Court’s Decision
The Delhi High Court set aside the Commercial Court’s order directing the petitioner to deposit ₹19.50 lakhs by way of a summary judgment under Order XIII-A of the Civil Procedure Code, 1908. Justice Manoj Jain held that:
“The bar under Order XIII-A Rule 1(3) CPC is attracted once the suit is originally filed under Order XXXVII. Mere conversion to an ordinary suit later cannot undo that procedural origin.”
The Court found the Trial Court’s interpretation erroneous and allowed the petition.
Facts
The petitioner was the defendant in a commercial suit filed for recovery of ₹53,77,197/- based on an agreement dated 01.08.2020. Under the said agreement, the respondent had paid salaries for workmen deployed at the petitioner’s organization and claimed reimbursement. The petitioner did not dispute the agreement’s execution but argued that the plaintiff breached terms by failing to provide reconciliation data. It also alleged that the respondent fraudulently misused a blank cheque, thereby breaching trust and committing cheating.
Initially, the suit was filed under Order XXXVII CPC (summary procedure). Upon realizing the commercial nature of the dispute under Section 2(1)(c)(xviii) of the Commercial Courts Act, 2015, the matter was transferred to the Commercial Court. The plaintiff, during proceedings, sought to convert the suit into an ordinary one, which was allowed.
Later, the respondent filed an application under Order XIII-A CPC seeking summary judgment. The petitioner raised a preliminary objection, arguing that such a remedy was legally impermissible due to the bar under Rule 1(3) of Order XIII-A CPC.
Nevertheless, the Trial Court disregarded the objection and passed an order for deposit of ₹19.50 lakhs through a Fixed Deposit Receipt.
Issues
- Whether a suit that was originally filed under summary procedure (Order XXXVII CPC) but subsequently converted into an ordinary suit can later invoke Order XIII-A CPC for summary judgment?
- Does the bar under Rule 1(3) of Order XIII-A CPC continue to apply even after such conversion?
Petitioner’s Arguments
The petitioner contended that the Trial Court committed a jurisdictional error by entertaining the summary judgment application under Order XIII-A CPC. They relied on Rule 1(3) of Order XIII-A which states that:
“…an application for summary judgment shall not be made in a suit in respect of any Commercial Dispute that is originally filed as a summary suit under Order XXXVII.”
The petitioner submitted that the bar was absolute and procedural origin could not be altered by subsequent conversion. They argued that permitting such a practice would render the phrase “originally filed” meaningless.
They also relied heavily on the Division Bench decision in Brijesh Kumar Agarwal & Ors. v. IFCI Factors Ltd., where a summary judgment was held impermissible in similar circumstances.
Respondent’s Arguments
The respondent argued that since the suit had been converted into an ordinary suit before any summons in the prescribed summary format were issued, the bar under Order XIII-A Rule 1(3) was not attracted. They emphasized that once converted, the procedural nature of the suit changed, allowing the invocation of Order XIII-A.
They also placed reliance on Ashok Commercial Enterprises v. Rajesh Jugraj Madhani, a Bombay High Court decision where summary judgment was permitted post-conversion.
Analysis of the Law
The Court examined the provisions of Order XXXVII CPC (summary procedure) and Order XIII-A CPC (summary judgment in commercial suits), noting the structural and substantive differences. It reiterated that:
- Order XXXVII allows judgment unless leave to defend is granted.
- Order XIII-A enables summary adjudication without oral evidence where there is no real prospect of success.
Rule 1(3) of Order XIII-A CPC clearly bars its applicability to suits “originally filed” under Order XXXVII. This, the Court held, is not contingent on whether summons were issued in the summary format or whether the suit was later converted.
Precedent Analysis
- Brijesh Kumar Agarwal & Ors. v. IFCI Factors Ltd., 2023 SCC OnLine Del 1502
- A Division Bench of the Delhi High Court held that the bar under Order XIII-A Rule 1(3) applies if the suit was initially filed under Order XXXVII.
- Summary judgment granted suo motu by the Single Judge was set aside.
- Ashok Commercial Enterprises v. Rajesh Jugraj Madhani, 2023 SCC OnLine Bom 248
- Distinguished on facts. There, the suit was registered as a regular commercial suit despite some ambiguity over the procedure. There was no objection from the defendant regarding maintainability under Order XIII-A.
The Delhi High Court ruled that Brijesh Kumar Agarwal governed the present case and the Bombay decision was not applicable.
Court’s Reasoning
The Court underscored the phrase “originally filed” as central. It held:
“The key words are ‘originally filed’. Therefore, once the suit is, originally, filed as a suit under summary procedure… that would not give any right to again seek a summary judgment, albeit, under a different procedure.”
The Court rejected the Trial Court’s reasoning that the bar under Rule 1(3) was avoided simply because no formal summary summons were issued.
It also held that interpreting the provision otherwise would render Rule 1(3) otiose and would contradict legislative intent, which explicitly excludes such suits from the purview of Order XIII-A.
Conclusion
The High Court allowed the petition and quashed the impugned order. It clarified that:
- Conversion of a summary suit into an ordinary suit does not lift the procedural bar under Order XIII-A CPC.
- The Commercial Court lacked jurisdiction to entertain the summary judgment application.
Implications
- Clarity on Procedural Bar: The judgment establishes that procedural origin cannot be disregarded for strategic relief under Order XIII-A CPC.
- Precedential Value: Reinforces Brijesh Kumar Agarwal as the binding law within Delhi jurisdiction.
- Commercial Litigation: Plaintiffs must exercise caution in choosing their procedural route at the outset.
FAQs
Q1. Can a commercial suit originally filed under summary procedure invoke Order XIII-A CPC after being converted into an ordinary suit?
No. The Delhi High Court held that the bar under Order XIII-A Rule 1(3) CPC is absolute and continues to apply regardless of subsequent conversion of the suit into an ordinary suit.
Q2. What was the reasoning of the Trial Court that was overruled?
The Trial Court held that since no formal summons under summary procedure were issued and the suit was converted into an ordinary suit early, the bar was not attracted. This was held to be a misinterpretation.
Q3. What precedent was relied upon to decide the matter?
The Court relied on Brijesh Kumar Agarwal & Ors. v. IFCI Factors Ltd., where a Division Bench held that suits originally filed under Order XXXVII CPC cannot later invoke Order XIII-A CPC even after conversion.
