What is Summary Suit?

Introduction –

One should know the essence of Summary suit in a trial especially in cases where the matter is regarding debt recovery and the defendant has no valid and genuine reason for non-payment of his debt. The Summary suit or summary procedure is mentioned under Order 37 of the Civil Procedure Code 1908. Summary suit is not an ordinary suit, it is instituted for certain specific reasons majorly for enforcing a right that has a faster effect and works more proficiently in favour of plaintiff than the usual and ordinary suits and procedures. The primary objective of summary suit is to summarise the procedure of suits and settle the dispute faster in cases where the defendant is not having a genuine defence. 

This suit might look as if it is doing injustice to the defendant and violates the common principles of natural justice and equity and it doesn’t give enough importance to the phrase “Audi Alteram Partem” which means that no one should be condemned unheard. But this is not exactly true as the defendant is given one chance to provide the evidence for grant of his leave for defence, in case the defendant fails to prove so or be present before the Court on the given date, then the decision is made in favour of plaintiff. However, this procedure is used in extremely limited cases where defendant has no defence. 

Apart from this, the primary underlying purpose of summary procedure is to ensure a speedy hearing and disposal of suits where there is no such question of law, and limited to matters of non-payment of debts. This procedure is instituted to avoid unreasonable obstacles put up by the defendants in usual cases especially when they have no legit defence or have a false, frivolous and vexatious defence. These suits help the court in prompt disposal of suit at the same time granting justice to the aggrieved parties as well, whose money is stuck with such defendants. 

The scope and object of summary suit was recently demarcated by the Gujarat High Court, where it was observed that sheer purpose of enacting or instituting the summary suit is to give a push and incentive to the commerce and industrial sector by inspiring the confidence of commercial population, by solving their suits and matters with respect to money claims of liquidating amounts in a speedy manner. This might give an assurance to the money claimants that their unpaid money won’t be hanging in the middle while the ongoing procedures of Court for longer durations. Thus, major use of summary suits is done in cases of recovery matters. 

Institution of Summary Suit –

If one wants to file or institute a summary suit, then the nature of the suit must be of the following classes- 

• Bill of exchange (unconditional order which has to be paid either immediately or on a fixed date)
• Hundies (financial instrument used for trade or credit purposes)
• Promissory notes (unconditional promise to pay sum of amount either on demand or on fixed date)
• For recovering debt or liquidated demand 

So, in order to file a summary suit for recovering debt or liquidate demand in money with or without interest, it shall arise on- 

• Written contract 
• An enactment where the recoverable sum should be already fixed in money or it should be explicit in the nature of the debt other than the penalty 
• A guarantee where the claim should be in respect of a debt or liquidate demand only (not unliquidated demands). 

A summary suit is usually instituted as a plaint in the appropriate civil court as per the jurisdiction of the parties. summary suits act as a welfare mechanism for granting speedy and prompt justice to the aggrieved party in fair manner, thus the language of Order 37 of Civil Procedure Code 1908 is interpreted liberally and it has been evident in plenty of judgments as well. In the case of Systel Ltd. v. Fijitsu ICIM Ltd. it was held that the phrase of written contracts has been interpreted in its widest possibility even in form of Invoices/ Bills. These bills are considered within the contemplation of Order 37 of CPC. 

Read – What is revision unde CrPC ?

Procedure after Institution of Suit – 

In summary procedures, the defendant has to get a leave to defend from the Court, in order to prevent the court from deciding in favour of plaintiff. The burden of proof in these suits is on the defendant to disclose the facts and reason which are sufficient enough for entitling him to defend in the application for leave to defend. The summary procedures are carried out in the following manner- 

• Once the suit is instituted, the defendant is required to be served with the copy of plaint and summons is released in the name of defendant in the prescribed form 
• Within 10 days of service of summons to the defendant, the defendant should appear before the court 
• In certain cases, the defendant doesn’t make an appearance where the Court often gives an ex parte order in favour of the plaintiff, but where the defendant makes an appearance before the Court, the plaintiff shall serve on the defendant a summons for judgment 
• Within 10 days of serving of that summons, the defendant has to apply for leave to defend the suit filed. 
• After hearing the reasons and facts of defendant, the leave to defend may be granted to him unconditionally or upon such terms as may appear to the Court or Judge just and fair for both the parties. 
• If the defendant fails to apply for leave to defend, or if such application is made but refused by the Court, the plaintiff becomes entitled to the judgment forthwith. 
• If the leave granted is conditional, and the conditions are not complied by the defendant then also the plaintiff shall be entitled to the judgment forthwith. 
• Order 37 sub-rule (7) of CPC, mentions that “save as by that order the procedure in summary suits shall be the same as the procedure in suits instituted in an ordinary suit.”

Thus, this how a summary suit procedure is carried out before the court, depending upon the appearance or non-appearance of the defendant. 

Decree in Summary Suits –

The plaintiff is entitled to decree of sum not exceeding the amount as mentioned by him in the plaint or suit along with interest and other expenses in the following conditions- 

• In case the defendant doesn’t make an appearance before the Court (ex parte decree)
• Where the defendant has not applied for leave to defend 
• When the defendant has made an application for leave to defend but it is rejected by the Court 
• If the leave to defend is granted then the suit proceeds as an ordinary suit and as per the provisions of CPC, the decree is granted. 

