Chapter 1: Introduction
Common prototypes of bills of exchanges and promissory notes originated in China. Here, in the 8th century during the reign of the Tang Dynasty they used special instruments called feitsyan for the safe transfer of money over long distances. Later such document for money transfer used by Arab merchants, ho had used the prototypes of bills of exchange ! suftad"a and haala in #$!#%th centuries, then such prototypes had used by &talian merchants in the #'th century. &n &taly in #%!#(th centuries bill of exchange and promissory note obtain their main features and further phases of its development have been associated ith )rance *#+! #8th #8th cent centur uries ies,, her heree the the endo endorse rseme ment nt had had appe appear ared ed and and -erm -ermany any *#t *#th h cent century ury,, formali/ation formali/ation of 0xchange 0xchange La. &n 0ngland 0ngland *and later in the 1.2. 0xchange 0xchange La as different from continental 0urope because of different legal systems #. A 3promissory note3 is an instrument in riting *not being a ban45note or a currency5note containing an unconditional underta4ing signed by the ma4er, to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument '. The 6adhya 7radesh High Court in the case hismat 7andey v. 7hoola %, hile considering the distinction beteen promissory note and bond laid don the essentials of a promissory note as under9 *# An unconditional underta4ing to pay: *' The sum should be a sum of money and should be certain: *% The payment should be to the order of a person ho is certain, or to the bearer of the instrument: and *; The ma4er should sign it. The most common civil remedy for recovery of money is
1 Justice Y Srinivasa Rao, ‘A brief note on promissory note’, Legal Service India, via ttp!""###$legalservicesindia$com"article"article"promissory%note%in%india% 1&'(%1$tml accessed 1&'(%1$tml accessed on )*$+$1$ ) Section + of te -egotiable Instruments Act, 1..1 de/nes 0promissory note 2 AIR )(1( 34 1+*
are disposed of faster. s allegations to be true and accordingly aard plaintiff. The summary suit applies to all suits for recovery of money that arise from ritten agreements. This could be promissory notes, contracts, bills of exchange or che?ues so long as plaintiff see4s to recover specific debt. @here matter is hoever to recover pending dues concerning penalties or any other uncertain amount, one cannot file a summary suit ;. Chapter 2: Provisions related to recovery of money through promissory note
2ummary 2uits are contemplated under
+ Sakina Babwani, How to recover your pending dues, Economic Times India, March 20! avai"ab"e at ttp!""articles$economictimes$indiatimes$com")(1+%(2% 1("ne#s"+.(.2'..515ce6ue%amount%dues%summary accessed on )*$+$1$ & -avincandra 7abulal 7avsar versus 7acubai 8anabai Sa AIR 1'' 9u:rat 1)+ ;1).< 87$ 7an=yag 7 9 Agara#al versus 7ag#anti 3e:i )((1 ;1< 7om LR .)2 ;87< * >ocarabai is#arbai patel versus 9opal bai ? patel AIR 1'*2 9u:rat )' ;21<
enacted to ensure that the defendants doesn>t prolong the litigation by raising untenable and frivolous defences8. &n other ords
<D0 B&& of the Code reads as follos9 1$ Courts and classes of suits to %hich the !rder is to apply
*# This
*b other Courts: 7rovided that in respect of the Courts referred to in clause *b, the High Court may, by notification in the
*' 2ub"ect to the provisions of sub5rule *# the
*b suits in hich the plaintiff see4s only to recover a debt or li?uidated demand in money payable by the defendant, ith or ithout interest, arising,5
. > R >esavan versus @e Sout Indian 7an= Ltd AIR ;2*< 1'&( 3adras )) ;)).< 87 ' 8ena 7an= versus 3"s 9ladstone Lyall ?o .* 7ombay La# Reporter +** ;+.(<$
*i on a ritten contract, or
*ii on an enactment, here the sum sought to be recovered is a fixed sum of money or in the nature of a debt other than a penalty:
or
*iii on a guarantee, here the claim against the principal is in respect of a debt or li?uidated demand only. The scope of the rule has been amended by the amendment of #=+. Adopting the ombay Amendment, summary procedure has been made applicable to all courts. The Code of Civil 7rocedure, #$8 provides for a summary procedure in respect of certain suits. 7rovisions relating to summary procedure are found in <. %=, ules # to = of the Code. A 2ummary suit is intended to facilitate the speedy disposal of cases. The ob"ect that underlies the summary procedure is to guard against delaying tactics that are indulged in by a defendant, ho may have no genuine defence. &n short, the essence of summary suits is that the defendant is not, as in an ordinary suit, automatically endoed ith the right to defend a suit. The right to exercise his defence ill be granted to the defendant only if the court is convinced as to the authenticity of his claims. The summary procedure is a poerful eapon in the hands of a court to discourage frivolous defences. The important feature of 3summary suit3, is that, here the Defendant is not alloed to defend the suit, unless he ta4es the permission from court. Defendant is alloed to defend himself only if according to the affidavit filed by him, it is must for the plaintiff to prove charges against him.
