Telangana High Court

Creative Print And Pack, vs Badruka Exim P Ltd., on 6 November, 2025

 THE HON'BLE JUSTICE MOUSHUMI BHATTACHARYA

          CIVIL REVISION PETITION NO.2661 OF 2025

Mr.Nizampur Chandra Sekhar, learned counsel for the petitioners.

Mr.S.Rajagopalan, learned counsel appearing for the respondent.

ORDER:

1. The Civil Revision Petition arises out of an order dated

27.06.2025 passed by the learned Additional Senior Civil Judge,

Medchal-Malkajgiri District at Medchal, dismissing I.A.No.127 of

2025 in O.S.No.127 of 2024 filed by the petitioners/defendants

for grant of leave to defend the Suit of the respondent/plaintiff.

2. The Suit filed by the respondent/plaintiff was a Summary

Suit for recovery of Rs.38,13,684/- along with pendente lite and

future interest @ 18% per annum, filed under Order XXXVII

read with Order VII Rule 1 and section 26 of The Code of Civil

Procedure, 1908 ('CPC'). The petitioners/defendants in the said

Suit filed the present I.A. (I.A.No.127 of 2025) under Order

XXXVII Rule 3(5) read with section 151 of the CPC seeking leave

to defend the Suit and permit the petitioners/defendants to file

a suitable written statement in defence of the alleged claim of

the respondent/plaintiff.

3. By the impugned order dated 27.06.2025, the Trial Court

dismissed the I.A. on the ground of the petitioners/defendants

failing to establish a good case to defend the Suit.

4. Learned counsel appearing for the petitioners/defendants

submits that the Trial Court erred in not granting leave to

defend the Suit since the petitioners had raised triable issues

which warranted adjudication. Counsel submits that the triable

issues included the three invoices issued by the plaintiff to the

defendants for the supply of the goods agreed upon by the

parties not containing the signature or seal of the defendant.

Counsel also submits that the invoices raised by the plaintiff

were false and fabricated. Counsel further submits that the

plaintiff was not entitled to claim interest at the rate of 18% per

annum since there was no agreement to that effect between the

parties.

5. Learned counsel appearing for the respondent/plaintiff

places on record a document (Confirmation of Accounts) dated

24.04.2023 issued by the defendants to the plaintiff confirming

the accounts for the period from 01.04.2019 to 24.04.2023 and

reflecting the payments made by the defendants to the plaintiff

till 18.02.2023. Counsel submits that all the invoices including

those disputed by the defendants were mentioned in the said

Confirmation of Accounts. Counsel submits that interest at the

rate of 18% per annum was demanded due to the excessive and

inordinate delay on the part of the defendants in making

payments to the plaintiff including on nine occasions.

6. I have heard learned counsel appearing for the parties

and considered the documents placed on record to corroborate

their respective submissions.

7. The Suit filed by the respondent/plaintiff for the recovery

of money was a 'Summary Suit' as defined under Order XXXVII

of the CPC. Order XXXVII - 'Summary Procedure' under Rule 1

defines the Courts and Classes of Suits to which the order is to

apply.

8. The present Suit falls under Order XXXVII Rule 1 Sub-

rule (2)(b) of the CPC being a Suit in which the plaintiff seeks to

recover a debt or liquidated demand in money payable by the

defendants, with or without interest. The plaint avers that the

plaintiff is a registered Micro, Small and Medium Enterprise

(MSME) and is a reputed vendor in the pulp and paper industry.

The plaintiff and the defendants have been engaged in the

business of sale (by the plaintiff) and purchase (by the

defendants) of goods from 01.04.2019 to 13.01.2024. The

plaintiff delivered paper and paper products to the defendants

vide numerous invoices from 21.11.2020 to 13.03.2021. The

invoices issued by the plaintiff to the defendants contained the

material particulars including the quantity of goods supplied,

the price per unit the place of supply, and the place of delivery

etc. The plaintiff states that the said invoices constitute valid

written contracts.

9. The procedure for the appearance of a defendant in a

Summary Suit is outlined in Order XXXVII Rule 3 of the CPC.

Sub-rules (1) to (4) of Rule 3 deal with the procedure for service

of summons on the defendant and provides an opportunity to

the defendant to enter appearance within ten days of service of

summons in the prescribed format. Sub-rule (5) of Rule 3 gives

the defendant an option, at any time within ten days from the

service of such summons for judgment, by affidavit or otherwise

disclosing such facts as may be deemed sufficient to entitle him

to defend the suit. Sub-rule 5 also contemplates the grant of

unconditional leave to the defendant to defend such terms

which the Court may impose.

