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2000 DIGILAW 143 (ALL)

RAM BHAJ v. PUNJAB NATIONAL BANK

2000-01-24

D.K.SETH

body2000
D. K. SETH, J. Suit No. 69 of 1989 was decreed ex pane on 8-2-1990. On 12-10-1995 an application under Order IX, Rule 13 was filed by the applicant for set ting aside ex pane decree. By order dated 4-12-1999 the learned Additional Civil Judge, 1st Court, Senior Division, Dehradun passed in Misc. Case No. 80 of 1995, allowed the said application under Order IX, Rule 13 of the Code of Civil Procedure hereinafter referred to as the Code and set aside the exparte decree dated 8-2-1990 on condition of depositing a sum of Rs. 2 lacs out of the decretal dues. This order has since been challenged by Mr. Ravi Kiran Jain, Senior advocate assisted by Mr. Push kar Mehrotra. 2. Mr. Ravi Kiran Jain learned Coun sel has contended that unless the defen dant is at fault, there cannot be a direction for depositing of decretal amount nor any cost is imposed on them. In the present case the Court has come to a finding that summons were not served on the defen dant-applicant nor they had any knowledge of the suit. Therefore, the defendant was found to be not at fault for the ex pane decree. He further contends that there is nothing to indicate that the defendant-applicant had adopted any dilly-dally tactics or had delayed the proceedings in any manner. In support of his contention he had relied upon the decision in the case of Raj Kumar Soni v. M/s. Mohan Meakin Breweries Ltd. , AIR 1979 Alld 370, particularly of paragraph 7 wherein it has been held that unless the party is at fault the Court is not supposed to order for payment of money or furnish ing of security while setting aside the ex aprte decree though however the Court may secure the decree by some other means on certain conditions. He had also relied upon the decision in the case of State of Orissa v. Sriram Barai (Simaram Barai), JT 1996 (6) SC 395:1996 SCFBRC 490. 3. On the other hand, Mr. K. L. Grover, learned Counsel appearing for the respon dent Bank has raised a preliminary objection that all the parties of the proceedings are not made parties and as such this application cannot be maintained. 4. Mr. 3. On the other hand, Mr. K. L. Grover, learned Counsel appearing for the respon dent Bank has raised a preliminary objection that all the parties of the proceedings are not made parties and as such this application cannot be maintained. 4. Mr. Jain answered the preliminary objection by seeking leave to incorporate the names of the defendants who in fact has no interest adverse to that of the applicant as opposite parties in the present applica tion and prays that since they would not be prejudiced, therefore, service upon them may also be dispensed with. 5. In the facts and circumstances of the case since the matter was also argued on merit by both the learned Counsel situation demands, in the interest of jus tice that the prayer of Mr. Jain be allowed and leave be granted. He may incorporate the names of other defendants in the revision application in course of today. 6. Since the other defendants cannot have any interest adverse to that of the applicant, if the exparte decree is set aside, therefore, in order to expedite the hearing this Court feels that the service on the said defendants be dispensed with and the mat ter be taken up and disposed of today. 7. On merits, Mr. Grover learned Counsel for respondent had pointed out that Order IX, Rule 13 of the Code does not conceive of any condition as to whether it should be imposed when there is a fault on the part of the defendant and it will not be imposed if there is no fault on the part of the defendant. Order IX, Rule 13 of the Code does not conceive of any reason. On the other hand according to him a plain reading of the said provision indicates that it is at the discretion of the Court which according to him should be just and proper. He further contends that the revisional Court can interfere only when it appears that the subordinate Court had exercised its jurisdiction not vested in it or exceeding the jurisdiction vested in it or it has illegally exercised the jurisdiction or it had acted illegally or with material irregularity in the exercise of its jurisdiction. Unless this Court comes to such a finding, this Court cannot interfere with the order passed by the subordinate Court. Unless this Court comes to such a finding, this Court cannot interfere with the order passed by the subordinate Court. He then contends that the decision in the case of Raj Kumar Soni (supra) has not taken into consideration of the Division Bench judgment in the case of Ahmad Hussain Khan v. Hardial, AIR 1926 Alld. 142, where this Court had held that the subordinate Court is empawered to impose cost or condition while resorting a case dismissed for default