Leave to Defend Under Order XXXVII CPC
Key Takeaways
- Leave to defend under Order XXXVII of the Code of Civil Procedure, 1908 is not an absolute or automatic right. A defendant in a summary suit must enter appearance and obtain permission from the court before being allowed to defend the suit.
- Under Order XXXVII Rule 3(5), the defendant may apply for leave to defend within ten days from the service of summons for judgment by disclosing facts sufficient to justify a defence.
- Leave should ordinarily be granted unconditionally where the defendant establishes a substantial defence or raises genuine and reasonable triable issues.
- Where the defence appears doubtful, improbable or lacks complete bona fides, the court may grant conditional leave, including conditions relating to deposit of money or furnishing security.
- Where the defence is frivolous, vexatious, sham or practically illusory, the court may refuse leave to defend and the plaintiff may become entitled to judgment.
- If any part of the plaintiff’s claim is admitted by the defendant, the admitted amount must ordinarily be deposited in court before leave to defend can be granted.
- The Supreme Court in IDBI Trusteeship Services Ltd. v. Hubtown Ltd. clarified the modern principles governing unconditional leave, conditional leave and refusal of leave under the amended Order XXXVII.
What Is Leave to Defend Under Order XXXVII CPC?
Leave to defend is the permission granted by a court to a defendant to contest a summary suit instituted under Order XXXVII of the Code of Civil Procedure, 1908.
A summary suit follows a special and comparatively expedited procedure. Unlike an ordinary civil suit, the defendant does not acquire an unrestricted right to defend merely because summons has been served. The defendant must follow the procedure prescribed under Order XXXVII and obtain leave of the court where required.
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This special procedure seeks to prevent defendants from unnecessarily delaying claims falling within the scope of Order XXXVII by raising defences that are frivolous, sham or incapable of succeeding.
At the same time, the procedure does not permit genuine defences to be shut out merely because the suit has been filed as a summary suit. Courts are therefore required to distinguish between a genuine triable defence and a defence raised only to delay the proceedings.
Is Leave to Defend a Matter of Right?
No. Leave to defend cannot be claimed as an absolute matter of right under Order XXXVII CPC.
A defendant must disclose facts showing that there is a substantial defence or a genuine issue requiring trial. The court examines the nature of the defence before deciding whether leave should be:
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- Granted unconditionally: Where a substantial or genuine defence requiring trial has been shown.
- Granted subject to conditions: Where the defence raises an issue but its bona fides or probability remains doubtful.
- Refused altogether: Where the proposed defence is frivolous, vexatious, sham or practically illusory.
However, judicial discretion in this area is not unrestricted. Once a substantial and genuine defence is shown, the defendant normally becomes entitled to unconditional leave.
The Supreme Court has repeatedly emphasised that the basic question is whether the defence is real and bona fide or merely sham and illusory.
Procedure for Entering Appearance Under Order XXXVII
Order XXXVII Rule 3 contains the procedure relating to appearance and leave to defend.
When a summary suit is instituted, the plaintiff serves the defendant with summons along with a copy of the plaint and relevant annexures.
Under Rule 3(1), the defendant may enter appearance within ten days from the service of summons. The defendant must also provide an address for service.
Where appearance has been entered, the plaintiff thereafter serves a summons for judgment upon the defendant. The summons for judgment must be supported by an affidavit verifying the cause of action, the amount claimed and the plaintiff’s belief that there is no defence to the suit.
The defendant then gets an opportunity to seek leave to defend.
The procedure is therefore different from the normal institution of a suit under CPC, where the defendant ordinarily contests the claim through the regular procedure without first having to establish grounds for permission to defend.
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What Is the Time Limit for Applying for Leave to Defend?
Under Order XXXVII Rule 3(5), an application for leave to defend may be made within ten days from the service of summons for judgment.
The application may be supported by an affidavit or other material disclosing facts sufficient to show why the defendant should be permitted to contest the suit.
Therefore, two procedural stages must be distinguished:
- Entering appearance: The defendant must first enter appearance within the prescribed period after service of the summons in the suit.
- Seeking leave to defend: After summons for judgment is served, the defendant must apply for leave to defend within the prescribed period.
These two stages should not be confused. Entering appearance does not by itself amount to obtaining permission to defend the claim.
The court may, on sufficient cause being shown, excuse delay in entering appearance or seeking leave where the provisions of Order XXXVII permit such relief.
