Decided on November 17,1954


Cited Judgements :-



Chagla, C.J. - (1.)This is an appeal against a decree passed by a Judge of file City Civil Court on a summary suit. A summons for judgment was taken out" by" the plaintiffs and conditional leave to defend was granted to the defendant, who is the appellant before us. The appellant failed to comply with the conditions on which he could defend the suit. Therefore the suit was placed on hoard for a decree and a decree was passed. It is against that decree that this appeal is preferred.
(2.)The first contention of Mr. Nain on behalf, of the appellant is that the suit is based on three oral agreements and therefore it was not maintainable as a summary suit. Now, the two agreements are referred "to in the plaint and these two agreements are that the defendant saw Ramrikhdas a partner of the plaintiffs at Muttra and it was then agreed between the parties that the plaintiffs should accept and honour 'hundis' drawn by the defendant against the plaintiffs and that the defendant should pay to the plaintiffs on demand the amounts of the said 'hundis' with interest thereon from the dates to payment at the rate of 6 per cent. per annum, and para. 3 of the plaint goes on to state that in pursuance of the said agreement and under instructions from the defendant, the plaintiffs honoured and paid three 'hundis' respectively dated 9-4-1950, 10-4-1950 and 10-4-1950, for the respective sums of Rs. 5,000, Rs. 5,000 and Rs. 2,000 drawn by the "defendant against Messrs. Ramrikhdas Chiranjilal Parasrampuria in favour of the Punjab National Bank Ltd. The 'hundis' are annexed to the plaint and they show that they were not drawn in favour of the plaintiff-film but they were drawn upon Ramrikhdas Chiranjilal Parasrampuria. In the affidavit in support of the summons the plaintiffs stated that in the plaintiff-firm Ramrikhdas and Chiranjilal are partners and the 'hundis' were drawn upon Ramrikhdas Chiranjilal pursuant to the instructions of the defendant, and therefore Mr. Nain says that really in this affidavit the plaintiffs are relying on a third agreement which is that the plaintiffs were liable for 'hundis' not drawn upon the plaintiff-firm but upon the individual Ramrikhdas Chiranjilal Parasrampuria.
(3.)Now, the question raised by Mr. Nain is of considerable importance because this question often arises where leave to defend is either refused or conditionally granted. The question we have to consider is whether a summary suit would lie when the plaintiff's claim is not based upon any written agreement but is based upon an agreement in order to prove which evidence would have to be given by the plaintiff. It seems that a view was taken in - Parmanand Waneklal v. Special Land Acquisition Officer, Ahmedabad', F. A. No. 16 of 1953, D/- 3-12-1954 (Bom) (A), by myself and my brother Mr. Justice Shah and also in - 'Hirachand Parsaram v. Lach-mandas Parsaram', Civil Revn. Appln. No. 536 of 1953, D/- 11-12-1953 (Bom) (B), by me sitting singly that where the plaintiff has got to prove an oral agreement, he could not enforce that agreement by a summary suit. It seems to us that that view should be reconsidered oil a more careful consideration of the rule framed by us with regard to the filing of a summary suit. Now, the High Court has amended Order 37, Rule 2, and the amended rule to the extent that it is material runs as follows :
"All suits upon hills of exchange, hundis or promissory notes and all suits in which the plaintiff seeks only to recover a debt or liquidated demand in money payable by the defendant with or without interest, arising on contract express or implied, or on an enactment where the sum sought to be recovered is a fixed sum of money."
Now, this case falls in the category of a debt or liquidated demand in money payable by the defendant with or without interest arising on the ton-tract express or implied. Therefore the rule itself assumes that the contract on which the plaintiff is suing need not be a contract in writing. It may even be an implied contract. But so long as there is a debt or liquidated demand which becomes payable under such a contract, the plaintiff is entitled to sue for the amount due under the contract. This amended rule has been borrowed from the corresponding English rule in Order 3, Rule 6 of the Rules of the Supreme Court and we find at p. 18 at the Annual Practice a commentary on the expression "debt or liquidated demand", and this is what the learned Commentator says :
"In order to come within the definition 'liquidated demand' a claim on a contract must (a) state the amount demanded, or be so expressed that the ascertainment of the amount is a mere matter of calculation; and (b) must give sufficient particulars of the contract to disclose its nature. It is the nature of the contract on which the claim is based, as well as the fact that a specific sum is claimed, which brings the claim, or fails to bring it, within the definition."
Now, here a specific sum is demanded by the plain-tiffs which is the amount of the hundis' honoured by the plaintiffs under an agreement with the defendant, Therefore there can be no doubt that on this interpretation of the rule the plaintiffs are suing on a debt or liquidated demand which arises on an express contract although the contract is oral and not in writing. In our opinion, therefore, a summary suit would be maintainable although it is based on an oral agreement or contract. It would be maintainable even if the contract or agreement is not admitted by the defendant. It may be said that if that were so, the plaintiffs would be bound to lead oral evidence to prove the contract. But the scheme of filing a summary suit is that when the summons is served upon the defendant which contains the cause of action - in England it is a specially endorsed writ - if he does not answer to the summons, he is deemed to admit the averments contained in the plaint, and therefore if the plaintiff relies on an oral contract and the defendant does not appear in answer to the summons, the Court would pass a decree in such a suit because the defendant has admitted the claim of the plaintiff by failing to appear in answer to the summons. When the defendant docs appear and files an affidavit and the matter is to be decided upon by affidavits by the Court, then the question that has to be considered is not with regard to the maintainability of the suit, but with regard, to the question as to whether unconditional leave should be granted to the plaintiffs. Now, we do feel that there is considerable force in Mr. Nain's argument that when a plaintiff is relying on an oral agreement which is denied by the defendant on affidavits, ordinarily the Court should grant unconditional leave: but there may be cases where the Court may hold the contract established after perusing the affidavits. It may be held to be established by surrounding circumstances or it may be held to be established from the conduct of the defendant. But where the affidavits do not clearly establish the oral contract relied upon by the plaintiff, it may well he that the Court should grant unconditional leave in order that the plaintiff should establish the contract by oral testimony to be tested by the Court.

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