Clear admission of principal liability warrants summary judgment; disputed interest remains for trial.

The plaintiff sought summary judgment for repayment of ₹52 crore, which it said had been advanced for a realty project and later converted into an interest-free loan.

The repayment period was extended, but the amount remained unpaid.

The first defendant’s written statement admitted the transaction and stated that the defendants owed ₹52 crore, attributing non-payment to a slowdown in the realty sector and the COVID-19 pandemic.

The first defendant later argued that the admission was erroneous, that the sum had become a capital/current-account contribution following its conversion into an LLP, and that the claim was barred by limitation; it also raised arbitration.

Defendants 2 and 3 disputed their liability and sought a trial.

The Court had previously dismissed the defendants’ applications to refer the dispute to arbitration and recorded that defendants 2 to 5 had forfeited their right to file written statements.

Whether the first defendant’s admission of the ₹52 crore liability, with no evidence of repayment, justified summary judgment for the principal under Order XIII-A CPC.

Whether the arbitration and limitation objections prevented summary judgment.

Whether the plaintiff was entitled to summary judgment for interest at 24% per annum, or whether that claim required trial.

Order XIII-A Rules 1 and 3 CPC permit summary judgment where a defendant has no real prospect of successfully defending the claim and there is no compelling reason to defer determination to trial.

The Court also relied on the Supreme Court’s orders in In Re: Cognizance for Extension of Limitation, which excluded the period from 15 March 2020 to 28 February 2022 for limitation purposes.

The Court treated the prior orders dismissing the defendants’ Section 8 applications under the Arbitration and Conciliation Act, 1996, as having concluded the arbitration objection in this application.

The first defendant’s written statement expressly admitted the ₹52 crore liability, and no evidence showed that any part had been repaid.

Its later assertion that the admission was inadvertent, and its contention that the amount had become a capital contribution, did not displace the admission for purposes of the principal claim.

The arbitration objection had already been rejected in earlier orders.

The limitation objection was raised only in the application proceedings and, in any event, the COVID-19 limitation exclusion meant the suit filed on 27 April 2022 was within time.

However, the documents described the loan as interest-free during the agreed period, and the plaintiff’s 24% claim required evidentiary determination.

The claim for interest at 24% per annum was left open for trial, and the suit was directed to proceed only on interest and consequential reliefs.