The High Court · 2025

Order

1. The Civil Revision petition arises out of ar crder datecl 27.06.2025 passcd by the le:rrned Additional Serrro, ()ivil Juclgc. Merdchal Malkajgiri Distrrcr ar Meclchal, dismissing i A.No.l27 of 202,i rn O.S.No. l27 of 2024 filcd by_ rhe pe[itioner; defend:rnts lbr grant of leave to defend the S,.rit of Lhe responclct) / pl:1lntill.

2. 1'he Suir filed by the rcsponclen t/ plaintifl \ rzrs r Surrrman. Suit for rcco\re ry of Rs.3g, 13,6g4/ along with pcncl: rtc litc :rnd frrttrre interesL @ l g\o per annum, flled under O_r Cr )r_XXVI i reacl u'ith Ordcr VII Rule 1 and sec[ion 26 of The (]r clc oi Civil Proccclurc, r9o8 ('cpc), The pctitione rs / dercndan r s . the said Suir frlccl the prescnt i.A. (l.A.No. 127 of 2O2S) rr Cer C)rtlcr x)cxvll Rulc 3(5) rcad with sccrion 15 i of rhe cpc sr r king le.r,c to clclend the Suit and permit thc rre t itioncrs / del-enc I nts to fik: a suilable u'r-itien statement in de le nce of the alleg-, I claim ol. the rcspondc nt,/ plaintiff. 2

3. By thc impugned ordcr daLed 27.06.2025, rhc l.rial Court dismissed the I.A. on the ground ol the petitioners / d efendan ts failing to establish a good casc to defend thc Suit.

4. Learned counsel appearing for Lhc petitioners / defcnciants submits that the Trial Courrt erred in not granting leave to defend the Suit sincc the pctitioncrs had rliscd triablc issur.es which warranted adjudication. Counsel submits that the trierbie

issues included thc threc invoiccs issued b1, the plaintiff to the defendants for thc supply o[ the goods agreed upon b1. thc parties not containing the signature or seal of the defendanl. Counscl also submits that thc invoices raiscd b1. the plaintiff were false and fabricated. Counsel lurthcr submits that the plaintilf was not cntitled to claim intcres[ at the rate of 18oz,o pcr annum sincc thcre \\,as no agrcemenL to thaL rjffect betwcen Lhc parLics.

5. Learned counscl appearing for the rt: sponde nt/ plaintiff places on record a document (Confirmation of Accounts) dated

24.O4.2023 issued by the delendants to the plaintiff conhrming the accounts for the period from O1.04.2019 to 24.O4.2023 and rcflccting the paymenrs made by thc defendants to rhe plaintiff Llil 18.O2.2023. Counsel submits that all the invoices including 3 tl-rose disputed by the defendants u,ere mentionc, I in Lhc said Conlirmation ol-Accounts. Counsel submits that i rtercst at the ra te of 187o pe r annum lr.as demanded due to lhc r xccssive and ir-rordinatc clelav on the part of the clefeltdan: in making payments to Lhc plaintifi including on tline occasir:r s. (1 I have hcarcl learned counsel appearing i) thc parLies anci cor-rsicler-cd the documents placcd on rccord t corroboratc ihe ir rcspectn'e submissions. 7 . Thc Srrrt irled by the respondenti plaintiff fo - the recovery o[ rrone-r n'as :r 'Summary Suit' as dcllned under I rcler )CXXVII of the CPC. Orcler XXXVII 'Summary procedurc, r ndcr Rulc 1 tlellnes the ('ourts and Classes of Suits to u,hich t l- : orrlcr is ro ap pl-r..

