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Order 37, CPC, Summary Suits

CPC: Civil litigation, especially recovery suits generally termed to be a long drawn battle and regarded as
something best avoided, is not so. The general belief that by filing a recovery Suit against a Debtor...

Author Name:   akshat759

CPC: Civil litigation, especially recovery suits generally termed to be a

long drawn battle and regarded as something best avoided, is not so.
The general belief that by ling a recovery Suit against a Debtor...

Order 37, CPC (Summary Suits): A neutral analysis

Civil litigation, especially recovery suits generally termed to be a long drawn battle
and regarded as something best avoided, is not so. The general belief that by filing a
recovery Suit against a Debtor will go on for years at large, is not so, if one knows the
real scope of Order 37 of the Civil Procedure Code, 1908.

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:
Rule 1, Sub-Rule 2 makes it applicable to all suits upon bills of exchange, hundies and
promissory notes or the ones in which a Plaintiff seeks only to recover a debt or
liquidated demand in money payable on a written contract, an enactment, where the
sum to be recovered is a fixed sum of money or in nature of any debt except penalty,
a guarantee - in respect of a debt or liquidated demand.

Rule 2 requires an Order 37 Suit to contain among others, a specific averment that
the Suit is filed under this Order and no relief which does not fall within the ambit of
this Rule is claimed. Top

U d Od 37 th t t f tti th S it d d O i t th t
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.

A boon in the hands of the Plainti

The real benefit of an Order 37 Suit is that unless the Defendant is able to
demonstrate that he has a substantial defence in his case, the Plaintiff is entitled to a
judgment immediately. This in layman’s language means that the stages of filing a WS
within 30 days and not later than 90 days, a rejoinder thereafter, admission/denial of
documents, framing of issues by Court, leading evidence, cross-examination by
parties, final arguments and then finally the judgment/decree, in an ordinary Civil Suit
gets eliminated. So all that a Plaintiff has to show is that it is a case which falls within
the ambit of Order 37. Once summons is issued, the ball is in the Court of the
Defendant to show that he is entitled to a leave to defend, on grant of which the
Order 37 Suit becomes an ordinary Civil Suit and the Defendant is then directed to file
his WS within 30 days.

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.
Top
(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
 oo s e, t e Cou t ay s o e cy to t e de e da t by e ab g to t y 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 Southern Sales and Services and Ors. v. Sauermilch Design and Handels GMBH
, 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."

Generally, the Courts are usually reluctant to grant leave to defend especially an
unconditional one. This is perhaps because in an Order 37 suit, balance of
convenience is usually in favor of Plaintiff and the Courts are also aware of the delay
caused in deciding a Civil Suit which takes about three to four years, to be finally
decided with an option of Appeal to a higher fora still open.

In Neebha Kapoor v Jayantilal Khandwala, Supreme Court said the underlying

public policy behind Order 37 is expeditious disposal of suits of commercial nature. It
provides for such disposal as expeditiously as possible by prescribing time frame
therefore. Where, however, applicability of Order 37 of the Code itself is in question
which appears to be the principal reason behind the impugned judgment, in our
opinion, grant of leave may be permissible. The court before passing a decree was
entitled to take into consideration the consequences therefore.

Getting out of Order 37.

The idea behind a summary suit as stated in the Neebha Kapoor’s case is speedy
remedy. But one must not forget - “justice hurried is justice buried”. A grant of leave
to defend no doubt delays the trial but it will be a travesty of justice where a Plaintiff
on basis of some photocopied documents, reproducing only the relevant extracts of
an agreement and without the evidence and cross of key witnesses gets a decree
solely on the basis that he has been able to make out a prima facie case, that too in
most cases before a Trial Court. The concept of making out a prima facie case exists in
Indian jurisprudence in certain limited cases only, under Article 136 before Supreme
Court, under Article 226, 227 before High Courts, etc. This jurisdiction cannot and
should not be entrusted upon a Trial Court which is a Court of First Record. A few
years of Trial is better than a scenario where a decree has been passed without giving
proper opportunity to Defendant to put forth its case. “Audi Alteram Partem” is one of
the basic feature of our Constitution and a fair hearing should be given to all
concerned. In any case, if the case of Plaintiff is genuine, along with the final
judgment and decree he will also be entitled to not only to pendent elite interest but
also the cost of the Suit, for causing delay and also for compensatory costs. Therefore
no prejudice is caused to a Plaintiff as it is only a matter of time before he gets a
decree in his favor.