and there is no illegality in passing such an order while laying down the principle of law. He then relies on the decision in the case of M/s. Modern Fuel Industry, Saharanpur and others v. Indian Bank, 1996 (27) ALR 587 and M/s. Jayshree Distribution Piplani Katra and others v. M/s. Jayshree Tyres and Rubber Products, 1989 (15) ALR 439, in support of his contention. He further con tends that decretal amount would come to Rs. 8 lacs and odd together with interest pendenti lite at the rate of 15% per annum with quarterly rest which according to him would calculate a sum of Rs. 40 lacs and therefore, imposition of condition of depositing Rs. 2 lacs is almost 5% of the amount and as such cannot be said to be unreasonable. That apart according to him the suit was filed in 1989 and there has been inordinate delay during which long 10 years have passed and then the decree was passed in 1990 whereas the applica tion for setting aside the ex pane decree was moved in 1995. Thus having regard to such a situation it was just and proper on the part of the learned trial Court to im pose such cost or condition. It cannot be said to be a wrong or unjust exercise of jurisdiction. On these grounds he prays that the application should be dismissed. 8. I have heard learned Counsel for the parties at length. 9. In the decision in the case of Raj Kumar Soni (supra), by learned Single Judge, the Court had laid down that unless the party is at fault or there was omission on his part or it was because of his act that there had been delay in disposal of the case the Court cannot impose condition. It also lays down that even if the Court imposes the terms it should not be onerous but should be reasonable terms. It also lays down that even if the Court imposes the terms it should not be onerous but should be reasonable terms. An order directing the party to deposit l/5th of the decretal amount is not justified and that there are other modes of safeguarding the interest of the decree holders and there fore, in a case where the defendant is not at fault while setting aside ex-parte decree, the Court is not empowered to impose cost or direct deposit of decretal amount. 10. So far as the decisions cited by Mr. Graver viz. the decision in the case of M/s. Modern Fuel Industry Saharanpur and others (supra), and M/s. Jayshree Distribu tion Piplani Katra and others (supra), are concerned the decision in the case of Raj Kumar Soni (supra) was considered and in both these cases the learned Single Judge in the said two cases had distinguished the case of Raj Kumar Soni (supra) on the ground that in both the cases there were fault on the part of defendant and as such these two decisions cannot help Mr. Grover to counter-act the proposition sought to be raised by Mr. Jain. 11. So far as the decision in the case of Ahmad Hussain Khan (supra), is con cerned that was not referred to or dealt with or taken note of in the case of Raj Kumar Soni (supra ). 12. Be that as it may, the decision in the case of Ahmad Hussain Khan (supra), also does not lay down a proposition as to whether there should be any reason for imposition of cost or not. Nor there was anything to indicate, that the Court had considered the question as to whether the cost would be imposed on account of cer tain fault on the part of the defendant itself. On the other hand the Division Bench in the said decision had proceeded to observe that "however that may be, to prevent any misapprehension we wish to lay down definitely that an order restoring a case dismissed for fault on condition of the payment of a reasonable amount of costs to the opposite party within a time fixed by the order is not an illegal order but on the contrary, is an order contemplated by Order IX, Rule 13 of the CPC. " In fact the Division Bench had laid down the proposition with regard to payment of reasonable amount of costs to the op posite party. It was not called upon to decide the question of direction to deposit part or whole of the decretal amount, Therefore, the proposition laid down by the Division Bench also cannot be called upon to nullify the ratio laid down in Raj Kumar Soni (supra ). 13. Reliance on the decision in the case of State of Orissa and others (supra), by Mr. Jain does not lead us directly to the proposition with which we are now con cerned. It had dealt with an appeal in which the appellate Court had directed deposit of decretal amount with cost in an appeal against an ex pane decree of a trial Court. In the said case the trial Court has set aside the ex, parte decree subject to the payment of cost. When revision was carried the High Court was required to consider whether the trial Court properly con sidered the facts to set aside the ex-parte decree and the case called for interference. It cannot exceed its jurisdiction in direct ing the appellant to deposit the entire decretal amount and also the cost. Such a position was accepted in view of the ex planation given by the State which appear to the apex Court as well justified viz. no one takes responsibility for the lapses and each would pass the buck on the other and ultimately it would be the public justice which would suffer and put to jeopardy. Under such circumstances it had set aside and restored that of the trial Court. In the instant case it was not a question as to whether the appeal Court would direct deposit of the decretal amount or part thereof. Therefore, this decision does not throw direct light on the proposition with which we are concerned. 