8. The present Suit falls unde r Ordcr XXXVII lule 1 Sub_ ruic (2)(b j of r hc CPC being a Suit in rvhich the plzr r tiff seeks to ie.rover :r cie bt or liquidated demand in money p:L.able b1. the clcl'enclants, u'ith or u,ithout interesl. The plaint a r, :rs that the plair til'f ls .1 registered Micro, Small and Mediur Enterprise (MSMtr) and is a rcputed vendor in the pulp and pag:r industr_r,. The plainrifl ancl thc defcndants have been ern;1t ged in thc 4 business of sale (by the ptaintiff) and purchase (by the defendants) of goods from 01.04.2019 to 13.01.2024. The plaintilf dclivered papcr and papcr products to the defendants uide numerous invoiccs from 21 .l l.2O2O to 13.O3.2O2 1. The invoices issued by the plaintiff to the defcndanrs conlained rhe ma'rerial particulars including thc quantity of goods supplied, the price per unit the place of supply, and the placc of delivery ctc- The plaintiff states Lhat thc said invoices constitute valid u.ritten contrac[s.

9. The procedure for the appearance of a delenclaLnt in a Summary Suit is outlined in Order XXXVII Rule 3 o[ thc CPC. Sub rules (1) to (+) of Rule 3 deal u.ith the procedure lirr scrvice of summons on the defendant and provides an opportuniry [o the defcndant lo enter appearance r,r,ithin tcn da1-s of service of summons in the prescribed format. Sub-rule (5) of Rulc 3 gives the defendant an option, at any timc within ter-r dar.s from the servicc of such summons for judgment, by affidavit or otherw.ise disclosing such facts as may bc deemed sufficicnt to entitle him to dclcnd [he suit. Sub-rule 5 also contemplaLes the grant ol unconditional leave to the defendant to delend such terms r,r'hich the Court may impose.

10. The provisos to Rule 3(5) of Order XXXVI I C ' I underscore thc discretion givcn to the Court to grant 1) re fuse thc dcfenclant's application for leave to defend. Thr: discreLion is somcu'hat curLerilecl in thc first proviso where the tl rurt is under a mandate to not rcfusc leave unless the Court is ;atislied that the facts clisclosed by lhe defendant do nol inclicate a substanlial defcncc or Lhat the defence intended t,r bc put up by thc def'enci:rnt rs lrivolous or vexatious. The s: :onc[ proviso applies in a r:onLran scenario, i.e ., where the 1t i ve Lo defend shall not be gran Lecl. Ttre second proviso applies r,' rere a part of thc arnounl ci:r ine cl b-r the plarntiff is admitted br. I rc cicfenclant- to be duc frorn him. hr such a case, the Court sl- all not grant Icave to def'end unlcss the admitted amount is dep )sited by the delendarr-i in (lrrrtrl. I I - Thc fiameu'ork of Order XXXUI Rule 3 ol the CPC indicatcs thil t a delendant applying to [he t] )urt lvith a srrbstantial clelr:nce cleserves leniency in terms ol 1 rant of lcavc to defcnd. I{()\\cvcr, the grant of leave II st also be zrccompanicd r.r ith bona fdes, especially whcrc L admits ro part of thc suit claim and deposits re delendan I hc admitted componcnt rn t he Court. 'lhe strictures on a dr f rndant, buill inLo thc frameu'orl< of Order XXXVII Rule 3 of r hc CPC, arc further emphasized in Order XXXVII Rule 3(6) of the CpC , u'hich specifies the outcomes at the hearing of such summons for Judgmenr. Under Order XXXVII Rule 3(6)(a) of the CpC, if the defendant has not applied lor leave to clefend, or if such application has been macle and refused, the plaintilf shall be entitled to judgment forthwith. Ordcr XXXVII Rule 3(6)(b) of rhe CPC proceeds further ancl entitles the plaintiff to immediate judgmcnt r.r,here Lhe defendant has lailed to give security n,ithin the timc specified by the Court or has lailed to carry- out such othcr directions given by the Court. I2 The facts in thc present casc must bc tested against the rrrtcn tion of the Legislature framing the proccdure lor 'Suntmarl Surts, uncler Order XXXVII oI the CpC. The only defcnce raised by the petitioners/ defendan ts in the Trial Court u,as that Lhe Suit was based on fictitious entries and fraudulcr.rt invoiccs.

