2018 (9) TMI 93 - HC - Indian Laws

Time Limitation - Leave to defend - suit filed under Order XXXVII of the Code - application for leave to defend has been rejected by the trial court on the ground of unexplained and inordinate delay - dishonored cheques - Held that - In the judgment and order impugned dated March 17, 2018 the trial court recorded that on February 26, 2018 the summons were returned unserved with the postal endorsement unclaimed when Advocates of both the parties were present and no petition for leave to defend was filed on behalf of the defendant on the ground that the defendant did not receive the summons for judgment - The trial court held that a mere statement that some representatives of the defendant were not in station was not good enough to explain the delay of 29 days particularly in a suit for summary judgment under Order XXXVII of the Code. It does not appear that the trial court erred in law or took any irrelevant consideration into account while deciding the matter. Order XXXVII of the Code provides for strict time limits and such time limits must be adhered to. In the instant case, the entirety of the claim is founded on three dishonoured cheques. There does not appear to be any dispute that these cheques were issued by the defendant to the plaintiff. It is evident from the material available that the cheques were dishonoured upon presentation. In such circumstances, it would require a very high case on the part of the defendant to rebut the presumption that the amounts represented by the three cheques were not immediately payable to the opposite party-plaintiff - Since the high defence that the petitioner herein was called upon to produce before the trial court may not have been available, it is evident that dilatory tactics as avoiding to accept the service or coming in to apply for leave to defend at a belated stage were resorted to by the defendant. It is evident that the defendant had and has no defence to the claim of the opposite party. Order dismissed.

Issues:
1. Scope of Order XXXVII of the Code
2. Procedure for summary judgment under Order XXXVII
3. Defences available in suits under Order XXXVII
4. Service of summons and implications of "unclaimed"
5. Rejection of application for leave to defend based on delay
6. Adherence to time limits under Order XXXVII
7. Presumption in cases of dishonoured cheques
8. Interference with trial court's order
9. Pending criminal proceedings under Section 138 of the Negotiable Instruments Act

Scope of Order XXXVII of the Code:
The judgment delves into the essence of Order XXXVII, emphasizing the urgency and limited scope of the provision. It clarifies that in suits under Order XXXVII, the defendant does not have an automatic right to file a written statement but must first enter appearance. The plaintiff can then apply for summary judgment, with the defendant having the opportunity to seek leave to defend. The test for granting leave is not the success of the defense but its plausibility.

Procedure for summary judgment under Order XXXVII:
The judgment elucidates the procedure for obtaining summary judgment under Order XXXVII, highlighting that the plaintiff is entitled to such judgment if the subject matter falls within the provision. It discusses the importance of serving the petition for summary judgment on the defendant and the subsequent need for the defendant to show cause for not granting leave to defend.

Defences available in suits under Order XXXVII:
In cases involving bills of exchange, the judgment explains the limited defenses available to defendants, particularly in rebutting the presumption under the Negotiable Instruments Act. It underscores the challenge for defendants to effectively counter the presumption arising from dishonoured cheques.

Service of summons and implications of "unclaimed":
The judgment addresses the issue of service of summons, emphasizing that a postal remark of "unclaimed" constitutes good service. It justifies the court's decision to proceed with the application for summary judgment in the absence of the defendant who refused to accept the summons.

Rejection of application for leave to defend based on delay:
The judgment discusses the trial court's rejection of the defendant's application for leave to defend due to unexplained delay. It upholds the strict time limits under Order XXXVII, emphasizing the need for adherence to such limits.

Adherence to time limits under Order XXXVII:
The judgment underscores the importance of adhering to the strict time limits prescribed under Order XXXVII. It asserts that the court must ensure speedy justice for claims falling within the purview of the provision.

Presumption in cases of dishonoured cheques:
Regarding the dishonoured cheques in the case, the judgment highlights the difficulty for the defendant to rebut the presumption of immediate payment to the plaintiff. It suggests that the defendant's dilatory tactics indicate a lack of defense to the claim.

Interference with trial court's order:
The judgment concludes that the trial court's order does not warrant interference, directing the court to pronounce a decree in accordance with the law. It emphasizes the lack of defense on the part of the defendant and the absence of grounds for challenging the order.

Pending criminal proceedings under Section 138 of the Negotiable Instruments Act:
Lastly, the judgment clarifies that the observations made in the case should not prejudice the petitioner in the pending criminal proceedings under Section 138 of the Negotiable Instruments Act. It dismisses the petition and directs the provision of certified copies to the parties upon compliance.

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