Leave to defend in summary suits must be granted where the document may be an indemnity and triable issues exist.

A defendant in a summary suit is entitled to leave to defend where a real triable issue is disclosed, and leave should be refused only if the defence is sham, illusory or moonshine. The disputed instrument was capable of being treated as an indemnity rather than an unconditional guarantee, which mattered because an indemnity claim ordinarily requires proof of loss. Serious pleas of fraud, collusion, missing bank records and discrepancies in the underlying documents were not effectively answered. As the claim did not plainly fall within the limited categories covered by Order 37 CPC, the defendants were entitled to defend the suit and leave to defend should not have been refused.

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Issues: Whether leave to defend ought to have been refused in a summary suit where the document relied on was disputed as an indemnity bond rather than a guarantee, the defence pleaded fraud and collusion, and the claim did not plainly fall within the categories covered by Order 37 of the Code of Civil Procedure, 1908.

Analysis: A defendant in a summary suit is entitled to leave where a real triable issue is shown, and leave may be refused only if the defence is sham, illusory, or practically moonshine. The document in question was capable, on its face, of being treated as an indemnity rather than an unconditional guarantee, and that distinction mattered because a claim on an indemnity ordinarily requires proof of loss. The appellants also raised serious pleas that the document was not in the bank's records, that there was fraud and collusion, and that the underlying documents had discrepancies and were not negotiated. Those assertions were not effectively answered. Order 37 permits a summary procedure for suits on negotiable instruments, written contracts, enactments, and guarantees in respect of debt or liquidated demand, but not a claim which fundamentally depends on proving loss under an indemnity.

Conclusion: Leave to defend should not have been refused; the defendants were entitled to defend the suit.

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