[Cites 5, Cited by 0]
Bombay High Court
Prakash Kallappa Patil Through Hid ... vs Abhay Anant Rudrawar on 15 December, 2025
2025:BHC-AUG:35104
WP-12803-2022.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
973 WRIT PETITION NO. 12803 OF 2022
Prakash S/o Kallappa Patil,
Age: 37 years, Occupation: Service,
Resident of: at present Singapore,
through his constituted Power of Attorney,
Anand Kallappa Patil;
Age: 38 yrs, Occupation: Business,
R/o: Gajanan Colony, Aurangabad ....Petitioner
VERSUS
Abhay Anant Rudrawar,
Age: 41 yrs, Occu: Business,
Jalan Nagar, Station Road, Aurangabad. .....Respondent
______________________________________________________________
Appearance :
Mr. A. R. Vaidya, Advocate for Petitioner.
Ms. Neha Udawant h/f Mr. S. J. Salunke, Advocate for Respondent.
______________________________________________________________
CORAM : NEERAJ P. DHOTE, J.
RESERVED ON : 27th November, 2025
PRONOUNCED ON : 15th December, 2025
FINAL ORDER :
1. Impugned in this Petition under Article 227 of the
Constitution of India is the common order below Exhibits - 11 and
13, dated 28/02/2022 passed by the learned 10 th Jt. Civil Judge
(Senior Division), Aurangabad, in Summary Civil Suit
No.157/2021.
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2. The Petitioner is the Original Plaintiff and the
Respondent is the Original Defendant in the above-referred Suit,
which is for recovery, based on negotiable instrument covered by a
Written Agreement. The suit summons came to be served on the
Respondent, and he caused appearance and filed an Application
below Exhibit - 11 seeking leave to defend. The Petitioner filed an
Application below Exhibit - 13 under Order XXXVII Rule 4 of the
Code of Civil Procedure, 1908 (hereinafter referred to as 'the CPC')
seeking summons for Judgment. The learned Trial Court, by the
impugned order, granted leave to defend and rejected the
Application below Exhibit - 13 filed by the Petitioner.
3. It is submitted by the learned Advocate for the
Petitioner that, the impugned order was passed without calling Say
of the Petitioner on the Application filed by the Respondent.
Without there being defence made out in the Application below
Exhibit - 11, the same is allowed. The impugned order do not
stand the scrutiny of law. Considering the averments made in the
Application below Exhibit - 11, no leave to defendant can be
granted and certainly not unconditional leave. The impugned
order is against the settled legal principles governing the
provisions of Order XXXVII of the CPC. In support of his
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contentions, he cited the Judgments in Gaurav Singhania Vs.
Matrix Agri Science Pvt. Ltd. And Ors.; 2011 (6) BCR 803 and
Rajesh Laxmichand Udeshi @ Bhatia Vs. Pravin Hiralal
Shah; 2012 0 Supreme (Bom) 1279.
4. It is submitted by the learned Advocate for the
Respondent that, in the Application below Exhibit - 11 for leave to
defend, the Respondent explained the factual matrix, which show
that, he was having the defence. The Written Statement of the
Respondent gives the necessary details. The averments made in
the Application and the Written Statement show that, the delay
was not intentional. The learned Trial Court has passed reasoned
order and rightly allowed the Application for leave to defend and no
inference is called for, and the Petition be dismissed.
5. Order XXXVII of the CPC is in respect of Summary
procedure. In Gaurav Singhania (Supra), which was in respect of
the Order XXXVII Rule 3 of the CPC, it is observed as follows :
" 6. Heard the learned Counsel for the parties. In my view, the
impugned order granting unconditional leave cannot be
sustained in terms of Order 37, Rule 3(5) of the Civil Procedure
Code. It is well settled that Order 37 of the Civil Procedure Code
is a self contained code, in so far as the prosecution of the
summary suits are concerned. In terms of Order 37, Rule 3(5) of
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the Civil Procedure Code, a time limit is prescribed for seeking
leave to defend or otherwise the applicant is obliged to file an
application for condonation of delay citing the reasons for the
delay. In the instant case none of the kind has been done though
admittedly the application for leave to defend has been filed
almost after 90 days of the summons being served upon the
respondents. The said aspect of delay has been totally glossed
over by the trial Court on the ground that in such matters a
liberal view has to be taken. The reasoning of the trial Court
cannot be sustained more so in view of the fact that the issue
before the trial Court was grant of unconditional leave in the said
summary suit."
