Where suit was filed for recovery against guarantor. As suit was entirely based on written contract between parties and maintainable as summary suit under Order 37, C.P.C.
Subject to the provisions of sub-rule (1), the Order applies to the following classes of suits, namely, (a) suits upon bills of exchange, hundies and promissory notes; (b) 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— (i) on a written contract; or (ii) 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 (iii) on a guarantee where the claim against the principal is in respect of a debt or liquidated demand only. (Order XXXVII, Rule 2).
Institution of summary suits:
A suit to which Order XXXVII applies, may, if the plaintiff desires to proceed hereunder be instituted by presenting a plaint which shall contain—(a) specific averment to the effect that the suit is filed under this Order, i.e., Order XXXVII; (b) that no relief, which does not fall within the ambit of this rule, has been claimed in the plaint; and (c) the following inscription immediately below the number of the suit in the title of the suit, namely:
“(Under Order XXXVII of the Code of Civil Procedure, 1908).”
The summons of the suit shall be in Form No. 4 in Appendix B or in such other form as may, from time to time, be prescribed.
The defendant shall not defend the suit unless he enters an appearance and in default of his entering an appearance the allegations in the plaint shall be deemed to be admitted and the plaintiff shall be entitled to a decree for any sum not exceeding the sum mentioned in the summons, together with interest at the rate specified, if any, up to the date of the decree and such sum for costs may be determined by the High Court from time to time by rules made in that behalf and such decree may be executed forthwith. [Order XXXVII, Rule 2].
Procedure for the appearance of the defendant:
In a suit to which Order XXXVII applies, the plaintiff shall, together with the summons, serve on the defendant a copy of the plaint and annexures thereto and the defendant may, at any time within ten days of such service enter an appearance either in person or by pleader and, in either case, he shall file in court an address for service of notices on him.
If the defendant enters an appearance, the plaintiff shall thereafter serve on the defendant a summons for judgment in Form No. 4A in Appendix B or such other form as may be prescribed from time to time, returnable not less than ten days from the date of service supported by an affidavit verifying the cause of action and the amount claimed and stating that in his belief there is no defence to the suit.
The defendant may, at any time within ten days from the service of such summons for judgment, by affidavit or otherwise disclosing such facts as may be deemed sufficient to entitle him to defend, apply on such summons for leave to defend such suit, and leave to defend may be granted to him unconditionally or upon such terms as may appear to the court to be just. Leave to defend shall not be refused unless the court is satisfied that the facts disclosed by the defendant do not indicate that he has substantial defence to raise or that the defence intended to be put up by the defendant is frivolous or vexatious.
Where a part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit shall not be granted unless the amount so admitted to be due is deposited by the defendant in the court.
At the hearing of such summons for judgment,—
(a) If the defendant is permitted to defend, or if such application has been made and is refused, the plaintiff shall be entitled to judgment forthwith; or
(b) If the defendant has not applied for leave to defend as to the whole or any part of the claim, the court or judge may direct him to give such security and within such time as may be fixed by the court or judge and that, on failure to give such security within the time specified by the court or judge or to carry out such other directions as may have been given by the court or judge, the plaintiff shall be entitled to judgment forthwith. The court or judge, may, for sufficient cause shown by the defendant, excuse the delay of the defendant in entering an appearance or in applying for leave to defend the suit. (Order XXXVII, Rule 3).
Court grants leave to defend where the court is satisfied that the defendant has a good defence to make. In a suit on bill of exchange by bank the acceptors of bill of exchange alleged that the entire transaction was fraud and bill of exchange were executed without consideration as neither goods were sold nor supplied in transaction in question. In the circumstances of the case the defence was not baseless and leave to defend was granted to the acceptors of bill of exchange.
In money suit the High Court granted leave to defend on condition of depositing Rs. 10 lacs and providing security of similar amount. The Supreme Court modifying the condition directed to deposit further sum of Rs. 10 lacs in lieu of security.
Grant of leave to defend suit:
Where suit was filed for recovery of goods supplied. Application for grant of leave to defend suit was filed. There was denial of liability by defendants on the ground that goods supplied were sub-standard and not taken back despite notice. Defence set up by defendants was not illusory or sham. Held, that grant of leave to defendants for defending suit as they raise triable issue was valid and as such not liable to be interfered with.
After decree the court may, under special circumstances set aside the decree, and, if necessary, stay or set aside execution and may give leave to the defendant to appear to the summons and to defend the suit. (Order XXXVII, Rule 4).
Where a process-server without making any efforts to find out defendants affixed only the copy of plaint and annexure thereto on the outer door of houses of the defendants and did not make any effort to find out if any adult male member of the family was residing with the defendant and the Registrar of the Court did not hold any enquiry to determine whether service under the circumstances was sufficient, the service of summons was deemed to be insufficient and it was a sufficient circumstance to set aside the decree.
A summary suit must be brought within one year from the date on which the debt becomes due and payable, whereas the period of limitation for suit brought in the ordinary manner on a negotiable instrument is three years.
The object of Order XXXVII is to see that summary procedure suits instituted within the shorter period of prescribed limitation are not unduly delayed by untenable pleas in defence because of the obvious legal presumption arising from such documents. But at the same time, when the defence raises a triable issue, trial must not be rendered prejudicial to the defendant by imposing unduly harsh conditions.