14. Rule 13, Order IX has also used the expression "upon such terms as to cost, payment into Court or otherwise as it thinks fit". Thus, Rule 13 provides that the Court may impose cost or direct payment into Court or otherwise as it may think fit. The scope of the Courts discretion has been encompassed within the said expres sion. The discretion conceived or intended to be legislated through the said expres sion appears to be very wide. Thus, Rule 13 provides that the Court may impose cost or direct payment into Court or otherwise as it may think fit. The scope of the Courts discretion has been encompassed within the said expres sion. The discretion conceived or intended to be legislated through the said expres sion appears to be very wide. It depends upon the discretion of the Court. Having regard to the facts and circumstances of the case there cannot be any straight- jack et formula, neither there can be any hard and fast rule. The Court may not impose cost where the defendant is not at fault but still then the fault clause is not absolute one. Even in the case of Raj Kumar Soni (supra) the no fault clause has not been held 10 be absolute. It is a proposition that formulated is where the defendant is not at fault, he should not be asked to deposit the decretal amount. The terms may not be onerous. But the question remains with regard to the exercise of jurisdiction con ferring the discretion on the Court which proposes a breathing space and flexibility in the exercise of the discretion. There cannot be inflexible rule to confine the scope without having regard to the facts and circumstances of each case. The exer cise of discretion, is no doubt a judicial discretion to be exercised judiciously. Court cannot be bound by any strict in flexible rule when the Court might think fit to put on terms. 15. The word payment into Court do not relate only to cost. When ordering the set aside of a decree the Court can as well impose conditions. Such conditions may be made condition precedent. The condi tion may include the direction to payment into Court. Not only cost but also decretal amount or a portion thereof. It may also impose such other condition. All this may be coupled together with or may be im posed one or the other since these imposi tion of condition has relevance to the Courts discretion as it may think fit. This discretion can also empower the Court to direct furnishing of security for the decre tal amount or for default clause for fulfil ment of the conditions. 16. In Re Saroda, 1 CWN 59, Shyam Lal Sahai v. Ram Narain Lal Seth, AIR 1920 p. 660, Sasoon v. Siviram, AIR 1926 Sindh 50, MC. This discretion can also empower the Court to direct furnishing of security for the decre tal amount or for default clause for fulfil ment of the conditions. 16. In Re Saroda, 1 CWN 59, Shyam Lal Sahai v. Ram Narain Lal Seth, AIR 1920 p. 660, Sasoon v. Siviram, AIR 1926 Sindh 50, MC. Canon v. Welti, 27 A 192, Ahmad Husain Khan v. Hardial, 48 A199: AIR 1926 Alld. 142 ; Gayadin v. Lalta Prasad and others, AIR 1936 Alld 477, Nanakchand v. Goswami, AIR 1972 Addl. 166; Karumuri Suragga v. Thadepalli Pushpavalli Thagarmma and others, AIR 1950 Mad 618 ; N. Karuppan v. M. Sankaran, A. 19731c 28; Sansthan v. Dinanath, 3 CWN 228, we may find support with regard to the proposition laid down above. 17. In All Mohd. v. Manak Lal Ratan Lal, AIR 1960 MP 234 . It was held that the Court should not impose any onerous con dition while setting aside ex pane decree unless the defendant was at fault. In Indira v. Gurdayal, 1974 1c 36, it was held that a condition as to payment of a large sum may work hardship. In Karumuri v. Thadepalli (supra), it was held that ordinarily without special circumstances the Court will not impose onerous condition. In Life In surance Corporation of India v. Anjan Kumar Arora and others, AIR 1987 Cal 199 , it was held that in composition the terms to set aside exparte decree, it will not be just and proper to call upon the defen dant to deposit the major part of the plaintiffs claim. This Court in M/s. Jayshree Distribution Piplani Katra and others v. Jayshree Tyres and Rubber Products, Al lahabad and another, AIR 1989 Alld 158at p. 160 had held that while setting aside ex pane decree under Order IX, Rule 13 directing the defendant to furnish only a Bank guarantee of 5% of the decretal amount was held not to be onerous. In Narayan v. Vaikunt, ILR 1951 Bombay 67 (FB), it was held that appellate Court has power to consider whether the condition imposed was reasonable. 