Case Note & Summary
The appeal arose from a summary suit for money recovery filed under Order XXXVII of the Code of Civil Procedure, 1908, by the plaintiff-respondent No. 1, a partnership firm, against defendant No. 1 (respondent No. 2 herein) and defendant No. 2 (appellant herein). The plaintiff supplied 200 tons of steel based on purchase orders issued by the appellant, who was a contractor working for defendant No. 1 on a construction project. An amount of Rs. 89,50,244/- remained due, and the suit was filed after a legal notice. Both defendants applied for leave to defend, with defendant No. 1 denying privity of contract and the appellant asserting no liability as the goods were supplied for defendant No. 1's project. The Trial Court rejected both applications, finding no triable issues, and decreed the suit with joint and several liability. The High Court dismissed the appellant's appeal, affirming that the invoices constituted written contracts under Order XXXVII CPC and that the appellant was liable. The Supreme Court considered the appeal limited to the prayer for leave to defend. The core legal issues involved whether the appellant raised triable issues entitling him to leave to defend under Order XXXVII CPC and whether there was privity of contract establishing joint and several liability. The appellant argued that he acted as an agent for defendant No. 1 and had no direct liability, while the plaintiff contended that the invoices specified the appellant's liability and that both defendants were responsible. The Court analyzed that under Order XXXVII CPC, leave to defend is granted only if triable issues are raised. It found that the invoices were written contracts naming the appellant as buyer, and the appellant's role as agent of defendant No. 1 did not absolve him of liability. The Court upheld the lower courts' decisions, reasoning that the defence was insubstantial and aimed at shifting burden. The final decision dismissed the appeal, affirming the denial of leave to defend and the decree for payment with joint and several liability.
Headnote
A) Civil Procedure - Summary Suit - Leave to Defend - Order XXXVII Code of Civil Procedure, 1908 - Appellant sought leave to defend in a money recovery summary suit filed under Order XXXVII CPC, contending no liability for payment of goods supplied as contractor for defendant No. 1 - Court held that no triable issues were raised as invoices constituted written contracts specifying appellant's liability, and appellant acted as agent of defendant No. 1, making both jointly and severally liable - Leave to defend was rightly denied (Paras 2-6). B) Contract Law - Privity of Contract - Joint and Several Liability - Indian Contract Act, 1872 - Appellant argued no privity of contract with plaintiff as purchase orders were issued on behalf of defendant No. 1 - Court found that goods were supplied to appellant as agent of defendant No. 1, invoices were addressed to appellant, and defendant No. 1 made payments, establishing liability - Held that defence of want of privity was without substance, and both defendants were jointly and severally liable (Paras 3-4).
Issue of Consideration
Whether the appellant was entitled to leave to defend in a summary suit under Order XXXVII of the Code of Civil Procedure, 1908, based on the existence of triable issues regarding liability for payment of goods supplied.
Final Decision
Appeal dismissed; leave to defend denied; decree for Rs. 89,50,244/- with interest at 10% per annum and joint and several liability of defendants affirmed
Law Points
- Summary suit procedure under Order XXXVII CPC
- triable issues for leave to defend
- privity of contract
- joint and several liability
- written contract requirement
