₹4-Lakh Cheque Decree Stands Despite COVID Limitation Error, P&H HC Finds Forgery Allegations Unsupported

The plaintiff brought a summary suit under Order XXXVII CPC to recover ₹4,00,000 on the basis of a cheque allegedly issued by the petitioners.

After ordinary summons had initially been issued, the trial court directed fresh summons in the prescribed summary-suit form.

The petitioners, served on 25 October 2021, applied for leave to defend on 11 November 2021, alleging that the cheque, pronote and receipt were forged.

The trial court refused leave as time-barred and decreed the suit on 4 January 2022.

The petitioners’ review applications were dismissed, and their appeal against refusal of leave was later dismissed as not maintainable.

In April 2026, they applied under Order XXXVII Rule 4 CPC to set aside the decree; the trial court dismissed that application. They challenged that decision under Article 227.

Order XXXVII Rule 4 CPC permits a court to set aside a summary decree in special circumstances; the applicant must also disclose facts that would entitle them to leave to defend.

Rajni Kumar v. Suresh Kumar Malhotra, (2003) 5 SCC 315, establishes that both requirements must be met; Ajay Bansal v. Anup Mehta, (2007) 2 SCC 275, recognizes the post-decree remedy while preserving those requirements.

Under IDBI Trusteeship Services Ltd. v. Hubtown Ltd., (2017) 1 SCC 568, a substantial or fair defence raising genuine triable issues ordinarily warrants leave, whereas a frivolous or unsupported defence does not.

The Supreme Court’s directions in In Re: Cognizance for Extension of Limitation, (2022) 3 SCC 117, excluded the period from 15 March 2020 to 28 February 2022 for limitation purposes.

Article 137 of the Limitation Act prescribes three years for an application where no specific period is provided, and Section 14 permits exclusion of time spent prosecuting, with due diligence and in good faith, a proceeding unable to be entertained for jurisdictional or similar reasons.

Article 227 confers supervisory, not appellate, jurisdiction, to be exercised sparingly: Shalini Shyam Shetty v. Rajendra Shankar Patil, (2010) 8 SCC 329; Radhey Shyam v. Chhabi Nath, (2015) 5 SCC 423.

The Court held that the trial court erred in rejecting the leave-to-defend application solely as out of time, since it was filed during the period covered by the Supreme Court’s COVID-19 limitation directions.

That error did not, however, establish entitlement to reopen the decree: the petitioners had participated in the suit, and their allegations of forgery and absence from Jalandhar were unsupported by particulars or material sufficient to disclose a genuine triable issue.

The Court also found no demonstrated prejudice from the alleged defects concerning the summons or the plaintiff’s affidavit, and no basis to set aside the decree merely because it included interest and costs.

Although the Rule 4 application was filed more than four years after the decree, the Court rejected limitation as an independent ground, taking account of the COVID-19 exclusion and the petitioners’ earlier appeal, but found that the substantive requirements of Rule 4 remained unsatisfied.

The trial court’s mistaken observation that the earlier appeal was pending did not warrant interference because the ultimate refusal of relief was justified on the merits.

It dismissed the revision petition and upheld the trial court’s order refusing to set aside the decree.

The interim stay was vacated, leaving the decree-holder free to pursue execution in accordance with law.