18. In B. Padmavathi Rai Parvatinsamma Jullundar v. M/s. United India In surance Co. Ltd. and another, AIR 1976 Karnataka 97, it was held that before res toration Court can direct the defendant to deposit the admitted portion of suit- claim as a condition precedent to restoration. 19. 18. In B. Padmavathi Rai Parvatinsamma Jullundar v. M/s. United India In surance Co. Ltd. and another, AIR 1976 Karnataka 97, it was held that before res toration Court can direct the defendant to deposit the admitted portion of suit- claim as a condition precedent to restoration. 19. In M/s. Northern Carriers Pvt. Ltd. v. United India, AIR 1986 P and H 175, the direction to deposit the entire decree dues as a condition for setting aside the exparte decree was held to be not onerous. In Bank of Baroda v. Subhash Malhotra, (1987) 1 Current Civil Cases 1129 (Alld), imposi tion of cost at Rs. 1,25,000 as condition for setting aside exparte decree of or recovery of secured bank loan to the tune of Rs. 2,97,368. 98 this Court had held that such condition was neither harsh nor onerous. . 20. In the present case admittedly the revisionist was one of partner who had take,, a loan. The retirement from partner ship does not absolve him of his liability with regard to the loan taken. He is equally liable for repayment of the loan along with his partners. Some of the partners had been contesting the suit and there was notice published in the news papers and after the ex pane decree was passed the petitioner came and asked for setting aside the exparte decree and thereby putting the whole situation back to square one. At the same time there is no attempt on the part of the other partners to pay the dues to the Bank. Though the story of retirement from partnership has been made out but still theii the falling out of the partners them selves cannot be a ground for denying the dues of the Bank. The manner in which delay has occurred in this case it is neces sary that some terms ought to be put on when the other partners are not coming to get the decree set aside. 21. Thus when it comes before the Court to impose terms while setting aside the exparte decree it is open to the Court to take account of all the relevant facts and circumstances and the situation. However, since Rule 13 does not prescribe giving any reason for imposition of terms, it is not necessary for the Court to record any reason for imposing the terms. However, since Rule 13 does not prescribe giving any reason for imposition of terms, it is not necessary for the Court to record any reason for imposing the terms. In revision the Court has to find out whether in a given situation imposition of terms would be justified or not. If there are reason to jus tify the conditions in that event the revisional Court is not supposed to inter fere with the decisions of the trial Court even if it is of a different view. The revisional Court is only required to see as to whether the discretion exercised by the trial Court could be said to judiciously exercised or not. Inasmuch as the trial Court having been vested with the jurisdic tion to put on terms the revisional Court can interfere only when the putting of terms appears to be wholly unj ustified and absolutely onerous in a given situation of the facts and circumstances of the case. The no fault clause can never be an ab solute proposition without having regard to given situation in the facts and cir cumstances of the case. 22. Having regard to the proposition as discussed above we may now proceed to the question as to whether the revisional Court can interfere with the order passed by the learned trial Court with regard to deposit of a sum of Rs. 2 lacs as condition for restoration of the suit while setting aside the exparte decree. 23. Mr. Jain has drawn my attention to the explanation given which according to him is liable to be set aside. Even on appeal the Court is not supposed to look into the ex parte decree while deciding the present proceeding. The ex pane decree has since been set aside on the ground that summons were not served on the ap plicant. The Court has come to a finding that the signature on the summons of the Smt. Santosh Manocha wife of the ap plicant was not in the hand of the applicants wife, since the signature of the applicants wife made in Court differed from that on the summons. It has also found that the date of knowledge of the ex pane decree was also not disputed by the revisionists. It has also found that the date of knowledge