Summary Suits Explained

Introduction

Summary suit or summary procedure is provided under order XXXVII of the Code of Civil Procedure, 1908. The summary suit is a unique legal procedure used for enforcing a right in an efficacious manner as the courts pass judgement without hearing the defence.

While this prima facie would appear to be violative of the cardinal principle of natural justice, Audi Alteram Partem, nobody should be condemned unheard, this procedure is only used in cases where the defendant has no defence and is applicable to only limited subject matters.

Therefore, this gives rise to an interesting question which forms the crux of this paper: What amounts to having no defence? This question is central to the practical application of Or.37 and has been analyzed in this paper after considering a catena of recent judgments and provisions under this order.

This article also analyzes and highlights the Salient features of summary suits by juxtaposing and comparing summary suits with ordinary suits. This would help one appreciate the unique position summary suits hold in the civil justice system and the problems summary suits intend to redress.

Nature

A summary suit under order 37 of the Code of Civil Procedure is a legal procedure used for enforcing a right that takes effect faster than ordinary suits as unlike in ordinary suits the courts do not hear the defence.

However it does not violate the principles of Audi Alteram Partem, nobody should be condemned unheard as it is used only in certain limited cases (elaborated below under scope) where the defendant has no tenable defence, which is a complex question of law and fact and has been elaborately analyzed subsequently.

Object

The object underlying the summary procedure is to ensure an expeditious hearing and disposal of the suit and to prevent unreasonable obstruction by the defendant who has no defence or a frivolous and vexatious defence[1] and to assist expeditious disposal of cases[2].

The Gujarat High Court in outlining the object of summary suits opined that the sheer purpose of enacting Summary Suits is to give impetus to commerce and industry by inspiring confidence in commercial population that their causes in respect of money claims of liquidating amounts (ascertained amount) would be expeditiously decided and their claims will not hang on for years blocking their money for a long period. [3]

Scope and extent of applicability

A summary suit can be instituted in High Courts, City Civil Courts, Courts of Small Causes and any other court notified by the High Court. High Courts can restrict, enlarge or vary the categories of suits to be brought under this order.

As explained above that the object of Summary suits is to aid commercial transactions by a swift redressal mechanism these suits can be instituted only in case of certain specified documents.

The documents such as a bill of exchange, hundies, and promissory notes[4] and suits in which the plaintiff seeks only to recover a debt or liquidated demand in money payable by the defendant, with or without interest, arising on a written contract; or on an enactment, where the sum sought to be recovered is a fixed sum of money or in the nature of a debt other than a penalty; or on a guarantee, where the claim against the principal is in respect of a debt or liquidated demand only[5].

The procedure of Summary Suits

Rules 2 and 3 provide the procedure of summary suits. Under rule 2 after the summons of the suit has been issued to the defendant. The defendant is not entitled to defend Summary suit unless he enters an appearance.

In default of this, the plaintiff will be entitled to an ex parte decree which is on a different footing to an Ex Parte decree passed in ordinary suits(the differences have been analyzed subsequently).

In the case that the defendant appears, the defendant must apply for leave to defend within ten days from the date of service of summons upon him and such leave will be granted only if the affidavit filed by the defendant discloses such facts as may be deemed to entitle him to defend.

The cases where leave to defend should and shouldn’t be granted have been analyzed subsequently.

Analyzing summary suits

Types of interpretations to be applied

As the purpose of summary suits is to act as a welfare mechanism to achieve justice in an expedient manner, the language under Or.37 is to be interpreted liberally, which has been reflected in numerous judgments.

An illustrative example would be the phrase written contracts that have been given the widest possible interpretation as even Invoices/Bills are written contract within the contemplation of Order 37 KIG Systel Ltd v.  Fijitsu ICIM Ltd. [6]

Difference between a summary suit and original suit

The major difference between ordinary suits and summary suits is that in the later the defendant will get a chance to defend himself only if leave to defend is granted.

Unlike ordinary suits, summary suits are restricted to matters related to bills of exchange, promissory notes and contracts, enactments, guarantees of specified nature. Interestingly Res Judicata is not applicable to summary suits, i.e. summary suits can be filed on the matter directly and substantially in issue in a previous ordinary suit.

In summary suits in the case of non-appearance of the defendant, a decree in favour of the plaintiff is passed easily, whilst in ordinary suits usually, multiple summonses are served and only then an ex parte order is passed.