What Must the Defendant Show to Obtain Leave to Defend?
The defendant does not have to finally prove the entire defence at the stage of seeking leave. The court is primarily concerned with whether the defence raises a genuine issue that deserves adjudication at trial.
The material placed before the court should disclose facts indicating:
- A substantial defence: The facts, if ultimately established, should be capable of defeating or materially affecting the plaintiff’s claim.
- A fair and bona fide defence: The defence should be genuine rather than manufactured merely to delay the summary proceedings.
- A genuine triable issue: There should be a question of fact or law requiring proper adjudication.
- A legally sustainable dispute: The defendant must show grounds on which the plaintiff’s claim can reasonably be contested.
- Circumstances justifying trial: The material should demonstrate why the dispute cannot properly be decided summarily.
The court ordinarily considers the parties’ pleadings, affidavits and documents placed before it. The leave stage is not itself intended to become a complete trial involving final determination of disputed evidence.
In IDBI Trusteeship Services Ltd. v. Hubtown Ltd., the Supreme Court reiterated principles governing the assessment of the defence and the circumstances in which unconditional or conditional leave may be granted.
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What Is a Triable Issue?
A triable issue is an issue that is sufficiently genuine, substantial or plausible to require adjudication through the ordinary trial process.
A bare denial of liability is not necessarily enough. Similarly, an imaginary or artificial defence created merely to prevent an early decree does not amount to a triable issue.
The court considers whether the facts alleged by the defendant, if ultimately proved, could constitute a proper defence to the plaintiff’s claim.
A triable issue may arise from disputed facts, the interpretation of a transaction, questions concerning liability or other legally relevant matters that cannot fairly be rejected without giving the defendant an opportunity to establish the defence.
Raj Duggal v. Ramesh Kumar
In Raj Duggal v. Ramesh Kumar, the Supreme Court explained that the relevant test is whether the defence raises a real, honest and bona fide dispute and whether a triable issue arises.
Where a fair dispute requiring trial exists, leave to defend should ordinarily not be refused.
The case reflects an important principle: summary procedure is intended to eliminate sham defences, not genuine disputes that require adjudication.
When Is Unconditional Leave to Defend Granted?
Unconditional leave is generally appropriate where the defendant shows either a substantial defence or a fair and reasonable triable issue.
The modern position was comprehensively explained by the Supreme Court in IDBI Trusteeship Services Ltd. v. Hubtown Ltd.
The Court held that where the defendant establishes a substantial defence that is likely to succeed, unconditional leave should be granted. Similarly, where the defendant raises triable issues indicating a fair or reasonable defence, though not necessarily a positively good defence, unconditional leave should ordinarily follow.
This protects a defendant from being denied a full trial where a genuine dispute exists.
At the same time, the word “ordinarily” is significant. The court may examine the bona fides of the defence and the surrounding circumstances before deciding whether any condition should be imposed.
When Can Conditional Leave Be Granted?
Conditional leave occupies the middle ground between unconditional permission to defend and complete refusal of leave.
It may be appropriate where the defence cannot immediately be described as entirely sham but nevertheless creates doubts regarding its genuineness, probability or bona fides.
In IDBI Trusteeship Services Ltd. v. Hubtown Ltd., the Supreme Court explained that even where triable issues are raised, if the trial judge retains genuine doubt regarding the defendant’s good faith or the genuineness of those issues, conditions may be imposed.
Such conditions may concern the conduct of the proceedings and, in appropriate cases, the deposit of money or furnishing of security.
Where a defence is plausible but improbable, conditional leave may similarly be justified.
However, conditions should serve the purpose of balancing the plaintiff’s interest in speedy recovery with the defendant’s right to contest a genuine dispute. They should not operate in a manner that practically shuts out a bona fide defence.
When Can Leave to Defend Be Refused?
Leave to defend may be refused where the court finds that the defendant has no substantial defence and that the proposed defence is frivolous or vexatious.
Typical circumstances include cases where:
- The defence is wholly sham or fictitious: It does not disclose any genuine dispute requiring adjudication.
- The defence is merely intended to cause delay: The material shows no substantial basis for contesting the claim.
- No triable issue is disclosed: Even if the assertions are considered, they do not create a matter requiring trial.
- The allegations do not constitute a defence: The facts relied upon would not defeat the claim even if accepted.