&f by affidavit by Defendant, it appears that he has no defense, then court ill decline him the permission and pass necessary orders in favor of plaintiff. &I'#S !( SUI)S:
#. 2uits upon bills of 0xchanges, hundies or promissory notes:
'. Any suit filed by the plaintiff for recovery of a debt E money payable by the defendant according to a ritten contract, or %. &n case of an enactment herein the amount to be recovered is a fixed amount of money, or a debt other than a penalty, or A guarantee, here the claim against the principal is in respect of a debt or for money only. The ob"ect behind provision of summary procedure as to ensure a speedy trial for recovery of money in cases here the defendant has no defence and thus any unreasonable delay sought to be caused is eliminated. )*" C!'S)I)U)I!'A+I) A'# SC!P":
The provisions of this
The and a Gbill of exchange>. Hoever, neither the Fegotiable &nstruments Act nor the Code def ines the term Hundi.
Account Payee Che/ues$
The rule is applicable to all suits on bills, hundis and promissory notes, hether they are negotiable or not. Thus, a suit based on a crossed che?ue bearing an endorsement GaEc payee only> can be filed under the summary procedure #'.
1( Cf Khemchand v. Hari AIR 1'*' 8el *$ 11 Ramkarandas v. Bhagwaandas AIR 1'& S? 11++$ 1) Tailors Priya v. Gulabchand AIR 1'2 ?al 2$
#e0t or +i/uidated #emand$
A debt is a present obligation to pay an unascertainable sum of money hether the amount is payable in presenta or in futuro. The former is a debt oing and the latter is a debt due. Hoever, a sum payable upon a contingency does not become a debt until the said contingency has happened #%. GLi?uidate demand> means an amount susceptible of being made certain by mathematical calculation from factors in possession or 4noledge of the party to be charged. A claim of damages in percentage is a li?uidated amount ithin the meaning of < %= #;.
I'S)I)U)I!' !( SUMMAR SUI)S$
*# A suit, to hich this
*b that no relief, hich does not fall ithin the ambit of this rule, has been claimed in the plaint:
*c the folloing inscription, immediately belo the number of the suit in the title of the suit, namely95
3*1nder
12 Kesoram Indusries v. Gheesi AIR 1''' Ra: '$ 1+ Ra!inder Kumar Khanna v. "rienal Insurance Co. AIR 1''( 8el )*.$
*% The defendant shall not defend the suit referred to in sub5rule *# unless he enters an appearance and in default of his entering an appearance the allegations in the plaint shall be deemed to be admitted and the plaintiff shall entitled to a decree for any sum, not exceeding the sum mentioned in the summons, together ith interest at the rate specified, if any, up to the date of the decree and such sum for costs as may be determined by the High Court from time to time by rules made in that behalf and such decree may be executed forthith.
This rule provides that after the summons of the suit has been issued to the defendant, the defendant must appear and the plaintiff ill serve a summons for "udgment on the defendant. The defendant is not entitled to defend a summary suit unless he enters an appearance. &n default of this, the plaintiff ill be entitled to a decree hich ill be executed forthith.
(ailure to "nter Appearance:
As provided by sub5rule*%, in a summary suit, if the defendant fails to enter appearance, the court can pass a decree on the basis that allegations in the plaint are deemed to have been admitted#(.
(orm of summons in a Summary Suit:
The summons in a summary suit re?uires the defendant to obtain leave from the court ithin ten days from the service thereof to appear and defend the suit and ithin such time to cause an appearance to be entered on his behalf.
+imitation for Application for +eave to #efend:
The period for an application for leave to appear and defend is ten days from the date hen the summons is served. The court has no poer to extend the time #+, unless the court has, by a
1& #i!aya Home $oans $d. #. Crown Traders $d.% AIR 1''. 8el 1.2$
rule framed in that behalf, made s ( of the Limitation Act applicable to such applications as done by the High Court of ombay. &t has been held in some decisions of 6adras High Court that a court could entertain, for sufficient cause, an application presented beyond ten days, as a poer to excuse delay should be implied from the poer to set aside an ex parte decree for sufficient cause, under rule ;#=. ut most of the authorities hold the vie that there is no poer in the court to excuse delay, as section ( of the Limitation Act is inapplicable #8.
!0taining +eave is Must:
efore the amendment of #=+, this rule provided that a defendant ho has failed to obtain a leave to defend can not be alloed to appear hile the hearing is proceeding. ut the scheme after the amendment is different. The defendant must enter an appearance and thereafter he has to see4 leave to defend.
PR!C"#UR" (!R )*" APP"ARA'C" !( #"("'#A'): $ Procedure for the appearance of defendant
*# &n a suit to hich this
notices
on
him.
*' 1nless otherise order, all summonses, notices and other "udicial processes re?uired to be served on the defendant, shall deemed to have been duly served on him if they are left at the address given by him for such service.
