entitlement to unconditional leave to defend.
  • If the issue raised is fair and has a reasonable defence, being tried, then again, the defendant will have full entitlement to unconditional leave to defend.
  • If the affidavit mentions or gives away the facts which the defendant might have used to get his claim, the court has the power to put forward conditions while giving a decision on leave to defend.
  • If a situation arises wherein the defendant has no way to defend or that the defence put forward is misrepresented, he will not be entitled to unconditional leave to defend.

In the case of Precision Steel & Engg. Works V. Prem Deva Niranjan Deva Tayal, a three-judge bench was of the opinion that substantial defence does not mean that the defendant gives or discloses a mere set of facts, it all depends on the conclusive evidence along with well-detailed facts and circumstances of the case in front. When the case of Southern Sales and Services and Ors. V. Sauermilch Design and Handels GMBH came in front of the court, it was held that “Unconditional leave to defend a suit shall not be granted unless the amount as admitted to be due by the Defendant is deposited in Court.” In Neebha Kapoor V. Jayantilal Khandwala the Supreme Court was of the opinion that the main aim of order 37 is efficient disposal of suits which are of commercial nature. It basically provides a fix time period required to give a solution or judgement for the given suit. But where there is a question raised on order 37 while giving of a judgement, then the leave granted will or may be permissible in nature and that the consequences should be observed before passing of decree for the same.

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In the recent case of IDBI Trusteeship Services Limited Vs Hubtown Limited which has laid down the law properly, it was observed by the court that: –

  • If the defendant satisfies the court that he has a substantial defence, that is, a defence that is likely to succeed, the plaintiff is not entitled to leave to sign the judgement, and the defendant is entitled to unconditional leave to defend the suit;
  • If the defendant raises triable issues indicating that he has a fair or reasonable defence, although not a positively good defence, the plaintiff is not entitled to sign the judgement, and the defendant is ordinarily entitled to unconditional leave to defend.
  • The question whether the defence raises a triable issue or not has to be ascertained by the court from the pleadings before it and the affidavits of parties and it is not open to it to call for evidence at that stage.
  • Even if the defendant raises triable issues, if a doubt is left with the trial judge about the defendant’s good faith or the genuineness of the triable issues, the trial judge may impose conditions both as to time or mode of trial, as well as payment into court or furnishing security. Care must be taken to see that the object of the provisions to assist expeditious disposal of commercial causes is not defeated. Care must also be taken to see that such triable issues are not shut out by unduly severe orders as to deposit or security.
  • If the defendant raises a defence which is plausible but improbable, the trial judge may impose conditions as to time or mode of trial, as well as payment into court, or furnishing security. As such a defence does not raise triable issues, conditions as to deposit or security or both can extend to the entire principal sum together with such interest as the court feels the justice of the case requires.
  • If the defendant has no substantial defence and/or raises no genuine triable issues, and the court finds such defence to be frivolous or vexatious, then leave to defend the suit shall be refused, and the plaintiff is entitled to judgement forthwith.
  • If any part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit, (even if triable issues or a substantial defence is raised), shall not be granted unless the amount so admitted to be due is deposited by the defendant in court.

Remedies Available To Defendant

Given the suit, if an ex-parte decree has been passed against the defendant in a suit, he will have the following remedies available to him: –

  • To set it aside, by applying to the court who gave such a decree which is part of Order IX rule 13; or
  • Have a preference of an appeal against such a decree- given in Section 96(2), or to apply for a revision under Section 115 in which there is no part of such an appeal; or
  • Apply for a review under Order 47 rule 1; or
  • Go in for a suit on fraudulent grounds.

All these remedies are of such a nature that they can be applied simultaneously. This was observed in the case of Mahesh Yadav V. Rajeshwar Singh.

Setting aside of ex-parte decree- under this one or more defendants have the power to apply for setting aside the decree. But if there is a situation wherein a defendant who has a suit being dismissed against him cannot apply for such a remedy. Such a remedy must be applied in the court where such a decree was passed against the defendant and if the decree is passed in superior court, then it must be applied in that court. Under order IX rule 13, such an application can be passed either when the summons issued were not duly served or where the defendant has not been allowed to apply for a sufficient cause for a fact in question for which he was called.

Appeal for such a decree- As per Section 96(2), the defendant can appeal against the ex-parte decree if his rights have not been exhausted under Order IX Rule 13. If even an appeal has come under order XLIII, he still has the right to file an appeal under the given section. But if his setting aside of the decree is cancelled then he cannot appeal against the decree for grievance.

Review for such a decree- Review is given under Order XLVII Rule 1 for a given a judgement. If the grounds or condition given under the rule are fulfilled then the defendant can apply for a review for an ex-parte decree.

Fraudulent Grounds- When a decree is passed based on fraud, the remedy available is to prove that the fraud has resulted in the actual loss, there is suppression on part of the summons for fraud. But if an application given for this by the defendant is rejected by the court, then a similar regular suit based on fraud in question will not be allowed as per res judicata. Secondly, it’s necessary to show that fraud conducted was a flaw on part of the party’s knowledge showing such conduct. Though these two points of summons suppressed or flaw on the party’s knowledge are not sufficient enough, once a summons is issued for such, it will lead to setting aside the ex-parte decree.

In Martin Burn Ltd. v. R.N. Banerjee, it was held when questioned about the role of the tribunal, that tribunals had the power to set aside an ex-parte decree and had jurisdiction over such matters when the application was put forward. In A.C. Ananthaswamy & Others vs Boraiah (Dead) By Lrs the court observed whether the question of non-service of summons amounts to fraud or not. The court held that on basing of non-service of summons, the suit filed will not be maintained on the grounds of the ex-parte decree being set aside. In Gauhati University v. Niharalal Bhattacharjee the court was of the view that if the summons being served are not conducted in a proper manner, then the day the petitioner gets to know about it or has knowledge of the order is the day when the limitation period for setting aside the ex-parte decree which is 30 days begins.

In Bhanu Kumar Jain v. Archana Kumar, it was held that a defendant had the right to apply for two remedies simultaneously and that this did not take away his right to appeal given under the law unless it is not interfering with any other provision. Hence it is clear that the defendant can apply for two remedies as well when an ex-parte decree is passed against him.

Conclusion

Summary Suits are suits which can be instituted upon a plaintiff seeking debt or recovery of an amount. The defendant in these suits can apply for leave to defend provided he has the required defence to prove that his stand is substantive in nature otherwise it’s the plaintiff who has a better hand on the suit. Given the various judgements, it is clear that such suits require the defendant to provide clear and true facts and the main aim of this order is to make sure that the cases are decided in a speedy and efficient manner. Based on various suits and their nature, there are 4 remedies available to the defendant which make sure that his position is safe and that he can overrule the decree passed against him and get justice in a fair manner.

 

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