Summary suit defence must be substantial; unsupported denial of written liability cannot secure unconditional leave to defend.

In a summary suit under Order 37 CPC, unconditional leave to defend is refused where the defence is vague, unsupported by documents, or otherwise sham and illusory. The text notes that an alleged challenge to a written acknowledgment of liability was rejected because surrounding materials, including admitted supply of goods, dishonoured cheques, and settlement minutes, supported the claim. The written acknowledgment dated 17 November 2001 was treated as the operative basis of liability, so only the admitted principal amount was recoverable. As no written term covered contractual interest, that claim was declined, though pendente lite and future interest at 6% per annum and costs were allowed.

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Issues: (i) Whether the defendants were entitled to unconditional leave to defend in a summary suit under Order 37 of the Code of Civil Procedure, 1908; (ii) Whether the plaintiff could recover the entire claimed amount and interest in the absence of a written contract covering interest.

Issue (i): Whether the defendants were entitled to unconditional leave to defend in a summary suit under Order 37 of the Code of Civil Procedure, 1908.

Analysis: The defence raised against the written acknowledgment of liability was found to be vague and unsupported by any correspondence, document, or definite factual foundation. The alleged challenge to the authenticity of the acknowledgment was not treated as credible in view of the surrounding materials, including the admitted supply of goods, the dishonoured cheques, and the written minutes recording the settlement. Under Order 37 Rule 3(5), leave to defend is to be refused where the defence does not disclose a substantial defence or is frivolous, vexatious, sham, or illusory.

Conclusion: The defendants were not entitled to unconditional leave to defend, and the applications for leave to defend were dismissed.

Issue (ii): Whether the plaintiff could recover the entire claimed amount and interest in the absence of a written contract covering interest.

Analysis: The written acknowledgment dated 17 November 2001 was treated as the foundation of the summary suit and as the operative contract between the parties. On that basis, the admitted liability was confined to Rs. 19.5 lakhs, and the larger principal claim was not allowed. As no written term provided for interest, and Order 37 was applied strictly to claims founded on written contracts, the demand for contractual interest was declined. However, reasonable pendente lite and future interest was awarded on the principal sum allowed.

Conclusion: The plaintiff was entitled only to Rs. 19.5 lakhs as principal, together with interest at 6% per annum from the date of institution till realization and costs.

Final Conclusion: The suit succeeded in part on the basis of the written acknowledgment, the defence was rejected as unsubstantial, and a decree was passed for the reduced principal amount with limited interest and costs.

Ratio Decidendi: In a summary suit, leave to defend must be refused where the defence is sham, illusory, or does not disclose a substantial defence, and interest cannot be awarded unless it is founded on a written contractual term or other written basis within Order 37.

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