DAMODARAM SANJIVAYYA
NATIONAL LAW UNIVERSITY
SABBAVARAM, VISAKHAPATNAM, A.P., INDIA
PROJECT TITLE:
Stay of Summary Suit
SUBJECT:
Code of Civil Procedure
NAME OF THE FACULTY:
Prof. Dr. N.Bhagyalakshmi
Name of the Candidate: Angela Elsa John
Roll No.: 2018LLB011
Semester: 5
ACKNOWLEDGMENT:
I would like to express my heartfelt gratitude to my CPC teacher, Dr. N Bhagyalakshmi ma’am
for giving me the golden opportunity to work on the topic “Stay in Summary Suit”. I would
like to thank my friends and family for giving me emotional support during these tough times.
Lastly, I would like to thank my University for providing adequate resources thus helping me
complete within a limited time frame.
Table of Contents
Abstract (Introduction).................................................................................................................1
Subject Matter and Jurisdiction...................................................................................................1
Difference between a summary suit and original suit................................................................2
The difference between special circumstances and sufficient cause.........................................3
Beneficial to the Plaintiff...............................................................................................................3
Decree in summary suits...............................................................................................................4
Setting aside a decree in Summary Suits.....................................................................................4
Section 10 of the Code of Civil Procedure...................................................................................6
Applicability of Section 10 in Summary Suits under Order 37.................................................6
CASE LAWS..................................................................................................................................7
CONCLUSION............................................................................................................................13
BIBLIOGRAPHY........................................................................................................................13
Abstract (Introduction):
A summary suit or a summary procedure is defined under Order 37 of the Civil Procedure Code,
1908. As the name suggests, a summary suit takes lesser time to resolve issues when compared
to ordinary suits. The summary procedure is a very unique procedure which is used to enforce a
right in an effective manner as the courts pass the judgment without hearing the defence.
This prima facie may look as though it is against the principle of natural justice, Audi Alteram
Partem, but in reality this procedure only applicable to limited subject matters where the
defendant has no defence. This provision is one of the best provisions in the hands of a plaintiff
who wants to institute a civil suit for speedy justice.
Subject Matter and Jurisdiction:
A summary suit can be instituted in High Courts, City Civil Courts, Courts of Small Causes and
any other court notified by the High Court. High Courts can restrict, enlarge or vary the
categories of suits to be brought under this order.
The main objective of summary suits is to ensure a swift redressal mechanism in case of certain
specified documents.”
“The documents include bill of exchange, promissory notes and hundies1 and 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 on a written contract; or 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 on a
guarantee, where the claim against the principal is in respect of a debt or liquidated demand
only2.”
Institution of a summary suit is done by filing a pliant in the concerned civil court.
1
Or.37.R1(2)
2
Or.37.R.1(2)b
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Procedure to be followed after institution of a Summary Suit
“When there is a summary suit, the defendant in the case has to get leave to defend from the
Court of Law. Following this, there is a burden on the defendant to state facts in his favour which
is sufficient to entitle him to get that leave to defend from the concerned court of law.”
What is the detailed procedure involved:
Once the summary suit has been instituted, it is required that the defendant is served
with a copy of the plaint and summons in the prescribed form.
Following this, the defendant in the case is required to make an appearance within 10
days after the summons has been served.
If the said defendant makes an appearance, then a summons for judgment shall be
served to the defendant by the plaintiff.
Within 10 days of service of such summons, the defendant has to apply for leave to
defend the suit.
“Leave to defend may be granted to him unconditionally or upon such terms as may
appear to the Court or Judge to be just.”
“If the defendant has not applied for leave to defend, or if such an application has been
made and refused, the plaintiff becomes entitled to the judgment forthwith.”
“If the conditions on which leave was granted are not complied with by the defendant
then also the plaintiff becomes entitled to judgment forthwith.”
Sub-rule (7) of Order 37 provides that “save as provided by that order the procedure
in summary suits shall be the same as the procedure in suits instituted in an ordinary
manner”. 3
Difference between a summary suit and original suit
The primary difference between ordinary suits and summary suits is that in summary
suits, the defendant will get a chance to defend only if he is granted the leave to defend.
3
Rule 3 & Rule 7, Order XXXVII, Code of Civil Procedure, 1908
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Ordinary suits are very general in nature. Summary suits on the other hand are applicable
only to certain subject matters as mentioned earlier. The principle of Res Judicata is not
applicable to summary suits. This means that summary suits can be filed on the matter
directly and substantially in issue in a previous ordinary suit.
