Civil and Parallel Remedies: Order XXXVII Summary Suits, and Section 138 Compared with Cheating

A holder of a dishonoured instrument has more than one remedy. He may file a civil suit to recover the money, often as a fast-track summary suit under Order XXXVII of the Code of Civil Procedure; he may prosecute under Section 138; and, where the drawer deceived him from the start, he may also complain of cheating. This note explains the summary suit procedure, the relationship between these remedies, and the differences between the Section 138 offence and cheating.

1. Summary Suits Under Order XXXVII

Which suits (Rule 1(2)): suits on bills of exchange, hundis and promissory notes, and suits to recover a debt or liquidated demand arising on a written contract, an enactment or a guarantee.
Which courts (Rule 1(1)): High Courts, City Civil Courts, Courts of Small Causes, and other courts notified by the High Court; commercial courts also hear summary suits in commercial disputes.
Defendant's appearance: the defendant must enter appearance within 10 days of service of summons.
Leave to defend: on being served with a summons for judgment, the defendant must apply for leave to defend within 10 days. Without leave, he cannot defend, and the plaintiff is entitled to judgment.
Speed: because the defendant must first show a defence worth trying, summary suits are much quicker than ordinary suits.

📖 IDBI Trusteeship Services v. Hubtown Ltd. (Supreme Court, 2017)

Held: Restating the principles for leave to defend: if the defendant shows a substantial defence, or raises triable issues with a fair or bona fide defence, he is entitled to unconditional leave; if the defence raises triable issues but its good faith is doubtful, or it is plausible but improbable, leave may be given on conditions such as deposit or security; if the defence is frivolous or vexatious, leave is refused and the plaintiff gets judgment. Where part of the claim is admitted, leave is not granted unless that amount is deposited.

2. Running Remedies in Parallel

Civil and criminal together: a civil suit for recovery and a Section 138 complaint may proceed simultaneously, since they serve different purposes. The civil court decides liability to pay; the criminal court decides whether an offence was committed.
No double recovery: amounts recovered in one proceeding are taken into account in the other, for example in fixing compensation.
Arbitration: an arbitration agreement in the underlying contract does not bar a Section 138 prosecution, since a criminal offence is not arbitrable.

3. Section 138 and Cheating

Cheating is defined in Section 318 of the Bharatiya Nyaya Sanhita, 2023 (formerly Sections 415 and 420 of the Indian Penal Code). The two offences differ in essential respects:

Dishonest intention: cheating requires fraudulent or dishonest intention at the time of the inducement; Section 138 requires no intention at all, only the statutory facts.
Inducement: cheating requires that the victim was deceived into delivering property or doing something; Section 138 needs no deception.
Notice: Section 138 requires a demand notice and failure to pay within 15 days; cheating has no such requirement, and payment after the event does not undo it.
Presumption: Section 139 presumes a debt; there is no corresponding presumption of dishonest intention for cheating.
Procedure: Section 138 is triable on private complaint only; cheating may be investigated by the police.
Punishment: Section 138 carries up to two years; cheating with delivery of property carries up to seven years and fine.

📖 Sangeetaben Mahendrabhai Patel v. State of Gujarat (Supreme Court, 2012)

Held: Prosecution under Section 138 does not bar a separate prosecution for cheating on the same facts. The ingredients of the two offences are different, so the bar against double jeopardy under Article 20(2) of the Constitution and the criminal procedure code does not apply.

But courts guard against turning every bounced cheque into a cheating case. The mere dishonour of a cheque, including a post-dated cheque, does not by itself show the dishonest intention needed for cheating; that intention must be shown to have existed when the cheque was issued (V. Ganesan v. State, Supreme Court, 2026). A breach of contract or later failure to pay is not cheating unless fraud existed from the start.

⚠ Key point

A holder may sue on a bill, hundi or note by summary suit under Order XXXVII CPC, where the defendant must obtain leave to defend, granted unconditionally for a substantial or bona fide defence, conditionally for a doubtful one, and refused for a frivolous one (IDBI Trusteeship v. Hubtown, 2017). Civil and Section 138 proceedings may run in parallel. Cheating (Section 318 BNS) differs from Section 138 in requiring dishonest intention at inception and deception, without notice or presumption; both may be prosecuted on the same facts (Sangeetaben, 2012), but dishonour alone does not prove cheating (V. Ganesan, 2026).

4. Related Topics and Provisions

Interest and compensation (Topic 21)
Ingredients of the Section 138 offence (Topic 42)
Compounding (Topic 51)