Written contract under Order XXXVII supports recovery where letters and balance-sheet admissions show debt, with interest allowed too.

A recovery claim based on exchanged letters was treated as a suit on a written contract within Order XXXVII CPC, and the defendant's balance sheet admission of the outstanding loan was treated as an acknowledgment of liability. On that basis, the defence was considered weak and untenable, so leave to defend was refused. The absence of a separate agreement fixing the rate of interest did not bar an award of interest in the summary suit, and the grant of interest was sustained. The appeal therefore failed and the decree for recovery with interest was maintained.

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Issues: (i) Whether the suit for recovery was maintainable under Order XXXVII of the Code of Civil Procedure on the basis of exchanged correspondence and admissions in the balance sheet, and whether leave to defend was rightly refused; (ii) Whether interest could be awarded in the summary suit despite the absence of a separate agreement on the rate of interest.

Issue (i): Whether the suit for recovery was maintainable under Order XXXVII of the Code of Civil Procedure on the basis of exchanged correspondence and admissions in the balance sheet, and whether leave to defend was rightly refused.

Analysis: A suit founded on an agreement evidenced by exchange of letters is within the ambit of a suit arising on a written contract under Order XXXVII. The letters between the parties were not disputed, and the defendant's balance sheet showed the amount claimed as a loan outstanding. An admission in the balance sheet was treated as an admission of liability, and the Court held that the surrounding circumstances did not displace the clear acknowledgment of debt. In these circumstances, the defence was found to be weak and untenable, and the matter would have gone to trial only as a formality.

Conclusion: The suit was maintainable under Order XXXVII and leave to defend was rightly refused, in favour of the respondent.

Issue (ii): Whether interest could be awarded in the summary suit despite the absence of a separate agreement on the rate of interest.

Analysis: The absence of a specific agreement on interest did not bar a claim for interest in a suit under Order XXXVII. The Court held that the nature of the claim as one based on a written contract did not exclude interest, and the precedents relied upon supported the grant of interest even where no precise rate had been separately agreed, though the exact contractual rate was not proved.

Conclusion: Interest was properly awarded, and the grant of interest did not warrant interference.

Final Conclusion: The appeal failed on all substantial grounds, and the decree refusing leave to defend and granting recovery with interest was sustained.

Ratio Decidendi: A recovery suit based on exchanged correspondence and supported by an admission of liability in the defendant's balance sheet can be maintained as a written-contract claim under Order XXXVII, and a defence lacking substance does not entitle the defendant to leave to defend.

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