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Summary Judgment: A Robust Tool To Curb Unnecessary Trial

Summary Judgment, as the combination of two words suggests, is an outcome of a case decided summarily, based on the documentary evidence produced before the Court by the parties, without going for recording of the oral evidence. The cause of action for filing the application under Order XIII-A of the Code of Civil Procedure, 1908, as inserted by the Commercial Courts Act, 2015, arises only when the summons are served upon the defendant.

The Order is applicable to both the parties to the litigation. It is not limited to the claim of the Plaintiff, rather it is extended to the counter-claim filed by the defendant as well. Application by a party for the Summary Judgment is filed not merely for deciding a claim or counter-claim but also to seek answer of any particular question on which the claim depends.

The Rules of Civil Procedure empower the Court to narrow issues and expedite proceedings by granting Summary Judgment where the common law permits. It is an effective tool for deciding cases where it can be clearly demonstrated that a trial is unnecessary. However, to grant a Summary Judgment the Court must be satisfied that there is no genuine issue for trial. The Courts have strictly interpreted the Summary Judgment test in recent years so that the Rule does not unnecessarily deprive the plaintiffs and defendants of their days in Court.

The Order XIII-A of the Civil Procedure Code, 1908 talks about the summary disposition of such disputes where an appropriate application is filed by the plaintiff or the defendant, to dispose of the suit in a summary fashion i.e. without conducting a full dress trial. The Court can exercise this power when the Plaintiff or Defendant have no real prospect of succeeding on the merits and there is no compelling reason why the suit should not be summarily disposed of.

The High Court of Delhi, in [Oxbridge Associates Ltd. Vs Atul Kumra, 2019 SCC OnLine Delhi 10641], held that:
an application is not essential to seek the Summary Judgment and the Court, on its own or on the asking of either party, is entitled to see/adjudicate, whether a case for Summary Judgment is made out.

The Court further observed that the Delhi High Court (Original Side) Rules, 2018, in Chapter X-A thereof, also provides for Summary Judgment and does not provide for any application to be moved. The Law Commission has also discussed this concept and made certain recommendations in its 253rd Report on Commercial Division & Commercial Appellate Division of High Courts and Commercial Courts Bill, 2015.

253rd Law Commission Report
In pursuant to the Law Commission’s 188th Report on Proposals for Constitution of Hi-Tech Fast - Track Commercial Divisions in High Courts, wherein, necessity for Commercial Courts was expressed, the Law Commission further, in its 253rd Report, submitted that a new procedure for Summary Judgment be introduced to permit the Courts to decide a claim pertaining to any commercial dispute without recording oral evidence, as long as the application for Summary Judgment has been filed before the framing of issues. Courts are also to be empowered to make conditional orders wherever necessary.

Summary Judgment is described as a blunt instrument that can abruptly terminate litigation. While a Summary Judgment is not a substitute for regular trial, it is a tool that allows Courts to weed out cases that do not need a trial to be resolved. It also allows the Court to simplify and streamline the cases so that trial is more efficient and focussed on the areas of actual dispute.

Intention and Objective
The purpose of Summary Judgment is to avoid unnecessary trials. It may also simplify a trial, as when partial Summary Judgment dispenses with certain issues or claims. For example, a Court might grant partial Summary Judgment in a personal injury case on the issue of liability. A trial would be necessary to determine the amount of damages.

Two criteria must be met before Summary Judgment may be properly granted: (1) there must be no genuine issue of material fact; and (2) the Movant must be entitled to Judgment as a matter of right. A genuine issue implies that certain facts are disputed. Usually a party opposing Summary Judgment must introduce evidence that contradicts the moving party's version of the facts. Moreover, the facts in dispute must be central to the case; irrelevant or minor factual disputes will not defeat a motion for Summary Judgment.

Finally, the law as applied to the undisputed facts of the case must mandate Judgment for the moving party. Summary Judgment does not mean that a Judge decides which side would prevail a trial, nor does a Judge determine the credibility of witnesses. Rather, it is used when no factual questions exist for a Judge or Jury to decide.

