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Notice in a recovery suit

Submitted to: Mrs. Neha Sinha


(Faculty of DPC)

AMITESH TIRKEY

Submission Date:
Section B
Roll No. 25
Semester VIII

Research Methodology
This project work is descriptive& analytical in approach. It is largely based on primary,
secondary & electronic sources of data. Books & other references as guided by faculty of
DPC are primarily helpful for the completion of this project.

Objectives of This Project

Various objectives are to be achieved by this project; which are mentioned below.

To understand Notice as under Section 80 of CPC.

To learn to draft a notice in a recovery suit.

Contents

Research Methodology
Objectives of This Project
Various objectives are to be achieved by this project; which are mentioned below.
To understand Notice as under Section 80 of CPC.
To learn to draft a notice as regarding section 125 of CrPC.
INTRODUCTION
Notice Under Section 80(1)
Amendment
NOTICE REGARDING RECOVERY SUIT
Conclusion

INTRODUCTION

Section 80 of the CPC provides for sending a notice to the government or a public officer if

one wants to institute a suit against the government or against a public officer in respect of
any act purporting to be done by such public officer in his official capacity until the

expiration of two months. The object of the notice is to give Secretary of State or the public

officer an opportunity to reconsider his legal position and to make amends or afford

restitution without recourse to a court of law.1 This section has been enacted as a measure of

public policy and the underlying purpose is the advancement of justice and securing of public

good by avoidance of unnecessary litigation. 2Further, it has been intended to alert the

Government or a public officer to negotiate just claims and to settle them if well-founded

without adopting an unreasonable attitude by inflicting wasteful expenditure on the public

exchequer.3 The Supreme Court, in the landmark case of BihariChowdhary v. State of

Bihar4 has stated that, The object of the section is the advancement of justice and the

securing of public good by avoidance of unnecessary litigation. This project analyses the

position of the section as it stands today and its applicability.

Notice Under Section 80(1)

Suits between individuals require no notice to be given to the defendant by the plaintiff

before filing of a suit. However as per Section 80 of the Code of Civil Procedure, 1908, no

suit will be instituted against the Government or against a public officer with regards to any

act done by such an officer in his official capacity, until the expiration of two months after the

notice in writing has been delivered to, or left at the office of:

(a) in the case of a suit against the Central Government, except where it relates to a railway, a

Secretary to that Government;


1Ghanshyam Das v. Union of India, (1984) 3 SCC Del 298.-

2Mulla on the Code of Civil Procedure, J.M. Shelat, 18th edn., LexisNexis Butterworths

3State of Punjab v. Geeta Iron & Brass Works Ltd., (1978) 1 SCC 68.

4AIR 1984 SC 1043


b) in the case of a suit against the Central Government where it relates to a railway, the

General Manager of that railway;

(c) in the case of a suit against the Government of the State of Jammu and Kashmir, the Chief

Secretary to that Government or any other officer authorised by that Government in this

behalf;

(d) in the case of a suit against any other State Government, a Secretary to that Government

or the Collector of the district;

(e) in the case of a public officer, delivered to him or left at his office, stating the cause of

action, the name, description and place of residence of the plaintiff and the relief which he

claims.5

Amendment

The amendment to this section had made some changes in 1976.By the amending act of 1976

section 80 has been extensively amended. Main changes consist of the insertion of sub

section (2) and (3) which are totally new. Sub-section (2) has been inserted to permit the

institution of a suit without notice but subject to the important restriction prohibiting the grant

of relief in the suit whether interim or otherwise except after giving a reasonable

opportunity of showing cause in respect of the relief prayed for in the suit. Sub section (3)

prohibits dismissal of a suit where the notice, has been given, but suffers from certain

technical deficiencies.

It is expected from public authorities that they will let the plaintiff know their stand within

the statutory period or in any case if has chooses to take up litigation. In certain cases the

court may be obliged to draw an adverse presumption if the notice is not acknowledged or

5Civil Procedure, Justice C. K. Thakker (Takwani), 7th edn., Eastern Book Company, Lucknow
telling the plaintiff of its stand and if no stand is taken during trial it may be considered as an

afterthought.6

Order 37, CPC (Summary Suits): A neutral analysis

Civil litigation, especially recovery suits generally termed to be a long drawn battle and

regarded as something best avoided, is not so. The general belief that by filing a recovery Suit

against a Debtor will go on for years at large, is not so, if one knows the real scope of Order

37 of the Civil Procedure Code, 1908.

