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. In simple words, a summary suit is a legal proceeding that allows a plaintiff to obtain a quick and summary judgment against the defendant. Summary suits are intended to provide a speedy and relatively simple means of resolving certain types of civil disputes, without the need for a full trial.
Under the CPC, a summary suit can be instituted in cases where the plaintiff’s claim is based on a negotiable instrument (such as a promissory note, bill of exchange, or cheque) or on an agreement that provides for the payment of a debt or liquidated demand in money. In order to be eligible for a summary suit, the plaintiff’s claim must be for a specific amount of money, and must not be disputed by the defendant.
Where can plaintiff file summary suit?
A plaintiff can file a summary suit in the court that has jurisdiction over the area where the cause of action arose, or where the defendant resides or carries on business. In other words, the suit can be filed in the court that has territorial jurisdiction over the matter.
Summary suits can be instituted in Courts of Small Causes, City Civil Courts, High Courts, and any court notified by the High Court. The High Courts have the power to restrict, enlarge or vary the categories of suits brought under this order.
The limitation period to file a summary suit in India is governed by the Indian Limitation Act, 1963. As per the Act, the limitation period for filing a summary suit is three years from the date on which the cause of action arose.
“Under Rule 2 of Order XXXVII, a summary suit can be instituted by presenting a plaint with specific averments that the suit is filed under this Order. The defendant is required to enter an appearance and is deemed to admit the allegations if he fails to do so. The plaintiff is entitled to a decree for the amount claimed if the defendant does not enter an appearance or fails to get leave to defend.”
FEATURES OF SUMMARY SUIT:
- Quick disposal: A summary suit is a fast track legal proceeding, and is designed to dispose of cases quickly and efficiently.
- Expedited hearing: The court is required to expedite the hearing of the case, and must conclude the trial within limited time.
- No trial: In a summary suit, there is no full-fledged trial. Instead, the case is decided based on the pleadings and evidence submitted by the parties.
- No appeals: The decision of the court in a summary suit is final, and there is no right of appeal. However, the defendant may apply for a review of the judgment if there is an error apparent on the face of the record.
PROCEDURES OF SUMMARY SUIT:
- The plaintiff files a summary suit petition in the appropriate court. The petition must contain all the necessary details of the claim, including the nature of the claim, the amount claimed, and the grounds for the claim.
- The court will then examine the petition and decide whether the claim is a debt or a liquidated demand that arises out of a written contract, an enactment, or a guarantee. If the court is satisfied that the claim falls within this category, it will issue a summons to the defendant.
- The defendant must file a written statement within ten days from the date of service of the summons. The defendant must raise all their defences in the written statement, failing which they will be deemed to have admitted the plaintiff’s claim.
- After the written statement is filed, the court will proceed to examine the case and decide whether to grant or dismiss the summary suit. If the court finds that there is a genuine dispute, it will dismiss the summary suit and order the plaintiff to file a regular suit.
- If the court finds that there is no genuine dispute, it will pass a summary decree in favour of the plaintiff.
ORDER XXXVII RULE 1. Courts and classes of suits to which the Order is to apply.—
(1) This Order shall apply to the following Courts, namely:—
(a) High Courts, City Civil Courts and Courts of Small Causes; and
(b) other Courts:
Provided that in respect of the Courts referred to in clause (b), the High Court may, by notification in the Official Gazette, restrict the operation of this Order only to such categories of suits as it deems proper, and may also, from time to time, as the circumstances of the case may require, by subsequent notification in the Official Gazette, further restrict, enlarge or vary, the categories of suits to be brought under the operation of this Order as it deems proper.
(2) 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.]
Rule 2. Institution of summary suits.—
(1) A suit, to which this Order applies, may if the plaintiff desires to proceed hereunder, be instituted by presenting a plaint which shall contain,—
(a) a specific averment to the effect that the suit is filed under this Order;
(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).”
(2) 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.
(3) The defendant shall not defend the suit referred to in sub-rule (1) 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 as may be determined by the High Court from time to time by rules made in that behalf and such decree may be executed forthwith.]
Rule 3. Procedure for the appearance of defendant—
(1) In a suit to which this Order applies, the plaintiff shall, together with the summons under rule 2, 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.