10. The provisos to Rule 3(5) of Order XXXVII CPC underscore

the discretion given to the Court to grant or refuse the

defendant's application for leave to defend. The discretion is

somewhat curtailed in the first proviso where the Court is under

a mandate to not refuse leave unless the Court is satisfied that

the facts disclosed by the defendant do not indicate a

substantial defence or that the defence intended to be put up by

the defendant is frivolous or vexatious. The second proviso

applies in a contrary scenario, i.e., where the leave to defend

shall not be granted. The second proviso applies where a part of

the amount claimed by the plaintiff is admitted by the defendant

to be due from him. In such a case, the Court shall not grant

leave to defend unless the admitted amount is deposited by the

defendant in Court.

11. The framework of Order XXXVII Rule 3 of the CPC

indicates that a defendant applying to the Court with a

substantial defence deserves leniency in terms of grant of leave

to defend. However, the grant of leave must also be

accompanied with bona fides, especially where the defendant

admits to part of the suit-claim and deposits the admitted

component in the Court. The strictures on a defendant, built

into the framework of Order XXXVII Rule 3 of the CPC, are

further emphasized in Order XXXVII Rule 3(6) of the CPC, which

specifies the outcomes at the hearing of such summons for

judgment. Under Order XXXVII Rule 3(6)(a) of the CPC, if the

defendant has not applied for leave to defend, or if such

application has been made and refused, the plaintiff shall be

entitled to judgment forthwith. Order XXXVII Rule 3(6)(b) of the

CPC proceeds further and entitles the plaintiff to immediate

judgment where the defendant has failed to give security within

the time specified by the Court or has failed to carry out such

other directions given by the Court.

12. The facts in the present case must be tested against the

intention of the Legislature in framing the procedure for

'Summary Suits' under Order XXXVII of the CPC. The only

defence raised by the petitioners/defendants in the Trial Court

was that the Suit was based on fictitious entries and fraudulent

invoices.

13. A perusal of the invoices, which are part of the records in

the CRP, shows that most of the invoices raised by the plaintiff

on the defendants from 21.11.2020 to 13.03.2021 were signed

and sealed by the defendants as acknowledgment, except 3

invoices dated 21.11.2020, 23.11.2020 and 25.01.2021. The

defendants' request for leave to defend based on the three

unsigned invoices, however, becomes irrelevant in view of the

Confirmation of Accounts sent by the defendants to the plaintiff

on 24.04.2023 in respect of the period from 01.04.2019 to

24.04.2023.

14. The Confirmation of Accounts mentions the following

important facts:

(i) The date and particulars of the invoices raised by

the plaintiff on the defendants from 13.11.2020 to

13.03.2021.

(ii) The three disputed invoices are part of the list

mentioned on the document.

(iii) Payments made by the defendants to the plaintiff

from 23.11.2020 to 18.02.2023 amounting to

Rs.36,37,018.00.

(iv) The 'Closing Balance' of Rs.23,80,173.00 is clearly

reflected in the Confirmation of Accounts.

(v) The sum of Rs.36,37,018.00 (payment made by the

defendants) + Rs.23,80,173.00 (closing balance/

amount not paid by the defendants) =

Rs.60,17,191/-, as recorded in the Confirmation of

Accounts.

15. Hence, the Confirmation of Accounts sent by the

defendants to the plaintiff on 24.04.2023 constitutes a clear

admission by the defendants of the balance payment owed to

the plaintiff for the goods supplied and received by the

defendants. It is also significant that the three invoices disputed

by the defendants are specifically mentioned in the

Confirmation of Accounts.

16. It is relevant to note that although the defendants have

restricted their defence only to three invoices, the case before

the Trial Court was that all the invoices were fictitious and

fabricated. Hence, the defendants have contradicted their own

case by restricting the dispute to only three invoices. In any

event, the dispute regarding the three invoices becomes

irrelevant since all of them are mentioned in the defendants'

'Confirmation of Accounts'.

17. The other contention raised by the petitioners/defendants

that the plaintiff was not entitled to claim interest at the rate of

18% per annum since there was no agreement to that effect

between the parties, is also not tenable. The plaint avers that

the Ledger Books maintained by the plaintiff for the period from

01.04.2019 to 13.01.2024 record nine delayed payments made

by the defendants to the plaintiff for the goods supplied. The

Tabulated Statement is part of the plaint. The delay in payment

ranges from 1 year to 3 years. Paragraph 7 of the plaint states

that the plaintiff sought for interest accrued on the delayed

part-payments in addition to the principal amount due.