13. A perusal of the invoices, which are par[ of the records in thc CRP, shou s that most of the invoices raised by the plaintilf on the cleleudants from 2I.ll.2O2O to 13.03.202 I were signed and scaled by the defendants acknou.ledgmcn t, exccpt 3 rnvorces clatcd 2 1.1 1.2O2O. 23.71.2O2O and 2S.01.202 1. The AS 1 defendants' rc.lLlesl lor lcarrc to defend based ,; L thr: three unsigned invoices, horvcvcr, becomes irrelevant irL vieu, of the Confirmation of AccounLs sent by thc defendants t,r the plaintiil on 24.04.2023 rn rcspcct ol the period from 0 L 04.2019 to

24.O4.2023. 14 The Conlirnra(ion ol Accounts mentions 1e follou,ing importaI]t facts (i) Thc drrte arrci parLiculars of the invojct s raised b1.' the olarntifl on t}-re defendants from 1! . 1 1.2020 to

13.03.202 i. (ii) Thc threc clisputcd invoices arc parL of l.he lisr mcntioncd on thc document. (iii) Pavrnent-s made bv the dcfendants to he plaintifl from ).?'.11 .2O2O ro 78.O2.2023 il]r )unting to Rs.-?6r,37,0 i8.00- (ivi Thc 'Ciosing Balancc' of Rs.23,80,173 ( 0 rs clearlr. rcllc,.:Lr:d in tl-rc Confirmation of Account (v) The sum o[ Its.36,37,O 18.O0 (payment I -rade by thc dcfendants) + Rs.23,80,173.OO (closir _l balancei amoLlnL not pard bv the clel-- tclants) r?s 6t), I 7 ,191 I - , zrs rccorcled in the Co r lrmation of Acco un ts.

15. Hcnce, thc Conhrmation of Accounts sent b1, the dcfcndants to thc plaintift on 24.O4.2023 constitutes a clcar errlrnission bl. thc defer,dants ol' the balancc pa.ymenr owcd to thc plaintiff for the goods supplied and rcceivecl by the ricfcndants. It is also significant that the thrcc rnvoices disputed b1' the defendants are specifically mentione<l in Conlirmertion oI Accounts.

16. [t is relcvarrt to notc that although thc clcfendants have rcstricted thcir dclence only to thrce invoiccs, rhe case bcforc t hc 'i'rial CoLlrt \\'as that all thc invoiccs u,crc fictitior_rs und ftrlrricated- Hc'r'rcr:, thc defendants have contradrcted Lhcir ou n c:rsc bv restricting the disputc to only thrce inr,,oices. [n an1. evcnt, thc clispute regarding the three invoices bccomcs irrclevant since all of them are mentioned in tiie defend:rnts, 'Corrlirm;rtion ol Accounts'.

17. The othcr contention raiscd by the pe titionors / d cfendan ts thert thc plaintifl u'as not entitlcd to claim intcrcsl at the ratc o[ 1{3"6 per ilnnllnt since [here \\,as no agrecment to that eflect bctwcen the parties, is also not tenable. Thc plaint avers that thc Lcclger Books maintained by the plaintiff for the period from O1.O-1.201(l to t3.01.2024 record nine dela_r,cd pzr-1,ments made by the defendants lo the plaintiff lor the goocls sr- 1 piicct The Tabulated StatcmcnL is part of the plaint The del:r-in payment ranges lrom 1 \ car Lo 3 -t'cars- Paragraph 7 of thc I laint states that the piaintitf souqht firr intercst accrued on he delayed part-paymenls rn additrot] to the principal amount rl le'

