THE HON’BLE MRS.JUSTICE N. MALA CRP No.5201/2024 AND CMP NO.29089/2024 1.M/s.Sri MVR Logistics Private Limited rep.by its Managing Director Mr.V.Sampath Sekar Having its Registered Office at No.3, Jaffer Syrang Street Chennai 600 001. 2.Mr.V.Sampath Sekar Managing Director

2026:MHC:1769
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated 26.03.2026
CORAM
THE HON’BLE MRS.JUSTICE N. MALA
CRP No.5201/2024
AND
CMP NO.29089/2024
1.M/s.Sri MVR Logistics Private Limited
rep.by its Managing Director Mr.V.Sampath Sekar
Having its Registered Office at No.3, Jaffer Syrang Street Chennai 600 001.
2.Mr.V.Sampath Sekar
Managing Director
M/s.Sri MVR Logistics Private Limited No.3, Jaffer Syrang Street Chennai 600 001.
And also at
No.50, Arthoon Road
Royapuram, Chennai 600 013.
3.Mrs.S.Alamelu
Director
M/s.Sri MVR Logistics Private Limited No.3, Jaffer Syrang Street Chennai 600 001.
And also at
No.50, Arthoon Road Royapuram, Chennai 600 013. .Petitioner(s)
Vs
Mr.A.Kanagarajan
S/o.Arumugam
New Door No.12, Old Door No.8
1st Floor, Govindasamy Street Ishwarya Nagar, Selavoyal
Kodungaiyur, Chennai 600 051.
..Respondent(s)
CRP No.5201/2024
Civil Revision Petition filed under Article 227 of the Constitution
of India challenging the final order dated 05.08.2024 passed by the learned XIX Additional Judge, City Civil Court, Chennai in IA.No.3/2023 in OS.No.7836/2021.
CMP No. 3080 of 2026
To stay all further proceedings pursuant to the impugned order
dated 05.08.2024 passed by the learned XIX Additional Judge, City Civil Court, Chennai, in IA.No.3/2023 in OS.No.7836/2021 pending disposal of the Civil Revision Petition.
CRP No.5201/2024
For Petitioner(s): Ms.Gopika Nambiar
For Respondent(s): Mr.Ralph V.Manohar For Sole Respondent
Order
(1) This Civil Revision Petition is filed against the order dated
05.08.2024, passed in IA No.3/2023 in OS.No.7836/2021, by the learned XIX Additional Judge, City Civil Court, Chennai, rejecting the petitioners’ application seeking unconditional leave to defend the main suit under Order 37 Rule 3[5] of CPC.
(2) For convenience, the parties are referred to as arrayed in the Civil
Revision Petition.
(3) The facts relevant, are as follows:-
(4) The respondent herein, filed a suit in OS.No.7836/2021, seeking a money decree against the petitioners herein, for a sum of Rs.59,70,000/together with interest and cost, on the basis of a Promissory Note dated 26.04.2016. According to the respondent, a sum of Rs.30 lakhs was advanced as loan to the petitioners through RTGS on various dates, viz., 26.04.2016, 27.04.2016, 21.06.2016, 22.06.2016 and 23.06.2016. According to the respondent, evidencing such borrowal, the petitioners executed a Promissory Note on 26.04.2016. The respondent contended that the petitioners paid a sum of Rs.7.50 lakhs towards interest through NEFT and cash on various dates, the last of such payment was received on 07.11.2018. The respondent further contended that the petitioners thereafter failed to pay any amount towards principal or interest and therefore, as on 30.04.2019, a sum of Rs.43.50 lakhs was outstanding towards principal and interest. The respondent contended that despite his best efforts to recover the above said outstanding amount, the petitioners failed to pay and therefore, he was constrained to file the aforesaid suit under Order 37 Rules 1 and 2 of CPC, for a judgment and decree, directing the petitioners to jointly and severally pay a sum of Rs.59.70 lakhs, to the respondent and to pay interest at 24% per annum, on the aforesaid sum from the date of plaint till the date of realisation.
(5) The petitioners contended that on the date of the Promissory Note, i.e., 26.04.2016, only a sum of Rs.5 lakhs was advanced and the balance was paid on various dates. The petitioners contended that the Promissory Note was a fabricated document. The petitioners further contended that the last of the payments was made on 23.06.2016, and therefore, the suit claim was barred by limitation, having been filed beyond three years from the date of last payment. The petitioners’ case was that only to bring the suit within the limitation period, the plea was taken that the last payment was received on 07.11.2018. The petitioners contended that the suit filed on the basis of a copy of the original pro-note was not maintainable and further contended that they did not receive any summons in the suit. The petitioners therefore prayed that since arguable issues were raised in the suit, leave to defend ought to be allowed.
