India: Simplifying The Commercial Courts Act, 2015: III. Order XIII-A: Summary Judgment

Introduction

A summary procedure of pronouncing judgment has been introduced through the addition of Order XIII-A applicable to the commercial suits of specified value.¹ It may be mentioned here that commercial suits involve monetary litigation between parties to a commercial contract and involve complex questions of facts and law often times requiring special attention of the Court.

So far the remedy of summary procedure was available under Order XXXVII most commonly known as 'Suits for Recovery' where the lis involved recovery of amount due on a negotiable instrument or an admitted monetary liability.

Now, by the addition of Order XIII-A to the CPC, 1908, an application² may be filed in a pending commercial suit for summary judgment in the facts of the case.

Distinction between Summary Judgment under Order XIII-A and Summary Procedure under Order XXXVII of Civil Procedure Code, 1908

It is necessary to mention that while a suit under Order XXXVII may be filed both for commercial as well as non –commercial suits, the remedy of summary judgment under Order XIII-A is available only for commercial suits of specified value.

Procedure under Order XXXVII:

The Summary Procedure under Order XXXVII can be availed by a Plaintiff right from the stage of filing of suit by declaring the suit to be specifically filed under Order XXXVII. Only after fulfilling this initial necessary step can the procedure under Order XXXVII be set in motion. The category of disputes for which a suit under Order XXXVII may be filed is also defined under this Order. Suits based on instruments of exchange, written contracts for recovery of amount of money in the nature of debt, liquidated demand, receivable with or without interest maybe filed under Order XXXVII. For a Defendant to defend a suit under Order XXXVII, he has to tender appearance within ten days of service of summons. On Defendant's appearance, the Plaintiff immediately serves on him a summons for Judgment in prescribed form. On service of summons for Judgment, the Defendant files within 10 days, an affidavit for leave to defend.

Procedure under Order XIII-A⁴:

The application for Summary Judgment may be filed under Order XIII-A before framing of issues as per rule 2⁵. Any party to the suit may file application for Summary Judgment on the two grounds⁶ that the opposite party has no real prospect of succeeding on/ defending the claim and that there is no other compelling reason why the claim should not be disposed of before recording of oral evidence. The application has to be duly supported with averments of facts and points of law involved. In case any documentary evidence is also relied upon, the same has to be made a part of the application with identification of relevant portions of that evidentiary material. The applicant has also to state the relief being sought. The respondent has to file a reply within 30 days of the receipt of said application with proper averments as to facts & law both and reliance on documentary evidence if applicable. The respondent must also state the issues that should be framed for trial and identify further evidence not filed but necessary to be brought on record.

The Orders which may be passed by the Court while deciding Order XIII-A Application⁸

A. Dismissing the application filed for summary judgment as not maintainable or meritless

B. Partly allowing the claim and passing judgment over the part found maintainable and dismissing the application to the extent the claim is found meritless.

C. Striking out pleadings wholly or partly if found irrelevant to the lis involved between the parties and streamlining the issues involved

D. Conditional Order⁹ may be passed as per Rule 7 where certain conditions prescribed in this section may be imposed by Court e.g. deposit of amount by a party in court, to take specified steps by parties in the facts of the case, provide security or surety for restitution of costs or losses, for the order to take effect. The Court may also state the consequences of failure to comply with conditions imposed.

E. Directions to parties to proceed for case management under Order XV A so that the suit itself may be tried and heard expeditiously

F. Judgment on the claim thereby decreeing the suit on the basis of appreciation of evidence adduced and arguments led by parties

Conclusion

The newly added remedy under Order XIII-A can serve a useful purpose to decide the suit in an expeditious and focused manner by agitating the real issues in a succinct manner before the Court. Apart from the weakness of merits of either the Plaintiffs' or Defendants' case, the lapses in following mandatory procedure laid down by the CPC amendments made to the Commercial Courts Act may also be urged as grounds for deciding the suit in a summary manner. Not filing the written statement as per the procedure laid down in Order VIII Rule 3A and thereby attracting the provisions of Order VIII Rule 5 (1) provision applicable to commercial suits treating the allegations of fact as being admitted if not refuted as per Order VIII Rule 3A is an example of procedural lapse.

As a general rule of interpretation, the amendments made to the CPC under Section 16 of the Commercial Courts Act have to be read as a whole to understand the import of each and every amendment. Only after a whole and complete reading, the real purpose behind the amendments can be gathered.

Footnotes

1. Vide Act 4 of 2016, Sec. 16 and Sch. – 5 (w.r.e.f. 23-10-2015)

2. Order XIIIA, Rule 1 (Scope of and classes of suits to which this Order applies), CPC, 1908

3. Order XIIIA, Rule 1(3), CPC, 1908

4. Order XIIIA, Rule 4 (Procedure), CPC, 1908

5. Order XIIIA, Rule 2 (Stage for application for Summary Judgment), CPC, 1908

6. Order XIIIA, Rule 3 (Grounds for Summary Judgment), CPC, 1908

7. Oder XIIIA, Rule 5 (Evidence for hearing of Summary Judgment), CPC, 1905

8. Order XIIIA, Rule 6 (Order that may be made by Court), CPC, 1908

9. Order XIIIA, Rule 7 (Conditional order), CPC, 1908

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.