However, even for a bonafide Defendant, sometimes it may become a horrifying

experience to get even a conditional leave to defend granted.

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 Top
order of the Trial Court and High Court of granting a conditional leave to defend is not
i bl b i i i h d i db f h
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.

While considering the scope of Rule 4 in Rajni Kumar vs Suresh Kumar Malhotra , the
Supreme Court said that the expression 'special circumstances' is not defined in the
C.P.C. nor is it capable of any precise definition. Non-service of summons will
undoubtedly be a special circumstance. In an application under Order 37, Rule 4, the
court has to determine the question, on the facts of each case, as to whether
circumstances pleaded are so unusual or extra ordinary as to justify putting the clock
back by setting aside the decree; to grant further relief in regard to post-decree
matters, namely, staying or setting aside the execution and also in regard to pre
decree matters viz., to give leave to the defendant to appear to the summons and to
defend the suit. In considering an application to set aside ex parte decree, it is
necessary to bear in mind the distinction between suits instituted in the ordinary
manner and suits filed under Order 37 C.P.C.

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.

In Inderjeet Kaur vs Nirpal Singh , Supreme Court warned that cautious and judicious
approach plus balanced view in respect of competing claims is necessary. It further
stated that at a stage when leave to defend is sought, it is enough if he prima facie
makes out a case by disclosing such facts as would disentitle the other side from
claiming an order. It would not be a right approach to say that unless the Defendant
at that stage itself establishes a strong case, he should be granted leave. It further
cautioned that leave to defend sought for cannot also be granted for mere asking or
in a routine manner which will defeat the very object of the special provisions
contained in Chapter III-A of the Act.
The  author can be reached at: aksh@legalserviceindia.com

ISBN No: 978-81-928510-1-3

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Author Bio:   Akshat Kulshrestha, Advocate, Supreme Court of India Ph. No.

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Email:   aksh@legalserviceindia.com Website:   http://www.
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Comments  :  

R.R. NAIR : A Complaint under Sec.138 of CrPC is filed in Magistrate Court

on 24.12.2010. The cheque is issued against materials supplied to
Defendant. The case is still in Magistrate and not concluded. Now I want to
file a Summary Suit. The cheque date is 17.12.2009. Cheque dishonoured
Memo from bank is dated 18.12.2009. Demand Notice dt. 18.1.2010. Now
my question, since the matter is in still in the Magistrate Court, can I file a
Summary Suit and is it within the time limit.

ramesh : One of my friend is not able to make credit card and personal
loan payment for last 8 months due to change of employment. Further, he
has also changed his address and not able to get this new address
updated to the respective banks. presently he is not able to make any
payment as he is not employed. Also in one of the bank personal loan, his
6 months ecs also got bounced. Recently he has received notice from
advocate under order 37 rule V for the payment purpose on 24th August,
2015. He could not check this email till 1st September, 2015 till 10.00 am. i
wish to know below related matters. (1) whether replying to this notice is
mandatory or not. If mandatory, what type or reply need to be given ? also
to whom to bank or to advocate ? by email or registered post ? (2) whether
non ecs payment or bounce would apply negotiable instrument act section
139/138 in the said case or not ? (3) what kind of remedy is available to my
friend in the said notice which is sent to his personal email id ? this notice
is sent to his previous employer where he already left the employment
long back. (4) whether bank can file criminal police complaint / civil
complaint against this my friend for the said case or not ? Please reply in
elaborabate way in yes and no both way and in what circumstances. (5)
please also guide other options if applicable. Please reply on email id:-
graduating@rediffmail.com with regards. girish

rohit : Can Amount of Form C ( sales tax declaration form along business
paymnets against Bills be claimed under Order 37 Summary suit

Amit khurana : Sir I had been given conditional leave,,,I had to deposit 2
lakh....we went to high court, ,said deposit 50000... but sir have nothing to
pay...I have no assets. ..I live on rent. ...what happens after deecree. ...pls
tell . I would be thankful to you...

