Settlement agreement remained enforceable despite return of complaint, and no substantial defence justified leave to defend.

A settlement agreement signed during Section 138 proceedings and taken on record remained enforceable despite the complaint later being returned for want of territorial jurisdiction, because the defendants did not dispute its execution, authenticity, or terms. In a summary suit under Order XXXVII, the court treated the liability as admitted and held that the defendants' reliance on a technical plea about the timing of instalments did not constitute a genuine triable issue or substantial defence. The suit was therefore decreed for the principal sum, interest, and costs.

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Issues: Whether the settlement agreement executed in the course of proceedings and taken on record by the criminal court remained binding notwithstanding return of the complaint for want of territorial jurisdiction, and whether the defendants had raised any triable issue or substantial defence in the summary suit.

Analysis: The settlement was undisputed in its existence, execution, and terms. It had been signed by the parties and placed on the record of the Section 138 proceedings, and the court had taken it on record before the complaint was returned only because of the later territorial-jurisdiction ruling. The defendants did not challenge the authenticity or validity of the settlement, but sought to avoid payment on a technical plea that instalments would begin only after formal re-presentation of the complaint in the proper court. In a suit under Order XXXVII, the decisive enquiry is whether a genuine triable issue or substantial defence exists. The court found that the defendants were attempting to evade an admitted liability arising from the settlement and that the later return of the complaint did not extinguish the obligation under the settlement agreement.

Conclusion: The settlement agreement was held to be enforceable, the debt was treated as admitted, and the defendants were found not to have raised any substantial defence warranting leave to defend. The suit was decreed for the principal sum with interest and costs.

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