- The defence is plainly untenable: The material placed before the court shows that the defence lacks substance.
Thus, refusal of leave is principally intended for cases where there is no genuine defence requiring trial.
Where leave is refused, the special nature of the summary procedure enables the plaintiff to obtain a decree without going through a full ordinary trial.
What Happens When Part of the Amount Is Admitted?
An important qualification applies where the defendant admits that a part of the plaintiff’s claim is due.
The second proviso to Order XXXVII Rule 3(5) provides that where part of the amount claimed is admitted to be due, leave to defend shall not be granted unless the admitted amount is deposited in court.
This requirement is mandatory in relation to the amount actually admitted.
Southern Sales and Services v. Sauermilch Design and Handels GmbH
The Supreme Court considered this issue in Southern Sales and Services v. Sauermilch Design and Handels GmbH.
The Court noted that the amendment to Rule 3 materially altered the earlier position by introducing the requirement concerning admitted amounts. The deposit of the amount admitted to be due became a condition precedent to the grant of leave in relation to such admission.
The decision therefore highlights an important distinction between:
- The disputed portion of the plaintiff’s claim: This may be contested where an appropriate defence or triable issue is shown.
- The admitted portion of the claim: The statutory requirement of deposit applies where the defendant admits that such amount is due.
A genuine triable issue concerning the disputed amount does not remove the statutory requirement relating to an amount expressly admitted by the defendant.
What Happens If Leave to Defend Is Not Applied for?
Order XXXVII creates serious consequences where the defendant does not seek leave after the summons for judgment has been served.
Under Rule 3(6), where the defendant does not apply for leave to defend, or where the application is made but refused, the plaintiff may become entitled to judgment forthwith.
This is one of the principal features distinguishing a summary suit from an ordinary civil suit.
The procedure therefore ensures that a defendant cannot automatically convert a summary claim into an ordinary contested trial merely by denying liability.
It also explains why compliance with the procedural requirements of Order XXXVII is important. Failure to enter appearance or properly seek leave can have direct consequences for the defendant’s ability to contest the suit.
Can the Court Examine Evidence at the Leave Stage?
The leave stage does not ordinarily require the court to conduct a complete trial or finally decide disputed evidence.
The court assesses whether the facts disclosed in the pleadings, affidavits and documents create a sufficiently genuine defence.
The absence of complete evidence at this preliminary stage does not by itself justify rejection of an otherwise genuine defence. The stage of formally proving disputed facts ordinarily arrives after leave has been granted.
However, the court is entitled to examine whether the allegations are inherently improbable, artificial or unsupported to such an extent that the defence appears sham.
The distinction is important. The court must evaluate whether a defence is genuinely triable without turning the application for leave into the trial itself.
What Did Wada Arun Asbestos Case Decide?
In Wada Arun Asbestos (P.) Ltd. v. Gujarat Water Supply and Sewerage Board, the Supreme Court considered questions arising from an order granting leave subject to conditions.
The decision recognised the significance of an order imposing conditional leave and the remedies available in relation to such an order.
Questions relating to such orders may also involve the revisional jurisdiction of the appropriate court, depending on the applicable legal requirements.
The decision reinforces the wider principle that an order concerning conditional leave has significant consequences because failure to comply with the condition may ultimately result in a decree being passed against the defendant.
Can a Summary Decree Be Set Aside?
Order XXXVII Rule 4 contains a special mechanism relating to decrees passed under the summary procedure.
Where special circumstances are shown, the court may set aside the decree and grant appropriate relief, including permission to appear and defend where legally justified.
This special provision is important because the power is specifically contained within Order XXXVII itself.
Ramkarandas Radhavallabh v. Bhagwandas Dwarkadas
In Ramkarandas Radhavallabh v. Bhagwandas Dwarkadas, the Supreme Court considered whether Section 151 CPC could independently be invoked to set aside a decree where Order XXXVII itself contained a specific provision dealing with the matter.
The Court held that since Rule 4 expressly provided for setting aside a decree passed under Order XXXVII, the inherent powers under Section 151 could not be used to bypass the requirements of the specific rule.
The case highlights an important procedural principle: where the CPC contains a specific remedy or procedure governing a matter, inherent powers cannot ordinarily be invoked to circumvent that express mechanism.
