After Borrower Paid One ₹1 Lakh Settlement Instalment Then Defaulted, Rajasthan HC Says ₹11-Lakh Order 37 Suit Must Proceed On Earlier Summons

The petitioner-plaintiff brought a summary suit under Order XXXVII CPC to recover Rs. 11,00,080.

Summons under Rule 2 were served on 7 April 2022, and summons under Rule 3, with the requisite affidavit, were served on 22 April 2022; the defendant entered appearance through counsel on 25 April 2022.

The parties later entered a compromise under which the defendant agreed to pay Rs. 1 lakh per month. After paying Rs. 1 lakh, he defaulted; the trial court’s order-sheet provided that, upon default, the suit would continue as it stood before settlement.

On 27 September 2022, despite the earlier service, the trial court directed fresh summons under Order XXXVII Rule 3. The plaintiff challenged that direction under Article 227 of the Constitution.

Order XXXVII Rules 2 and 3 CPC govern the special procedure for summary suits. Under Rule 3(5), a defendant may seek leave to defend within ten days of service of the summons for judgment; Rule 3(6) provides for judgment where leave is not sought or is refused, subject to the applicable law.

The Court held that the statutory consequences of service in a summary suit are not automatically suspended or erased because the parties pursue settlement; in the absence of an enabling provision, settlement does not revive procedural opportunities that have already arisen.

The Court exercised its superintending jurisdiction under Article 227 to review the trial court’s direction.

The Court found that the relevant summons had already been served and that the defendant had entered appearance before the parties pursued settlement.

The compromise and the trial court’s order-sheet expressly contemplated that, if the defendant defaulted, the suit would resume in its pre-settlement posture. Because the defendant paid only the initial instalment and then defaulted, the settlement did not justify issuing fresh summons or restarting the summary-suit procedure.

The trial court’s direction failed to account for the earlier service and its consequences, and therefore warranted interference.

It directed that the summons under Order XXXVII Rule 3 be deemed duly served and that no application for leave to defend had been filed within the prescribed period.

The trial court was directed to proceed with the suit in accordance with Order XXXVII CPC and pass appropriate orders according to law.