(2) Unless otherwise ordered, all summonses, notices and other judicial processes, required to be served on the defendant, shall be deemed to have been duly served on him if they are left at the address given by him for such service.
(3) On the day of entering the appearance, notice of such appearance shall be given by the defendant to the plaintiff’s pleader, or, if the plaintiff sues in person, to the plaintiff himself, either by notice delivered at or sent by a pre-paid letter directed to the address of the plaintiff’s pleader or of the plaintiff, as the case may be.
(4) 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.
(5) 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 or Judge to be just:
Provided that 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 a substantial defence to raise or that the defence intended to be put up by the defendant is frivolous or vexatious:
Provided further that, 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 Court.
(6) At the hearing of such summons for judgment,—
(a) if the defendant has not applied for leave 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 is permitted 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.
(7) 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.]
Rule 4. Power to set aside decree.—
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, if it seems reasonable to the Court so to do, and on such terms as the Court thinks fit.
Rule 5. Power to order bill, etc., to be deposited with officer of Court.—
In any proceeding under this Order the Court may order the bill, hundi or note on which the suit is founded to be forthwith deposited with an officer of the Court, and may further order that all proceedings shall be stayed until the plaintiff gives security for the costs thereof.
RELEVANT CASE LAWS
Santosh Kumar v. Bhai Mool Singh AIR 1958 SC 321
Facts: The plaintiff (the appellant herein) filed a summary suit on the basis of a cheque for Rs. 60,000 drawn by the defendants in favour of the plaintiff and which, on presentation to the Bank, was dishonoured. The defendants filed the application to defend themselves under Rule 2 of Order XXXVII of CPC but they were refused leave (permission) to defend. It was held by the trial judge that the defence raised by the defendants raises a triable issue, but he went on to hold that the defendants have not placed anything on the file to show that the defence was a bona fide one.
The appellants applied under Article 227 of the Constitution of India, 1959 to the Delhi Circuit Bench of the Punjab High Court, but the case was dismissed. The appellants herein approached the Supreme Court by way of a Special Leave Petition (SLP) under Article 136 of the Constitution of India, 1950.
Issue: Whether the defendant raised a real issue and not a sham one for asking the leave of the court?
Judgement: The Court noted that though the rigidness of Order XXXVII Rule 2 CPC restricts court to grant leave to the defendants to defend themselves but the rigor of that is softened by Rule 3(1) of Order XXXVII CPC which makes it obligatory on the Court to grant leave when the conditions set out there are fulfilled. And it further said that though the Court is given a discretion it must be exercised along judicial lines, and that in urn means, in consonance with the principles of natural justice, that form the foundations of our laws. The court noted that it is undesirable and often not possible to set strict rules in matters involving discretion. However, it is important to know why a specific procedure is in place so that discretion can be used correctly. The only ground given for concluding that the defence is not bona fide is that the defendant did not prove his assertions before he was allowed to put in his defence; and there is an obvious failure of justice if judgment is entered against a man who, if he is allowed to prove his case, cannot but succeed.
The SC granted permission to set aside the orders of the HC and the learned trial judge and remand the case to the first court for trial of the issues raised by the defendants. Hence, the appeal was allowed.
M/s. Mechalec Engrs. & Manufacturers v. M/s. Basic Equipment Corn. AIR 1977 SC 577
Facts: The plaintiff-respondent instituted a summary suit under Order XXXVII of the CPC for recovery of an amount, given by the defendant-appellant in the form of a cheque which was dishonoured by the State Bank of India, with interest. The cheque was given by the appellant as the price for procuring equipment. The defendant-appellant applied for leave to defend under Rule 2, Order XXXVII of the Code which had been granted unconditionally by the Trial Court. On a revision application by the plaintiff-respondent under S.115 of the Code, the HC interfered and held that although a triable issue arose, the defences were not bonafide. Hence the defendant-appellant would be allowed to defend only after paying the said amount to the court as security within 2 months. Against the order of HC, this appeal has been granted by special leave.
Issue: Whether the HC can interfere under S.115 of the Code, with the discretionary power of Additional District Judge in granting unconditional leave to defend?
