Procedure for Summary Suits and Leave to Defend under Order XXXVII of CPC
Key Takeaways
- Order XXXVII of the Code of Civil Procedure, 1908 provides a summary procedure for specified categories of suits, particularly claims based on negotiable instruments and certain liquidated monetary demands.
- A defendant in a summary suit does not have an automatic right to defend the suit. The defendant must first enter appearance and thereafter obtain leave of the court to defend.
- After service of summons under Order XXXVII, the defendant ordinarily has 10 days to enter appearance and provide an address for service.
- After the defendant enters appearance, the plaintiff may serve a summons for judgment, following which the defendant must apply for leave to defend within the period prescribed under Order XXXVII Rule 3.
- Leave to defend may be unconditional, conditional or refused, depending upon the nature and strength of the defence disclosed by the defendant.
- A substantial or bona fide defence ordinarily justifies unconditional leave, whereas a frivolous, sham or vexatious defence may result in refusal of leave.
- The Supreme Court decisions in Santosh Kumar v. Bhai Mool Singh, Mechelec Engineers & Manufacturers v. Basic Equipment Corporation and IDBI Trusteeship Services Ltd. v. Hubtown Ltd. are important for understanding the principles governing leave to defend.
What Is a Summary Suit under Order XXXVII of CPC?
A summary suit under CPC is a special form of civil proceeding governed by Order XXXVII of the Code of Civil Procedure, 1908. It is designed to provide a comparatively speedy remedy in certain categories of monetary claims where the plaintiff’s claim is based on documents or obligations of a nature that ordinarily require less extensive examination than an ordinary civil suit.
The principal difference between an ordinary civil suit and a summary suit lies in the defendant’s right to defend.
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In an ordinary civil suit, the defendant normally has a right to appear and contest the claim by filing a written statement. In a summary suit, the defendant cannot defend the action merely by entering appearance. Leave of the court is required before the defence can proceed.
This special procedure is intended to prevent defendants from delaying clear monetary claims by raising defences that are merely sham, frivolous or lacking in substance.
Which Suits Can Be Filed under Order XXXVII?
Order XXXVII does not apply to every money recovery suit. Rule 1 identifies the categories of suits in which the summary procedure may be invoked.
Broadly, it applies to:
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- suits upon bills of exchange, hundies and promissory notes; and
- suits in which the plaintiff seeks recovery of a debt or liquidated demand in money, with or without interest, arising from specified sources.
Bills of exchange and promissory notes are important forms of negotiable instruments recognised under Indian commercial law.
The second category includes claims arising from:
- a written contract;
- an enactment where the amount sought to be recovered is a fixed sum or a debt other than a penalty; or
- a guarantee where the claim against the principal debtor relates to a debt or liquidated demand.
The scope of Order XXXVII is confined to the categories specifically contemplated by the provision. A plaintiff cannot adopt the summary procedure merely because the suit involves recovery of money.
How Is a Summary Suit Instituted under Order XXXVII?
The institution of a summary suit begins with the filing of a plaint before a court having jurisdiction.
The general law relating to the institution of suits under CPC continues to be relevant, subject to the special requirements prescribed under Order XXXVII.
A plaint filed under Order XXXVII must clearly indicate that the suit is being instituted under the summary procedure.
Requirements of the Plaint
Order XXXVII Rule 2 requires the plaint to contain specific particulars showing that the special procedure is being invoked.
The plaint should indicate, among other things:
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- that the suit is filed under Order XXXVII;
- that no relief outside the scope of Order XXXVII has been claimed; and
- the appropriate inscription required by the procedural rules.
The claim must fall within one of the categories covered by Order XXXVII Rule 1.
Where the suit does not satisfy these requirements, the plaintiff cannot ordinarily obtain the procedural advantages available in a summary suit.
What Happens after the Summary Suit Is Filed?
After the suit is instituted, summons is served upon the defendant in the prescribed form.
The summons in a summary suit is important because the procedure following service differs substantially from an ordinary civil suit.
Together with the summons, the plaintiff is required to serve the defendant with a copy of the plaint and its annexures.
The defendant must then decide whether to enter appearance within the statutory period.
How Does the Defendant Enter Appearance?
