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2014 DIGILAW 4406 (MAD)

Petitioner v. Respondent

2014-11-25

PUSHPA SATHYANARAYANA

body2014
Judgment Pushpa Sathyanarayana, J. 1. This is an application filed by the defendant in the suit to set aside the ex parte decree dated 25.10.2013 passed by this Court in C.S. No. 70 of 2012. 2. From the materials available on record, it is seen that the plaintiff Tamil Nadu State Marketing Corporation Limited, which is under the control of the Government of Tamil Nadu, has filed suit C.S. No. 70 of 2012 against the defendant M/s Reliance General Insurance Company Limited for the balance of the Marine (Transit) Insurance claim to the tune of Rs. 2,57,45,245/-. Admittedly, the suit summons and the plaint which were served on the defendant on 21.3.2012, were received by one Satish Kumar Yasoju, the person in charge, who had not brought the same to the knowledge of the higher officers or to the Legal Department. It is seen that the said person also had left the organisation on 28.12.2012. As almost 70% of the claim of the plaintiff was satisfied by the defendant, it was under the bona fide impression that the plaintiff has not come up with any new claim. The receipt of the summons was also not informed by the person who received it. The defendant was kept in dark about the pendency of the suit. Hence, even though the case was listed under the caption “Undefended Board”, according to the applicant/defendant, it could not file the written statement and due to the lack of knowledge about the pendency of the case, it could not defend the case effectively. In such circumstance, the applicant was set ex parte by an order dated 22.02.2013 and, thereafter, an ex parte decree was passed on 25.10.2013. 3. Heard Mr. AR.L. Sundaresan, learned Senior Counsel appearing for the applicant/defendant and Mr. Aravindh Pandian, learned Additional Advocate General representing the respondent/plaintiff and perused the records. 4. The only submission made by the learned Senior Counsel appearing for the applicant/defendant is that only on seeing the passing of the decree as a news item in the newspaper on 26.10.2013, the applicant/defendant got knowledge about the filing of the suit and immediately filed the application to set aside the ex parte decree. However, according to the learned Senior Counsel, the application is filed within time. 5. However, according to the learned Senior Counsel, the application is filed within time. 5. Per contra, learned Additional Advocate General representing the respondent/plaintiff contended that the applicant/defendant was aware of the proceedings as there had been various meetings and even after filing of the suit, when the matter was referred before the Mediation Centre, notice was served to them hence, there is no bona fide in the contention of the applicant/defendant. 6. At the outset, learned Senior Counsel appearing for the applicant referred to the relevant provisions of the Insurance Act, 1938. Section 3(4)(f) of the Insurance Act which deals with the cancellation of the registration of an insurer is extracted below:- 3. Registration.-- ................ ............... .............. [4] The Authority shall cancel the registration of an insurer either wholly or in so far as it relates to a particular class of insurance business, as the case may be, -- ........................... ........................... ................................ ........................... ........................... ................................ (f) if the insurer makes default in complying with, or acts in contravention of, any requirement of this Act or of any rule or any regulation or order made or, any direction issued thereunder, or” 7. Referring to the above provision, learned Senior Counsel appearing for the applicant/defendant contended that any dereliction of duty by the defendant Company would be at the risk of cancellation of their registration and, therefore, according to the learned Senior Counsel, it was not deliberate or intentional on the part of the defendant to let the suit decreed ex parte. 8. From a perusal of the facts of the case and the contentions raised by the learned Senior Counsels, it is seen that 70% of the claim has been honoured by the defendant and it is only for the balance of the money due, the suit has been laid and decreed ex parte. Though the claim is huge, considering the fact that the defendant is an Insurance Company governed by the Rules of the Insurance Regulatory and Development Authority and by virtue of Section 3(4)(f) of the Insurance Act, 1938, as extracted above, it cannot act independently, the claim of the defendant is bona fide and they should be given an opportunity to contest the suit claim on merits. Even considering the conduct of the defendant it is clear that it is not a habitual defaulter and it had let the suit be allowed ex parte for the first time and in view of the fact that the application to set aside has also been filed within time, this Court is of the opinion that the ends of justice would be met by giving an opportunity to the defendant to contest the suit on merits. 9. In fine, this application is allowed setting aside the ex parte decree dated 25.10.2013 passed by this Court in C.S. No. 70 of 2012 and the suit is directed to be taken on file. However, considering the unnecessary exercise and wastage of the precious time of this Court, I am of the opinion that the defendant should be mulcted with costs. Accordingly, a sum of Rs.10,000/- (Rupees Ten Thousand only) is imposed on the defendant as cost payable to the Chief Justice Relief Fund within a period of two weeks from the date of receipt of a copy of this order and report compliance before this Court.