MANU/SC/7090/2008

Equivalent/Neutral Citation: 2008(63)AIC 118, AIR2008SC 1117, 2008(3)ALLMR(SC )443, 2008 (70) ALR 776, 2008(2)ALT44(SC ), 2008(1)ARC 609,
2008 (1) AWC 902 (SC ), 2008(3)BomC R96, 2008 (1) C C C 265 , (SC Suppl)2008(1)C HN162, 2(2008)C LT374, 2008GLH(1)507, JT2008(2)SC 29, 2008-
2-LW634, 2008(5)MhLj87, 2008(5)MhLJ87(SC ), (2008)2MLJ1065(SC ), 2008MPLJ513(SC ), 2008(3)RC R(C ivil)816, RLW2008(3)SC 2063,
2008(1)SC ALE575, (2008)3SC C 770

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 573 of 2008 (Arising out of SLP (Civil) No. 5629 of 2007)
Decided On: 22.01.2008
Appellants: Neebha Kapoor
Vs.
Respondent: Jayantilal Khandwala and Ors.
Hon'ble Judges/Coram:
S.B. Sinha and V.S. Sirpurkar, JJ.
Counsels:
For Appellant/Petitioner/Plaintiff: Shekhar Naphade, Sr. Adv., Balraj Dewan, Satish K.
Srivastava and Shekhar Gupta, Advs
For Respondents/Defendant: Jatin Zaveri, Adv.
Case Note:
Code of Civil Procedure, 1908 - Section 128 (2) (f) and Order XXXVII, Rules 1
and 3--Summary suit--Leave to defend--In order to obtain summary judgment
in terms of Order XXXVII -- Ordinarily original documents must be produced--
But original documents not available--High Court of opinion that it was case
where unconditional leave should be granted--Decree could not have been
granted on basis of even photostat copies of documents--No embargo in C.P.C.
on Court exercising suo moto power of granting leave in case of this nature--
No interference called for with order granting unconditional leave to defend.
Ratio Decidendi:
As a decree in summary suit may not be automatic and the court can always
refuse to exercise its discretionary as the original documents were not
produced.
Case Category:
SIMPLE MONEY AND MORTGAGE MATTERS ETC. - MONEY LENDING ACT
JUDGMENT
S.B. Sinha, J.
1. Leave granted.
Appellant herein questions a judgment and order dated 13.02.2007 passed by a learned
Single Judge of the Bombay High Court granting unconditional leave to defend in a
summary suit wherein summons for judgment had been taken out.
2. Appellant filed the aforementioned suit for recovery of a sum of Rs. 25,00,000/- with

28-07-2023 (Page 1 of 4) www.manupatra.com Adv. Jitendra Ahuja

interest, which amount he is said to have advanced to the respondents by a cheque.
Respondents allegedly executed a promissory note for the said amount. An amount of
Rs. 5,27,293/- was said to have been repaid by way of interest. A certificate of
deduction of tax at source under Section 203 of the Income Tax Act, 1961 for the
amount of tax deducted is said to have been issued to the appellant. A post dated
cheque for Rs. 25,00,000/- was also given. Respondents also allegedly issued the
following cheques towards payment of interest accrued, the details whereof are as
under:

3 . All the four cheques having not been honoured, complaint petitions were filed.
Allegedly all original documents, viz., promissory note and four cheques, which were
filed in the criminal court were misplaced.
The writ of summons in the summary suit was served upon the respondents. They
appeared on 14.08.2006. An application for a judgment in the said suit was applied for
by way of Summons for Judgment on 07.12.2006, which by reason of the impugned
judgment has been disposed of.
4 . Mr. Shekhar Naphede, learned senior counsel appearing on behalf of the appellant,
would submit that a suit having been filed on the basis of bill of exchange within the
meaning of Order 37, Rule 1 of the Code of Civil Procedure (for short "the Code") read
with Section 6 of the Negotiable Instruments Act, 1881 (for short "the Act"), the High
Court committed a manifest error in passing the impugned order.
In any event, the learned Counsel would contend that the court ought to have, keeping
in view the facts and circumstances of the case, imposed conditions.
5 . Mr. Jatin Zaveri, learned Counsel appearing on behalf of the respondents, on the
other hand, would submit that the promissory note, having not been properly stamped,
was not admissible in evidence and as such even a summary suit is not maintainable.
6. A summary suit, as provided for in Order 37, Rule 1 of the Code is maintainable if it
is filed on bills of exchange, hundis and promissory notes. A cheque is a bill of
exchange within the meaning of Section 6 of the Act. Order 37, Rule 2 of the Code
provides as to what should a 'Plaint' contain. Rule 3 thereof provides for the procedure
to be adopted in such a suit. Sub-rule (1) of Rule 3 provides for entrance of appearance
by the defendant within ten days from the date of service of summons. Sub-rule (4) of
Rule 3 provides for service of a summons for judgment in Form No. 4A upon the
defendant. Defendant within ten days from the service of such summons by affidavit or
otherwise may disclose facts which would be deemed sufficient to entitle him to defend,
apply for leave to defend such suit. Leave to defend, however, may be granted
unconditionally upon such terms as may appear to the court to be just. Sub-rule (6) of
Rule 3 of Order 37 of the Code provides for hearing of such summons for judgment
stating:
6. Recovery of cost of noting non-acceptance of dishonoured bill or
note.-The holder of every dishonoured bill of exchange or promissory note
shall have the same remedies for the recovery of the expenses incurred in
noting the same for non-acceptance or non-payment, or otherwise, by reason of
such dishonour, as he has under this Order for the recovery of the amount of