(6) The respondent in the counter to IA.No.3/2023, denied the allegations made in the affidavit and stated inter alia that the issuance of the cheque dated 07.11.2018 for a sum of Rs.2,46,000/- was a clear acknowledgement of debt and therefore, the suit was not barred by limitation. The respondent contended that the cheque issued by the petitioners on 18.01.2019, acknowledging the debt, was dishonoured and therefore, criminal proceedings under Section 138 of the Negotiable Instruments Act, were initiated and that the present petition was only to drag on the main suit. The respondent contended that no substantial and triable issues were raised by the petitioners in the main suit and hence, the petition deserved to be dismissed.
(7) The Trial Court, upon an appreciation of the pleadings and the materials on record found that the case of the respondent/plaintiff stood substantiated by documentary evidence, whereas the defence projected by the petitioners herein was unsupported by acceptable material. The Trial Court held that the petitioners had failed to produce any document to demonstrate the existence of triable issues warranting a regular trial instead of adjudication under summary procedure. The Trial Court accepted the contention of the respondent that the petition had been filed only to protract the proceedings on unsubstantiated allegations. Taking note of the admitted receipt of the loan amount of Rs.30 lakhs, by the petitioners, the Trial Court held that the remaining defenses raised by them lacked substance and that a full-fledged trial would serve no useful purpose. On such findings, the Trial Court rejected the petition. Aggrieved thereby, the petitioners have filed the present Civil Revision Petition,for the aforesaid relief.
(8) At the time of hearing, the learned counsel appearing for the
respondent, raised a preliminary issue with regard to the maintainability of the Civil Revision Petition. Placing reliance upon the judgment of the Hon’ble
Supreme Court in Ajay Bansal Vs. Anup Mehta and Others [2007 [2] SCC
275] ; the judgments of this Court in CRP [NPD].No.1100/2019 dated
03.02.2022 [V.Vijaykumar Vs. S.Pradeep Kumar] and in CRP
[NPD].No.3222/2017 dated 25.02.2021 [Craft AD Publicity and Promotion, Chennai and Another Vs. M/s.Next Radio Ltd., rep.by its Senior Manager], the learned counsel submitted that a Civil Revision Petition under Article 227 of the Constitution of India, is not maintainable against an order refusing leave to defend under Order 37 Rule 3[5] of CPC and the proper remedy available to the petitioners is only by way of an appeal.
(9) Per contra, the learned counsel for the petitioners, relied on the judgment of the Hon’ble Supreme Court in Ajay Bansal’s case [referred to above] and the judgment of this Court reported in 2013 [2] L.W. 949
[M/s.Shivsu Canadian Clear International Limited, Shivsu Towers, No.149,
EVR Lane, Kilpauk, Chennai Vs. Freightcan Global Logistics Private
Limited rep.by its Managing Director Mr.Arun K Nair], and contended that the Civil Revision Petition under Article 227 of the Constitution, is very much maintainable.
(10) This Court bestowed its anxious consideration to the competing submissions.
(11) In the judgment in Ajay Bansal Vs. Anup Mehta and Others [2007 [2] SCC 275], the Hon’ble Supreme Court held that an order refusing to grant leave is a judgment within the meaning of the Letters Patent of the Chartered High Courts ; and that a decree passed in a summary suit consequent upon such refusal is almost automatic. The Apex Court further observed that ordinarily, an application under Article 227 of the Constitution of India would not be maintainable where an appeal lies from the decree.
(12) Following the aforesaid Apex Court judgment, a learned Judge of this
Court, in CRP.[NPD].No.1100/2019, held that the revision petition under Article 227 of the Constitution, was not maintainable against an order, dismissing the application under Order 37 Rule 3[5] of CPC, seeking leave to defend the suit. A similar view was taken in CRP.No.3222/2017.
(13) The aforesaid judgments of the Hon’ble Supreme Court in Ajay Bansal case [2007 [2] SCC 275] and Wada Arun case [2009 [2] SCC 432], were considered by a learned Single Judge of this Court in M/s.Shivsu Canadian case [referred to above] reported in 2013-2-L.W.-949 and it was held that a party aggrieved by an order refusing leave to defend, has a right to challenge the same, either under Article 227 of the Constitution or under Section 115 of CPC. The learned Judge, in the said judgment found that the Hon’ble Supreme Court, in Ajay Bansal’s case, did not enter into the question of maintainability and therefore the judgment could not be taken as laying down the law that a challenge against the order made under Order 37 Rule 5 of CPC, could not be entertained by the High Court under Article 227 of the Constitution.
