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Sudin Dilip Talaulikar v. Polycab Wires Pvt. Ltd. and Others

Civil Appeal · 2019 INSC 757Decided 15 Jul 2019
Civil Appeal No. 5528 of 2019
Justice Ashok Bhushan · Justice Navin Sinha

Background

A supplier of electrical cables and wires filed a summary suit against a buyer for recovery of over Rs. 64 lakh in alleged outstanding dues. The buyer claimed he had already cleared all legitimate dues, returning defective goods and paying the balance, and pointed out that the supplier had earlier filed, and then unconditionally withdrawn, a criminal cheque-dishonour complaint over the same dues before switching to this civil recovery suit. The trial court and the High Court nevertheless granted the buyer only "conditional" leave to defend, requiring him to deposit Rs. 30 lakh before he could contest the suit, and he appealed this condition to the Supreme Court.

Decision Breakdown

The Supreme Court held that a defendant should be granted unconditional leave to defend a summary suit where he raises a substantial, genuine triable defence that is not sham, frivolous, or improbable: mere evidence of a past commercial relationship between the parties does not by itself justify imposing a deposit condition. The Court found the buyer's defence genuine: the supplier's unexplained delay in presenting a cheque, its unconditional withdrawal of the earlier criminal prosecution, and the undisputed facts of returned goods and cleared balances all showed real triable issues that the lower courts had failed to properly consider. The Court set aside the orders granting only conditional leave to defend and allowed the appeal, granting the buyer unconditional leave to defend the suit on its merits.

Lesson Learnt

In a summary suit for recovery of money, a defendant with a genuine, non-frivolous defence is entitled to defend the case unconditionally, without being forced to deposit a disputed amount upfront merely because the parties once had commercial dealings.

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

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