Under Order XXXVII Rule 3, the defendant may enter appearance within 10 days from service of summons.
The appearance may be entered personally or through a pleader.
At the time of entering appearance, the defendant must also file an address for service of notices.
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The procedural rule further requires the defendant to give notice of appearance to the plaintiff’s advocate or, where the plaintiff is appearing personally, directly to the plaintiff.
Entering appearance is therefore an important first procedural step. It does not itself amount to permission to defend the suit.
What Happens If the Defendant Does Not Enter Appearance?
Failure to enter appearance within the prescribed period may have serious consequences.
Order XXXVII creates a special procedure under which the allegations in the plaint may be treated as admitted where the defendant fails to enter appearance as required.
The plaintiff may consequently become entitled to a decree for the amount claimed, subject to the requirements of the provision.
This is significantly different from an ordinary civil suit, where the procedure for dealing with non-appearance or failure to file a written statement follows the general provisions of the CPC.
The summary procedure therefore places considerable importance on compliance with the statutory time limits.
What Is a Summons for Judgment?
Entering appearance does not immediately convert the summary suit into an ordinary contested action.
After the defendant has entered appearance, the plaintiff may serve upon the defendant a summons for judgment.
The summons for judgment calls upon the defendant to show why the plaintiff should not be entitled to judgment.
It is at this stage that the question of leave to defend becomes important.
The defendant who intends to contest the claim must file an application seeking permission from the court to defend the suit.
What Is Leave to Defend under Order XXXVII?
Leave to defend means permission granted by the court allowing the defendant to contest a summary suit.
Unlike an ordinary suit, the defendant has no unrestricted right to defend merely because a defence has been asserted.
The defendant must satisfy the court that there exists a defence deserving judicial examination.
The purpose of this requirement is to strike a balance between two competing considerations:
- preventing unnecessary delay in straightforward monetary claims; and
- protecting a defendant who has a genuine defence requiring trial.
The court therefore examines the nature of the defence at a preliminary stage without conducting the full trial itself.
When Must an Application for Leave to Defend Be Filed?
After service of the summons for judgment, the defendant is required to apply for leave to defend within the period prescribed under Order XXXVII Rule 3.
The statutory framework requires such an application to be made within 10 days of service of the summons for judgment.
The application is generally supported by an affidavit disclosing the facts upon which the proposed defence is based.
The affidavit must contain sufficient material to enable the court to determine whether a genuine defence or triable issue exists.
What Is a Triable Issue?
A triable issue is an issue that requires examination through the ordinary process of trial rather than summary rejection.
The defendant is not expected to prove the entire defence conclusively at the leave-to-defend stage.
The question is whether the defence is genuine enough to require adjudication.
In Santosh Kumar v. Bhai Mool Singh, AIR 1958 SC 321, the Supreme Court considered a summary suit arising from a dishonoured cheque.
The Court explained that the relevant test is whether the defence raises a real issue rather than a sham issue. If the facts alleged by the defendant, if ultimately established, could constitute a good or plausible defence, leave should ordinarily follow.
The significance of this principle is that the court should not conduct a detailed trial while deciding the leave application.
Can the Court Demand Evidence at the Leave-to-Defend Stage?
The leave-to-defend stage is primarily concerned with determining whether a genuine defence has been disclosed.
Detailed proof of the defence is normally a matter for trial.
In Santosh Kumar v. Bhai Mool Singh, the trial court had recognised that a triable issue existed but nevertheless imposed security because the defendant had not produced evidence supporting the defence.
The Supreme Court held that such an approach was inappropriate because the stage for recording evidence had not yet arrived.
The defence must therefore be examined primarily from the pleadings, affidavits and circumstances placed before the court.
The principles relating to pleadings under CPC are relevant because pleadings identify the material facts and issues upon which the parties rely, while proof of those facts ordinarily takes place at the appropriate stage of trial.
Principles in Kiranmoyee Dassi v. Chatterjee
The decision of the Calcutta High Court in Kiranmoyee Dassi v. Dr. J. Chatterjee, AIR 1949 Cal 479, became an important authority governing the grant of leave in summary suits.
The principles developed in that case broadly distinguished between different kinds of defences.