In ordinary suits, in case of non appearance of the defendant, multiole summons are
served to the defendant and only then an ex-parte order is passed. However, in such cases
in a summary suit, the decree is passed in favour of the plaintiff easily.
The process of setting aside an ex-parte decree is stricter and more stringent and special
circumstances citing the absence must be submitted. However, in ordinary suits, it is
required that only the sufficient cause has to be submitted.
The difference between special circumstances and sufficient cause
The two terms have been lucidly juxtaposed in Karumili Bharathi v. Prichikala Venkatchalam4.
The reasons offered by the defendant to explain the special circumstances should be such that he
had no possibility of appearing before the Court on a relevant day.
For instance, there was a strike and all the buses were withdrawn and there was no other mode of
transport. This may constitute special circumstances. But if the defendant were to plead that he
missed the bus he wanted to board and consequently he could not appear before the Court.
It may constitute a ‘sufficient cause’, but not a ‘special circumstance’. Thus a ‘special
circumstance’ would take with it a ’cause’ or ‘reason’, which prevents a person in such a way
that it is almost impossible for him to attend the Court or to perform certain acts which he is
required to do.”
“Thus the ‘reason’ or ’cause’ found in “special circumstances” is stricter or more stringent than
in “sufficient cause” and depends on the facts of each case.”
Beneficial to the Plaintiff:
The concept of Summary suits limited to a certain subjects is very beneficial to the plaintiff.
Unless the defendant in the case had a credible defence, the plaintiff is entitled to a judgment
4
1999 (3) ALD 366
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immediately. All that a plaintiff is required to do is to show that the case falls under Order 37 of
the Code of Civil Procedure.
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.”
Decree in summary suits
The plaintiff is entitled to a decree of a sum not exceeding the sum mentioned in plaint, together
with interest and cost in following conditions”:-
1. If the defendant does not enter an appearance (ex parte decree)
2. If the defendant has not applied for leave to defend
3. If the defendant has applied for leave to defend but it is refused
4. If the leave to defend is granted then the suit proceeds as an ordinary suit and decree is
granted as per the CPC5
Setting aside a decree in Summary Suits:
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 the CPC, rule 13 of order IX deals with setting aside the ex parte decree. The defendant has
to satisfy the court that the summons was not duly served or he was prevented by any sufficient
cause from appearing in the hearing. Rule 7 of Order 37 says that except as provided in the
order, the procedure in suits under Order 37 shall be the same as the procedure in suits instituted
5
Rule 3(6) & Rule 7, Order XXXVII, Code of Civil Procedure, 1908
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in an ordinary manner. Rule 4 of Order 37 specifically provides for setting aside the decree,
therefore, provisions of Rule 13 of Order 9 will not apply to a suit filed under Order 37.”
Under rule 4 of order XXXVII, the court has the power to set aside the ex parte decree passed in
summary suit. The court is empowered to stay the execution of such a decree. Under this rule, an
application is made either because the defendant did not appear in response to summons and
limitation expired, or having appeared, did not apply for leave to defend the suit in the prescribed
period. To set aside ex parte decree, the defendant has not only to show special
circumstances which prevented him from appearing but also facts which would entitle him to
leave to defend. 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.”
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.”
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Section 10 of the Code of Civil Procedure:
Section 10 of the Code of Civil Procedure deals with the concept of Stay of Suit. It reads as
follows:
“No Court shall proceed with the trial of any suit in which the matter in issue is also directly and
substantially in issue in a previously instituted suit between the same parties, where such suit is
pending in the same or any other Court in India having jurisdiction to grant the relief claimed.”
Applicability of Section 10 in Summary Suits under Order 37:
Section 10 is a general provision applicable to all categories of cases. The provisions contained
in O 37 applies to certain classes of suit. One provides a bar against proceedings with the trial of
the suit, the other provides for granting of quick relief. Both these provisions have to be
interpreted harmoniously so that the objects of both are not frustrated. The words ‘trial of any
suit’ will have to be construed in the context of provisions of O 37 of the Code. The scheme of
summary procedure provided by O 37 is that a stage of determination of the matter in issue will
arise in a summary suit only after the defendant obtains leave. The trial would really begin only
after leave is granted to the defendant.”