18. Moreover, a l-cgal Dem:rnd Notice issued b1' t' l the defendants orl 23.04 2C2'1, ri'hrch \vas rer'i plaintifl on 24.Otl.'2O24. also mcntions the interest l the plaintill orl thc dclal cd pii) ments ar 1 Rs.14,83,51 1/ Paragraph No.9 ol the De rr spccifically stalcs ihat lntercst ilt l-hc raLe of l8') ' : plaintiff to ,cd by the rlculated bY )unting tc Lnd Notice pcr annum shall be levted oLr the r.lclayccl pavments, based on t rc St-andard Industry Practrcc in thc Pulp anci Paper Industry' ] Provisional Interest Dcbit Notc rlatcd 02.04-2024 forned )art of the Demand Noticc The dcfend:Lnts did not deny o - dispute the Legal NoLicc. The rccorcis .rlst., do not contain ' .ny rcbutlal thcreto includrnq calculalion ol interest at the ral( of 18%o Per

19. The on11'c1r-tcstion bclore thc Court is wheth.: Trial Court err:d in refustng leavc to def'end to the petitionersT c efendants? 10 20- The rcason givcn by the Trial Court is that the invoices u,cre signed and stamped by the petitioners / defendan ts and that lhe delendants lhemsch'es issued Confirmation o[ Accounts d.ated '24 .O4.2023 u'hich inclicates that the dcfendan[s admitLed their liabilitv. Thc impugned order also records that the delendants did not dent' the Confirmation of Accounts

21. This Court docs not find any error in the reasons gtven by ihc Trial Court for clismissing the defendants I.A. for leave lo dclend. 'lhe records placcd belore the Court do not sho'"r' any triable issue raiscd by the defendants for granting lezrve to dcfend cirher in thc form of the clisputed invoices and intcrest on clela-t,ed pavmenls or otheru'ise.

22. As stated zrbove, the Suit filccl by the re spondcnt/ ptain titf for reco",ert' of mottev falls '"r'ithin the classihcation ol Order XXXVII Rulc 1 ol the CPC. Order XXXVII Rulc 3 of the CPC provides an opportunil]' to a defendant to apply lor leave to defcnd a Suit undcr Summ:rry Proccdure and for grat-rt of such lcave unconditionerlly or on tcrms, provided t hc defcndant cliscloscs a substantial larcLual dcfet.rce to the Suit- 11

23. The principle undertakLng icave to defend ,r r'-q explained b1' the Supreme Courl in IDBI 'l'rusteeshtp Sert.i :es Ltd., Vs. Hubtoutn Ltci.,1 and reiteraied in B.L. Kashgap arvl Sorts Lirnited 7s. JMS Sleels and Pou.,er Corporationz. t\ t lolrgh IDBI Ttusteeship helcl that the earlier decision in MecLL,t ?c Engineers and Manufacturers I/.s., Basic Equipment Corttr ralion3 was superseded b1' the forme r, the harmonl' bett t in thc two decisions rvas restorcd in B.1,. Kusltyap. In B. L ! ushycLp. thc Supreme Court hcld ihilt ihe grant of lcavc to rlL I :ncl (rvith or $,1thout conciitions), is thc orclrnar_y' rule and deir I i oi lcavc is an exception unless Lhe dcfcnclant has practir--iLl r no defcncc and is unabic to give ouL c\.ctl a scmblancc of iabie issues before the Court. The Suprcmc Court found in ih: f:rct s of that case that thc appcllant/delendant h:rs indccd 'r isecl triable issucs, particLrLtrlr conccn'ring its liabilitv and : I : dc:l'cnce of the appellan t cannot be said to bc frivolou s i r vexatious al[ogethcr.

