Reply Or Defence Cannot Be Allowed To Come On Record In Summary Suit Without Leave Of Court: Supreme Court

The appeal before the Apex Court was filed at the instance of the Plaintiff in a Commercial Summary Suit before the Bombay High Court.

The Division Bench of Justice Ahsanuddin Amanullah and Justice S.V.N. Bhatti held, “After perusing the record and also the step taken by the High Court in bypassing the requirement of sub-Rules (4) and (5) of Rule 3 of Order XXXVII of the CPC; without much deliberation, we are of the view that the order impugned needs to be interfered with in as much as if a reply or defence is allowed to come on record in a summary suit without the Leave of the Court then the distinction sought to be maintained between a Suit normally instituted and Summary Suit under Order XXXVII of the CPC stands effaced. The procedural deviation goes to the root of the matter”

AOR Debesh Panda represented the Appellant, while Advocate Sanampreet Singh represented the Respondent.

Factual Background

The Commercial Suit was filed to recover the alleged admitted and confirmed total liability of Rs. 2,15,54,383.50 together with interest at 24% per annum. The suit was filed under Order XXXVII of the Civil Procedure Code, 1908 (CPC). Summons were issued along with the Plaint and Annexures were stated as served on the Defendants. The Defendant entered an appearance in terms of sub-Rule (3) of Rule 3 of Order XXXVII of the CPC. The Plaintiff filed a Summons and alleged that the Summons was served on the Defendant and the Defendant ought to have, if advised, filed for leave to defend by disclosing the defence available against the claim in the Summary Suit.

Instead of filing an Application seeking leave to defend, the Defendant filed an application praying for the dismissal of the suit for non-compliance with Section 12A of the Commercial Courts Act, which was allowed. The parties were referred to mediation, and the Summary Suit was kept in abeyance. Another application to allow the Plaintiff to amend the plaint and summons for judgment as per the Schedule annexed was allowed. The defendant then filed an Application for condoning the delay in applying for leave to defend, and the same remained pending before the High Court.

Arguments

It was the case of the plaintiff that the step ordered by the High Court, allowing a reply to the Summons for Judgment, was procedurally incorrect and unsustainable.

Reasoning

The Bench set out the sequence of steps under Order XXXVII Rule 3 sub-Rules (1) to (7) of the CPC as follows:

• On filing the Summary Suit, the plaintiff must serve the defendant with the plaint and annexures, together with the summons.
• The defendant has ten days to enter an appearance, in person or through a pleader, and provide a service address. On the same day, the defendant must notify the plaintiff or its pleader of its appearance.
• The plaintiff then serves a summons for judgment on the defendant in the court-prescribed format, supported by an affidavit verifying the cause of action, the amount claimed, and the belief that the defendant has no defence.
• Thereafter, the defendant has ten days to apply for leave to defend by filing an affidavit disclosing a genuine and substantial defence. The court may grant leave to defend unconditionally or on such terms that may appear to be just.
• The court shall not refuse leave unless the defence is frivolous or vexatious. Further, if the defendant admits to owing part of the amount, it must deposit that amount in court to get the leave to defend.
• If the defendant does not apply for leave or its application seeking leave is refused, the plaintiff is entitled to immediate judgment. If the court grants leave to defend but the defendant fails to comply with any condition or other directions, the plaintiff is also entitled to immediate judgment.
• The court has the discretion to condone any delay in entering an appearance or applying for leave to defend if the defendant shows sufficient cause.

Thus, setting aside the impugned order, the Bench clarified, “The setting aside of the order impugned shall not be understood as foreclosing the options available to the Defendant in the Judgment Summons already issued, or the observations made in the present order shall not prejudice the case of either.”

The Bench thus allowed the appeal by leaving the option to the parties to pursue remedies in accordance with the steps envisaged in Rule 3 of Order XXXVII of the CPC.

Cause Title: Executive Trading Company Private Limited v. Grow Well Mercantile Private Limited (Neutral Citation: 2025 INSC 1157)

Appearance

Appellant: AOR Debesh Panda, Advocates Shivang Berry, Vinit Udernani

Respondent: Advocates Sanampreet Singh, Dhiraj Mhetre, AOR Pulkit Agarwal, Advocate Md Anas Chaudhary

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