Case Note & Summary
The Plaintiff, Tiscon Realty Private Limited, filed a Commercial Summary Suit (No. 34 of 2021) against the Defendants, C. G. Edifice (a partnership firm), Ajay Jagannath Thakur, and Shyam Kumar Shah, seeking a decree for Rs.1,70,93,880/- based on the dishonour of six cheques dated 31st December 2019. The cheques were issued by the Defendants towards repayment of a loan advanced by the Plaintiff. The Defendants had applied for leave to defend the suit under Order XXXVII of the Code of Civil Procedure, 1908. The court examined whether the Defendants had raised a triable issue or a substantial defence. The Defendants contended that the cheques were not issued for any legally enforceable debt or liability and that the Plaintiff had failed to prove the loan. The court, however, noted that the cheques were issued by the Defendants and that the presumption under Section 139 of the Negotiable Instruments Act, 1881 applied, which the Defendants failed to rebut. The court found that the defence raised was not substantial and that the Defendants had not shown a triable issue. Consequently, the court granted conditional leave to defend, directing the Defendants to deposit the entire suit amount of Rs.1,70,93,880/- within four weeks from the date of the order. In default, the Plaintiff would be entitled to a decree. The court also directed that the deposit be kept in a fixed deposit and that the suit be listed for further directions after compliance.
Headnote
A) Civil Procedure - Summary Suit - Leave to Defend - Order XXXVII Rule 2 CPC - The court considered whether the defendants had raised a triable issue or substantial defence to merit unconditional leave to defend. The court held that the defendants' defence was not substantial and granted conditional leave to defend upon depositing the suit amount. (Paras 1-19) B) Negotiable Instruments - Dishonour of Cheques - Consideration - Sections 138, 139 NI Act - The court noted that the cheques were issued towards repayment of a loan and that the presumption under Section 139 of the Negotiable Instruments Act, 1881 applies. The defendants failed to rebut the presumption. (Paras 1-19) C) Civil Procedure - Summary Suit - Conditional Leave - Order XXXVII Rule 3 CPC - The court granted leave to defend on condition that the defendants deposit the entire suit amount within a specified period, failing which the plaintiff would be entitled to a decree. (Para 19)
Issue of Consideration
Whether the Defendants are entitled to unconditional leave to defend the summary suit based on the alleged dishonour of cheques, or whether the Plaintiff is entitled to a decree under Order XXXVII of the Code of Civil Procedure, 1908.
Final Decision
The court granted conditional leave to defend to the Defendants, directing them to deposit the entire suit amount of Rs.1,70,93,880/- within four weeks from the date of the order. In default, the Plaintiff shall be entitled to a decree. The deposit shall be kept in a fixed deposit. The suit to be listed after compliance.
Law Points
- Summary suit under Order XXXVII CPC
- Leave to defend
- Triable issue
- Dishonour of cheques
- Negotiable Instruments Act
- 1881
