Summary Judgment Is 'Exceptional In Nature', Must Be Used With Prudence In Commercial Cases: Delhi High Court

The Delhi High Court has set aside a summary decree passed by a Commercial Court, holding that disputes over rent and consultancy fees could not have been decided without a full trial.

A division bench of Justices Anil Kshetarpal and Amit Mahajan said the power of summary judgment under Order XIII-A of the Civil Procedure Code is “exceptional in nature” and must be exercised with prudence. 

The court said, “The provision does not contemplate dispensation of trial merely because documents are admitted; rather, it requires the Court to examine whether, even on the defence pleaded, the Defendant stands completely shut out from defending the claim."

The case involved Cottage Industries Exposition Ltd., which occupied commercial premises at Barakhamba Road under a lease and a supplementary lease with the landlord and had also entered into a separate consultancy agreement with another party. All agreements expired in June 2018, though payments continued for some time.

During the COVID-19 lockdown, the company sought a waiver of rent. When this was refused, it conveyed its decision to vacate and offered to hand over possession. Possession was finally handed over in February 2021. The landlords and the consultancy counterparty later moved the Commercial Court seeking recovery of about Rs 13 lakh towards rent and consultancy charges

The landlords argued that since the agreements and correspondence were admitted, there was no need for a trial. The tenant disputed liability, saying the agreements had expired, consultancy services were not availed, and rent could not be claimed once possession was offered. It said these were factual disputes that required evidence.

Allowing the appeal, the High Court said the Commercial Court had wrongly treated the existence of agreements as decisive of liability. “The mere fact that contractual documents exist does not, by itself, justify a summary decree when the liability flowing therefrom is seriously contested,” the bench observed.

It also said issues such as liability after the offer of possession, subsistence of consultancy obligations, and even the manner in which interest was awarded were matters that could not have been conclusively determined by summary judgment. The court restored the suit for trial, making it clear that it had expressed no view on the merits of the claims or defenses.

Concluding that the Commercial Court had exceeded the permissible limits of jurisdiction, the High Court restored the suit and directed the parties to appear before the Commercial Court on 17 February 2026 for trial.

For Appellant: Advocates Anunaya Mehta, Inder S. Adhikari, and Vidhan Malik

For Respondents: Senior Advocate Sunil Mittal, with Advocate Seema Seth