of the ex pane decree was also not disputed by the revisionists. It had further found that the newspaper in which the notice was pub lished was not forwarded to the applicant over and above that the said notice did not contain the name of the appellant. At the same time it is apparent on the face of the record that the suit was instituted some time in 1989 and it was decreed exparte on 3-2- 1990. The applicant was one of the partners of the firm against which the suit was instituted though it is alleged that the applicant had retired from the partnership but he has not produced any deed of dis solution of the partnership. Though how ever, Mr. Graver contends that it is not the stage of production of such document or disclosure of defence of the defendants. True, however, that the defendant is not supposed to produce such document at this stage but then there is nothing on record to conclusively show that the defendant had retired from the partnership firm which may be one of the factor that might weigh with the Court in imposition of terms, though how ever no reason has been given as to why the terms were imposed. Mr. Jain contended that if terms are imposed the reason is to be given. But Order IX, Rule 13 of the Code does not postulate giving of reason in order to impose any term. If it is not ex pressly provided in the statute it is not open to the Court to alter or add anything in the expression. Therefore, it cannot be urged that while examining the case the Court is supposed to give reason. Thus, I am unable to agree with the submission of the learned Counsel for the applicant Mr. Jain to the extent that while examining the case the Court is supposed to give reason. 24. At the same time, it is admitted that the suit was instituted in the year 1989 and the exparte decree was passed in 1990 and the application for setting aside the ex pane decree was filed on December, 1995. Jain to the extent that while examining the case the Court is supposed to give reason. 24. At the same time, it is admitted that the suit was instituted in the year 1989 and the exparte decree was passed in 1990 and the application for setting aside the ex pane decree was filed on December, 1995. Thus even if it is assumed that the defen dant is not responsible for the delay be cause of non- service of summons but the fact remains that there had been delay and there might be further delay in the proceeding after moving the application for setting aside the exparte decree. In such circumstances, if the Court, even if it does not record any reason feels that in order to see the bonafide of the defendant certain terms may be imposed which may be reasonable and may not be onerous to the defendant it cannot be said that the Court has acted illegally or with material ir regularity in exercise of such jurisdiction. In the present case the suit was decreed for a sum of Rs. 8 lacs with 15% interest per annum which even calculated at simple interest would take a total of Rs. 20 lakhs. Therefore, the amount of Rs. 2 lacs cannot be said to be unreasonable or onerous. 25. The decision in the case of Raj Kumar Soni (supra), is concerned whether there is fault or not that would be decided conclusively in such proceeding when the Court has accepted the case of the defen dant that summons were not served but the fact remains there had been a delay and it is the discretion of the Court to impose cost in order to secure decretal amount and explore the bonafide on the part of the defendant. In such circumstances having regard to facts and circumstances of the case it appears that there is a distinguishing feature which can take away the present fact and situation from the application of the ratio decidendi in Raj Kumar Soni (supra), on no fault proposition. In such circumstances having regard to facts and circumstances of the case it appears that there is a distinguishing feature which can take away the present fact and situation from the application of the ratio decidendi in Raj Kumar Soni (supra), on no fault proposition. It is also found that notice was published in respect of the firm of which the defendant applicant was one of the partner but still then he did not take note of it whether his name was included in it and that may be one of the factor to weigh with the Court, which can be taken to be a fault on the part of the defendant. 26. Be that as it may be, in the facts and circumstances of the case, I do not find any reason to interfere with the order im pugned with regard to the deposit of Rs. 2 lakhs as condition for setting aside exports decree. However, the applicant may secure the amount through Bank guarantee or otherwise if he is so advised within a period of three months from date. With this observation, this revision is disposed of. However, there will be no order as to cost. Revision disposed of. .