Supreme Court grants appellant unconditional leave to defend suit, remands case for fresh consideration.

The Supreme Court allowed the appeal, granting the appellant unconditional leave to defend the suit. The lower court judgments were set aside, and the case was remanded to the High Court for a fresh consideration of all issues without influence from the Supreme Court's observations.

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Issues Involved:
1. Maintainability of the Summary Suit under Order 37, CPC.
2. Alleged lack of a written contract and acceptance of Bills of Exchange.
3. Alleged delay and negligence in prosecuting the suit.
4. Allegation of fraud and internal mismanagement within the appellant Bank.
5. Entitlement to leave to defend under Order 37 Rule 3, CPC.

Issue-wise Analysis:

1. Maintainability of the Summary Suit under Order 37, CPC:
The appellant argued that the suit did not qualify under Order 37, CPC due to the absence of a "written contract" and that the plaintiff's averment was regarding an "agreement." The court noted that the applicability of Order 37 itself was in question, and in such cases, leave to defend may be permissible. The court emphasized that summary trials should be handled carefully, considering the interests of both parties and ensuring that the defendant raises a real issue rather than a sham one.

2. Alleged Lack of a Written Contract and Acceptance of Bills of Exchange:
The appellant contended that there was no written contract as the Bills of Exchange did not bear the acceptance by the appellant Bank as required under the Negotiable Instruments Act. The court acknowledged that the appellant had not endorsed its acceptance on the Bills of Exchange. Despite this, the High Court had ruled that the appellant had agreed to pay the amount due even without the Bills of Exchange, which was sufficient to grant a decree in favor of the respondent.

3. Alleged Delay and Negligence in Prosecuting the Suit:
The appellant highlighted a delay in prosecuting the suit, noting that the plaintiff had initially filed a suit in 2001, withdrew it in 2003, and only after four years, in 2007, sought amendments and refiled the suit. The court recognized this delay and the appellant's argument that it indicated negligence and an abuse of the legal process.

4. Allegation of Fraud and Internal Mismanagement within the Appellant Bank:
The appellant alleged that the transactions were fraudulent, involving collusion between the plaintiff's constituent and some officials of the appellant Bank. The court noted the pending CBI inquiry and the charge sheet indicating the involvement of the appellant Bank's officials. The court found that these allegations raised triable issues that warranted further investigation and adjudication.

5. Entitlement to Leave to Defend under Order 37 Rule 3, CPC:
The court referred to established legal principles that if a defendant raises a triable issue or a reasonable defense, they are entitled to unconditional leave to defend. The court found that the appellant had made out a prima facie case of triable issues, including the alleged fraud and lack of proper acceptance of the Bills of Exchange. Consequently, the court concluded that the appellant was entitled to unconditional leave to defend the suit.

Conclusion:
The Supreme Court allowed the appeal, setting aside the judgments of the lower courts and granting the appellant unconditional leave to defend the suit. The case was remanded to the learned Single Judge of the High Court to deal with all issues afresh, without any influence from the observations made by the Supreme Court in this judgment.

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