The moving party has the initial burden to show that SummaryJjudgment is proper even if the moving party would not have the Burden of Proof at trial. The Court generally examines the evidence presented with the motion in the light most favourable to the opposing party. Where the opposing party will bear the burden of proof at trial, the moving party may obtain Summary Judgment by showing that the opposing party has no evidence or that its evidence is insufficient to meet its burden at trial.

The Supreme Court, in [Ambalal Sarabhai Enterprises Vs. K. S. Infraspace Llp & Anr., 2019 SCC OnLine SC 1311] held:
… Keeping in view the object and purpose of the establishment of the Commercial Courts and fast tracking procedure provided under the Act, the statutory provisions of the Act and the words incorporated thereon are to be meaningfully interpreted for quick disposal of commercial litigations so as to benefit the litigants especially those who are engaged in trade and commerce which in turn will further economic growth of the country.

The Division Bench of the Madras High Court, in [Syrma Technology Pvt. Ltd. Vs. Powerwave Technologies Sweden AD & Anr, 2020 SCC Online Mad 5737] held;
11. … the Commercial Courts Act has been introduced with the intention to give qualitative and quantitative decisions. Interestingly, the enactment fixes responsibility on all the stakeholders, including Judiciary, in achieving the avowed object.

The Delhi High Court further held, in [Bright Enterprises Pvt. Ltd. & Anr. Vs M. J. Bizcraft LLP & Anr, 2016 SCC OnLine Delhi 4421],
 …from the provisions laid out in Order XIII-A, it is evident that the proceedings before Court are adversarial in nature and not inquisitorial. It follows, therefore, that Summary Judgment under Order XIII-A cannot be rendered in the absence of an adversary and merely upon the inquisition by the Court..

In order to have a better understanding of the concept, it will be pertinent to have a look at some of the provisions concerned under the Code and their interpretation.

Statutory Provisions for Summary Judgment

  1. Rule 1 of Order XIII-A of the Code of Civil Procedure, 1908 sets out the procedure by which the Courts may decide a claim pertaining to any commercial dispute without recording oral evidence. Sub-rule (2) for the purpose of this order includes the word claim. Rule 1 of Order XIII-A of the Code of Civil Procedure, 1908 thus reads as under;
    1. Scope of and classes of suits to which this Order applies.– (1) This Order sets out the procedure by which Courts may decide a claim pertaining to any commercial dispute without recording oral evidence.
    2. For the purposes of this Order, the word claim shall include:
      1. part of a claim;
      2. any particular question on which the claim (whether in whole or in part) depends; or
      3. a counterclaim, as the case may be.
    3. Notwithstanding anything to the contrary, an application for Summary Judgment under this Order shall not be made in a suit in respect of any commercial dispute that is originally filed as a summary suit under Order XXXVII.
       
  2. Rule 2 of Order XIII-A of the Code of Civil Procedure, 1908 provides that an application for the Summary Judgment can be filed any time after the service of the summons has been served upon the defendant. Proviso to the clause reads that no application for Summary Judgment may be made after issues are framed by the Court.

    The High Court of Madras held, in [Syrma Technology Private Limited Vs. Powerwave Technologies Sweden AD & Anr., 2020 SCC OnLine Mad 5737;
    Thus, if one reads the provision as a whole, what emerges is that an application may not be filed after framing of the issues. The first part speaks of the entitlement to file an application and the second is the outer limit. Although, the legislation uses the words ‘may’, one has to see the preceding words, ‘no application for Summary Judgment‘..

    The power being discretionary, it has to be exercised before the framing of issues. The reason being that once issues are framed and taken note of to be answered, regular trial is the way out.
    One may argue that the defendant may file an application for Summary Judgment under the above said order after receiving the summons under sub-clause (b) of clause 2 of sub-rule (1) of Rule 1 of Order XIII-A of the Code of Civil Procedure, 1908. However, filing the same will not entitle him to claim an extension of the time period, statutorily fixed for filing the Written Statement.

    The Division Bench of the High Court of Delhi has held in Bright Enterprises (supra):
    …the provisions related to Summary Judgment, which enables Courts to decide claims pertaining to commercial disputes without recording oral evidence, are exceptional in nature and out of the ordinary course which a normal suit has to follow. In such an eventuality, it is essential that the stipulations are followed scrupulously, otherwise, it may result in gross injustice.
     
