Synopsis

The appellant (National Power Training Institute) challenged a summary decree passed under Order XXXVII CPC, which had rejected its application for leave to defend in a suit for recovery of Rs. 59,12,458/- filed by the respondent contractor. The High Court set aside the decree and granted leave to defend, holding that: (i) the defence raised substantial triable issues, including disputed measurements, valuation of work, legality of rate enhancements, authority of officers approving extra items, and the plea of limitation; (ii) subsequent departmental reports questioning the measurements (valuation of Rs. 12.28 lakhs vs. claim of Rs. 79 lakhs) created a serious dispute requiring evidence; (iii) the trial court erred in treating official records as conclusive proof of liability in summary proceedings.

1. Heading of the judgment

High court of delhi at new delhi

Regular first appeal no. 54 of 2022

National power training institute (appellant) vs. Sunehari bagh builders pvt. ltd. (respondent)

Coram: hon’ble ms. justice neena bansal krishna

Core Law: Code of Civil Procedure, 1908 – Order XXXVII (summary procedure for recovery of money) – Rule 3(5) (leave to defend) – Criteria for grant of leave – Substantial triable issues – Disputed contractual claims.

Court: High Court of Delhi at New Delhi
Coram: Hon’ble Ms. Justice Neena Bansal Krishna (Single Judge)
Date of Judgment: June 16, 2026 (Reserved on March 24, 2026)
Case No.: RFA No. 54 of 2022

2. Legal framework

Major laws and provisions involved:

• Code of Civil Procedure, 1908 – Order XXXVII (summary procedure), Rule 3(5) (leave to defend), Section 96 (appeals from original decrees)

• Indian Contract Act, 1872 – Sections 73 (compensation for breach), 74 (liquidated damages)

Subject matter of the judgment:

Whether the trial court was justified in refusing leave to defend and decreeing the suit summarily under Order XXXVII CPC when the defendant raised substantial disputes regarding the correctness of measurements recorded in departmental Measurement Books, valuation of work executed, enhancement of rates, approval of extra items, the authority of officers, and the plea of limitation.

Key legal principles applied:

• Liberal approach to grant of leave to defend: Under Order XXXVII Rule 3(5) CPC, leave to defend should be granted if the defendant discloses a substantial defence or raises bona fide triable issues. The refusal of leave is justified only where the defence is frivolous, illusory, or practically moonshine. (Mechelec Engineers v. Basic Equipment Corp.)

• Triable issues require evidence: Where the defendant raises disputes concerning measurements, valuation, quality of work, rate enhancements, and approval of extra items – all requiring examination of documentary an

... Upgrade to a Premium Plan to view the full judgment.