Summary-suit procedure preserved as Supreme Court requires leave before permitting defence to be filed in judgment summons

A bench of Justices Ahsanuddin Amanullah and S.V.N. Bhatti heard an appeal by the plaintiff in Commercial Summary Suit No. 19 of 2020 challenging a Bombay High Court order of December 5, 2023 that permitted the defendant to file a reply to a summons for judgment. The dispute raised a narrow procedural question under Order XXXVII Rule 3 of the Civil Procedure Code and the regime for commercial summary suits.

The Court allowed the appeal, set aside the High Court direction permitting a reply without an application for leave to defend, and held that permitting a defence to be placed on record in a summary suit without leave undermined the statutory summary procedure. The Court emphasized that the sequence prescribed by Rule 3 must be followed and that procedural deviation "goes to the root of the matter." The Court, in its reasoning, observed: "After perusing the record and also the step taken by the High Court in bypassing the requirement of sub-Rules (4) and (5) of Rule 3 of Order XXXVII of the CPC; without much deliberation, we are of the view that the order impugned needs to be interfered with in as much as if a reply or defence is allowed to come on record in a summary suit without the Leave of the Court then the distinction sought to be maintained between a Suit normally instituted and Summary Suit under Order XXXVII of the CPC stands effaced. The procedural deviation goes to the root of the matter. Hence, the order impugned is set aside. The setting aside of the order impugned shall not be understood as foreclosing the options available to the Defendant in the Judgment Summons already issued, or the observations made in the present order shall not prejudice the case of either party." The Court left the parties free to pursue remedies in accordance with Rule 3 of Order XXXVII of the CPC and made no order as to costs.

Background The plaintiff (Executive Trading Company Pvt. Ltd.) filed a summary suit on October 15, 2019 under Order XXXVII CPC to recover an admitted and confirmed liability of Rs. 2,15,54,383.50 together with contractual interest. Summons issued on January 15, 2020 and the defendant entered appearance on January 28, 2020. The plaintiff issued Summons for Judgment No. 75 of 2021, which it said was served on the defendant on January 11, 2022. Instead of applying for leave to defend under sub‑rule (5) of Rule 3, the defendant filed an interlocutory application under Section 12A of the Commercial Courts Act seeking dismissal for non‑compliance; that application resulted in referral to mediation and the suit remained in abeyance. A mediation report dated February 9, 2023 was filed and the plaintiff obtained permission on August 29, 2023 to amend the plaint and summons for judgment. The High Court then directed that "Let the reply to the Summons for Judgment be filed by 20th December, 2023," and listed the matter, which prompted the present challenge.

The plaintiff argued that the High Court had bypassed the mandatory requirement that a defendant seeking to contest a judgment summons must apply for and secure leave to defend with an affidavit disclosing a genuine and substantial defence. The defendant maintained that an application for condonation of delay (filed January 23, 2024) was pending and that the question of leave could be addressed by the High Court. The Supreme Court reviewed the statutory scheme and the sequence of steps under Order XXXVII Rule 3, and noted that "the precise question [was] whether the court could have permitted filing a reply/defence without even praying for leave," concluding that permitting a reply without leave defeated the statutory distinction between ordinary suits and summary suits. The appeal was allowed, the impugned order was set aside, and the parties were permitted to proceed in accordance with the procedure laid down in Rule 3; no costs were imposed.

Case No.: Civil Appeal No. of 2025 (SLP (C) No. 1134 of 2024) Case Title: EXECUTIVE TRADING COMPANY PRIVATE LIMITED … APPELLANT(S) VERSUS GROW WELL MERCANTILE PRIVATE LIMITED … RESPONDENT(S) Appearances: For the Petitioner(s): Mr. Debesh Panda (advocate) For the Respondent(s): Mr. Sanampreet Singh (advocate)