Case Note & Summary
The plaintiff, Mohandas I. Chatlani, filed a summary suit against the defendant, Varad L. Ullal, for recovery of Rs.72,68,750/- with interest. The suit was based on two written collateral agreements dated 26 June 2006 and 8 February 2007, under which the plaintiff advanced Rs.50 lacs to the defendant. The defendant offered his property as collateral security and issued a TDS certificate dated 31 March 2008 showing interest of Rs.2,66,631/- and tax deducted at source. The plaintiff demanded payment by letter dated 8 May 2010, but the defendant failed to pay. The plaintiff then filed Summary Suit No.2138 of 2010 and took out Summons for Judgment No.425 of 2010 seeking judgment under Order 37 of the Code of Civil Procedure, 1908. The defendant applied for unconditional leave to defend, arguing that the suit was not maintainable as a summary suit because the claim was not based on a written contract. The court considered the submissions and held that the suit was clearly based on written contracts, and the TDS certificate further corroborated the loan. The court found that the defendant had not raised any triable issues or shown a substantial defence. The defence was considered moonshine and not bona fide. Consequently, the court allowed the summons for judgment and decreed the suit in favor of the plaintiff for Rs.72,68,750/- with further interest at 16.5% per annum on the principal sum of Rs.50 lacs from the date of suit until payment.
Headnote
A) Civil Procedure - Summary Suit - Order 37 CPC - Leave to Defend - Plaintiff filed summary suit for recovery of loan based on written contracts and TDS certificate - Defendant sought unconditional leave to defend - Court held that defendant failed to raise any triable issues or show a substantial defence - Held that plaintiff is entitled to summary judgment as the defence is moonshine and not bona fide (Paras 1-10).
Issue of Consideration
Whether the defendant is entitled to unconditional leave to defend the summary suit or whether the plaintiff is entitled to summary judgment under Order 37 of the Code of Civil Procedure, 1908.
Final Decision
Summons for Judgment is allowed. The suit is decreed in favour of the plaintiff for Rs.72,68,750/- with further interest on the principal sum of Rs.50 lacs at the rate of 16.5% p.a. from the date of filing of the suit till payment and/or realization and costs of the suit.
Law Points
- Summary suit
- Order 37 CPC
- Written contract
- Loan advance
- Collateral security
- TDS certificate
- Unconditional leave to defend
- Triable issues