24. Thc principles delincateci ir-r Kiranntat,t Dasl Vs J.ChcLtterjia, as reiterated in Mechelec EngirLeet : nominall_r, '1zorz1 r scc sea ' lzotz) z scc zst '{rszs1 a scc osz ' AIR 1949 Cal 479 1,2 altered in IDBI Tntsteeshtp ancl explained in B.L. Kashyap can be summarized thus: (a) Thc dcfcndanr must satisfy the Court that the defcnd:rnl hers a substan[ial delcnce that is one rvhich is likel1. to succeed anci that the plaintiff is not cntitled to lcave to sign judgment. (b) 'lhc delcndant is ordinarily entitled to unconditional lcave to dcfcncl, il r.hc defendant raises a triable issue indicating rhar he /she has a fair or bona Jide or rcasonable delencc albcit not a posiLively good delcnce. (c) The Court ma_r in its discretion impose conclitions as [o the Lime or moclc of trial including payment by the defendant or furnishing security whcre the triable issues r:riscd bv the delendant raiscs a cloubt on the dclenclant,s good faith or the genuincness of the tria blc issues. (d) A frivolons or r exalious delence vr,,hich does not r:rise arnr, gcnuirrc tri:rble issues shall be refused. (e) I-cave to delend the Suit shall not be granted unless the defendant clcposits the amount in the Court 13 admitted by the defendant to be due f om him u,ith reg:rrd to any part oi-the amount clair-r:d-

25. The principics laid clou.n b,r, the Suprerri, Coltrt lollo$, lrom thc statutory provisions ir-r Order KX-XVII I ule 3 of the CPC. The enrrmeration of conditions b1. the S. trerne Court reiLerate that leavc [o defcnd shall be gral-rL,] [ r.r,]rere the defcndant raises triable issues disclosing cvcn a plausible de lence as opposed to a dcfcnce u,hich is entr rt I. urilounde d, unsubstantiaterl or groundlcss, In other ri.orci:. the dcfcnce rzrrsed must have a scmblancc of genuincness r - onc u-hich conrrinces thc Court that thc de[endatrt shouLlr-i bc git e n an opporluniLy to conLest the Suit on merirs. -l'he rtr unc(: ci:lnnot be impossible, illogical or flimsy.

26. It is clcar that the Courts have givcn consrr t rable lees'arr to defendants to contest a Summarlr Suit on m,: rts bul onlrr rr,rherc the defendar-rt comes foru'ard s.iLh a subst r rti:lL de fence and raises tnable issues qucstioning thc plainri '1 s righr to a Summary juclgment. 27 " In the prcsent case, thc pctitione rs / de f'e nd I r ts fall shorf of the lenienc] shou.n bl thc Courts in interprctirr hc nancl:rtc undcr Order XXXVII ol the CPC. In essence, thc r:titroners do 74 not havc any deience to thc claim of the respondent/ plaintiff and did nor disclose any dcfence, subs[antial or plausibie, to the Trial Court. Hcnce, the Triai Court rightly dismissed the petiiioncrs' I.A. for leavc to clcl-cnd. Thrs Court, accordingly, does not find any merit in thc CRp u.arrranting interlerence with the impugned order dated 27 .06.2O2..

28. C-R.P.No.2661 of 2O2:>, along r.vrth a[ connectcd applications, is accordingly dismissecl. Thcrc shall be no order as tc costs SD/- A,JAYASREE ASSISTANT REGISTRAR 6 //TRUE COPY// SECTION OFFICER To,

1. The Additional senior civil Judge, Medchal tMalkajgiri District, Medchat- (with records if anY)

2. One CC to SRl. Nizampur Chandra Sekhar' Advocate [OPUC] 3. One CC to SRl. S Raiagopalan, Advocate IOPUC] 4. Two CD CoPies JA/PSL 4,. /l\, ^ ,/ l// HIGH COURT DATED:06/'1 1/2025 ) ORDER CRP.No.2661 of 2025 ,-a J 0l t4- /, j>\. . -,::..\ i:'' 7t .l,ll ,:iJ Tf,' i CIVIT- REVISIO\ PI]'IITION IS DISMISSI]t) I ,. I ,l\-. t