1 &ahmudar v. 'arachandra ;1'((< & ?B- )&'$ 1* &urahari Rao v. Ba(ayya AIR 1'+' 3ad *+)$ 1. Kamalammu v. #enkaa 'asri ;1'&1< 1 3LJ *, AIR 1'&1 3ad .'&$
*%
*; &f the defendant enters an appearance, the plaintiff shall thereafter serve on the defendant a summons for "udgment in )orm Fo. ;A in Appendix for such other )orm as may be prescribed from time to time, returnable not less than ten days from the date of service supported by an affidavit verifying the cause of action and the amount claimed and stating that in his belief there is no defence to the suit.
*( The defendant may, at any time ithin ten days from service of such summons for "udgment, by affidavit or otherise disclosing such facts as may be deemed sufficient to entitle him to defend, apply on such summons for leave to defend such suit, and leave to defend may be granted to him unconditionally or upon such terms as may appear to the Court or udge to be "ust9 7rovided that leave to defend shall not be refused unless the Court is satisfied that the facts disclosed by the defendant do not indicate that he has a substantial defence to raise or that the defence intended to be put up by the defendant is frivolous or vexatious9
7rovided further that, here a part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit shall not be granted unless the amount so admitted to be due is deposited by the defendant in Court. *+ At the hearing of such summons for "udgment,5 *a if the defendant has not applied for leave to defend, or if such application has been made and is refused, the plaintiff shall be entitled to "udgment forthith: or
*b if the defendant is permitted to defend as to the hole or any part of the claim, the Court or udge may direct him to give such security and ithin such
time as may be fixed by the Court or udge and that, on failure to give such security ith the time specified by the Court or udge or to carry out such other directions as may have been given by the Court or "udge, the plaintiff shall be entitled to "udgment forthith. *= The Court or udge may, for sufficient cause shon by the defendant, execute the delay of the defendant in entering an appearance or in applying for leave to defend the suit.
This rule prescribes the mode of service of summons and leave to defend. The defendant must apply for leave to defend ithin ten days from the date of service of summons upon him and such leave ill be granted only if the affidavit filed by the defendant discloses such facts as may be deemed sufficient to entitle him to defend. 2uch leave may grant to him unconditionally or upon such terms as may appear to the court or "udge to be "ust #. Leave to defend, hoever, should not be refused unless the court is satisfied that the facts disclosed by the defendant do not indicate that he has substantial defence to rise or that the defence intended to be put by him is frivolous or vexatious.
•
Su0rule345:
As a rule, leave to defend must be given unconditionally if the defendant shos a prima facie case or raises a triable issue. Leave should be made conditional if the court doubts the bona fides of defendant or thin4s that the defence is put in only in order to gain time '$. The 6adras High Court has held that if the defendant sets up a defence hich if proved ould entitle him to succeed, the court has no discretion but must grant leave unconditionally '#.
1' &echalec )ngineers v. Basic )*ui(men Cor(n.% ;1'*< + S?? .*$ )( 'anosh v. &oolsingh AIR 1'&. S? 2)1$ )1 'underam v. #alli +mmal ;1'2&< ILR &. 3ad 11, 1&) I? .*$
&n the Santosh Kumar v. Mool Singh 22 , the 2upreme Court approved the decision of Sundaram v. Vallimal 23 held that once it as found that there as a triable issue, leave should be given.
•
#iscretion 9
After the amendment of #=+, the discretion to give leave to defend is delineated by the provisios.
Su0rule 365
1nder rule %*=, time cannot be given until the defendant enters appearance. )or leave to defend in a summary suit for recovery of money, the defendants must sho that they have
)) AIR 1'&. S? 2)1$ )2 ;1'2&< ILR &. 3ad 11, 1&) I? .*$
substantial defence and triable issues to raise, and that their defence is not frivolous. may mean that the period may be less than ten days or, at the most, on the tenth day. ut it cannot go beyond that.
P!7"R )! S") ASI#" #"CR""$ 8$ Po%er to set aside decree
After decree for the Court may, under special circumstances set aside the decree, and if necessary stay or set aside execution, and may give leave to the defendant to appear to the summons and to defend the suit, if it seems reasonable to the Court so to do, and on such terms as the Court thin4s fit. 1nder this rule, the court can set aside the decree and stay the execution and may grant leave to the defendant to appear and defend the suit. P!7"R )! !R#"R -I++, ")C$, )! -" #"P!SI)"# 7I)* !((IC"R !( C!UR)$
&n any proceeding under this
2ave as provided by this
)+ Rule & )& Rule *$
#. &n the ordinary suit the defendant is entitled to defend the suit as of right. ut in a summary suit he is not entitled for the same except ith the leave of the court. '. in an ordinary suit the decree cannot be set aside by the trial court except in revie. ut in the summary suit the trial court may set it aside under special circumstances.
Chapter : Model (ormat for recovery of money under Promissory 'ote
