Summary
The supplier’s summary suit based on purchase orders, invoices and cheques was maintainable, but the contractor’s assertion that it acted only for the project owner raised genuine issues about its liability. Grant of leave to defend is ordinarily the rule; refusal requires the absence of substantial defence or genuine issues and a frivolous or vexatious defence. The decree was set aside only against the contractor, with its existing Rs40 lakh deposit treated as a condition of leave. Ultimate liability was left for trial.
Issues
- Whether the summary suit was maintainable and whether the contractor raised triable issues warranting leave to defend.
Provisions considered
- Order XXXVII Rules 1 and 3, Code of Civil Procedure, 1908The pleaded written-contract claim supported summary procedure, while genuine issues concerning the contractor’s liability required leave to defend. (¶ 14-20.1)
Held
- The supplier pleaded a written contractual claim and joint and several liability, supported by purchase orders, invoices and cheques. The contractor’s agency defence did not itself make the summary suit unmaintainable; it was to be examined when deciding leave and liability. (¶ 14-14.2)
- Substantial defence warrants unconditional leave, and a fair or reasonable triable defence ordinarily does so. Doubts about genuineness or a plausible but improbable defence may justify conditions rather than outright refusal. Admitted amounts must be deposited. Denial is exceptional where no genuine substantial defence is disclosed and the defence is frivolous or vexatious. (¶ 16-17.3)
- The owner’s admitted history of paying the supplier and issuing the cheques supported a triable issue concerning the contractor’s asserted agency and lack of personal liability. Reasons used to reject the owner’s defence could not automatically defeat the contractor’s distinct defence. (¶ 18-20.1)
- Only the decree against the appealing contractor was set aside. The existing Rs40 lakh deposit was treated as the leave condition, its treatment left to the trial court, and trial directed against that defendant. Agency and other liability issues remained open; the owner’s separate adverse judgment was not set aside. (¶ 21-22.1)
Result
Appeal allowed; decree set aside only against defendant No2, which was granted leave to defend subject to its existing Rs40 lakh deposit; liability left for trial; no costs.