Order 37 summary suit on signed account statement upheld where defence was found illusory and unsupported.

A signed statement of account acknowledging a definite liability and admitted balance due may constitute a written contract for purposes of Order 37 CPC, allowing a summary suit on the debt. Where the documents show mutual accounting, a subsisting obligation to pay, and part-payments consistent with the admitted liability, the claim is treated as maintainable under the summary procedure. A defendant is not entitled to leave to defend when the pleaded version of adjustment or oral arrangement is unsupported by particulars and does not disclose a real triable issue; a sham or moonshine defence will not suffice. The revision was interfered with only conditionally, subject to furnishing a bank guarantee within time.

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Issues: (i) whether a suit under Order 37 of the Code of Civil Procedure, 1908 could be maintained on the basis of a written acknowledgement of liability and account stated; (ii) whether the defendant had disclosed a substantial defence justifying leave to defend.

Issue (i): Whether a suit under Order 37 of the Code of Civil Procedure, 1908 could be maintained on the basis of a written acknowledgement of liability and account stated.

Analysis: Order 37 applies to suits on negotiable instruments and to suits for recovery of a debt or liquidated demand arising on a written contract. A written acknowledgement signed by the debtor, if it evidences an ascertained liability and a present obligation to pay, may amount to an account stated and a written contract. Where the document shows mutual accounting, an admitted balance, and a signed liability, the claim is not confined to a bare acknowledgement for limitation purposes but constitutes a contract embodying the subsisting debt. The Court treated the signed statements of account as reflecting a concluded liability and as satisfying the requirements of a written contract under the summary procedure.

Conclusion: Yes. The suit was maintainable under Order 37 on the basis of the written acknowledgement and account stated.

Issue (ii): Whether the defendant had disclosed a substantial defence justifying leave to defend.

Analysis: The defence was found to be unsupported by particulars and inconsistent with the admitted written acknowledgements and part-payments. The plea of adjustment and oral arrangement was not backed by a credible disclosure of facts, and the supporting affidavit was treated as deficient in substance. In the circumstances, the defence was regarded as illusory and not a real triable issue, attracting the principle governing sham or moonshine defences in summary suits.

Conclusion: No. Unconditional leave to defend was not warranted.

Final Conclusion: The revision succeeded to the extent that the summary decree and refusal of leave to defend were interfered with, but the relief was made conditional on furnishing bank guarantee within the stipulated time, failing which the claim would stand restored for execution.

Ratio Decidendi: A signed statement of account acknowledging a definite liability and balance due may constitute a written contract for the purposes of Order 37, and a defendant is not entitled to leave to defend where the pleaded defence is merely illusory or unsupported by credible particulars.

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