  3. Rule 3 of Order XIII-A of the Code of Civil Procedure, 1908 laid down the following grounds for the Summary Judgment against a party on a claim when it considers that:
    1. the Plaintiff has no real prospect of succeeding on the claim or the defendant has no real prospect of successfully defending the claim; and
       
    2. there is no other compelling reason why the claim should not be disposed of before recording of oral evidence.

      To narrow down the grounds for Summary Judgment, the Court, while deciding the said application, is required to disclose the grounds that the Plaintiff has no real prospect of succeeding on the claim, or, the defendant has no real prospect of successfully defending the claim and also, that there is no other justifiable reason for keeping the claim alive and allowing the recording of oral evidence.

      The High Court of Delhi held in [Su-Kam Power Systems Ltd. Vs. Kunwer Sachdev & Anr., 2019 SCC OnLine Del 10764]:
      91. Rule 3 of Order XIII-A CPC, as applicable to commercial disputes, empowers the Court to grant a Summary Judgment against the defendant where the Court considers that the defendant has no real prospects of successfully defending the claim and there is no other compelling reason why the claim should not be disposed of before recording of oral evidence.

      The expression real directs the court to examine whether there is a realistic as opposed to fanciful prospects of success. This Court is of the view that the expression no genuine issue requiring a trial in the Ontario Rules of Civil Procedure and no other compelling reason…..for trial in the Commercial Courts Act can be read mutatis mutandis. Consequently, Order XIII-A CPC would be attracted if the Court, while hearing such an application, can make the necessary finding of fact, apply the law to the facts and the same is a proportionate, more expeditious and less expensive means of achieving a fair and just result.

      92. Accordingly, unlike ordinary suits, Courts need not hold trial in commercial suits, even if there are disputed questions of fact as held by the Canadian Supreme Court in {'Robert Hryniak Vs Fred Mauldin, 2014 SCC OnLine Can SC 53}, in the event, the Court comes to the conclusion that the defendant lacks a real prospect of successfully defending the claim.

      The High Court of Delhi, in an another case of [Ambawatta Buildwell Pvt. Ltd. Vs Imperia Structure Ltd. & Ors., 2019 SCC OnLine Del 8657], held:
      what has to be seen is, whether the defence pleaded, has any chance of succeeding in law and if the answer is in the negative, a decree on admissions or under Order XV of CPC or a Summary Judgment under Order XIII-A of the CPC as applicable to commercial disputes read with Chapter X-A of the Delhi High Court (Original Side) Rules, 2018, has to follow.
  4. Rule 4 of Order XIII-A of the Code laid down the following procedure for filing such application, which reads as under:

    4. Procedure:
    1. An application for Summary Judgment to a Court shall, in addition to any other matters the applicant may deem relevant, include the matters set forth in sub-clauses (a) to (f) mentioned hereunder:
      1. the application must contain a statement that it is an application for Summary Judgment made under this Order;
      2. the application must precisely disclose all material facts and identify the point of law, if any; in the event the applicant seeks to rely upon any documentary evidence, the applicant must:
        1. include such documentary evidence in its application, and
        2. identify the relevant content of such documentary evidence on which the applicant relies;
      3. the application must state the reason why there are no real prospects of succeeding on the claim or defending the claim, as the case may be;
      4. the application must state what relief the applicant is seeking and briefly state the grounds for seeking such relief.
    2. Where a hearing for Summary Judgment is fixed, the respondent must be given at least thirty days’ notice of:
      1. the date fixed for the hearing; and
      2. the claim that is proposed to be decided by the Court at such hearing.
    3. The respondent may, within thirty days of the receipt of notice of application of Summary Judgment or notice of hearing (whichever is earlier), file a reply addressing the matters set forth in clauses (a) to (f) mentioned hereunder in addition to any other matters that the respondent may deem relevant:
      1. the reply must precisely:
        1. disclose all material facts;
        2. identify the point of law, if any; and
        3. state the reasons why the relief sought by the applicant should not be granted;
      2. in the event the respondent seeks to rely upon any documentary evidence in its reply, the respondent must—
        1. include such documentary evidence in its reply; and
        2. identify the relevant content of such documentary evidence on which the respondent relies;
      3. the reply must state the reason why there are real prospects of succeeding on the claim or defending the claim, as the case may be;
      4. the reply must concisely state the issues that should be framed for trial;
      5. the reply must identify what further evidence shall be brought on record at trial that could not be brought on record at the stage of summary judgment; and
      6. the reply must state why, in light of the evidence or material on record if any, the Court should not proceed to Summary Judgment.