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Jurisdiction Of Civil Court Under Civil
Procedure Code

The Power of The Magistrate Under

Section 156 (3) of Cr.P.C

Jurisdiction of Civil Court and Place of

Suing

Condonation of Delay and Law of

limitation

Understanding of the term Decree, Order,

Judgment and Mesne Profit

Non Bailable Warrant: Preventive Measure

not Ultra Virus

Suits by indigent person

Procedure to Investigate suits by or

against Government

Condonation of Delay in case Appeals

Restitution W.r.t. to Civil Procedure Code

1908

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332 Comments Sort by Top

Add a comment...

Kartik Bagchi
The Union Cabinet is all poised to table an amendment to the marriage laws, which, in the event of a
divorce, would give the wife an equal share of not only the property acquired by the husband during or
before the marriage, but also his inherited or inheritable property. This proposed amendment is already
creating a furore.
Like · Reply · Mark as spam · 17 · 6y

Mallikarjuna Sharma
That is quite insane proposal. Self-acquired property can be disposed of at will - is the established
law and this contradicts it. Even if elements of social or public interest are there, those should not
totally drown the established law. The maintenance provisions should be made more stringent and
adequate by reform but not such divesting of property for a song.
Like · Reply · Mark as spam · 10 · 2y

Veeraswami Panjan
Mallikarjuna Sharma It is not divesting of property for a song Sharmaji, when two join in wedlock,
they flurish and family become established. This society was men dominated, is being men
dominated and I feel bad and continue to be men dominated. Hence, to safeguard the interest of
women folk who have to face so many illtreatment are protected through this historic measure.
Why not we support.
Like · Reply · Mark as spam · 2 · 1y

Lakshmirajyam Jonnalagadda
Execute documents of all the property in the name of your beloved wife and then you will face the
music. men are the strong enemeies of the men and idiotically they see cruelity in men and the
regular and continuous female mess in houses which lead to the disastrous state of affairs forTopthe
men folk and it has become a regular irony and more than 90% of women who seek divorce recite
the stupid stanza that their live is full of thorns and many impedements espeically after marriage
 the stupid stanza that their live is full of thorns and many impedements espeically after marriage
as if their life at their parental houses ran on golden carpet. Present day should be taken into
consideration to ascertain present day oproblems and the days of great great grand fathers or the
inception times of this Kali Yuga.
Like · Reply · Mark as spam · 6 · 42w

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Tukaram Gaude
hi
Like · Reply · Mark as spam · 5 · 5y

Angel Vijayvidya
Can anyone help me.i am suffering from dowry harassment.i am mentally have depressed from my
husband.
Like · Reply · Mark as spam · 3 · 5y

Nilesh Pawar
Go to Police Station and file Section 498A of IPC
if getting Physical harrasment you can file Domestice Violence in the appropriate Court and get
Protection from Husand & relatives of husband
Like · Reply · Mark as spam · 9 · 2y

Abhinav Vishnu
What's ur actual problem, u r not mentioned facts here
Like · Reply · Mark as spam · 2 · 2y

Abhinav Vishnu
Is it belongs to dowry ,or, cruelty,or , harrassment, domestic violence,or ,adultry,or, desertion, what
is ur actual problem
Like · Reply · Mark as spam · 1 · 2y

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Anita Rao
India being democratic country and having protective laws for women , its high time to have special courts
for women to try cases exclusively women cases only...........
Like · Reply · Mark as spam · 18 · 5y

Sharon Chatterjee
woman courts is no solution it fact we need capable judges who are not appointed politically
Like · Reply · Mark as spam · 28 · 4y

A Singh
Sharon Chatterjee Right
Like · Reply · Mark as spam · 6 · 1y
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Muneeta Dhiman
By demanding women courts we ourselves are encouraging gender discrimination in our country
 By demanding women courts, we ourselves are encouraging gender discrimination in our country.
We can't encourage and demand gender discrimination at the same time. It's time to have more
courts and efficient judicial system. Let's demand and create that!!!
Like · Reply · Mark as spam · 11 · 47w

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