Case Note & Summary
The petitioner, Olive Tree Trading Pvt. Ltd., was the defendant in Special Summary Suit No. 153 of 2016 filed by the respondent, F.lli De Cecco Di Filipro - FAra S. Martino S.P.A., before the 9th Jt. Civil Judge Senior Division, Pune. The suit was based on invoices for supply of pasta, claiming a debt of Rs. 1,23,00,000/-. The defendant filed an application at Exhibit-21 under Order 37 Rule 3 CPC seeking unconditional leave to defend the suit. The trial court allowed the application but imposed a condition that the defendant must deposit the claim amount or furnish a bank guarantee within two months. Aggrieved, the defendant filed a writ petition under Article 227 of the Constitution of India before the Bombay High Court. The petitioner argued three main points: (1) the suit based on stand-alone invoices is not maintainable in summary form under Order 37 CPC because invoices do not constitute a 'written contract'; (2) the petitioner had already filed a prior suit for damages and specific performance against the respondent, raising triable issues; and (3) there was no admission of liability, so the condition of deposit was unjustified. The respondent contended that the invoices were accepted by the petitioner and constituted a written contract, and that the condition was proper. The High Court analyzed the requirements of Order 37 CPC, noting that it applies only to suits on bills of exchange, hundies, or promissory notes, or suits for recovery of a debt or liquidated demand arising on a written contract. The court found that the invoices were not signed by the defendant and did not amount to a written contract. Additionally, the prior suit filed by the petitioner for damages and specific performance indicated the existence of serious triable issues, including the nature of the agreement and the amount due. The court held that the trial court erred in imposing a condition of deposit, as the defendant had raised a substantial defense and was entitled to unconditional leave to defend. The High Court set aside the condition and granted unconditional leave to the petitioner to file a written statement and defend the suit without any deposit.
Headnote
A) Civil Procedure - Summary Suit - Leave to Defend - Order 37 Rule 3 CPC - Unconditional Leave - The defendant sought unconditional leave to defend a summary suit based on invoices. The trial court granted leave but imposed a condition of depositing the claim amount or furnishing a bank guarantee. The High Court held that stand-alone invoices, without a written contract, do not satisfy the requirement of a 'written contract' under Order 37 CPC, and the suit itself is not maintainable in summary form. Additionally, the existence of a prior suit for damages and specific performance filed by the defendant against the plaintiff raises triable issues, entitling the defendant to unconditional leave. The condition of deposit was set aside. (Paras 6-12) B) Civil Procedure - Summary Suit - Maintainability - Order 37 CPC - Written Contract - The suit was based on invoices for supply of pasta. The High Court observed that invoices are not a 'written contract' as required by Order 37 CPC, which applies only to suits upon bills of exchange, hundies, or promissory notes, or suits in which the plaintiff seeks to recover a debt or liquidated demand arising on a written contract. Since the invoices were not signed by the defendant and did not constitute a written contract, the summary suit was not maintainable. (Paras 6-8) C) Civil Procedure - Leave to Defend - Triable Issues - Order 37 Rule 3 CPC - Prior Pending Suit - The defendant had filed a prior suit for damages and specific performance against the plaintiff, which was pending. The High Court held that this prior suit raises serious triable issues, including the existence of an agreement between the parties and the quantum of liability. Therefore, the defendant is entitled to unconditional leave to defend without any condition of deposit. (Paras 9-12)
Issue of Consideration
Whether the trial court was justified in imposing a condition of deposit of the claim amount or furnishing bank guarantee while granting leave to defend in a summary suit based on stand-alone invoices, and whether the suit itself is maintainable under Order 37 CPC.
Final Decision
The High Court allowed the writ petition, set aside the condition imposed by the trial court of depositing the claim amount or furnishing bank guarantee, and granted unconditional leave to the petitioner to defend the suit. The petitioner was directed to file a written statement within four weeks from the date of the order.
Law Points
- Order 37 Rule 3 CPC
- unconditional leave to defend
- summary suit
- written contract
- stand-alone invoices
- triable issues
- prior pending suit
- condition of deposit
