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2019 DIGILAW 511 (JK)

United India Insurance Co. Ltd. v. Sushma Sood

2019-12-27

SANJEEV KUMAR

body2019
JUDGMENT : 1. This appeal purportedly under Order XLIII, Rule (d) of Code of Civil Procedure (for short ‘CPC’) is directed against the order dated 29.10.2018 passed by the Additional District Judge, Jammu (hereinafter referred to as the ‘trial Court’) on an application of the appellant-defendant No.1 filed under Order IX Rule 13 of CPC for setting aside ex parte judgment and decree dated 06.02.2014 passed in a Suit for Recovery titled ‘Sushma Sood and another v. United India Insurance Company and another’. By virtue of the order impugned (supra), the application of the appellant-defendants for setting aside ex parte judgment and decree has been rejected. 2. Before adverting to the grounds of challenge urged by the appellant-defendant to assail the judgment and decree impugned, a brief advertence to the factual antecedents, as is relevant to the disposal of this appeal, would be desirable. 3. Respondent Nos. 1 and 2-plaintiffs filed a Suit for Recovery of Rs.35,93,000/- against the appellant-defendant before the trial Court. The suit was primarily for recovery of insurance claim pertaining to fire loss to plaintiff No.2 in the night intervening 26th and 27th of January 2004.The suit was contested by the appellant-defendant who was duly represented by Sh. R.P. Jamwal, Advocate. A written statement was filed by the appellant-defendant on 02.11.2007. On 24.12.2007, an application was filed by respondents-plaintiffs for grant of preliminary decree. The objections were filed by the appellant-defendant on 06.02.2008 and the trial Court vide its order dated 11.03.2008 passed the preliminary decree. Issues in the suit were struck by the trial Court on 20.11.2009 and parties were given fifteen days time to file the list of witnesses. The respondents-plaintiffs commenced their evidence on 20th August, 2010 when the statement of respondent No.1- plaintiff Sushma Sood was recorded. The evidence of the respondents-plaintiffs was closed by the trial Court on 31.01.2013 and a direction was issued to the appellant-defendant to adduce their evidence. It may be noted that the appellant-defendants had not filed any list of witnesses and, therefore, sought time to produce the witnesses on their own. They were given several opportunities for the purpose and as per the record, last opportunity to lead evidence was granted to the appellant-defendants on 1st October, 2013. The appellant-defendants were given two more opportunities as is apparent from the orders of the trial Court dated 08.11.2013 and 26.11.2013. They were given several opportunities for the purpose and as per the record, last opportunity to lead evidence was granted to the appellant-defendants on 1st October, 2013. The appellant-defendants were given two more opportunities as is apparent from the orders of the trial Court dated 08.11.2013 and 26.11.2013. On failure of the appellant-defendants to lead their evidence, the trial Court vide its order dated 26.11.2013 closed the evidence of the appellant-defendants and the suit was set down for final arguments. The suit was thereafter adjourned on three occasions i.e., 02.12.2013, 28.12.2013 and 18.01.2014, but the arguments in the matter were not addressed and finally, the trial Court fixed the suit for final arguments on 30.01.2014. The appellant-defendant failed to appear and address the arguments on the said date and resultantly, the trial Court initiated ex parte proceedings against the appellant-defendant and heard the matter in exparte. The suit was decreed in exparte on 06.02.2014. The appellant-defendants filed a belated application under Order IV Rule 13 of CPC for setting aside the ex parte judgment and decree on 31st October 2014. The said application was accompanied by an application under Section 5 of the Limitation Act for condonation of delay which application was allowed by the trial Court vide its order dated 07.11.2017. 4. Vide order impugned, the trial Court rejected the application of the appellant-defendants and declined to set aside the ex parte decree and judgment dated 06.02.2014. The application of the appellant-defendants for setting aside exparte decree and judgment has been rejected on two counts. One that the appellant-defendants have failed to show that there was any sufficient or even reasonable cause which had prevented them from appearing in the Suit when the judgment and decree was passed by the trial Court on 06.02.2014; and second, that the decree passed by the trial Court is on the basis of evidence on record and on merits and, therefore, cannot be construed to be an exparte decree and judgment. The trial Court has passed the order impugned by placing reliance on a judgment of the Supreme Court in the case of Parimal vs Veena @ Bharti, 2011 (3) SCC 545 and a judgment of the Patna High Court in the case of Anil Kumar Sah and others vs Gita Devi, 2013(3) Civil L.J 883. 5. The trial Court has passed the order impugned by placing reliance on a judgment of the Supreme Court in the case of Parimal vs Veena @ Bharti, 2011 (3) SCC 545 and a judgment of the Patna High Court in the case of Anil Kumar Sah and others vs Gita Devi, 2013(3) Civil L.J 883. 