Confirmation of accounts signed by a debtor constitutes a written contract maintainable under Order XXXVII CPC.

The Plaintiff (Zavenir Developers) filed a summary suit under Order XXXVII CPC for recovery of ₹72,13,890, asserting they provided a friendly loan of ₹50,00,000 to the Defendant (Sandeep Goel), their former auditor, in September 2018 via bank transfers.

The Plaintiff relied on a "Confirmation of Accounts" signed by the Defendant on 01.04.2019, which acknowledged the loan and a 15% interest rate.

The Defendant filed a Leave to Defend application, claiming the ₹50 lakhs was actually a repayment of a short-term cash loan he had previously arranged for the Plaintiff's directors, evidenced by WhatsApp chats.

The Trial Court dismissed the Leave to Defend, finding the defense "sham," and decreed the suit with 9% pendente lite interest but no future interest.

Both parties appealed: the Defendant against the decree (RFA 361/2024) and the Plaintiff seeking the contractual interest rate and future interest (RFA 718/2024).

1. Whether the Defendant raised a triable issue or a bona fide defense sufficient to grant Leave to Defend under Order XXXVII CPC.

2. Whether an "Acknowledgement/Confirmation of Account" can be construed as a written contract for the purpose of a summary suit.

3. Whether the Court erred in reducing the pendente lite interest rate and denying future interest under Section 34 of the CPC.

The Court applied Order XXXVII Rule 3(5) CPC regarding the standards for granting Leave to Defend as established in Mechelec Engineering Manufacturers v. Basic Equipment Corporation.

It clarified that an unconditional acknowledgement of debt constitutes a "written contract" under Order XXXVII, citing FCI v. Bal Kishan Garg and Khan Bahadur Shapoor Freedom Mazda v. Durga Prosad Chamaria.

Regarding interest, the Court applied Order XXXVII Rule 2(3) CPC, which entitles a plaintiff to the specified interest up to the date of the decree, and Section 34 CPC, which grants the court judicial discretion to award reasonable pendente lite and future interest regardless of contractual terms, as settled in Central Bank of India v. Ravindra and Space Enterprises v. Srivivasa Enterprises Ltd.

The Court found the Defendant’s plea of a "cash loan repayment" to be a "sham and moonshine," noting that as a Chartered Accountant, he could not plausibly claim he signed a formal Confirmation of Account under "duress" or without intent for it to be acted upon.

The bank transfers were undisputed, and the signed confirmation established a clear written contract and acknowledgement of debt.

Regarding interest, the Court held that while Order XXXVII allows for the agreed rate up to the decree, the Trial Court’s reduction of pendente lite interest to 9% was a valid exercise of judicial discretion under Section 34 CPC, as 15% compounded quarterly might be considered disproportionate.

However, the Court found no justification for the total denial of future interest, as the Plaintiff was entitled to compensation for the time-value of money until actual realization.

It partly allowed the Plaintiff’s appeal (RFA 718/2024), modifying the decree to include future interest at the rate of 9% per annum simple interest from the date of the decree until the date of payment.

The Court upheld the Trial Court's decision to maintain pendente lite interest at 9% instead of the contractual 15%.