Considering the objects of the both the provisions, i.e. s 10 and O 37, wider interpretation of the
word ‘trial’ is not called for. The word ‘trial’ in s 10, in the context of a summary suit, cannot be
interpreted to be the entire proceedings starting with the institution of the suit by lodging a plaint.
In a summary suit, the ‘trial’ really begins after the court or the judge grants leave to the
defendant to contest the suit. Therefore, the court or the judge dealing with the summary suit can
proceed upto the stage of hearing the summons for judgment and passing the judgment in favour
of the plaintiff if : (i) the defendant has not applied for leave to defend, or if such application has
been made and refused; or if, (ii) the defendant who is permitted to defend fails to comply with
the conditions on which the leave to defend is granted.”
In a summary suit, the ‘trial’ really begins after the court grants leave to the defendant to contest
the suit, and thus, the word ‘trial’ in section 10, in the context of a suit under Order XXXVII,
cannot be interpreted to be the entire proceedings starting with the institution of the suit. Further,
the court dealing with the summary suit can proceed upto the stage of hearing the summons for
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judgment and passing the judgment in favour of the plaintiff if the defendant has not applied for
leave to defend or if such application has been made and refused, or if the defendant who is
permitted to defend but fails to comply with the conditions on which the leave to defend was
granted.”
CASE LAWS:
1) Case Name: Indian Bank Vs. Maharashtra State Co-operative Marketing
Federation Ltd.
IN THE SUPREME COURT OF INDIA
Case Citation: AIR 1998 SC 1952
Hon’ble Judges: S.C Agrawal, G.T Nanavati
Cases Referred: Harish Chandra v. Triloki Singh6
Cases Overruled: Maharashtra State Co-operative marketing Federation Ltd., Bombay
Vs. Indian Bank, Bombay7
FACTS:
In the case at hand, the respondent federation had applied to the appellant bank to open an
irrevocable Letter of Credit for a certain amount of Rs. 3,87,90,000 in favour of M/s. Shankar
Rice Mills. Following this, the bank opened an irrevocable Letter of Credit as requested by the
respondent federation. The arrangement that was agreed upon was that the documents under the
Letter of Credit when tendered to the Bank was to be sent to the respondent federation for
confirmation and their acceptance following which the Bank would make payments to M/s
Shankar Rice Mills on behalf of the Federation.
The Bank then filed a Summary suit in the Bombay High Court under Order 37 against the
federation for obtaining a decree for Rs. 4,96,59,160 saying that the said amount had become
under the Letter of Credit. The Bank then took out summons for the judgment. The federation
made appearance before the Court and took out a Notice of Motion stating that there was a stay
6
AIR 1957 SC 444
7
AIR 1997 Bom 186
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required on the summary on the ground that the federation had already instituted a suit against
the Bank for recovery of Rs. 3,70,52,217.88 preceding the event of them filing a summary suit.
Learned Single Judge of the Bombay High Court held that the concept of trial in Section 10 of
the Code is applicable only to an ordinary suit and not to summary suits. therefore the
proceedings under the Summary suit were not required to be stayed. The same judge was also of
the opinion that there was credibility in the defence raised by the federation. Subsequently, he
granted leave to the federation to defend the suit on the condition that the federation would
deposit 4 crores in the Court.
The federation then filed appeal before the Divison Bench of the High Court. The Division
Bench was of the opinion that the word ‘trial’ mentioned in section 10 of the Code had not been
used in a narrow sense and that Section 10 would be applicable to Summary suits also. therefore
the summary suit which was filed by the Bank was required to be stayed till the disposal of the
prior suit by the federation.
ISSUES:
Whether Section 10 of the Code of Civil Procedure is applicable to a Summary Suit under Order
37 of the Code of Civil Procedure?
APELLANT’S CONTENTIONS:
The learned counsel for the appellant contended that the Single Judge bench took the right
decision whereas the Division bench made an error by taking the contrary opinion. he contended
that if Section 10 is made applicable to summary suits also, the very purpose of creating a
separate provision for summary suits will be futile.
RESPONDENT’S CONTENTIONS:
The respondents in this case sided with the decision of the Division Bench. They were of the
view that the word ‘trial’ mentioned in section 10 of the Code had not been used in a narrow
sense and that Section 10 would be applicable to Summary suits also.
