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Issues: (i) Whether the suit originally filed as a summary suit could be decreed forthwith when the defendant, after service of summons, neither entered appearance nor applied for leave to defend. (ii) Whether the plaintiff was entitled to interest at the contractual rate and to costs.
Issue (i): Whether the suit originally filed as a summary suit could be decreed forthwith when the defendant, after service of summons, neither entered appearance nor applied for leave to defend.
Analysis: Order XIII-A was inapplicable to a commercial dispute originally instituted as a summary suit, but the Court treated the application as one under Order XXXVII Rule 3(6)(a). The defendant had been duly served, did not enter appearance within the prescribed time, did not seek leave to defend under Rule 3(5), and the record also showed clear admissions of liability in the correspondence exchanged between the parties. In these circumstances, the plaintiff became entitled to judgment forthwith.
Conclusion: The issue was answered in favour of the plaintiff, and the suit was liable to be decreed forthwith.
Issue (ii): Whether the plaintiff was entitled to interest at the contractual rate and to costs.
Analysis: The invoices contained an express stipulation that delayed payment would carry penalty interest at 0.375% per week, which the Court accepted as the contractual basis for interest. The Court applied Section 34 of the Code of Civil Procedure, 1908, and held that the agreed rate governed the award of interest. As the defendant failed to contest the claim and compelled prolonged litigation, costs were also warranted.
Conclusion: The plaintiff was held entitled to interest at 18% per annum and to costs.
Final Conclusion: The suit was decreed in favour of the plaintiff with interest at the contractual rate and costs.
Ratio Decidendi: In a summary suit, where the defendant has been duly served but neither enters appearance nor seeks leave to defend, and the claim is supported by admissions and a contractual stipulation on interest, judgment may be entered forthwith under Order XXXVII and interest may be awarded in accordance with the contract, subject to Section 34 of the Code of Civil Procedure, 1908.
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