5. The appellant-defendant is aggrieved and challenges the order impugned primarily on the following grounds: a. That the conclusion of the trial Court, that the judgment and decree dated 06.02.2014 was a judgment and decree on merits and, therefore, beyond the scope of Order IX Rule 13 CPC, is erroneous and contrary to the settled position of law. b. That the trial Court has fallen in serious error of fact and law by holding that the judgment and decree dated 06.02.2014 is on merit and, therefore, cannot be construed to be an ex parte decree and judgment . c. That the trial Court did not appreciate in right perspective the plea of the appellant-defendant that the absence on the date when the appellant-defendants were proceeded ex parte was not intentional or deliberate, but due to the negligence of the counsel engaged by them. 6. The present appeal has been resisted by the respondents-plaintiffs on the ground that it was on account of persistent default of the appellant-defendants to appear in the matter that the trial Court was constrained to proceed ex parte. The trial Court, however, considered the entire evidence on record and passed the judgment and decree dated 06.02.2014 on merits. It is submitted on behalf of the respondents-plaintiffs that the judgment and decree dated 06.02.2014 was not an ex parte judgment and decree and, therefore, the application under Order IX Rule 13 of CPC was not maintainable. The respondents-plaintiffs have, thus, supported the order impugned. 7. Having heard learned counsel for the parties and perused the record, I am of the view that the pivotal question that needs determination is; whether the judgment and decree passed by the trial Court on 06.02.2014 is an exparte judgment and decree amenable to be set aside under Order 9 Rule 13 of CPC ?. 8. 7. Having heard learned counsel for the parties and perused the record, I am of the view that the pivotal question that needs determination is; whether the judgment and decree passed by the trial Court on 06.02.2014 is an exparte judgment and decree amenable to be set aside under Order 9 Rule 13 of CPC ?. 8. On behalf of the appellant-defendant, it is argued that the judgment and decree dated 06.02.2014 even if passed on the basis of evidence on record and merits is still an ex parte decree as the trial Court vide its order dated 30.01.2014 had proceeded against the appellant-defendants ex parte and heard only the respondents-plaintiffs. Referring to the provisions of Order XVII, Rule 2 CPC and placing reliance upon the judgment of the Supreme Court in the case of Parkash Chander Manchanda and another v. Smt. Janki Manchanda, AIR 1987 SC 42 , learned counsel for the appellant-defendant argues that if, on a date fixed, one of the parties to the suit fails to appear, the Court has to proceed to dispose of the suit in one of the modes provided under Order 9. He, therefore, submits that in the given circumstances when the trial Court found the appellant-defendants absent on a particular date, it had no option other than proceeding under Order 9 and this exactly was done by the trial Court when it proceeded ex parte against the appellant-defendants on 30.01.2014. He, therefore, urges that the judgment and decree passed against the appellant-defendants after proceeding ex parte against them is by all logic an ex parte decree and, therefore, application under Order IX Rule 13 for setting aside such decree and judgment was clearly maintainable. 9. On the other hand, learned counsel for the respondents-plaintiffs argues that in the instant case, the explanation to Rule 2 of Order XVII was clearly attracted. Learned counsel submits that the appellant-defendants absented at a time when their right to lead evidence had been closed after affording them several opportunities. He, therefore, asserts that the trial Court, in view of explanation to Rule 2, was well within its powers to pass the judgment and decree on merits as if the appellant-defendants were present before it. Learned counsel submits that the appellant-defendants absented at a time when their right to lead evidence had been closed after affording them several opportunities. He, therefore, asserts that the trial Court, in view of explanation to Rule 2, was well within its powers to pass the judgment and decree on merits as if the appellant-defendants were present before it. He, therefore, insists that the judgment and decree dated 06.02.2014 cannot be construed as an ex parte decree and judgment and, therefore, the trial Court was correct in holding that the application under Order IX Rule 13 was not maintainable and the remedy available to the appellants-defendants was to assail the ex parte judgment and decree before the Appellate Court. 10. With a view to appreciate the rival arguments on the issue in proper perspective, it would be necessary to first set out the provisions of Order XVII, Rule 2 and 3 of CPC, which read as under: “Order XVII 2. Procedure if parties fail to appear on day fixed. - Where, on any day to which the hearing of the suit is adjourned, the parties or any of them fail to appear, the Court may proceed to dispose of the suit in one of the modes directed in that behalf by Order IX or make such other order as it thinks fit. 3. Where any party to a suit to whom time has been granted fails to produce his evidence, or to cause the attendance of his witnesses, or to perform any other act necessary to the further progress of the suit, for which time has been allowed, the Court may, notwithstanding such default- (a) if the parties are present, proceed to decide the suit forthwith; or (b) if the parties are, or any of them is absent, proceed under rule 21]” 11. From a plain reading of Rule 2, it is clear that if the parties or any of them fail to appear on any date to which the suit is adjourned, the Court, in its discretion, may proceed to dispose of the suit in any of the modes provided in Order 9 CPC or make such other order as it thinks fit. The explanation appended to Rule 2 is by way of an exception to Rule 2 and provides that in a case where the