28-07-2023 (Page 2 of 4) www.manupatra.com Adv. Jitendra Ahuja

 such bill or note.
7 . A decree in a summary suit is to be granted provided it fulfills all the criteria laid
down therein. What is mandatory is the entering of appearance by the defendant in the
suit. Appellant took out summons for judgment under Order 37, Rule 3 on 5.01.2007. It
was served on the respondents on 8.01.2007. It was listed for hearing on 13.02.2007.
Time was sought for by the respondents to file their affidavit in reply. However, an
unconditional leave to defend was granted by the learned Judge having regard to the
admitted position that the appellant was not in a position to produce the original
documents.
8. For the purpose of obtaining a summary judgment in terms of Order 37 of the Code,
ordinarily the original documents must be produced. Original documents are not
available. Appellant, therefore, is obligated to prove the loss of documents. Only
because a suit has been entertained as a summary suit, the same by itself may not be a
ground for passing of a judgment on mere asking. We have noticed the fact situation
obtaining herein. The High Court was of the opinion that it is a case where
unconditional leave should be granted. The question as to whether the defence of the
respondents is 'moonshine' or not was not a matter which required consideration of the
High Court at that stage. A decree could not have been granted on the basis of even
photostat copies of the documents. [See Food Corporation of India v. Dena Bank,
Indore and Anr. MANU/MP/0477/2003 : AIR2004MP158 ] Presumption in regard to a
negotiable instrument or a bill of exchange in terms of Section 118 of the Act is also an
evidence. It is true that a presumption can be raised that a bill of exchange was
correctly stamped as provided for under Clause (f) of Sub-section (2) of Section 128 of
the Code but a decree is to be passed by a court of law upon application of mind.
Order 37 of the Code has been prescribed in terms of the provisions contained in Clause
(f) of Sub-section (2) of Section 128 of the Code so as to expedite trial of suits
specified therein. We have no doubt in our mind that 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.
9 . Reliance has been placed by Mr. Naphede on a decision of this Court in Mechelec
Engineers & Manufacturers v. Basic Equipment Corporation MANU/SC/0043/1976 :
[1977]1SCR1060 wherein this Court quoted with approval a decision of the Calcutta
High Court in Sm. Kiranmoyee Dassi v. Dr. J. Chatterjee 49 CWN 246 : AIR 1949 Cal
479 in the following terms:
(a) If the defendant satisfies the court that he has a good defence to the claim
on its merits the plaintiff is not entitled to leave to sign judgment and 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 positively good defence the plaintiff
is not entitled to sign judgment and 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 to say, although the affidavit does not positively and

28-07-2023 (Page 3 of 4) www.manupatra.com Adv. Jitendra Ahuja

 immediately make it clear that he has a defence, yet, shows such a state of
facts as leads to the inference that at the trial of the action be may be able to
establish a defence to the plaintiff's claim the plaintiff is not entitled to
judgment and the defendant is entitled to leave to defend but in such a case the
court may in its discretion impose conditions as to the time or mode of trial but
not as to payment into court or furnishing security.
(d) If the defendant has no defence or the defence set-up is illusory or sham or
practically moonshine then ordinarily the plaintiff is entitled to leave to sign
judgment and the defendant is not entitled to leave to defend.
(e) If the defendant has no defence or the defence is illusory or sham or
practically moonshine then although ordinarily the plaintiff is entitled to leave
to sign judgment, the court may protect the plaintiff by only allowing the
defence to proceed if the amount claimed is paid into court or otherwise
secured and give leave to the defendant on such condition, and thereby show
mercy to the defendant by enabling him to try to prove a defence.
10. Admissibility of secondary evidence would be subject matter to evidence. Only if a
court is to go into the evidence, presumptive evidence could also be taken into
consideration. Although the burden may be on the defendant, he may discharge the
same only when it is raised. The Code does not put any embargo on the courts
exercising a suo moto power of granting leave in a case of this nature. If a court does
so even when an application was not filed, keeping in view the admitted position of the
case, we do not see any illegality therein. As a decree in summary suit may not be
automatic and the court can always refuse to exercise its discretionary as the original
documents were not produced and, thus, the plaintiff is called upon to prove that the
documents are lost in the criminal proceedings.
11. In view of the fact that no application for leave was filed, it is not possible for us to
consider submission of Mr. Naphede in regard to the presumptions arising under Clause
(f) of Sub-section (2) of Section 128 of the Code or purported acknowledgement
contained in the balance sheet of the respondents.
We, however, are of the opinion that the question as to whether the respondents should
be put to any terms or not should be determined afresh by the High Court as the High
Court did not address itself on the aforementioned question. We, however, express no
opinion thereupon.
12. For the reasons aforementioned, we are of the opinion that the impugned judgment
warrants no interference at this stage. The appeal is dismissed accordingly, subject,
however, to the aforementioned observations. No costs.

© Manupatra Information Solutions Pvt. Ltd.

28-07-2023 (Page 4 of 4) www.manupatra.com Adv. Jitendra Ahuja