Case Note & Summary
The plaintiff, Anjali Sales Corporation, filed a Summary Suit under Order XXXVII Rule 2 of the Code of Civil Procedure, 1908 (CPC) seeking a decree for Rs.1,49,54,224/- with interest at 24% per annum on the principal amount of Rs.69,00,000/- from the date of the loan till payment. The claim was based on a friendly loan given in installments, secured by four promissory notes executed by the defendant, Binaykumar B. Shrivastava, proprietor of Shiva Rubber. The defendant had also executed confirmation of accounts year after year. On 3rd May 2017, the defendant paid interest of Rs.2,00,000/- against the dues. Due to non-payment, the suit was filed. The defendant entered appearance and filed a reply denying that the transaction was a friendly loan. According to the defendant, the amounts were transferred for supply of machinery as the plaintiff wanted to establish a factory to manufacture rubber tyres at Mumbai. The defendant contended that upon receipt of the monies, the same were paid to various companies who in turn transferred the machinery to his factory premises. The court considered whether the defendant had raised a triable issue entitling him to leave to defend. The court noted that the defendant's version, if accepted, would show that the amounts were not a loan but payments for machinery, which is a substantial defense. The court held that the defendant had raised a triable issue and granted unconditional leave to defend. The court directed the defendant to file his written statement within four weeks and the suit to be placed on the commercial division list for further proceedings.
Headnote
A) Civil Procedure - Summary Suit - Leave to Defend - Order XXXVII Rule 2 CPC - The plaintiff filed a summary suit for recovery of Rs.1,49,54,224/- based on a friendly loan of Rs.69,00,000/- evidenced by promissory notes and confirmation of accounts. The defendant denied the loan and claimed the amounts were for supply of machinery. The court held that the defendant raised a triable issue as to the nature of the transaction, and unconditional leave to defend was granted. (Paras 1-7)
Issue of Consideration
Whether the defendant has raised a triable issue entitling him to leave to defend in a summary suit under Order XXXVII CPC.
Final Decision
The court grants unconditional leave to the defendant to defend the suit. The defendant is directed to file his written statement within four weeks. The suit to be placed on the commercial division list for further proceedings.
Law Points
- Summary suit
- Order XXXVII CPC
- Leave to defend
- Triable issue
- Friendly loan
- Promissory note
- Confirmation of accounts