Order 37 CPC is one of the best provisions in the hands of a proposed Plaintiff, wanting to

institute a Civil Suit. Broadly it states as under:

Rule 1, Sub-Rule 2 makes it applicable to all suits upon bills of exchange, hundies and

promissory notes or the ones in which a Plaintiff seeks only to recover a debt or liquidated

demand in money payable on a written contract, an enactment, where the sum to be recovered

is a fixed sum of money or in nature of any debt except penalty, a guarantee - in respect of a

debt or liquidated demand.

Rule 2 requires an Order 37 Suit to contain among others, a specific averment that the Suit is

filed under this Order and no relief which does not fall within the ambit of this Rule is

claimed.

Under Order 37, there are two stages of getting the Suit decreed. One is at the stage of Rule

2(3) and the other is at the stage of Rule 2(6).

6New India Assurance Co. Ltd v. Delhi Development authority A 1991 Del
298,301
Rule 2(3) states the procedure for appearance of Defendant which is within 10 days from the

service of the summons on him. After entering appearance, the Plaintiff serves on the

Defendant summons for judgment within ten days from the date of service supported by an

Affidavit; verifying the cause of action, amount claimed and that in his belief there is no

defence to the suit.

Rule 2(6) states that in case the Defendant does not apply for a leave to defend, (a) the

Plaintiff shall be entitled to judgment immediately or (b) the Court may direct the Defendant

to give such security as it may deem fit. Sub-clause 7 states that in case sufficient cause is

shown, the delay in entering an appearance or in applying for leave to defend the Suit may

also be excused.

Rule 2(5) further states that the Defendant may within 10 days from service of such summons

for judgment by Affidavit or otherwise disclose such facts as may be deemed sufficient to

entitle him to defend, apply for leave to defend and it may be granted to him unconditionally

or upon such terms as may appear to the Court to be just. Further, the proviso indicates that

leave to defend shall not be refused unless the Court is satisfied that the facts disclosed do not

indicate a substantial defence or that the defence is frivolous or vexatious.

A boon in the hands of the Plaintiff

The real benefit of an Order 37 Suit is that unless the Defendant is able to demonstrate that he

has a substantial defence in his case, the Plaintiff is entitled to a judgment immediately. This

in laymans language means that the stages of filing a WS within 30 days and not later than

90 days, a rejoinder thereafter, admission/denial of documents, framing of issues by Court,

leading evidence, cross-examination by parties, final arguments and then finally the

judgment/decree, in an ordinary Civil Suit gets eliminated. So all that a Plaintiff has to show
is that it is a case which falls within the ambit of Order 37. Once summons is issued, the ball

is in the Court of the Defendant to show that he is entitled to a leave to defend, on grant of

which the Order 37 Suit becomes an ordinary Civil Suit and the Defendant is then directed to

file his WS within 30 days.

Lets analyze the law laid down by the Supreme Court on the issue.

The crux of the various judgments on Order 37 has been summarized in Sunil Enterprises

and Anr. v. SBI Commercial and International Bank Ltd. wherein the position was

summarized as under:

(a) If the defendant satisfied the Court that he has a good defence to the claim on merits,

the defendant is entitled to unconditional leave to defend.


(b) If the defendant raises a triable issue indicating that he has a fair or bona fide or

reasonable defence, although not a possibly good defence, the defendant is entitled to

unconditional leave to defend.


(c) If the defendant discloses such facts as may be deemed sufficient to entitle him to

defend, that is, if the affidavit discloses that at the trial he may be able to establish a

defence to the plaintiff's claim, the Court may impose conditions at the time of

granting leave to defend the conditions being as to time of trial or made of trial but

not as to payment into Court or furnishing security.


(d) If the defendant has no defence, or if the defence is sham or illusory or practically

moonshine, the defendant is not entitled to leave defend.


(e) If the defendant has no defence or the defence is illusory or sham or practically

moonshine, the Court may show mercy to the defendant by enabling him to try to

prove a defence but at the same time protect the plaintiff imposing the condition that

the amount claimed should be paid into Court or otherwise secured.


A three judge bench said in Precision Steel &Engg. Works vsPrem Deva Niranjan

Deva Tayal said that mere disclosure of facts, not a substantial defence is the sine qua

non.

What is a substantial defence depends upon facts and circumstances of each case.