Judgement: Conditions can be imposed by the Court when it is of the opinion that the defence is not bonafide but it can’t refuse to leave to defend. The HC can interfere under S.115, CPC only when the subordinate Court-
exercised a jurisdiction not vested in it by law, or failed to exercise a jurisdiction so vested, or
acted illegally or with material irregularity. The HC under S.115, CPC can’t vary or reverse any order except-
where the order made by the HC finally disposes the suit or proceedings. where an appeal lies against the order.
No opinion should be formed on a matter before the evidence is placed by the party.
Allowed appeal. The judgement of HC was an error and unable to find a ground of interference covered by S.115, CPC. Set aside the order and judgement of the HC and restored that of the trial Court.
Oil & Natural Gas Corporation Ltd. v. State Bank Of India, Overseas Branch, Bombay AIR 2000 SC 2548
Facts: ONGC (the appellant) contracted with a consortium comprising M/s. Saipem SPA/Snamprogetti of Italy to construct a network of undersea pipelines, known as the Gas Lift Pipelines. Time was of the essence in the contract, requiring completion by 30th April 1991. The contract included provisions for liquidated damages if the contractor failed to complete the works by the scheduled dates, amounting to 3% of the total contract price for each month’s delay, capped at 10% of the contract price. The contractor was obligated to provide a bank guarantee covering liquidated damages, equivalent to 10% of the contract price, four months before the scheduled completion date.However, it was mentioned that if the project’s completion date slips beyond the scheduled completion date, the contractor shall have the validity of the said guarantee suitably extended. The contract also mentioned that, in case the contractor fails to provide the guarantee for liquidated damages within the stipulated time, the appellants shall be entitled to encash the performance guarantee. In compliance, the contractor furnished a bank guarantee from the State Bank of India, Overseas Branch (the respondent), to cover liquidated damages. On 17th March 1993, after a total delay of 306 days, the appellant assessed liquidated damages and requested the contractor to extend the bank guarantee for six more months. The appellant also requested the respondent bank to renew the guarantee, indicating that failure to do so by a specified date would lead to encashment of the guarantee. The respondent bank refused, citing dependence on an Italian bank’s counter guarantee and pending realization of funds. The appellant, aggrieved by the refusal, filed a summary suit under Order XXXVII of the Code of Civil Procedure, 1908 (CPC) before the High Court of Judicature at Mumbai. The High Court, in its order dated 27th April 1998, granted unconditional leave to defend the suit, highlighting the following concerns:The lack of specification of liquidated damages in the letter dated 27th September 1993, when invoking the bank guarantee.
The requirement for clear notice of demand for liquidated damages as per the bank guarantee. The inadequacy of the notice dated 27th September 1993, to fulfill legal requirements for communicating liquidated damages. The pending arbitration proceedings and the jurisdiction of the Italian Court over the matter. Hence, appellant preferred an appeal before Supreme Court.
Issue: Whether a confirmed bank guarantee can be interfered with by the court?
Whether encashment of unconditional bank guarantee depends on adjudication of disputes?
What effect will the counter guarantee have in this case?
Judgement: SC said that respondent Bank’s sole basis for seeking and securing the injunction rests upon the contingency that if the counter guarantee becomes unenforceable due to the injunction issued by the Italian court, the respondent Bank should be afforded similar protection. However, a thorough examination of the Foreign Exchange Manual reveals that none of the assertions would obstruct the fulfillment of payment under the Bank Guarantee in question. The High Court committed a clear error in granting unconditional leave to defend.
The Supreme Court annulled the High Court’s order and rejected the respondent Bank’s application for leave to defend. The Supreme Court upheld the appeal.
PRESENT CASE
Q. 3a/2022. Since the defendant has admitted to issuing the cheque but claims it was for collateral purposes, and if no supporting material is presented, the court may grant conditional leave by directing the defendant to deposit a part or whole of the cheque amount in court. However, if the defendant produces a credible document or evidence showing the collateral arrangement, unconditional leave should be granted as it raises a bona fide triable issue.
Q. 5a/2018. To secure unconditional leave to defend, Mr. B must show that his defense is not only plausible but also raises a genuine triable issue. If he produces credible evidence, he is entitled to unconditional leave. If his defense is vague or unsupported, he may be granted conditional leave or be denied leave entirely. The guiding case laws are Mechelec Engineers v. Basic Equipment and IDBI Trusteeship Services v. Hubtown Ltd.