7. In Rajesh Laxmichand Udeshi @ Bhatia (Supra), which
was also the matter in respect of Order XXXVII of the CPC, the
relevant observations are as follows :
"15. When a summary suit instituted is based on a cheque
which is dishonoured, effect of Sections 138 and 139 of Negotiable
Instruments Act raising statutory presumption that the cheque
was issued in discharge of a liability, is a relevant consideration
to be kept in mind. The said Sections cast a burden upon the
defendant to rebut the presumption. Summary suits instituted on
cheques which are dishonoured will, therefore, stand on a higher
footing than summary suits instituted on the basis of other
documents. In such cases, the Court will have to take into
consideration the statutory presumption which is raised when the
cheques are dishonoured. The object behind providing a statutory
presumption under the Negotiable Instruments Act has to be kept
in mind while judging the credibility of a defence raised by the
defendant in summary suit. Thus, the test of more than
"shadowy" and less than "probable" as adverted to by the Apex
Court cannot apply in cases where the law requires a person to
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explain certain state of affairs. The judgments which are relied
upon by the Learned Counsel do not consider the effect of the
statutory presumptions raised under the Negotiable Instruments
Act when a cheque is dishonoured. In our opinion, when a cheque
is dishonoured, the Court is enjoined with the duty to scrutinize
the defence put up by the defendant with a much higher degree of
care and circumspection. Such summary suits cannot be treated
as on par with the cases instituted on contracts or invoices etc.
where such statutory presumptions do not operate.
16. The legislative intent behind enactment of Sections 138
and 139 of the Negotiable Instruments Act is to prevent abuse of
the banking system. Thus, one who issues a cheque extends a
solemn promise to pay. Based on this promise and action, the
recipients arrange their affairs and quite often enter into further
transactions. Unless extra ordinary circumstances are made out,
one who issues cheque is deemed to have undertaken to pay.
Negotiable Instruments Act enforces the promise strictly by
raising statutory presumption and treating it as an offence. This
provision elevates a cheque to a higher status than the other
instruments, such as written contract etc. to which no such
statutory presumption is attached. What needs to be emphasized
is that presumption in respect of a dishonoured cheque places a
higher burden on the defendant to elucidate the defence than the
burden which is cast on a defendant where the suit is filed on the
basis of ordinary instruments. In the cases based on dishonour of
cheques, the defendant must satisfy the conscience of the Court
and cannot take shelter behind the rules formulated primarily in
respect of suits based on ordinary instruments. The Court while
exercising the discretion to grant leave or otherwise to the
defendant in such cases, cannot be oblivious of the legislative
intent to place the promise made through a cheque on a higher
pedestal than the promise made through an ordinary instrument.
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This is not to state that moment a Summary Suit is lodged based
on a dishonoured cheque, it must be decreed without anything
more. What needs to be emphasised is that the fact that there is a
statutory presumption attached to the dishonoured cheque will
constitute an important ingredient while considering the question
whether leave to defend should be granted in cases of dishonoured
cheques and the Court must scrutinise the defence strictly. The
object of the summary procedure is ultimately to see that the
defendant does not needlessly prolong the litigation by creating
untenable, frivolous and casual defences so as to deprive the
plaintiff of the monies due to him.
17. The distinction regarding suits based on dishonoured
cheques is also indicated by the Apex Court in V. K. Enterprises
and Anr. v/s. Shiva Steels, (2010) 9 SCC 256, wherein the Apex
Court has held as under:
"10. Order 37 CPC has been included in the Code of Civil
Procedure in order to allow a person, who has a clear and
undisputed claim in respect of any monetary dues, to recover
the dues quickly by a summary procedure instead of taking
the long route of a regular suit. The courts have consistently
held that if the affidavit filed by the defendant discloses a
triable issue that is at least plausible, leave should be
granted, but when the defence raised appears to be
moonshine and sham, unconditional leave to defend cannot
be granted.