In Southern Sales and Services and Ors.v. Sauermilch Design and Handels GMBH ,

it has been 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."

Generally, the Courts are usually reluctant to grant leave to defend especially an

unconditional one. This is perhaps because in an Order 37 suit, balance of convenience is

usually in favor of Plaintiff and the Courts are also aware of the delay caused in deciding

a Civil Suit which takes about three to four years, to be finally decided with an option of

Appeal to a higher fora still open.

In NeebhaKapoor v JayantilalKhandwala, Supreme Court said the underlying public

policy behind Order 37 is expeditious disposal of suits of commercial nature. It provides

for such disposal as expeditiously as possible by prescribing time frame therefore. Where,

however, applicability of Order 37 of the Code itself is in question which appears to be

the principal reason behind the impugned judgment, in our opinion, grant of leave may be

permissible. The court before passing a decree was entitled to take into consideration the

consequences therefore.

Getting out of Order 37.

The idea behind a summary suit as stated in the NeebhaKapoors case is speedy remedy.

But one must not forget - justice hurried is justice buried. A grant of leave to defend no
doubt delays the trial but it will be a travesty of justice where a Plaintiff on basis of some

photocopied documents, reproducing only the relevant extracts of an agreement and

without the evidence and cross of key witnesses gets a decree solely on the basis that he

has been able to make out a prima facie case, that too in most cases before a Trial Court.

The concept of making out a prima facie case exists in Indian jurisprudence in certain

limited cases only, under Article 136 before Supreme Court, under Article 226, 227

before High Courts, etc. This jurisdiction cannot and should not be entrusted upon a Trial

Court which is a Court of First Record. A few years of Trial is better than a scenario

where a decree has been passed without giving proper opportunity to Defendant to put

forth its case. Audi AlteramPartem is one of the basic feature of our Constitution and a

fair hearing should be given to all concerned. In any case, if the case of Plaintiff is

genuine, along with the final judgment and decree he will also be entitled to not only to

pendent elite interest but also the cost of the Suit, for causing delay and also for

compensatory costs. Therefore no prejudice is caused to a Plaintiff as it is only a matter of

time before he gets a decree in his favor.

However, even for a bonafide Defendant, sometimes it may become a horrifying

experience to get even a conditional leave to defend granted.

In NeebhaKapoors case itself, the Supreme Court did not interfere with the order of

the High Court granting unconditional leave to defend.

In Defiance Knitting Industries Pvt. Ltd. v. Jay Arts , the Supreme Court held that the

order of the Trial Court and High Court of granting a conditional leave to defend is not

sustainable but since as an interim measure the amount was deposited before the Court,

Supreme Court said that the amount need not be refunded and Trial Court was directed to

proceed with the matter.


Further, all that the Defendant has to show is a fair or bona fide or reasonable defence,

although not a possibly good defence. That means prima facie it should appear that there

is a good case on merits. Where there are disputed facts leave to defend, without doubt be

granted.

Also what is a Triable issue has not been defined anywhere and depends on facts and

circumstances of each case. Further, a Defendant has to disclose only such defence as will

entitle him to a leave to defend. Hence the provision does not envisage disclosing the

entire defence and the same is not a pre-requisite for grant of leave to defend.

While considering the scope of Rule 4 in Rajni Kumar vs Suresh Kumar Malhotra , the

Supreme Court said that the expression 'special circumstances' is not defined in the C.P.C.

nor is it capable of any precise definition. Non-service of summons will undoubtedly be a

special circumstance. In an application under Order 37, Rule 4, the court has to determine

the question, on the facts of each case, as to whether circumstances pleaded are so

unusual or extra ordinary as to justify putting the clock back by setting aside the decree;

to grant further relief in regard to post-decree matters, namely, staying or setting aside the

execution and also in regard to pre decree matters viz., to give leave to the defendant to

appear to the summons and to defend the suit. In considering an application to set aside

ex parte decree, it is necessary to bear in mind the distinction between suits instituted in

the ordinary manner and suits filed under Order 37 C.P.C.

Order 37 CPC is best suited for cases in which a Defendant does not have a case at all and

the Suit is prolonged for years. Also cases in which loans are taken from Banks and

borrowers disappear with no trace, Order 37 is useful as on the basis of loan documents, it

is easier to get a decree from Court within a short time and then all that is left for a Bank
to do is, to find the Defendant and get the decree executed. Infact, most borrowers, who

otherwise are not scared of recovery agents, often offer settlement once they receive

summons and are reprimanded by the Courts.