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REASONING:
Section 10 of the Code of Civil Procedure prohibits the court from proceeding with the trial of
any suit in which the matter in issue is also directly and substantially in issue in a previously
instituted suit provided other conditions mentioned in the section are also satisfied. The word
‘trial’ has a very wide meaning. According to Webster Comprehensive Dictionary, International
Edition, it means the examination, before a tribunal having assigned jurisdiction, of the facts or
law involved in an issue in order to determine that issue. According to Stroud's Judicial
Dictionary (5th Edition), a 'trial' is the conclusion, by a competent tribunal, of question in issue
in legal proceedings, whether civil or criminal.”
Therefore the word trial will be interpreted based on the object and nature of the provision. It is
clear that the object of prohibition which is mentioned in Section 10 of the Code is to prevent the
courts of concurrent jurisdiction from simultaneously having to undergo the trial of two parallel
suits together, besides avoiding inconsistent findings on the issue at hand.”
This provision does not bar the institution of a suit. It has been construed by the courts as not a
bar to the passing of interlocutory orders such as an order for consolidation of the later suit with
the earlier suit, or appointment of a Receiver or an injunction or attachment before judgment.
The course of action which the court has to follow according to Section 10 is not to proceed with
the 'trial' of the suit but that does not mean that it cannot deal with the subsequent suit any more
or for any other purpose. In view of the object and nature of the provision and the fairly settled
legal position with respect to passing of interlocutory orders it has to be stated that the word 'trial'
in Section 10 is not used in its widest sense.”
The provision contained in Section 10 is a general provision applicable to all categories of cases.
The provisions contained in Order 37 apply to certain classes of suits. One provides a bar against
proceeding with the trial of a suit, the other provides for granting of quick relief. Both these
provisions have to be interpreted harmoniously so that the objects of both are not frustrated. This
being the correct approach and as the question that has arisen for consideration in this appeal is
whether the bar to proceed with the trial of subsequently instituted suit contained in Section 10 of
the Code is applicable to a summary suit filed under Order 37 of the Code, the words 'trial of any
suit' will have to be construed in the context of the provisions of Order 37 of the Code. Rule 2 of
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Order 37 enables the plaintiff to institute a summary suit in certain cases. On such a suit being
filed the defendant is required to be served with a copy of the plaint and summons in the
prescribed form. Within 10 days of service the defendant has to enter an appearance. Within the
prescribed time the defendant has to apply for leave to defend the 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. If the defendant has not applied for leave to defend, or if such an application has been made
and refused, the plaintiff becomes entitled to judgment forthwith. If the conditions on which
leave was granted are not complied with by the defendant then also the plaintiff becomes entitled
to judgment forthwith. Sub-rule (7) of Order 37 provides that save as provided by that order the
procedure in summary suits shall be the same as the procedure in suits instituted in the ordinary
manner. Thus in classes of suits where adopting summary procedure for deciding them is
permissible the defendant has to file an appearance within 10 days of the service of summons
and apply for leave to defend the suit. If the defendant does not enter his appearance as required
or fails to obtain leave the allegations in the plaint are deemed to be admitted and straightaway a
decree can be passed in favour of the plaintiff. The stage of determination of the matter in issue
will arise in a summary suit only after the defendant obtains leave. The trial would really begin
only after leave is granted to the defendant. This clearly appears to be the scheme of summary
procedure as provided by Order 37 of the Code.”
Considering the objects of both the provisions, i.e., Section 10 and Order 37 wider interpretation
of the word 'trial' is not called for. We are of the opinion that the word 'trial' in Section 10, in the
context of a summary suit, cannot be interpreted to mean the entire proceedings starting with
institution of the suit by lodging a plaint. In a summary suit the 'trial' really begins after the Court
or the Judge grants leave to the defendant to contest the suit. Therefore, the Court or the Judge
dealing with the summary suit can proceed up to the stage of hearing the summons for judgment
and passing the judgment in favour of the plaintiff if (a) the defendant has not applied for leave
to defend or if such application has been made and refused or if (b) the defendant who is
permitted to defend fails to comply with the conditions on which leave to defend is granted.”
It had relied upon the decision of this Court in Harish Chandra v. Triloki Singh8. That was a case
arising under the Representation of People's Act and, therefore, it was not proper to apply the
8
[1957] 1 SCR 370
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interpretation of word 'trial' in that case while interpreting Section 10 in the context of Order 37
of the Code.”
JUDGMENT:
Leave granted. Therefore, allow these appeals, set aside the impugned judgment of the Division
Bench of the High Court and restore the order passed by the learned Single Judge.”