Good Defence on Merits
Where the defendant demonstrates a good defence to the plaintiff’s claim on merits, unconditional leave should ordinarily be granted.
Fair or Bona Fide Triable Issue
Where the defence may not immediately appear certain to succeed but raises a genuine and reasonable triable issue, unconditional leave is ordinarily appropriate.
Defence Requiring Further Examination
Where the material does not immediately establish a complete defence but shows circumstances from which a defence may emerge at trial, leave may be granted subject to appropriate conditions relating to the conduct of the proceedings.
Sham or Illusory Defence
Where the defence is merely sham, illusory or practically meaningless, the defendant may be denied leave.
These principles were subsequently discussed and adopted in important Supreme Court decisions dealing with summary suits.
Mechelec Engineers & Manufacturers v. Basic Equipment Corporation
The Supreme Court considered the principles governing leave to defend in Mechelec Engineers & Manufacturers v. Basic Equipment Corporation, AIR 1977 SC 577.
The dispute arose from a cheque issued by the defendant which was subsequently dishonoured. The broader law relating to dishonour of cheques is governed by the Negotiable Instruments Act, 1881, though the dispute in Mechelec Engineers concerned the civil summary procedure.
The plaintiff claimed that the cheque had been issued towards the price of goods supplied. The defendant admitted issuance of the cheque but disputed the plaintiff’s explanation regarding the underlying transaction.
The trial court granted unconditional leave to defend.
The Delhi High Court interfered in revision under Section 115 CPC and imposed conditions after concluding that the defence was not bona fide.
The scope of the High Court’s revisional jurisdiction can be understood through the principles relating to reference, review and revision under CPC.
The Supreme Court ultimately restored the order granting unconditional leave.
It observed that where the defence raises genuine triable issues, unconditional leave should not ordinarily be interfered with unless the defence is patently dishonest or so unreasonable that it could not realistically succeed.
The judgment relied substantially upon the principles developed in Kiranmoyee Dassi.
Is Mechelec Still the Complete Law on Leave to Defend?
The principles in Mechelec Engineers remain historically important, but the modern legal position must be read in light of the amended Order XXXVII Rule 3.
In IDBI Trusteeship Services Ltd. v. Hubtown Ltd., (2017) 1 SCC 568, the Supreme Court clarified that the formulation contained in Mechelec had been superseded following the amendment of Order XXXVII Rule 3.
The Court nevertheless retained the central distinction between substantial defences, doubtful defences and frivolous defences.
Therefore, Mechelec Engineers remains useful for understanding the development of the law, but the present test for granting leave to defend must be applied in accordance with the amended procedural framework and subsequent Supreme Court decisions.
When Is Unconditional Leave to Defend Granted?
Unconditional leave is ordinarily granted when the defendant demonstrates a substantial defence.
A substantial defence is one which appears capable of succeeding if ultimately proved at trial.
The Supreme Court in IDBI Trusteeship explained that where the defendant has a defence likely to succeed, unconditional leave should be granted.
Unconditional leave may also ordinarily be granted where the defendant raises genuine triable issues showing a fair or reasonable defence, even though its ultimate success is not certain.
The leave stage is therefore not meant to determine conclusively which party will win the litigation.
When Can Conditional Leave Be Granted?
Between a strong defence and a completely frivolous defence lies a category where the defendant raises a possible defence but the court has doubts about its genuineness or strength.
In such situations, the court may grant conditional leave to defend.
Conditions may include measures intended to protect the plaintiff while allowing the defendant an opportunity to establish the defence.
The discretion must be exercised judicially and according to the circumstances of the case.
The court’s discretion under Order XXXVII is broad, but it must not become arbitrary. Conditions should have a reasonable connection with the nature of the defence and the need to protect the plaintiff’s claim.
When Can Leave to Defend Be Refused?
Leave may be refused where the proposed defence is clearly frivolous or vexatious and does not disclose any real triable issue.
A defendant cannot obtain leave merely by making vague allegations or raising imaginary disputes.
Where there is practically no defence and no genuine issue requiring adjudication, the object of the summary procedure would be defeated by sending the matter to a full trial.