In InderjeetKaurvsNirpalSingh , Supreme Court warned that cautious and judicious

approach plus balanced view in respect of competing claims is necessary. It further stated

that at a stage when leave to defend is sought, it is enough if he prima facie makes out a

case by disclosing such facts as would disentitle the other side from claiming an order. It

would not be a right approach to say that unless the Defendant at that stage itself

establishes a strong case, he should be granted leave. It further cautioned that leave to

defend sought for cannot also be granted for mere asking or in a routine manner which

will defeat the very object of the special provisions contained in Chapter III-A of the Act.

NOTICE REGARDING RECOVERY SUIT

Registered/AD

Advocate

Amitesh Tirkey

Office 4, Raipur

Date 10/2/2017

TO,
ShriDr. Money Ram

Medical Superintendent,

Ganga Ram Hospital

Re: NOTICE REGARDING RECOVERY SUIT

Dear Sir,

Pursuant to the instructions from and on behalf of my client M/s Roly Poly, through its Legal

Head, Mr. RakeshSinha, I do hereby serve you with the following Legal Notice: -

1- That my client is a firm under the name and style of M/s Roly Poly.
2- That my client is engaged in the business of bakery.
3- That against your valid and confirmed order dated 24 November, 2016 my client did

your job work from time to time on credit basis as you have running credit account in

the account books of my client operated in due course of business.


4- That my client-raised bills of each and every work performed for payment, although

you have acknowledged the receipt of such bills raised by my client.


5- That inspite of acknowledging the liability of payment of principal balance of Rs.

40,000/- you have been miserably failed to make payment of the said amount due to

my client from you deliberately with malafide intent, hence you are liable to pay the

said principal balance amount of Rs. 40,000/- alongwith interest @ 10 % p.a. from

the date of due till actual realization of the said sum as is generally and customarily

prevailing in the trade usages, which comes to Rs. 48,000/-


6- That thus you are liable to pay the total amount of Rs. 48,000/- to my above named

client and my above named client is entitled to recover the same from you.
7- That my client requested you several times through telephonic message and by

sending personal messenger to your office for release of the said outstanding

payment, but you have always been dilly delaying the same on one pretext or the
other and so far have not paid even a single paisa out of the said outstanding

undisputed amount.

I, therefore, through this Notice finally call upon you to pay to my client Rs. 48,000/-.

along with future interest @10 % p.a. from the date of notice till actual realization of the

said amount, together with notice fee of Rs. 500/- to my client either in cash or by

demand draft or Cheque which ever mode suits you better, within clear 15 days from the

date of receipt of this notice, failing which my client has given me clear instructions to

file civil, criminal., suit for recovery and other Misc. proceedings against you in the

competent court of law and in that event you shall be fully responsible for the same.

A copy of this Notice has been preserved in my office for record and future course of action.

Yours faithfully,

Amitesh Tirkey

Advocate

Enclosure: Plaint

Verification

I, RakeshSinha, do hereby verify that the contents from paras 1 to 7 are correct and true to
the best of my knowledge and personal belief and no part of it is false and nothing material
has been concealed therein. Affirmed at Jaipur this 10th Day of February, 2017.

(Signature)
My client
Conclusion

This project has explained what suits against the government and public officials are. The

project starts off by saying what exactly is stated in Section 80(1) which explains how a suit

must be filed. After this, it was felt that there had to be a special emphasis given to the

amendment and how it changed the whole sections pertinent to the above topic. There is also

a mention about the nature and applicability of such suits with a mention about the various

essentials mentioned under Section 80. This project also tries to answer some of the questions

with respect to this topic such as whether notices in this matter are just a mere formality or if

they are mandatory. As this is with respect to government and public officers, this project also

speaks about what happens to acts that are conducted in an official capacity. After concluding

the above topics, this project attempts to elucidate about the various aspects of these types of

suits. It speaks about whether rights granted under this can be waived, the forms in which

notices can be served and also the modes in which these have to be served. As Justice Sen

stated laws can survive only on technicality. Keeping in view with it, this project speaks

about some of the technicality of law, like what happens when there is a technical defection

in the notice, or about the exclusion period of the notice or when there is a need for a

judgment on an urgent basis. Additionally, this project talks about the procedure when writs

are files, or when there is a premature suit, on appeal or if there is a revision.