Professional Documents
Culture Documents
http://www.legalservicesindia.com/article/1514/Order-37,-CPC,-Summary-Suits.html
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:
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).
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.
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 vs Prem 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 Neebha Kapoor’s 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.
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.
Email: aksh@legalserviceindia.com
Website: http://www.