11. What is required to be examined for grant of leave is
whether the defence taken in the application under Order 37
Rule 3 CPC makes out a case, which if established, would be
a plausible defence in a regular suit. In matters relating to
dishonour of cheques, the aforesaid principle becomes more
relevant as the cheques are issued normally for liquidation of
dues which are admitted. In the instant case, the defence
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would have been plausible had it not been for the fact that
the allegations relating to the interpretation of the cheque is
without substance and the ledger accounts relating to the
dues, clearly demonstrated that such dues had been settled
between the parties. Moreover, the issuance of the cheque had
never been disputed on behalf of the petitioner whose case
was that the same had been given on account of security and
not for presentation, but an attempt had been made to
misuse the same by dishonest means. (emphasis supplied)"
8. Coming to the case at hand, as seen from the Plaint of
the Summary Suit, it is the case of the Petitioner that, due to old
acquaintance in the family, he was knowing the Respondent since
long. The Respondent was engaged in the business of the land
development and initiated venture of developing a real estate.
Because of the acquaintance, the Petitioner was lured to invest a
handsome amount in the form of earnest amount under the flat
booking. The investment and understanding between the
Petitioner and Respondent was reduced into writing vide
Agreement dated 03/03/2016 in presence of witnesses, who were
the family members of the parties. It was an understanding
between the Petitioner and the Respondent that, the Respondent
would be liable to return the amount invested, if the project was
not completed and the Sale Deed was not executed within a period
of twenty four (24) months. As the Respondent failed to perform
his duties under the Agreement, relating to the development of the
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real estate, he became liable to repay the amount with interest as
per the understanding in the above-referred Agreement; however,
the Respondent did not honoured his word of payment within time.
In furtherance of his obligation, the Respondent issued three post-
dated cheques in favour of the Petitioner, which on presentation,
were dishonoured for the reason "funds insufficient", vide Memo
dated 23/02/2021. Thereafter, the Petitioner issued legal notice to
the Respondent to pay the amount covered under the said cheque
on 17/03/2021. The Respondent avoided to accept the said notice,
and therefore, the Petitioner had no option but to institute the said
Summary Suit for recovery of Rs.33,60,000/- with interest @ 12%
per annum from the date of Suit till realization of the entire
amount.
9. In the Application below Exhibit - 11 filed by the
Respondent for leave to defend, it is stated that, the brother of the
Petitioner executed the Agreement for sale with the Respondent on
03/03/2016 for sale of one flat for consideration of Rs.35 Lakhs in
Vitthal Dham Apartment. The conditions were mentioned in the
Agreement. One of the condition was that, if the construction of
flat was not completed within the specific period then thereafter
the Respondent will give the amount to the Petitioner and if the
said amount is not returned within one (01) year period, the
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Respondent will pay the amount with interest. After executing the
Agreement of sale in March - 2016, the Respondent started the
construction of the Apartment and some portion of the Apartment
was completed, however, there was lock-down, which resulted in
stoppage of construction work. There was no ill-intention or
intentional delay from the Respondent to give the possession of the
flat. The Vitthal Dham Apartment scheme was owned by Girish
Badge and Vaijinath Bank had financed the said project. The
Respondent started the work of the Apartment, in which, the
Petitioner and his friend, namely, Pravin Gambhare and the
Respondent invested the amount in the said Apartment's scheme.
The Petitioner invested Rs.20 Lakhs and executed the Agreement
to sale with the Respondent for one flat amounting to Rs.35 Lakhs.
The Petitioner gave the money with interest @ 2.50%. Thereafter,
in the year 2017, there was Demonetisation, due to which, the
Bank account of Vaijinath Bank became Non-Performing Asset
(NPA) and Bank seized the said property and the Respondent was
trying to release the property from the Bank by depositing the
amount. As already the Agreement is executed, the Respondent
was ready to handover the possession of Flat No. D-6 to the
Petitioner after completion. It is stated that, the Respondent was
having substantial defence and the Application be allowed.
