A summary suit based on a dishonoured cheque cannot be defeated by sham, mutually destructive, or unsubstantiated defences.

The Respondent (Plaintiff) filed a summary suit under Order XXXVII CPC for the recovery of ₹58,00,000/- based on a dishonoured cheque.

The Plaintiff alleged he provided financial assistance totaling ₹50,00,000/- to the Appellant (Defendant) and his wife between 2016 and 2018.

A notarized receipt was executed for the first ₹30,00,000/-.

The Plaintiff claimed that after reconciling dues including interest and deducting partial repayments, the Defendant issued a cheque for ₹58,00,000/- dated 09.03.2022, which was returned for "Insufficient Funds".

The Defendant sought leave to defend, claiming the ₹30,00,000/- was earnest money for a property transaction that stood forfeited, that he had repaid ₹46,00,000/-, and that the cheque was a blank security cheque misused by the Plaintiff.

The Trial Court dismissed the leave to defend application and decreed the suit.

1. Whether the summary suit was maintainable under Order XXXVII CPC and whether the court had territorial jurisdiction.

2. Whether the Defendant’s plea regarding an Agreement to Sell and forfeiture of earnest money constituted a substantial/triable defense.

3. Whether the defense of a "blank signed cheque" absolves the drawer of liability under the Negotiable Instruments Act.

4. Whether the defense raised was bona fide or a "sham and moonshine".

Order XXXVII Rule 3(5) of the CPC, which governs the grant of leave to defend in summary suits.

Section 6 and Section 5 of the Negotiable Instruments Act, 1881, defining a cheque as a bill of exchange, thus making it eligible for summary procedure under Order XXXVII Rule 1(2)(a) CPC.

The principle of joint and several liability under Section 43 of the Indian Contract Act, 1872.

The precedent set in Bir Singh v. Mukesh Kumar (2019), which establishes that a drawer who hands over a signed blank cheque is liable for the amount filled in by the payee to discharge a debt.

The Court found the Defendant's version to be logically inconsistent and unsupported by evidence. While the Defendant claimed in his leave to defend application that ₹30,00,000/- was earnest money forfeited under an "Agreement to Sell," his prior reply to the legal notice specifically denied the existence of such an agreement and claimed the receipt was signed under "coercion".

The Court noted that the Defendant provided no proof of the alleged repayment of ₹46,00,000/- or the existence of a property deal.

Regarding interest, the Court observed that the Defendant’s own documents contained entries for monthly interest payments, contradicting his claim that the loan was interest-free.

Finally, applying Bir Singh, the Court rejected the "blank cheque" defense, noting the Defendant failed to take any legal steps (like stop-payment instructions) consistent with the alleged misuse of security cheques.

It held that the summary suit was maintainable as it was based on a dishonoured cheque and the territorial jurisdiction was proper since both parties resided and the cause of action arose in Delhi. The Court upheld the Trial Court’s order dismissing the Leave to Defend and the decreeing of the suit for ₹58,00,000/- with 9% interest. The appeal was dismissed.