A vague, unsupported repayment plea raises no triable issue warranting leave to defend under Order XXXVII CPC.

The respondent-plaintiff instituted a summary suit under Order XXXVII CPC for recovery of ₹2,00,000 with interest, relying on a Memorandum of Understanding dated 20 January 2016 executed between herself and M/s Steps for Wealth Traders, through its partner, the second appellant.

The appellants sought leave to defend, contending that the transaction was with the plaintiff’s husband, that the cheque had been issued only as security, and that the amount had already been repaid in cash.

The Civil Judge rejected the application for leave to defend and decreed the suit for ₹2,00,000 with pendente lite interest at 9% per annum.

The First Appellate Court affirmed the decree, holding that the MoU established the contractual relationship and that the plea of repayment was unsupported by particulars or documentary evidence.

In the Regular Second Appeal, the appellants additionally contended that the suit was barred by the Punjab Registration of Money-Lenders Act, 1938, and that non-presentation of the cheque raised triable issues.

1. Whether the concurrent findings of the courts below disclosed any substantial question of law warranting interference in a Regular Second Appeal under Section 100 CPC.

2. Whether the appellants established that there was no privity of contract between them and the plaintiff because the transaction was allegedly with her husband.

3. Whether the plea that the amount had been repaid, and that the cheque was issued only as security and was never presented, raised a genuine triable issue requiring leave to defend under Order XXXVII CPC.

4. Whether the suit was barred under Section 3 of the Punjab Registration of Money-Lenders Act, 1938, on the ground that the plaintiff was an unlicensed money-lender.

The Court applied Section 100 CPC, under which a Regular Second Appeal lies only upon the existence of a substantial question of law, and Order XLII Rule 1 CPC.

Under Order XXXVII Rules 3(5) and 3(6)(a) CPC, leave to defend is required where the defendant discloses a genuine and substantial defence; a vague or unsupported denial does not constitute a triable issue.

The Court relied on the contractual principle that consideration may move from the promisee or any other person, and that privity of contract—not privity of consideration—is determinative.

It also considered Sections 2(9) and 3 of the Punjab Registration of Money-Lenders Act, 1938, holding that the statutory bar applies only where the plaintiff is shown to be carrying on the business of money-lending without the requisite registration or licence.

A cheque issued as security does not, by itself, extinguish or negate the underlying contractual transaction, particularly where the transaction is independently evidenced by a written agreement.

The MoU was executed between the plaintiff and Defendant No. 1 and bore the admitted signatures of Defendant No. 2 on behalf of the firm; consequently, the appellants’ assertion that they had dealt only with the plaintiff’s husband was contradicted by the written contract.

Even assuming that the husband physically advanced the money, that circumstance did not defeat the plaintiff’s contractual rights because consideration may proceed from a third person.

The repayment defence was vague: the appellants disclosed neither the dates, mode, recipient, nor other particulars of payment, and produced no receipt, account statement, or contemporaneous document.

Similarly, non-presentation of the cheque did not negate the MoU or create a triable issue, since the cheque was referred to in the MoU and its signatures were not denied.

The money-lending objection, raised for the first time in the second appeal, was unsupported because the pleadings described an isolated investment/business transaction and did not establish that the plaintiff carried on the business of money-lending.

The courts below therefore correctly concluded that no genuine triable issue had been disclosed and that no substantial question of law arose.

The challenge to privity, repayment, the security cheque, and the alleged bar under the Money-Lenders Act was rejected.

The Regular Second Appeal was dismissed, the decree for ₹2,00,000 with pendente lite interest at 9% per annum was upheld, and all pending applications were disposed of.