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10. From the above pleadings or the averments made by the
parties, it is crystal clear that, there is no dispute in respect of the
money transaction between them based on Written Agreement and
issuance of the cheques by the Respondent in favour of the
Petitioner in discharge of liability. It would not be out of place to
refer the relevant Paragraph No.17 from the Judgment of this
Court in Navnath R. Adak Vs. Rakesh Giridharilal Rungta;
2020 (1) All MR 749, on the same issue, which reads as under:
17. Accordingly, the principles stated in paragraph 8 of
Mechelec's case will now stand superseded, given the
amendment of Order 37 Rule 3, and the binding decision of
four judges in Milkhiram's case, as follows:
17.1 If the defendant satisfies the Court that he has a
substantial defence, that is, a defence that is likely to
succeed, the plaintiff is not entitled to leave to sign
judgment, and the defendant is entitled to unconditional
leave to defend the suit;
17.2 If the defendant raises triable issues indicating that
he has a fair or reasonable defence, although not a
positively good defence, the plaintiff is not entitled to sign
judgment, and the defendant is ordinarily entitled to
unconditional leave to defend;
17.3 Even if the defendant raises triable issues, if a doubt
is left with the trial judge about the defendant's good faith,
or the genuineness of the triable issues, the trial Judge may
impose conditions both as to time or mode of trial, as well
as payment into court or furnishing security. Care must be
taken to see that the object of the provisions to assist
expeditious disposal of commercial causes is not defeated.
Care must also be taken to see that such triable issues are
not shut out by unduly severe orders as to deposit or
security;
17.4 If the Defendant raises a defence which is plausible
but improbable, the trial Judge may impose conditions as
to time or mode of trial, as well as payment into court, or
furnishing security. As such a defence does not raise triable
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issues, conditions as to deposit or security or both can
extend to the entire principal sum together with such
interest as the court feels the justice of the case requires.
17.5 If the Defendant has no substantial defence and/or
raises no genuine triable issues, and the court finds such
defence to be frivolous or vexatious, then leave to defend the
suit shall be refused, and the plaintiff is entitled to
judgment forthwith;
17.6 If any part of the amount claimed by the plaintiff is
admitted by the defendant to be due from him, leave to
defend the suit, (even if triable issues or a substantial
defence is raised), shall not be granted unless the amount
so admitted to be due is deposited by the defendant in
court." (emphasis supplied)
11. From the settled legal position, as is clear from the
above-referred Judgments cited by the learned Advocate for the
Petitioner and the above-referred Judgments of this Court, only
when the Defendant makes out a substantial defence, he becomes
entitled to unconditional leave to defend the Suit. If he raises
triable issue indicating that, he has a fair or reasonable defence, he
is ordinarily entitled to unconditional leave to defend. If the
Defendant raises triable issue but there is doubt about the
genuineness of the triable issue or the defence appears improbable,
the Trial Judge may impose conditions. If no substantial defence is
raised or made out and the amount claimed by the Plaintiff is
admitted, leave to defend is to be refused.
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12. The impugned order show that, the learned Trial
Court's conclusion that, the Defendant was having valid defence, is
not supported with reasons. The impugned indicate that, it is
passed in a mechanical manner. The impugned order do not reflect
that, the discretion used by the learned Trial Court is in
consonance with the above-referred principles in respect of the
Summary Suits. The impugned order indicate that, the same was
passed without appreciating the undisputed aspects of the matter
emanating from the pleadings of the parties and is in complete
variance with the requirement of law. The only course under such
circumstance is to set aside the impugned order and remanded
back the matter to the learned Trial Court for re-consideration of
the Applications and pass appropriate orders strictly, in accordance
with law. Hence, the following order:
ORDER
[I] The Writ Petition is partly allowed.
[II] The impugned order dated 28/02/2022, passed below Exhibits
below 11 and 13, in Summary Civil Suit No.157/2021, by the
10th Jt. Civil Judge, (Sr. Division), Aurangabad, is hereby
quashed and set aside.
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[III] Both the Applications are restored back on the file of the
learned Trial Court for re-consideration and decision, in
accordance with law.
[IV] The parties shall appear before the learned Trial Court on 5th
January, 2026.
[V] Writ Petition stands disposed off accordingly.
[NEERAJ P. DHOTE, J.]
Sameer/November-2025
