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Executive Trading Company Private Limited vs. Grow Well Mercantile Private Limited

Not available · 2025 INSC 1157Decided 25 Sept 2025
Not available
Justice Ahsanuddin Amanullah · Justice S.V.N. Bhatti

Background

The plaintiff (appellant) filed a Commercial Summary Suit before the Bombay High Court to recover an admitted business liability of over Rs. 2.15 crore with interest. Instead of the defendant formally applying for "leave to defend" as required under Order XXXVII of the Civil Procedure Code, the defendant sought dismissal for non-compliance with the Commercial Courts Act's mediation requirement, and the matter went through mediation. The High Court then permitted the defendant to simply file a "reply" to the Summons for Judgment, without the defendant ever having applied for leave to defend: a step the plaintiff challenged as procedurally improper.

Decision Breakdown

The Supreme Court explained the strict step-by-step scheme of Order XXXVII Rule 3 CPC: after summons for judgment, a defendant has ten days to apply for leave to defend by affidavit disclosing a genuine defence, and leave can only be refused if the defence is frivolous. Allowing a defendant to file a plain "reply" or "defence" without ever seeking leave effaces the fundamental distinction between an ordinary suit and a summary suit, defeating the purpose of the summary procedure meant for speedy recovery on negotiable/admitted claims. The Court set aside the High Court's order permitting a reply without leave, while clarifying that the defendant remains free to pursue its pending application (including one for condonation of delay in seeking leave) through the proper channel.

Lesson Learnt

In a commercial summary suit, a defendant cannot bypass the mandatory requirement of formally seeking the court's leave to defend by disclosing a genuine defence; courts must preserve this procedural safeguard, which exists precisely to prevent summary suits from being converted into ordinary, prolonged litigation.

Official source (sci.gov.in)View Judgment (PDF)

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