Research › Browse › Judgment

Allahabad High Court · body

1986 DIGILAW 297 (ALL)

Bank of Baroda Head office Mandvi v. Subhash Malhotra

1986-03-18

K.C.AGRAWAL, RAVI S.DHAVAN

body1986
JUDGMENT K.C. Agrawal, J. - Suit No. 164 of 1984 was filed by the Bank of Baroda in the Court of Civil Judge, Gorakhpur, for the recovery of Rs. 2,97,368.98 paise as against the defendant who, according to the plaint, were jointly and severally liable to pay the same. The plaintiff Bank of Baroda alleged that defendants 2 to 4 recommended to the plaintiff to grant a loan of Rs. 55,000/- to defendant No. 1 and Cash credit facility of Rs. 1,20,000/- to it against, the security and execution of the documents by defendants 2 to 4 jointly and severally. The defendant No 1 availed the loan of Rs. 55,000/- and also the Cash credit facility of Rs. 1,20,000/-. Defendants 2 to 4 delivered to the plaintiff D.P. note signed by them on 12-10-1979 for Rs. 55,000/-. The defendants 2 to 4 promised to pay the interest at the rate of 3% over Reserve Bank of India rate. The defendants did not pay the instalments, as was promised, hence the suit for the recovery of the aforesaid amount was filed- 2. The defendants did not appear to contest the suit in pursuance of the service of summons. Consequently, the notices were published in the newspaper. The defendants did not appear even on the date of hearing fixed in the suit by the newspaper. Thereupon, on 12-9-1985 an exparte decree was passed against defendants 1 to 4 for the recovery of Rs. 2,97,368.98 paise. 3. An application for setting aside the exparte decree was made under Order IX, Rule 13 of the Code of Civil Procedure on 20-9-198 5. The application allowed by the Civil Judge III, Gorakhpur, on the condition of making payment of Rs. 1,25,000/- in Cash within the time stipulated in the order. Out of this Rs. 1,25,000/- Rs. 1,00,000/-was towards the principal payable by the defendants and Rs. 25000/- was the amount which had been paid as Court fees. Instead of preferring any appeal against this order setting aside the exparte decree on the conditions aforesaid, the defendant Subhash Malhotra moved an application under Order XLVII, Rule 1 of the Code of Civil Procedure for reviewing the order dated 14-1-1986, by which the exparte decree was set aside. The application for review was contested. On 5-2-1986, the review application was allowed and the order dated 14-1-1986 was set aside. The application for review was contested. On 5-2-1986, the review application was allowed and the order dated 14-1-1986 was set aside. The condition of setting aside the exparte decree was confirmed to the payment of Rs. 50/- by way of costs. 4. Against the order allowing the review application, the above First Appeal under Order XLIII, Rule 1 (w) of the Code of Civil Procedure has been preferred by the Bank of Baroda. 5. Order IX, Rule 13 of the Code of Civil Procedure empowers the Court, which has passed an exparte decree to set aside the same upon "Such terms as to cause the payment into Court or otherwise as it thinks fit." These words occurring in Order IX, Rule 13, C.P.C. reflect the Court's power to make a conditional order. This empowers the Court to set aside an exparte decree and give a direction for that purpose to deposit costs of the suit or decree for the amount in part or full before an exparte decree is set aside. 6. In Nanak Chand v. Goswami Pritamla AIR 19742 Allahabad 1966 it was held that if on an application to set aside the exparte decree the Court passes a conditional order and in case the condition relating to the deposit of the amount directed to be made is not complied, the application automatically stands dismissed. In N. Karuppan v. M. Sankran Nair AIR 1973 Kerala 28, it was held that a Court can pass conditional order that the applicant should deposit in Court amount of the decree in part or full before the decree is set aside. However, what is needed is that such a condition should not be harsh or onerous, rendering it impossible for the applicant to comply with it. 7. In the instant Case, the suit was filed in the year 1984. It was on 12-9-1985 that the exparte decree had been passed when the defendants had not appeared. Uptil that stage, they had not even filed the written statement. The suit had been filed on the ground that the defendants had not paid the amount. While dealing with the application for setting aside the exparte decree, the Court thought it appropriate and expedient in the interest of justice to set it aside on the condition that a sum of Rs. 1,25,000/- was deposited by the defendants. The suit had been filed on the ground that the defendants had not paid the amount. While dealing with the application for setting aside the exparte decree, the Court thought it appropriate and expedient in the interest of justice to set it aside on the condition that a sum of Rs. 1,25,000/- was deposited by the defendants. It may be remembered that the suit was for the recovery of Rs. 2,97,368.98 paise, apart from costs. The plaintiff had paid Rs. 25,000/- as Court fees and while giving & direction to the defendant, who applied for setting aside the exparte decree, this fact had been taken into consideration and also that the defendants were guilty of delay in putting in appearance in the suit. The order of the Court below, therefore made for setting aside of the decree on the condition, quoted above, could not be said to be onerous or harsh. 