        Once the application for Summary Judgment is filed, the respondent has to be given 30 days’ notice intimating him the next date fixed for the hearing and also the claim to be adjudicated upon. This Order casts a duty upon the respondent that the reply, among other things, must concisely state the issues that should be framed for trial and also identify what further evidence shall be brought on record at trial that could not be brought on record at the stage of Summary Judgment. Besides, the reply must also state as to why, in light of the evidence brought before it, the Court should not proceed to issue a Summary Judgment. Onus has been shifted on the respondent, if he opposes the application for Summary Judgment, to file the proposed issues before the Court. This will enable the Court to verify the authenticity of the defence adopted by the respondent.
  5. Rule 5 of Order XIII-A of the Code of Civil Procedure, 1908 provides for evidences to be placed before the Court for hearing of Summary Judgment, which more specifically reads as under; 5. Evidence for hearing of Summary Judgment:
    1. Notwithstanding anything in this Order, if the respondent in an application for Summary Judgment wishes to rely on additional documentary evidence during the hearing, the respondent must:
      1. file such documentary evidence; and
      2. serve copies of such documentary evidence on every other party to the application at least fifteen days prior to the date of the hearing.
    2. Notwithstanding anything in this Order, if the applicant for Summary Judgment wishes to rely on documentary evidence in reply to the defendant’s documentary evidence, the applicant must:
      1. file such documentary evidence in reply; and
      2. serve a copy of such documentary evidence on the respondent at least five days prior to the date of the hearing.
    3. Notwithstanding anything to the contrary, sub-rules (1) and (2) shall not require documentary evidence to be:
      1. filed if such documentary evidence has already been filed; or
      2. served on a party on whom it has already been served.
         
  6. Rule 6 of Order XIII-A of the Code of Civil Procedure, 1908 provides the list of orders to be made by the Court as under;
    6. Orders that may be made by Court.
    1. On an application made under this Order, the Court may make such orders that it may deem fit in its discretion including the following:
      1. judgment on the claim;
      2. conditional order in accordance with Rule 7 mentioned hereunder;
      3. dismissing the application;
      4. dismissing part of the claim and a judgment on part of the claim that is not dismissed;
      5. striking out the pleadings (whether in whole or in part); or
      6. further directions to proceed for case management under Order XV-A.
    2. Where the Court makes any of the orders as set forth in sub-rule (1)(a) to (f), the Court shall record its reasons for making such order.
      It is clarified that the Court may pass any other order in addition to the above orders and the Court is also obliged to record the reasons for making the orders.
      The High Court of Madras has held in Syrma Technology (supra):
       Thus, to conclude, we are of the view that when an application is filed under Order XIII-A, a Court is expected to keep in mind the provisions contained in Order XIII-A Rules 6 & 7 before considering a Summary Judgment under Order XIII-A Rule 3. We are conscious that Order XIII-A Rule 6 also speaks of a Judgment on the claim both part or full. Order XIII-A Rule 7, read with other modes mentioned under Order XIII-A Rule 6, act as contraceptive to grant of Summary Judgment under Order XIII-A Rule 3. The question as to whether the case is complicated or not is not the concern of the Court especially in deciding an application filed invoking Order XIII-A CPC. Obviously, the respondent in the application has to produce his best evidence, which would be his lead trump as he would stand the chance of losing his case.

