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        Case ID :

        2008 (1) TMI 961 - SC - Indian Laws

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        Summary suit on negotiable instruments requires judicial scrutiny; leave to defend may be granted where originals are absent and defence issues arise. In a summary suit based on a negotiable instrument, Order 37 permits expeditious relief only after judicial scrutiny, and a decree cannot follow ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                        Provisions expressly mentioned in the judgment/order text.

                          Summary suit on negotiable instruments requires judicial scrutiny; leave to defend may be granted where originals are absent and defence issues arise.

                          In a summary suit based on a negotiable instrument, Order 37 permits expeditious relief only after judicial scrutiny, and a decree cannot follow mechanically on secondary material alone. The court noted that a cheque falls within the definition of a bill of exchange, but the plaintiff normally must produce the original documents or satisfactorily explain their loss before relying on secondary evidence. It also reiterated that the existence of a triable issue, or a defence that is sham or moonshine, informs the court's discretion on leave to defend. On the facts, the grant of unconditional leave to defend was upheld.




                          Issues: Whether, in a summary suit based on a negotiable instrument, the High Court was justified in granting unconditional leave to defend where the original documents were not produced and the applicability of summary procedure itself was in question.

                          Analysis: A summary suit under Order 37 of the Code is meant for expeditious disposal of claims on specified instruments, including bills of exchange and promissory notes, and a cheque is a bill of exchange within the meaning of Section 6 of the Negotiable Instruments Act, 1881. The grant of a decree is not automatic; the defendant's appearance and the court's judicial application of mind are essential. Ordinarily, production of the original documents is required for obtaining summary relief, and where originals are unavailable, the plaintiff must account for their loss before relying on secondary material. The court also noted that the presence or absence of a defence like a triable issue, or a defence that is sham or moonshine, is relevant to the exercise of discretion under the summary procedure. In the facts, the High Court was entitled to grant leave, and no illegality was shown in that exercise of discretion.

                          Conclusion: The grant of unconditional leave to defend was upheld and the appeal failed.

                          Ratio Decidendi: In a summary suit, where original documents are not produced and the applicability of the summary procedure is itself disputed, the court may grant leave to defend on a judicial assessment of the circumstances, and a decree cannot be passed mechanically on secondary material alone.


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                          ActsIncome Tax
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