Admission of promissory note execution does not bar conditional leave where triable defenses arise.

The respondent-plaintiff brought a summary suit to recover money on a promissory note dated 8 April 2023, which the petitioner-defendant admitted executing. The plaintiff claimed that Rs. 4 lakh of the Rs. 7 lakh principal had been repaid and sought the balance.

The defendant maintained that the promissory note and a cheque had been given as security for earlier financial transactions, and that he had repaid more than the sums borrowed. He raised substantially the same defence in his reply to the pre-suit notice and in his application for leave to defend.

The Trial Court dismissed the application, reasoning that the admitted execution of the promissory note left no triable issue. The defendant challenged that order under Article 227 of the Constitution.

Whether the defendant’s admission of executing the promissory note, in the circumstances, justified refusing leave to defend on the ground that no triable issue arose.

Whether the defendant was entitled to unconditional or conditional leave to defend the summary suit.

Under the principles governing leave to defend a summary suit under Order XXXVII of the Code of Civil Procedure, a defendant with no defence, or a defence that is moonshine, is not entitled to leave; a sterling defence warrants unconditional leave; and a defence falling between those categories may warrant conditional leave.

The Court relied on the Supreme Court’s decision in Anand Narayan Shukla v. Jagat Dhari, 2026 SCC OnLine SC 827, and the Telangana High Court’s decision in Shaik Abdul Khader v. G. Anil Dutt Kamble, CRP No. 345 of 2025, dated 18 March 2026.

It distinguished the respondent’s authorities under the Negotiable Instruments Act, explaining that the proposition that a holder may fill in a blank negotiable instrument did not resolve whether the defendant had raised triable issues for purposes of leave to defend.

The admitted execution of the promissory note did not, by itself, make the defence baseless. The defendant had consistently asserted that the instruments secured earlier transactions and that he had repaid amounts exceeding what he borrowed.

The plaintiff’s own case acknowledged multiple financial dealings and repayment of Rs. 4 lakh towards the suit principal; the parties disputed the nature and allocation of the payments.

In that context, the defendant’s account of prior borrowings and repayments raised matters requiring trial, rather than a defence that could be summarily rejected. The Court therefore found that leave was warranted, but that the circumstances justified imposing a deposit condition.

The defendant must deposit 50% of the suit claim within four weeks of receiving the order, without further extension. Upon compliance, the suit is to proceed as a regular suit, with the defendant permitted to file a written statement; the Trial Court is to dispose of it within eight weeks after completion of pleadings. If the defendant fails to comply, leave to defend will not take effect.