8. The petitioner's counsel, in support of his submission that such a condition as was imposed in the instant Case, could not be provided for, relied upon a decision of this court in B. Madan Mohan v. Kanhaiya Lal AIR 1933 All 601. The aforesaid decision does not lay down as a proposition of law that the Court while setting aside the exparte decree has no power to impose a condition relating to payment of whole or part of the decretal amount. It is a question of fact which has to be decided on the basis of circumstances emerging in it. 9. With respect to the power of the Court while allowing restoration application on payment of costs and to impose conditions as to payment into Court of the decretal amount or a part of the decretal amount or as to furnishing security therefore there are a number of cases. It is not necessary to refer to all of them. Two of these cases have already been cited by us above. Reference to another case of the Allahabad High Court in Gaya Din v. Lalta Prasad AIR 1936 All. 477 , may be made. The Calcutta High Court also took the same view in Foundation Overseas v. P.N. Bank AIR 1977 Cal. 428 . 10. In Raj Kumar Soni v. M/s Mohan Mekin Brewaries AIR 1979 All. Reference to another case of the Allahabad High Court in Gaya Din v. Lalta Prasad AIR 1936 All. 477 , may be made. The Calcutta High Court also took the same view in Foundation Overseas v. P.N. Bank AIR 1977 Cal. 428 . 10. In Raj Kumar Soni v. M/s Mohan Mekin Brewaries AIR 1979 All. 370 , on the facts of that Case, the Court found that the direction to deposit one-fifth of the decretal amount was improper. Earlier decisions of this Court were not cited before the learned Judge in this Case. 11. Reverting to the facts of the present Case, the Court below had set aside the exparte decree on the condition of the defendants' depositing in cash a sum of Rs. 1,25,000/-. This order became final. The defendant Subhash Malhotra, however, applied for the review of this order on the ground that as the amount taken on loan from the Bank of Baroda was secured by pledging of the Fixed Deposit Receipt and the Life Insurance Policies, therefore, the condition directing Satish deposit Rs. 1,25,000/- in cash was unjustified. The plaintiff Bank of Baroda had pointed out that as against the Fixed Deposit Receipt the defendant Subhash Malhotra had taken advance, and advance had also been taken as against the Life Insurance policies. The Court below while repelled the case of the plaintiff that the premiums of the policies had not been given by the defendant No. 2 Subhash Malhotra which was also one of the pleas of the Bank of Baroda, did not record any finding as to whether the defendant No. 2 had taken; loans as against the Fixed Deposit Receipt and Life Insurance policies. It held that the amount taken on loan was secured, hence direction about payment of Rs. 1,25,000/- was not justified on the facts of the present case. The Court below also took the view that there was no power under Order IX, Rule 13 C.P.C. to set aside the exparte decree conditioned upon the payment of part or whole of the decretal amount as in its opinion such condition would be onerous. The view of the Court below that the condition of depositing Rs. The Court below also took the view that there was no power under Order IX, Rule 13 C.P.C. to set aside the exparte decree conditioned upon the payment of part or whole of the decretal amount as in its opinion such condition would be onerous. The view of the Court below that the condition of depositing Rs. 1,25,000 was onerous, even if was assumed to be correct, which does not appear to be so, the Court could not set aside the earlier order setting aside the exparte decree, dated 14-1-1986, as there was no mistake apparent on the face of the record which justified the Court to review the earlier order. The power to review is not a routine procedure. Material error manifest on the record result-filing in miscarriage of justice must be proved. The power of review can also be exercised on the discovery of new or important matter or evidence which, after the exercise of due diligence, was not within the knowledge of the N person seeking there view. This power of review cannot be exercised on the ground that the decision was erroneous on merits, as has been held by the Supreme Court in A.T. Sharma v. A.R. Sharma AIR 1979 SC 1047 . In this Case, the Supreme Court observed : "... But it may not be exercised on the ground that the decision was erroneous on merits. That would be the province of a Court of appeal. A power of review is not to be confused with the appellate power which may enable an appellate Court to correct ail manner of errors committed by subordinate Court." 12. In our opinion, the Court below was wrong in allowing the review application of the defendant Subhash Malhotra and recalling the order dated 14-1-1986, by which the exparte decree was set aside. To us it appears that in the instant case the condition of depositing Rs. 1,25,000/- be modified and the said amount be reduced to Rs. 75,000/-. The defendant No. 2 Subhash Malhotra will further be required to furnish security for the amount of Rs. 50,000/- (Rupees fifty thousand) in addition to the security already given, to the satisfaction of the Court below. These two conditions have to be complied with within one month from today. 75,000/-. The defendant No. 2 Subhash Malhotra will further be required to furnish security for the amount of Rs. 50,000/- (Rupees fifty thousand) in addition to the security already given, to the satisfaction of the Court below. These two conditions have to be complied with within one month from today. If the defendant No. 2 Subhash Malhotra fails to comply with any of these two conditions, the order setting aside the exparte decree dated 14-1-1986 shall stand vacated. 13. Subject to the above, the appeal is allowed, and the judgment and order of the Court below dated 5-2-1986 is set aside. We make no order as to costs.