2) Case name: M/S. Malwa Strips Pvt. Ltd v. M/s Jyothi Ltd.
Case citation: AIR 2009 SC 1581
Hon’ble Judges: JUSTICE S.B. SINHA, JUSTICE CYRIAC JOSEPH
Advocates: For the Appellant Shiv Sagar Tiwari, For the Respondent Kamini Jaiswal
Facts:
Appellant is a company incorporated and registered under the Companies Act, 1956 (for short,
"the said Act"). It is engaged in manufacturing of copper strips and copper foils etc. It has its
registered office at 17-20, Industrial Area No.2, AB Road, Dewas, Madhya Pradesh. Respondent
is also a company registered and incorporated under the said Act. It has its registered office at
Nanubhai Amin Marg, Industrial Area, Vadodara. Respondent used to place orders for supply of
copper rods strips and foils from time to time with the appellant. Allegedly, the payments used to
be made towards the said supply from time to time. Appellant, inter alia, on the premise that a
sum of Rs. 49,03,908.29 was owed to it by the respondent filed a Summary Suit under Order
XXXVII of the Code of Civil Procedure, 1908 (for short, "the Code"). An application for leave
to defend the suit was filed by the respondent. Appellant contended that as the respondent raised
a defence only as regards the rate of interest and not the principal amount, its application should
be dismissed. By an order dated 23.08.2007, the application for leave to defend the suit was
allowed, subject to the condition that the respondent shall make payment of undisputed and
admitted amount of Rs.22,64,789.52. Such deposit was to be made by 22.9.2007. Respondent
obtained extension of time to deposit the amount. However, as the said amount was not
deposited, the trial court passed a judgment on or about 14.11.2007 decreeing the suit in favour
of the appellant. Respondent preferred an appeal there against. An application for stay of the said
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judgment and decree passed by the trial Court was also filed. By reason of the impugned
judgment, the High Court stayed the operation and execution of the decree in its entirety. While
doing so, the High Court opined:”
"We are conscious of the fact that usually money decrees are not stayed in appeal. At the same
time, it is not a universal principle of law that the stay can never be granted in cases relating to
money decree. The Court has discretion to grant a stay keeping in view all facts and
circumstances of the case, including the manner in which the trial of the suit was conducted and
the impugned decree was passed. We are prima facie of the view that a case for stay of execution
of the decree is made out by the appellant on the facts on record. We do not, however, wish to
express any opinion on the merits and demerits of the case at this stage, which, in our opinion,
will be gone into at the time of hearing of the appeal. For the purpose of grant of stay, we are of
the view that a ground for stay, as contemplated under O.41 R.5 CPC is made out. We are,
therefore, inclined to stay execution of the decree pending appeal."
Appellant’s Contentions:
Mr. Shiv Sagar Tiwari, learned counsel appearing on behalf of the appellant would submit that
the High Court committed a serious error of law in passing the impugned judgment insofar as it
failed to take into consideration that the defendant - respondent had raised no substantive and
bona fide defence and that in view of the matter it was not a case where the execution of the
decree should have been stayed.”
Respondant’s Contentions:
Ms. Kamini Jaiswal, learned counsel appearing on behalf of the respondent, on the other hand,
would urge that compound interest was not payable and in any event a suit under Order XXXVII
of the Code being not maintainable, the manner in which the judgment and decree passed by the
learned trial judge being wholly unsustainable, the High Court could not be said to have
committed any error of law in passing the impugned judgment.”
Reasoning of the Court:
In terms of sub-rule (5) of Rule 5 of Order XLI, the court shall not make an order staying the
execution of the decree notwithstanding anything contained in the foregoing sub-rules, where the
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appellant fails to make the deposit or furnish the security specified in sub-rule (3) of rule 1. We
will proceed on the assumption that although the word `shall' has been used in Order XLI Rule 1
(3) of the Code, the same is not mandatory in character, and, thus, may be read as directory.”
Judgement:
The appeals are allowed with the aforementioned directions. No costs.
CONCLUSION:
After a study of the topic, we can understand that a stay in a summary suit is an unlikely event.
The reason why a summary suit has been introduced in the first place is because it serves an
important purpose of delivering speedy justice in cases relating to a certain subject matter.
BIBLIOGRAPHY:
1) Mulla’s Code of Civil Procedure
2) lexinexis.com
3) manupatra.com
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