Tests for Granting Leave to Defend
The principles governing leave to defend can broadly be understood through the following categories.
Substantial Defence
Where the defendant shows a substantial defence that appears likely to succeed, unconditional leave should be granted.
A substantial defence goes beyond a mere denial. It presents a legally significant answer to the plaintiff’s claim that, if established, may defeat the claim wholly or substantially.
Fair or Reasonable Triable Issue
Where the defence raises a genuine and reasonable issue requiring trial, unconditional leave should ordinarily be granted even if the defence cannot yet be described as certain to succeed.
At this stage, the court is not required to determine which party will ultimately succeed. The question is whether there is a real dispute requiring adjudication.
Doubtful Bona Fides
Where a triable issue is disclosed but the court has genuine doubts concerning the defendant’s good faith or the genuineness of the defence, conditional leave may be appropriate.
Conditions allow the defence to proceed while protecting the plaintiff against unnecessary delay or an apparently doubtful claim of defence.
Plausible but Improbable Defence
Where the defence appears theoretically possible but substantially improbable, conditions such as deposit or security may be imposed.
The court must carefully distinguish such cases from those involving a genuine and substantial defence deserving unconditional leave.
Frivolous or Vexatious Defence
Where the defence is sham, illusory, frivolous or vexatious and no genuine issue exists, leave may be refused.
A defendant cannot obtain a full trial merely by putting forward assertions that have no real bearing on the plaintiff’s claim.
These categories reflect the principles restated by the Supreme Court in IDBI Trusteeship Services Ltd. v. Hubtown Ltd., which also clarified the position after amendments to Order XXXVII Rule 3 and the earlier principles concerning leave to defend.
Purpose Behind the Leave to Defend Requirement
The requirement of obtaining leave serves two competing objectives.
First, it protects plaintiffs in specified classes of suits against unnecessary delay caused by defendants raising artificial or untenable defences.
Second, it ensures that a defendant who genuinely disputes liability is not deprived of a proper trial.
The court must therefore balance procedural efficiency with fairness.
A summary suit cannot be treated as an automatic decree-producing mechanism merely because Order XXXVII has been invoked. Equally, a defendant cannot defeat the summary procedure simply by making vague denials or raising imaginary disputes.
The judicial inquiry centres on the quality and genuineness of the defence.
This balance lies at the heart of the summary suit procedure under CPC.
Difference Between Leave to Defend and Ordinary Right to Defend
In an ordinary civil suit, the defendant ordinarily has the right to contest the plaintiff’s claim by filing a written statement in accordance with the CPC.
The position under Order XXXVII is different.
The defendant must comply with the special procedure and obtain leave where required before the suit can proceed as an ordinarily contested action.
This distinction is fundamental to understanding why leave to defend is not an unrestricted right. Order XXXVII deliberately creates a filtering mechanism through which the court determines whether a full trial is genuinely necessary.
In fact, the Supreme Court’s discussion of when a “trial” begins in a summary proceeding can also be understood through Indian Bank v. Maharashtra State Cooperative Marketing Federation Ltd., where the Court considered the procedural character of proceedings under Order XXXVII.
Conclusion
Leave to defend under Order XXXVII CPC cannot be claimed as an absolute matter of right. A defendant must satisfy the requirements prescribed under Rule 3 and disclose facts demonstrating a genuine defence worthy of trial.
Where a substantial defence exists, unconditional leave should normally be granted. Where fair and reasonable triable issues are raised, unconditional leave is also ordinarily appropriate. If the defence is doubtful or improbable, the court may impose suitable conditions. Where it is frivolous, vexatious or entirely sham, leave may be refused.
An additional statutory requirement applies where the defendant admits any portion of the plaintiff’s claim. The admitted amount must be deposited before leave can be granted in accordance with Order XXXVII Rule 3(5).
The decisions in Raj Duggal v. Ramesh Kumar, Southern Sales and Services v. Sauermilch Design and Handels GmbH, Wada Arun Asbestos (P.) Ltd. v. Gujarat Water Supply and Sewerage Board, Ramkarandas Radhavallabh v. Bhagwandas Dwarkadas and particularly IDBI Trusteeship Services Ltd. v. Hubtown Ltd. demonstrate that the central consideration is whether the defendant has disclosed a real and bona fide defence requiring adjudication, rather than a defence raised merely to postpone an otherwise enforceable claim.
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