     
  7.  Rule 7 of Order XIII-A of the Code of Civil Procedure, 1908 talks about the conditional order as under;
    7. Conditional order:
    1. Where it appears to the Court that it is possible that a claim or defence may succeed but it is improbable that it shall do so, the Court may make a conditional order as set forth in Rule 6(1)(b).
    2. Where the Court makes a conditional order, it may:
      1.  make it subject to all or any of the following conditions:
        1. require a party to deposit a sum of money in the Court;
        2. require a party to take a specified step in relation to the claim or defence, as the case may be;
        3. require a party, as the case may be, to give such security or provide such surety for restitution of costs as the Court deems fit and proper;
        4. impose such other conditions, including providing security for restitution of losses that any party is likely to suffer during the pendency of the suit, as the Court may deem fit in its discretion; and
      2. specify the consequences of the failure to comply with the conditional order, including passing a judgment against the party that have not complied with the conditional order.
        The purpose of the conditional order is to safeguard the interests of the parties.

        The Madras High Court observed in Syrma (supra):
        This Rule provides sufficient power to the Court to pass a conditional order. This power has to be exercised when it appears to the Court that it is possible that a claim or defence may succeed but it is improbable that it shall do so. If we read order XIII-A Rules 6 & 7 together, a clear picture would emerge. If it appears to the Court that a claim or defence may succeed and it is also probable, then the application filed seeking a Summary Judgment will have to be dismissed. If it appears to the Court that it is possible but improbable as stated in Rule 7 of Order XIII-A of the Code, then it may consider passing a conditional order.

        If the Court considers that a plaintiff has no real prospect of succeeding on the claim or the defendant has no real prospect of successfully defending the claim there is no other compelling reason as to why the claim should not be disposed of before recording of oral evidence, it may give a Summary Judgment. Alternatively, the Court can also consider striking out the pleadings either in whole or in part. This discretion is given to the Court before deciding to give a Summary Judgment. Therefore, the Court has to keep in mind and decide as to whether it is a fit case for striking out the pleadings dismissing an application and proceed further or a conditional order could be passed. After exhausting these stages, the question of granting a Summary Judgment would arise.
         
  8. Rule 8 of Order XIII-A of the Code of Civil Procedure, 1908 empowers the Court to impose cost upon the defaulting parties as per the dynamic provisions incorporated under Sections 35 & 35- A of the Commercial Courts Act, 2015, which reads as under.

    8. Power to impose costs. – The Court may make an order for payment of costs in an application for Summary Judgment in accordance with the provisions of Sections 35 and 35-A of the Code.

    Insertion of Order XV-A – After Order XV of the Code of Civil Procedure, 1908, the following Order shall be inserted, namely:
    6. Powers of the Court in a Case Management Hearing.
    1. prior to the framing of issues, hear and decide any pending application filed by the parties under Order XIII-A;
    In any Case Management Hearing held under this Order, the Court shall have the power to-

    It may be noted here itself that the provisions of Order XIII – A of the Code of Civil Procedure, 1908 are para materia to Rule 24.2 of the Civil Procedure Rules in England.
    Emphasising the scope of Order XIII – A of Order XIII – A of the Code of Civil Procedure, 1908, the Delhi High Court in the Judgment of [Bright Enterprises Private Limited & Anr. Vs M. J. Bizcraft LLP & Anr., 2017 SCC OnLine Delhi 6394], held as under:
    21…Rule 3 of Order XIII-A CPC empowers the Court to give a Summary Judgment against a plaintiff or defendant on a claim if it considers that – (a) the plaintiff has no real prospect of succeeding on the claim or the defendant has no real prospect of successfully defending the claim, as the case may be; and (b) there is no other compelling reason why the claim should not be disposed of before recording of oral evidence…

    In the Judgment of [Rockwool International A/S & Anr. Vs Thermocare Rockwool (India) Pvt. Ltd., 2018 SCC OnLine Delhi 11911], the Delhi High Court observed the following requisites for passing a Summary Judgment:
    1. There is no real prospect of a party succeeding in a claim;
    2. No oral evidence would be required to adjudicate the matter;
    3. There is a compelling reason for allowing or disallowing the claim without oral evidence.

