Case Note & Summary
The case arises from a summary suit filed by the respondent/plaintiff, A. Kanagarajan, against the petitioners/defendants, M/s. Sri MVR Logistics Private Limited and its directors, for recovery of Rs. 59,70,000/- based on a promissory note dated 26.04.2016. The respondent alleged that he advanced a loan of Rs. 30 lakhs to the petitioners through RTGS on various dates in April and June 2016, and the petitioners executed a promissory note evidencing the debt. The respondent claimed that the petitioners paid Rs. 7.50 lakhs towards interest via NEFT and cash, with the last payment on 07.11.2018, but thereafter defaulted. The suit was filed under Order 37 Rules 1 and 2 CPC. The petitioners filed an application under Order 37 Rule 3(5) CPC seeking unconditional leave to defend, contending that the loan was fully repaid through RTGS and NEFT, and that the promissory note was not supported by consideration. The trial court, by order dated 05.08.2024, granted conditional leave to defend, directing the petitioners to deposit 50% of the suit claim. Aggrieved, the petitioners filed the present Civil Revision Petition under Article 227 of the Constitution. The High Court examined the facts and submissions. The court noted that the petitioners had raised specific triable issues, including that the loan was repaid through bank transfers and that the promissory note was not executed for the full amount. The court held that the trial court erred in imposing a condition of deposit as the defence raised triable issues. The court set aside the impugned order and granted unconditional leave to defend, allowing the petitioners to contest the suit on merits. The court directed the trial court to proceed with the suit in accordance with law.
Headnote
A) Civil Procedure - Summary Suit - Leave to Defend - Order 37 Rule 3(5) CPC - Unconditional Leave - The court considered whether the defendants raised triable issues entitling them to unconditional leave to defend. The defendants contended that the loan was repaid and the promissory note was not properly executed. The court held that the defendants had raised substantial triable issues, including the fact that the loan amount was allegedly repaid through RTGS and NEFT, and that the promissory note was not supported by consideration. The court allowed unconditional leave to defend, setting aside the trial court's order which had granted only conditional leave. (Paras 1-11) B) Civil Procedure - Summary Suit - Triable Issues - Order 37 CPC - The court examined whether the defendants' defence raised triable issues. The defendants claimed that the loan was repaid and that the promissory note was not executed for the full amount. The court found that the defendants had made specific allegations of repayment through bank transfers and that the promissory note was not supported by consideration. The court held that these were triable issues that required a full trial, and therefore unconditional leave to defend should be granted. (Paras 4-10) C) Civil Procedure - Summary Suit - Conditional Leave - Order 37 Rule 3(5) CPC - The trial court had granted conditional leave to defend, requiring the defendants to deposit 50% of the suit claim. The High Court held that the trial court erred in imposing such a condition as the defendants had raised triable issues. The court set aside the condition and granted unconditional leave to defend, allowing the defendants to contest the suit without any deposit. (Paras 8-11)
Issue of Consideration
Whether the petitioners/defendants are entitled to unconditional leave to defend the summary suit under Order 37 Rule 3(5) CPC, given the alleged triable issues regarding the loan transaction, repayment, and execution of the promissory note.
Final Decision
The High Court allowed the Civil Revision Petition, set aside the impugned order dated 05.08.2024 passed by the XIX Additional Judge, City Civil Court, Chennai in IA.No.3/2023 in OS.No.7836/2021, and granted unconditional leave to defend to the petitioners. The trial court was directed to proceed with the suit in accordance with law.
Law Points
- Order 37 Rule 3(5) CPC
- unconditional leave to defend
- triable issues
- summary suit
- promissory note
- loan repayment
- RTGS
- NEFT
- limitation
- burden of proof