The modern judicial approach therefore treats refusal of leave as appropriate primarily where the defence lacks any meaningful substance.
Grant of leave, whether conditional or unconditional, depends upon the quality of the defence disclosed before the court. Complete denial is generally associated with cases where no substantial or genuine defence exists.
What Happens When Part of the Claim Is Admitted?
Order XXXVII specifically deals with cases where the defendant admits that a portion of the amount claimed by the plaintiff is due.
Where part of the claim is admitted, leave to defend cannot ordinarily be granted unless the admitted amount is deposited in court.
This requirement prevents a defendant from withholding an amount that is admittedly payable while contesting only the disputed portion of the plaintiff’s claim.
The rule therefore separates the admitted liability from the genuinely disputed portion of the claim.
Can Leave to Defend Be Granted with Security?
The court may impose conditions where the circumstances justify protection of the plaintiff’s claim.
However, security should not be imposed mechanically merely because the court is uncertain about the final outcome.
Where a genuine and substantial defence exists, unconditional leave is generally appropriate.
Where the defence appears doubtful or raises issues that require trial but also creates a legitimate concern regarding the plaintiff’s interests, conditional leave may be considered.
The condition imposed must remain proportionate to the nature of the defence and the circumstances of the dispute.
Why Is Leave to Defend Important in a Summary Suit?
Leave to defend is the central procedural safeguard available to defendants under Order XXXVII.
The summary procedure gives the plaintiff a procedural advantage because the defendant cannot automatically contest the suit.
At the same time, the leave mechanism prevents this advantage from resulting in an unjust decree where a genuine dispute exists.
The court therefore performs a filtering function.
It separates:
- genuine defences requiring trial;
- doubtful defences that may require conditional permission; and
- sham defences that do not justify delaying judgment.
This balance is essential to the functioning of Order XXXVII.
Difference Between Appearance and Leave to Defend
Appearance and leave to defend are separate procedural stages.
Appearance
Appearance informs the court and the plaintiff that the defendant intends to participate in the proceedings.
It must ordinarily be entered within 10 days of service of summons.
Leave to Defend
Leave to defend is the court’s permission allowing the defendant to contest the plaintiff’s claim after summons for judgment has been served.
Thus, merely entering appearance does not confer a right to file a defence on merits.
This distinction is one of the most important procedural features separating a summary suit from an ordinary civil suit.
Procedure under Order XXXVII at a Glance
The basic sequence of a summary suit may be understood as follows:
- The plaintiff institutes a suit falling within Order XXXVII.
- The plaint specifically indicates that the summary procedure is being invoked.
- Summons, along with the plaint and annexures, is served upon the defendant.
- The defendant ordinarily enters appearance within 10 days.
- Notice of appearance is communicated to the plaintiff or the plaintiff’s advocate.
- The plaintiff serves a summons for judgment.
- The defendant applies for leave to defend within the prescribed period.
- The court examines the nature of the proposed defence.
- Leave may be granted unconditionally, granted subject to conditions or refused.
- Where leave is granted, the matter proceeds for adjudication according to the terms of the order.
Where the plaintiff ultimately succeeds, the court may pronounce a judgment followed by a decree. The distinction and relationship between a judgment and decree form an important part of civil procedure.
Conclusion
Order XXXVII CPC creates a special and comparatively speedy procedure for specified monetary claims. Its most important feature is that the defendant does not possess an automatic right to defend the suit in the same manner as in an ordinary civil action.
The defendant must first enter appearance and subsequently seek leave to defend after service of summons for judgment.
The court, while considering such an application, must determine whether the defence is substantial, genuinely triable, doubtful or merely sham.
The decisions in Santosh Kumar v. Bhai Mool Singh, Kiranmoyee Dassi v. Chatterjee and Mechelec Engineers & Manufacturers v. Basic Equipment Corporation played an important role in developing the principles governing leave to defend. The present position, however, must be understood particularly in light of the amended Order XXXVII Rule 3 and the Supreme Court’s decision in IDBI Trusteeship Services Ltd. v. Hubtown Ltd.
The underlying principle remains that genuine disputes should receive an opportunity for trial, while frivolous defences should not be permitted to defeat the purpose of the summary procedure.
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