Therefore, in Summary, suits setting aside an ex parte decree is stricter and more stringent and special circumstances for non-appearance need to be set out, while in ordinary suits only sufficient cause needs to be shown. The difference between special circumstances and sufficient cause has been elucidated below.

Special circumstances v. sufficient cause

The two terms have been lucidly juxtaposed in Karumili Bharathi v. Prichikala Venkatchalam[7]. The reasons offered by the defendant to explain the special circumstances should be such that he had no possibility of appearing before the Court on a relevant day.

For instance, there was a strike and all the buses were withdrawn and there was no other mode of transport. This may constitute “special circumstances”. But if the defendant were to plead that he missed the bus he wanted to board and consequently he could not appear before the Court.

It may constitute a ‘sufficient cause’, but not a ‘special circumstance’. Thus a ‘special circumstance’ would take with it a ’cause’ or ‘reason’, which prevents a person in such a way that it is almost impossible for him to attend the Court or to perform certain acts which he is required to do.

Thus the ‘reason’ or ’cause’ found in “special circumstances” is stricter or more stringent than in “sufficient cause” and depends on the facts of each case.

Analyzing what constitutes no defence

As mentioned above, to proceed with summary suits the defendant must have no tenable defence.

What constitutes conditions when a leave to defend must be granted has been dealt with recently(2016) by the Supreme court in IDBI Trusteeship Services Ltd v. Hubtown Ltd[8] held that the position in law with respect to granting of leave to defend a summary suit is that the trial Judge is vested with a discretion which has to result in justice being done on the facts of each case.

The Court explained that at one end of the spectrum is unconditional leave to defend, granted in all cases which present a substantial defence. However, it must be borne in mind that on the other end of the spectrum are frivolous or vexatious defences, which should result in a refusal of leave to defend.

In between these two extremes are various kinds of defences raised which yield conditional leave to defend in most cases. The judgement lays out principles that have been summarized below.

  • 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 judgment, and the defendant is ordinarily entitled to unconditional leave to defend;

This reiterates the position laid out in Precision Steel & Engg. Works vs Prem Deva Niranjan Deva Tayal[9] where it was held 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.

  • 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, or if they are plausible but not probable, the trial judge may impose conditions both as to time or mode of trial, as well as payment into court or furnishing security.

Moreover, recently in Uma Shankar Kamal Narain v. MD overseas limited[10], the Supreme court upheld previous judgements like Southern Sales and Sevices v. Sauermilch Design and Handles GMBH[11], and the Sunil Enterprise v. SBI,[12] and reiterated the principles to be adhered to in the case of a leave to defend summary suit relating to the dishonoured cheques.

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.”

Conclusion

It is humbly opined that summary suits act like an ingenious solution to help prevent unreasonable obstructions by a defendant who has no tenable defence.

Summary suits would be beneficial to businesses as unless the defendant is able to demonstrate that he has a substantial defence, the plaintiff is entitled to a judgment.

Order 37 engineers an appropriate mechanism that ensures that the defendant does not prolong the litigation especially as in commercial matters time is of the essence and helps further the cause of Justice.

Bibliography

8th Edition, Civil Procedure Code with Limitation Act, 1963, CK Takwani, EBC Publishing limited.

Bhardwaj, P. (2019). order 37 CPC Archives SCC Blog. [online] SCC. Available at: https://blog.scconline.com/post/tag/order-37-cpc/ [Accessed 13 Jan. 2019].

[1] Kocharabhai ishwarbhai patel v. Gopal bhai C patel AIR 1973 Gujrat 29 (31)

[2] Bankyag B G Agarawal v. Bhagwanti Mehji 2001 (1) Bom LR 823 (DB)

[3] Navinchandra Babulal Bhavsar v. Bachubhai Dhanabhai Shah AIR 1969 Gujrat 124 (128) DB.

[4] Or.37.R1(2)

[5] Or.37.R.1(2)b

[6] KIG Systel Ltd v. Fijitsu ICIM Ltd AIR 2001 Del 357.

[7] Karumili Bharathi v. Prichikala Venkatchalam 1999 (3) ALD 366

[8] IDBI Trusteeship Services Ltd v. Hubtown Ltd,  2016 SCC OnLine SC 1274

[9] Precision Steel & Engg. Works vs Prem Deva Niranjan Deva 1982 Air 1518

[10] Uma Shankar Kamal Narain v. MD overseas limited 2007 4 SCC 133

[11] Southern Sales and Sevices v. Sauermilch Design and Handles GMBH 1982 AIR 1518

[12] Sunil Enterprise v. SBI, (1998) 5 SCC 354

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