      The scope of Summary Judgment has also been explained by the Delhi High Court in the judgment of [R. Impex Vs Punj Lloyd Ltd., 2019 SCC OnLine Delhi 6667], as under:

      18….but vide the said Act, Order XIII-A titled Summary Judgment has been incorporated in CPC insofar as applicable to commercial suits and Rule 2 whereof, while prescribing the stage for making application for summary judgment, provides that the same be filed at any time after the summons have been served on the defendant but not after the court has framed the issues in respect of the suit. Rule 3 of Order XIII-A, while prescribing the grounds for summary judgment, empowers the Court to give summary judgment against a plaintiff or defendant on a claim, if it considers inter alia that the plaintiff has no real prospect of succeeding on the claim or the defendant has no real prospect of successfully defending the claim, as the case may be and there is no other compelling reason why the claim should not be disposed before recording of oral evidence. Rule 4 prescribes the procedure for making summary judgment.

      27. The purpose of the proviso to Rule 2 of Order XIII-A is to discourage filing of applications for summary judgment after issues have been framed, thereby delaying trial and to empower the Court to, if finding the same to be dilatory, dismiss the same in limine.

      28. The objective of the Commercial Courts Act even otherwise is to expedite the disposal of the commercial suits and none of the provisions thereof can be interpreted as counterproductive to the said objective of the Commercial Courts Act and it would delay rather than expedite the disposal of commercial suits, if inspite of finding a suit to be befitting of summary judgment, the Court considers itself constrained merely on account of issues having been framed.

      The scope of Summary Judgment as also the object of CCA was re-emphasised by the Delhi High Court in [Mallcom (India) Limited & Anr. Vs Rakesh Kumar & Ors., 2019 SCC OnLine Delhi 7646].

      The above principle has been reiterated in the matter of [Jindal Saw Limited Vs Aperam Stainless Services and Solutions Precision SAS & Ors., 2019 SCC OnLine Delhi 9163], wherein, the Delhi High Court explained the scope of Order XIII-A CPC. The relevant text of the Judgment is reproduced below:

      22. Order XIII-A CPC, as made applicable to commercial suits within the meaning of the Commercial Courts Act, is titled Summary Judgment. Rule 2 thereof provides, that an application for summary judgment may be made at any time after summons have been served on the defendant, till the framing of issues. Rule 3 is as under:

      3. Grounds for summary judgment.–…………….
      (a) the plaintiff has no real prospect of succeeding on the claim or the defendant has no real prospect of successfully defending the claim, as the case may be; and
      (b) there is no other compelling reason why the claim should not be disposed of before recording of oral evidence.

      23. Rule 4 thereof providing the procedure for applying for a summary judgment inter alia requires the applicant to state the reason why there are no real prospects of succeeding on the claim or defending the claim and requires notice of the said application to be given to the opposite party of 30 days, and the reply to such application to precisely identify the points of law if any and the reasons why the relief of summary judgment should not be granted and why there are real prospects of succeeding on the claim or defending the claim and to state the issues to be framed for trial and what evidence is to be lead thereon and permits additional documentary evidence to be filed with such reply.

      Summary Judgment Vis-à-vis Judgment on Admission
      The High Court of Delhi, in Su-Kam Power Systems Ltd. v. Kunwer Sachdev (supra) held that the legislative intent behind introducing Summary Judgment under Order XIII-A of the Code is to provide a remedy independent, separate and distinct from Judgment on admissions and Summary Judgment under Order XXXVII of the Code.

Conclusion
Summary Judgment and the mechanisms to determine an issue before trial support one of the key principles of the Rules of Civil Procedure: to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits. If a trial is unnecessary or can be expedited, or the legal issues can be narrowed, then a party has legal tools at its disposal to achieve such a result.

The procedure given under Order XIII-A of the Code of Civil Procedure, 1908 has the sole purpose to reduce the time period in deciding the commercial dispute of a specified value. It is not alien to say that the amendment in the Code is basically to strengthen the confidence of the merchant class in the fairness, transparency and effective Justice Delivery System. Loopholes exploited by some of the parties have also been taken care of in the present provision.

Moreover, it can be noted that the Special Courts, that too, of District Judges, which are Superior Courts at the District level, have been designated to adjudicate the matters. The fact that trial is a default process in every civil suit has been done away with the insertion of Order XIII-A of the Code of Civil Procedure, 1908. Therefore, the intention of the legislature is to enable the Courts to decide the commercial disputes of a specified value in a time bound and efficient manner.

Written By: Dinesh Singh Chauhan, Advocate - High Court of Judicature, J&K, Jammu.
Email: [email protected], [email protected]

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