18. Moreover, a Legal Demand Notice issued by the plaintiff to

the defendants on 23.04.2024, which was received by the

plaintiff on 24.04.2024, also mentions the interest calculated by

the plaintiff on the delayed payments amounting to

Rs.14,83,511/-. Paragraph No.9 of the Demand Notice

specifically states that interest at the rate of 18% per annum

shall be levied on the delayed payments, based on the Standard

Industry Practice in the Pulp and Paper Industry. A Provisional

Interest Debit Note dated 02.04.2024 formed part of the

Demand Notice. The defendants did not deny or dispute the

Legal Notice. The records also do not contain any rebuttal

thereto including calculation of interest at the rate of 18% per

annum.

19. The only question before the Court is whether Trial Court

erred in refusing leave to defend to the petitioners/defendants?

20. The reason given by the Trial Court is that the invoices

were signed and stamped by the petitioners/defendants and

that the defendants themselves issued Confirmation of Accounts

dated 24.04.2023 which indicates that the defendants admitted

their liability. The impugned order also records that the

defendants did not deny the Confirmation of Accounts.

21. This Court does not find any error in the reasons given by

the Trial Court for dismissing the defendants I.A. for leave to

defend. The records placed before the Court do not show any

triable issue raised by the defendants for granting leave to

defend either in the form of the disputed invoices and interest

on delayed payments or otherwise.

22. As stated above, the Suit filed by the respondent/plaintiff

for recovery of money falls within the classification of Order

XXXVII Rule 1 of the CPC. Order XXXVII Rule 3 of the CPC

provides an opportunity to a defendant to apply for leave to

defend a Suit under Summary Procedure and for grant of such

leave unconditionally or on terms, provided the defendant

discloses a substantial factual defence to the Suit.

23. The principle undertaking leave to defend was explained

by the Supreme Court in IDBI Trusteeship Services Ltd., Vs.

Hubtown Ltd., 1 and reiterated in B.L. Kashyap and Sons Limited

Vs. JMS Steels and Power Corporation 2. Although IDBI

Trusteeship held that the earlier decision in Mechelec Engineers

and Manufacturers Vs., Basic Equipment Corporation 3 was

superseded by the former, the harmony between the two

decisions was restored in B.L. Kashyap. In B.L. Kashyap, the

Supreme Court held that the grant of leave to defend (with or

without conditions), is the ordinary rule and denial of leave is

an exception unless the defendant has practically no defence

and is unable to give out even a semblance of triable issues

before the Court. The Supreme Court found in the facts of that

case that the appellant/defendant has indeed raised triable

issues, particularly concerning its liability and the defence of

the appellant cannot be said to be frivolous or vexatious

altogether.

24. The principles delineated in Kiranmayi Dasi Vs.

J.Chatterji 4, as reiterated in Mechelec Engineers, nominally

(2017) 1 SCC 568

(2022) 3 SCC 294

(1976) 4 SCC 687

AIR 1949 Cal 479

altered in IDBI Trusteeship and explained in B.L. Kashyap can

be summarized thus:

(a) The defendant must satisfy the Court that the

defendant has a substantial defence that is one

which is likely to succeed and that the plaintiff is

not entitled to leave to sign judgment.

(b) The defendant is ordinarily entitled to unconditional

leave to defend, if the defendant raises a triable

issue indicating that he/she has a fair or bona fide

or reasonable defence albeit not a positively good

defence.

(c) The Court may in its discretion impose conditions

as to the time or mode of trial including payment by

the defendant or furnishing security where the

triable issues raised by the defendant raises a

doubt on the defendant's good faith or the

genuineness of the triable issues.

(d) A frivolous or vexatious defence which does not

raise any genuine triable issues shall be refused.

(e) Leave to defend the Suit shall not be granted unless

the defendant deposits the amount in the Court

admitted by the defendant to be due from him with

regard to any part of the amount claimed.

25. The principles laid down by the Supreme Court follow

from the statutory provisions in Order XXXVII Rule 3 of the

CPC. The enumeration of conditions by the Supreme Court

reiterate that leave to defend shall be granted where the

defendant raises triable issues disclosing even a plausible

defence as opposed to a defence which is entirely unfounded,

unsubstantiated or groundless. In other words, the defence

raised must have a semblance of genuineness or one which

convinces the Court that the defendant should be given an

opportunity to contest the Suit on merits. The defence cannot

be impossible, illogical or flimsy.

26. It is clear that the Courts have given considerable leeway