Introduction:

In a recent judgment, the Supreme Court of India delivered a significant ruling clarifying the procedural requirements in summary suits under Order XXXVII of the Code of Civil Procedure (CPC). The case titled Executive Trading Company Private Limited versus Grow Well Mercantile Private Limited (2025 LiveLaw (SC) 969) revolved around a commercial dispute concerning recovery of dues exceeding ₹2.15 crore with 24% interest. The dispute, originating in the Bombay High Court, questioned whether a defendant could file a defence in a summary suit without first seeking the leave of the Court. A bench comprising Justices Ahsanuddin Amanullah and SVN Bhatti settled this controversy, holding that no defence can be placed on record in a summary suit without the leave of the Court. The ruling set aside the Bombay High Court’s order, which had allowed the defendant to submit a reply as if the case were an ordinary civil suit, thereby bypassing the special procedure envisaged under Order XXXVII CPC.

Arguments of the Petitioner:

The petitioner, Executive Trading Company Private Limited, argued that the Bombay High Court had erred in permitting the defendant to file a reply without seeking leave to defend, which is a mandatory requirement under Order XXXVII CPC. The petitioner emphasized that the entire objective of summary suits is to provide an expedited mechanism for adjudicating claims based on negotiable instruments, written contracts, or certain statutory dues, where there is little scope for frivolous defences. The petitioner submitted that if the defendant were allowed to file a reply as in an ordinary suit, the distinction between summary suits and ordinary suits would collapse, rendering the special provisions under Order XXXVII redundant. Counsel for the petitioner relied on the structured procedure under Order XXXVII Rule 3, which mandates that once a plaintiff files a summary suit, the defendant has only ten days to enter appearance, and thereafter, when the plaintiff issues summons for judgment, the defendant must seek leave to defend within ten days. Unless the defendant applies for and obtains leave, it cannot file any defence, reply, or written statement. The petitioner stressed that the High Court’s order diluted this mandatory process and set a dangerous precedent that could defeat the very object of summary suits. Furthermore, it was argued that the defendant initially did not apply for leave but instead attempted to dismiss the suit citing Section 12A of the Commercial Courts Act, 2015, which deals with mandatory pre-institution mediation. Although mediation was attempted, it failed, and yet the defendant chose not to file a proper application for leave to defend but waited until the plaintiff amended the pleadings, at which stage the High Court directed a reply to be filed. The petitioner maintained that this approach was procedurally defective and undermined the established summary procedure recognized by law.

Arguments of the Respondent:

On the other hand, the respondent, Grow Well Mercantile Private Limited, defended the High Court’s order, contending that the procedure had to be applied flexibly in the interest of justice. The respondent argued that since the plaintiff had amended its pleadings after the failed mediation, the High Court was justified in directing the filing of a reply as if the matter were an ordinary civil suit. The respondent’s counsel maintained that the procedural rigidity advocated by the petitioner should not override the principles of fairness, particularly when the amendments introduced by the plaintiff altered the scope of the pleadings. It was also submitted that the defendant had attempted to comply with the Commercial Courts Act by seeking pre-institution mediation, which itself was a step in good faith. The failure of mediation, followed by amendment of pleadings, placed the defendant in a difficult position, and hence the direction of the High Court to permit a reply was a just and equitable solution. Moreover, the respondent suggested that the discretion vested in courts under the CPC should be liberally construed to allow defendants to present their case, especially when a substantial defence exists. It was contended that denying the defendant an opportunity to file a reply would amount to shutting the doors of justice on them without considering whether the claim itself was sustainable.

Supreme Court’s Judgment:

After hearing both sides, the Supreme Court delivered a detailed judgment authored by Justice SVN Bhatti. The Court categorically held that the procedure under Order XXXVII CPC is distinct from ordinary suits, and the Bombay High Court had committed an error in directing the filing of a reply without leave. The Court stressed that if such a practice were allowed, the very purpose of Order XXXVII would be defeated. The Court observed, “If a reply or defence is allowed to come on record in a summary suit without the leave of the Court, then the distinction sought to be maintained between a suit normally instituted and a summary suit under Order XXXVII CPC stands effaced.” The Court emphasized that summary suits are intended to provide speedy justice in cases where the claims are based on written contracts or negotiable instruments, and defendants are required to disclose genuine and substantial defences at the earliest stage. The Court further explained the structured sequence of steps under Order XXXVII Rule 3, highlighting that once a summary suit is filed and summons served, the defendant has ten days to enter appearance. Thereafter, when the plaintiff serves summons for judgment, the defendant has ten days to apply for leave to defend. The court may then grant unconditional or conditional leave depending on whether the defence is substantial or frivolous. The Supreme Court clarified that if the defendant fails to apply for leave or the application is refused, the plaintiff is entitled to immediate judgment. Importantly, the Court acknowledged that procedural flexibility exists insofar as the court may condone any delay in entering appearance or applying for leave if sufficient cause is shown. However, the fundamental requirement of obtaining leave before filing a defence cannot be waived or bypassed. The Court also noted that in cases where part of the claim is admitted, the defendant must deposit the admitted amount as a precondition for leave. In conclusion, the Supreme Court allowed the appeal, set aside the High Court’s order, and restored the sanctity of the summary suit procedure. At the same time, the Court clarified that its observations would not prejudice the defendant’s rights in respect of the judgment summons already issued, thereby leaving open the option for the defendant to seek leave in accordance with law.

Broader Implications of the Judgment:

This ruling reinforces the importance of procedural discipline in summary suits under Order XXXVII CPC. By reaffirming that no defence can be filed without the leave of the Court, the Supreme Court has ensured that the efficiency and purpose of summary suits are preserved. The judgment underscores that courts cannot dilute procedural safeguards in the name of flexibility, especially when the legislature has designed a mechanism to curb unnecessary delays. At the same time, the Court recognized that defendants are not entirely without remedy; they can always seek condonation of delay or apply for leave belatedly by showing sufficient cause. This balanced approach maintains both procedural sanctity and substantive fairness. The case also highlights the interplay between the CPC and the Commercial Courts Act, 2015, particularly the mandatory pre-institution mediation under Section 12A. While mediation is encouraged, its failure does not allow courts to circumvent the special procedure under Order XXXVII. Thus, the ruling harmonizes the objectives of speedy adjudication under Order XXXVII with the policy of promoting mediation under the Commercial Courts Act. For litigants, the decision is a reminder that procedural compliance in summary suits is critical, and any attempt to bypass the requirement of seeking leave to defend will not be entertained. For the judiciary, it is a reaffirmation that procedural shortcuts cannot undermine the legislative intent of providing expeditious remedies in commercial disputes.