(14) The learned Judge, in M/s.Shivsu Canadian case, upon an exhaustive consideration of the legal position, held as follows:-
20. In my considered opinion, the law on the subject has been very clearly and clinchingly declared by the Hon’ble Supreme Court in the case in Wada Arun Asbestos Private Limited v. Gujarat Water Supply and Sewerage Board, reported in (2009) 2 SCC 432 : 2009-2-L.W. 832. If one reads this judgment along with the judgment of the Hon’ble Supreme Court in Ajay Bansal’s case (reported in (2007) 2 SCC 275 : 2007-3-L.W. 166) (cited supra), what emerge are as follows:—
i. After the dismissal of the application filed under Order 37 Rule 3(5) of C.P.C., thereby, declining to grant leave to defend the suit, what follows is a decree, which is almost automatic.
ii. The defendant in such a situation need not wait until a decree is passed. He has got every right to challenge the said order either under Article 227 of the Constitution of India or under Section 115 of C.P.C. before this Court.
iii. It is also available for the defendant to wait till the decree is passed and thereafter, to challenge the decree by means of an appeal, in which case, in the appeal itself, he can also challenge the order made by the trial Court declining to grant leave to defend the suit.
iv. Simply because, a decree has been passed by the trial Court after the dismissal of the application under Order 37 Rule 3(5) of C.P.C, the right of the defendant to challenge such an order before this Court will not be taken away.
v. In the event, such an order made under Order 37, Rule 3(5) of CPC is set aside in the revision, the decree passed in the suit shall not stand automatically set aside as the theory of “dependent order” is not applicable and so, it is for the defendant to approach the trial court under Order
37, Rule 4 of CPC to reopen the decree.”
(15) It is pertinent to note here that in the judgment in CRP. [NPD} No.1100/2019, the judgment in 2013 [2] LW 949, was not referred to at all and in CRP.[NPD].No.3222/2017, though a mention was made to the judgment in 2013-2-LW-949, the same was not discussed. In the considered opinion of this Court, the aforesaid judgments appear to have been rendered without noticing the decision in Shivsu case. As the later judgments neither adverted to nor deal with the legal position on the subject with the same degree of elaboration as undertaken in Shivsu’s case, this Court is persuaded to follow the ratio laid down therein that simply because a decree which is automatic after the dismissal of the application under Order 37 Rule 3[5] of CPC is passed, the right of the defendant to challenge the said order before this Court, will not be taken away. Accordingly, following the judgment of this Court in 2013-2LW-949, this Court finds that the Civil Revision Petition is maintainable.
(16) On the merits of the case, this Court finds that in para 5 of the affidavit filed in support of the petition under Order 37 Rule 3[5] of CPC, the petitioners have admitted the borrowal of a sum of Rs.30 lakhs. Even in the reply notice dated 25.02.2019, issued in response to the respondent’s notice dated 07.02.2019, the petitioners admitted the borrowal and further stated that they had repaid more than Rs.20 lakhs, to the respondent as on the date of the reply notice. The petitioners’ principal defence is that the suit claim is barred by limitation and that there was no acknowledgement of the loan as alleged by the respondent. In the considered opinion of this Court, the plea of limitation raises a mixed question of law and fact which can be adjudicated only upon a fullfledged evidence. Likewise, the allegation regarding the fabrication of promissory note also constitutes a triable issue requiring adjudication upon oral and documentary evidence.
(17) In such circumstances, the application seeking leave to defend ought not to have been dismissed outright. At best, the Trial Court could have imposed conditions while granting leave, particularly, in view of the admissions contained in the reply notice. Since the petitioners themselves admit to the extent of Rs.10 lakhs, out of the admitted borrowal of Rs.30 lakhs, this Court is of the view that the impugned order is liable to be interfered with and leave granted on condition stated hereunder:-
”Considering the admissions made by the petitioners with regard to the borrowal as well as partial payment, and without prejudice to the rights of the parties in the suit, this Court is inclined to grant leave to defend, subject to the condition that petitioners deposit the balance amount of Rs.10 lakhs, to the credit of the suit, within a period of six weeks from the date of receipt of a copy of this order. Upon such deposit, the Trial Court shall permit the petitioners to contest the suit on merits. In default of compliance, the order impugned shall stand restored automatically. It is made clear that the observations and views expressed in this order shall not influence the Trial Court in the trial”
(18) Accordingly, the Civil Revision Petition is allowed and the impugned order dated 05.08.2024 made in IA.No.3/2023 in OS.No.7836/2021, by the learned XIX Additional Judge, City Civil Court, Chennai, is set aside. No costs.
Consequently, the connected miscellaneous petition is closed.
26.03.2026 Index: Yes
Speaking/Non-speaking order
Neutral Citation: Yes
Internet: Yes
AP
N.MALA J.
AP
To
1.The XIX Additional Judge City Civil Court, Chennai.
CRP No.5201/2024
26-03-2026