Executive Trading Company Private Limited vs Grow Well Mercantile Private Limited

2025 INSC 1157 IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. OF 2025 [@ SLP (C) NO. 1134 OF 2024]

EXECUTIVE TRADING COMPANY PRIVATE LIMITED. … APPELLANT(S)

VERSUS

GROW WELL MERCANTILE PRIVATE LIMITED … RESPONDENT(S)

JUDGMENT

S.V.N. BHATTI, J.

1. Leave granted.

2. We have heard Advocates Mr. Debesh Panda and Mr. Sanampreet Singh

for the parties. The appeal is at the instance of the Plaintiff in Commercial

Summary Suit No. 19 of 2020 before the High Court of Judicature at Bombay

and challenges the order dated 05.12.2023. To make the narrative brief, the

order impugned is excerpted hereunder:

“1. Let the reply to the Summons for Judgment be filed

by 20th December, 2023 with a copy to the other side.

Rejoinder, if any, be filed by 9th January, 2024 with a

copy to the other side.

2. List on 9th January, 2024.”

3. The parties to the civil appeal had business transactions for reasonably

good time. The present Commercial Suit is filed to recover the alleged admitted

and confirmed total liability of Rs. 2,15,54,383.50/- together with interest at Signature Not Verified

24% per annum amounting to Rs. 2,38,50,845.00/-. Digitally signed by SAPNA BISHT Date: 2025.09.25 15:58:32 IST Reason:

4. The suit was filed on 15.10.2019 under Order XXXVII of the Civil

Procedure Code, 1908 (‘the CPC’). Summons were issued on 15.01.2020,

1 along with the Plaint and Annexures, which have been stated as served on

the Defendants on 18.01.2020. On 28.01.2020, the Defendant entered

appearance in terms of sub-Rule (3) of Rule 3 of Order XXXVII of the CPC.

The Plaintiff filed Summons for Judgment No. 75 of 2021 in Commercial

Summary Suit No. 19 of 2020. The Plaintiff alleges that the Summons for

Judgment No. 75 of 2021 was served on the Defendant on 11.01.2022.

According to the plaintiff, the Defendant ought to have, if advised, filed for

leave to defend by disclosing the defence available against the claim in the

Summary Suit.

5. Admittedly, instead of filing an Application seeking leave to defend, the

Defendant filed an I.A. (L) No. 7771 of 2022 praying for the dismissal of the

suit for non-compliance with Section 12A of the Commercial Courts Act. On

08.04.2022, the application was allowed, the parties were referred to

mediation, and the Summary Suit was kept in abeyance. The Mediation

Report dated 09.02.2023 was filed by the Mediator. The I.A. No. 1353 of 2023

was filed to allow the Plaintiff to amend the plaint and summons for judgment

as per the Schedule annexed, and the same was allowed by order dated

29.08.2023. The operative portion reads as follows:

“6. Having heard the learned counsel and having

perused the papers and proceedings, the draft

amendment as requested by way of praecipe is allowed.

Let the amendment to the plane as well as the summons

for judgment be carried out within a period of two weeks.

7. Let the amended plane as well as the summons for

judgment be served upon the other side within a period

of one week thereafter.”

2 The defendant filed an Application for condoning the delay in applying for

leave to defend on 23.01.2024. The said application is still pending before the

High Court.

6. By referring to the above chronological undisputed events, Advocate for

Plaintiff contends that the step ordered by the High Court, allowing reply to

the Summons for Judgment, is procedurally incorrect and unsustainable. The

requirement in terms of sub-Rule (5) of Rule 3 of Order XXXVII of the CPC is

to file an application seeking leave to file the defence. In the application filed

praying for leave, the court decides whether a case for granting leave to defend

is made out or not, considering the nature of the recovery. At the present

stage, we are not determining whether a case for granting leave is made out

or not, but the precise question is whether the court could have permitted

filing a reply/defence without even praying for leave, setting out the available

defence, etc.

7. To appreciate the procedural objection pointed out by the Plaintiff, the

sequence of steps under Order XXXVII Rule 3 sub-Rules (1) to (7) of the CPC

is set out as follows:

7.1 On filing the Summary Suit, the plaintiff must serve the defendant with

the plaint and annexures, together with the summons.

7.2 The defendant has ten days to enter an appearance, in person or

through a pleader, and provide a service address. On the same day, the

defendant must notify the plaintiff or its pleader of its appearance.

7.3 The plaintiff then serves a summons for judgment on the defendant in

the court-prescribed format, supported by an affidavit verifying

the cause of action, the amount claimed, and the belief that the

defendant has no defence.

3 7.4 Thereafter, the defendant has ten days to apply for leave to defend by

filing an affidavit disclosing a genuine and substantial defence. The

court may grant leave to defend unconditionally or on such terms that

may appear to be just.

7.5 The court shall not refuse leave unless the defence is frivolous or

vexatious. Further, if the defendant admits to owing part of the amount,

it must deposit that amount in court to get the leave to defend.

7.6 If the defendant does not apply for leave or its application seeking leave

is refused, the plaintiff is entitled to immediate judgment. If the

court grants leave to defend but the defendant fails to comply with any

condition or other directions, the plaintiff is also entitled to immediate

judgment.

7.7 The court has the discretion to condone any delay in entering an

appearance or applying for leave to defend if the defendant shows

sufficient cause.

8. Advocate Sanampreet Singh, appearing for the Defendant, contends

that the Application seeking condonation of delay is pending. Even if the

application is under a wrong provision, the same is not a ground to assume

that the Plaintiff is entitled to a decree. Further, the delay stated by the

Plaintiff in filing the application is not correct, as it is always available to the

Defendant to convince the court either to grant leave or condone the delay.

He argues that the delay in filing the application, as stated by the Plaintiff, is

factually incorrect.

9. After perusing the record and also the step taken by the High Court in

bypassing the requirement of sub-Rules (4) and (5) of Rule 3 of Order XXXVII

of the CPC; without much deliberation, we are of the view that the order

4 impugned needs to be interfered with in as much as 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 Summary Suit under Order XXXVII of the CPC stands effaced.

The procedural deviation goes to the root of the matter. Hence, the order

impugned is set aside. The setting aside of the order impugned shall not be

understood as foreclosing the options available to the Defendant in the

Judgment Summons already issued, or the observations made in the present

order shall not prejudice the case of either party.

10. The appeal stands allowed by leaving the option to the parties to pursue

remedies in accordance with the steps envisaged in Rule 3 of Order XXXVII of

the CPC. There shall be no order as to costs.

………..……….…………………J. [AHSANUDDIN AMANULLAH]

………..…………………………J. [S.V.N. BHATTI]

New Delhi;

September 25, 2025.

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