Principles for grant/refusal of leave to Defend –

One must be thinking of what are the conditions when a leave to defend is granted by the Court to the defendant. This was recently dealt by the Apex Court in the case of IDBI Trusteeship Services v. Hubtown Ltd., 2016 where the Court held that the position of law regarding the granting of leave to defend in a summary suit vests within the hands of trial Judge who shall have the discretion whether to grant or refuse it, but it shall result in justice being done to each case. The Apex Court also listed certain principles that are applicable while deciding the matter to grant or refuse leave to defend to the defendant in summary suits. The principles are- 

1. If the defendant satisfies the court, that he has substantial and significant defence, he might be entitled to unconditional leave of appeal

2. If the defendant gives sufficient reasons and raises triable issues indicating that he has fair or prudent defence, although it might not be completely positive defence then the defendant might be ordinarily entitled to unconditional leave to defend

3. In case the defendant raises triable issues, but the Judge is not satisfied and doubt is left with the trial Judge regarding the defendant’ good faith, then the conditional leave might be granted 

4. If the defendant raises a defence which might look as plausible but is doubtful, then also the trial Judge might grant conditional leave to defend specifying the conditions to be complied with respect to time, mode of trial and payment made into court or providing with security. 

5. If the defendant lacks any substantive defence and there are no genuine or legitimate triable issue, then no such leave to defend shall be granted. 

6. When the part of payment claimed by plaintiff is submitted by the defendant which was due, leave to defend shall not be granted unless the due amount is deposited by the defendant before the Court. 

Thus, these are some of the principles suggested in the above case while determining the granting or refusal of leave to defend. 

Read – How to avoid Property Disputes after your Death ?

What constitutes no defence ?

As mentioned above, there are certain principles that need to be determined while granting the leave to defend the defendant. The Court has also explained that at one end of the spectrum an unconditional leave to defend is granted in many cases where substantial defence is presented by the defendant. 

Although, it must be noted that in other side spectra, there are frivolous and false defences claimed by the defendants in order to stretch the cases for longer periods. In these kinds of cases, no leave to defend is granted by the Court and the judgment is given in favour of the plaintiff. 

In between the granting and rejecting of leave to defend applications, there are various other kinds of defences raised to yield the conditional leave to defend in most of the cases. Certain judgments have been laid out with respect to these principles below- 

• When the defendant raises triable issues stating that he has a fair and reasonable defence which might not be a positive good defence, the Court might entitle the defendant to unconditional leave to defend even though the plaintiff is not entitled to sign the judgment. 

This restates the order laid out in the case of Precision Steel and Engg. Works v. Prem Deva Niranjan Deva Tayal, where it mentioned that mere disclosure of the facts will not be considered as substantive defence and substantive defence shall depend upon the facts and circumstances of each and every case. 

• When the defendant raises triable issues and there is doubt left with the trial judge regarding the good intentions and genuineness of the defendant with respect to its triable issues, or even if they are possible but look dubious in nature, the trial might grant a conditional leave to defend and impose certain conditions on the defendant which need to be complied by the defendant. 

This principle can be seen in the case of Uma Shankar Kamal Narain v. MD Overseas Ltd., where the Apex Court upheld some other prominent judgments like Southern Sales and Services v. Sauermilch Design and Handles GMBH and the Sunil Enterprise v. SBI and emphasized the principles which need to be adhered to in case of granting leave to defend summary suit with regard to dishonored cheques. 

It has been also held that “Unconditional leave to defend a suit shall not be granted unless the amount due on behalf of the defendant is deposited by him in the Court.” 

When can a summary suit decree be set aside? 

As per the Civil Procedure Code 1908, Rule 13 of Order 9 talks about the setting aside of the ex parte orders. But in order to set aside these decrees, the defendant has to satisfy the Court that the summons was either not duly served to the defendant or that he was prevented by any sufficient cause from appearing in the hearing before the court. But Rule 7 of Order 37 states that except as provided in the order, the procedure in suits under Order 37 shall be the same as the procedure in suits instituted in an ordinary manner. Rule 4 of Order 37 of the CPC, has specifically provided for setting aside of the decree, hence Rule 13 of Order 9 will not apply in the suit filed under Order 37. 

Under Rule 4 of Order 37 of CPC, the section gives the Court the power to set aside the ex parte decree as passed in the Summary suit. The Court is empowered to put a stay on the execution of such ex parte decree. Under this rule, an application is made usually because the defendant either didn’t appear in response to the summons and the limitation period expired, or even if he appeared, the defendant didn’t apply for leave to defend in the given period. So, in order to set aside the decree, the defendant should not only show his special circumstances which barred him from appearing or filing the application but will have to present the facts and reasons which would entitle him leave to defend. 

Usually, for setting aside of ex parte decree in an ordinary suit, the defendant has to convince the Court by providing sufficient cause for his non-appearance. But in the case of summary suits, the ex parte decree can be set aside only when the defendant shows the special circumstances along with facts for his non-appearance within the given time. 

Conclusion –

Thus, this article gives a comprehensive overview of the concept of summary suit or procedures, how they are instituted in Court. It also focuses on the nature of summary suits filed, as the cases are related to debt recovery or money matters, as it is easier and faster to give an ex parte decree in favor of the plaintiff in such cases or even if a leave to defend is to be granted to the defendant. The main purpose of these suits is to grant justice in an expeditious manner to the aggrieved parties without blocking their money for longer durations and to keep the frivolous defences out of the way from imparting justice to the needy ones. 

Refer – Civil Procedure Code, 1908

-This Article has been authored by Rhea Banerjee pursuing B.A.LL.B from Indore Institute of Law.