evidence or a substantial portion of the evidence of any party has already been recorded and such party fails to appear on any date to which the hearing of the suit is adjourned, the Court, in its discretion, may proceed to decide the suit as if such party was present. The explanation in its clear terms creates a fiction and vests discretion in the trial Court to proceed to decide the case on merits where the evidence or a substantial portion thereof of the party in default has been recorded. There is obvious object sought to be achieved by the explanation. In a case, where the defaulting party has led his evidence or a substantial portion thereof, the Court would be in a position to dispose of the matter on merits even if the defaulting party is not present. Such party, whose claim or defence, as the case may be, is already on record of the suit, shall be deemed to be present and the Court shall be well within its discretion to dispose of the matter on merits, rather than following the grounds directed in that behalf by Order 9 of the CPC. The explanation, as is apparent from its plain language, vests discretion in the Court. 12. In the case on hand, the appellant-defendants had failed to adduce their evidence even after availing several opportunities. Their right to lead evidence was closed in their presence. They continued to appear even after closure of their evidence, but absented when the case was taken up for final arguments on 30.01.2014. Undoubtedly, the trial Court, at that stage, had the discretion to decide the matter on merits by invoking the explanation to Rule 2, but the trial Court decided otherwise and proceeded under Order 9 of CPC. The appellants-defendants were set ex parte by the trial Court on 30.01.2014. Once the trial Court did not exercise the discretion vested in it under explanation to Rule 2, the subsequent decree passed by the trial Court, in the absence of appellant-defendants, is by all means an ex parte decree. The appellants-defendants were set ex parte by the trial Court on 30.01.2014. Once the trial Court did not exercise the discretion vested in it under explanation to Rule 2, the subsequent decree passed by the trial Court, in the absence of appellant-defendants, is by all means an ex parte decree. In that view of the matter, the trial Court is not correct in its view that the ex parte judgment and decree passed on the basis of evidence on record and on merits is not an ex parte decree and liable to be set aside under Order 9 Rule 13 of CPC. It may be reminded that even an ex parte judgment and decree is required to be passed by the trial Court on the basis of pleadings and evidence available before it and on merits. Simply because the decree has been passed on the basis of available evidence and on merits, it does not cease to be an ex parte decree if the same has been passed against the appellant-defendants in their absence and after formally proceeding ex parte against them. 13. The view I have taken is fortified by the judgment of the Supreme Court in the case of B.Janki Ramai Chetty vs A. K. Parthasarthi And Ors, 2003 (5) SCC 641 . The Supreme Court elaborately considered the scope of Order 17 Rule 2 and what was held by the Supreme Court in paras 7 to 10 of the judgment (supra) is noteworthy and is reproduced under: 7. In order to determine whether the remedy under Order IX is lost or not what is necessary to be seen is whether in the first instance the Court had resorted to the Explanation of Rule. 2. 8. The Explanation permit the Court in its discretion to proceed with a case where substantial portion of evidence of any party has already been recorded and such party fails to appear on any day to which the hearing of the suit is adjourned. As the provision itself shows, discretionary power given to the Court to be exercised in a given circumstances. For application of the provision, the Court has to satisfy itself that (a) substantial portion of the evidence of any party has been already recorded; (b) such party has failed to appear on any day and (c) the day is one to which the hearing of the suit is adjourned. For application of the provision, the Court has to satisfy itself that (a) substantial portion of the evidence of any party has been already recorded; (b) such party has failed to appear on any day and (c) the day is one to which the hearing of the suit is adjourned. Rule 2 permits the Court to adopt any of the modes provided in Order IX or to make such order as he thinks fit when on any day to which the hearing of the suit is adjourned, the parties or any of them fail to appear. The Explanation is in the nature of an exception to the general power given under the Rule, conferring discretion on the Court to act under the specified circumstance i.e. where evidence or a substantial portion of evidence of any party has been already recorded and such party fails to appear on the date to which hearing of the suit has been adjourned. If such is the factual situation, the Court may in its discretion deem as if such party was present. Under Order IX Rule 3 the Court may make an order directing that the suit be dismissed when neither party appears when the suit is called on for hearing. There are other provisions for dismissal of the suit contained in Rules 2, 6, and 8. We are primarily concerned with a situation covered by Rule 6. The crucial words in the Explanation are ‘proceed with the case’. Therefore, on the facts it has to be seen in each case as to whether the Explanation was applied by the Court or not. 9. In Rule 2, the expression used is “make such order as it deems fit”, as an alternative to adopting one of the modes directed in that behalf by Order IX. Under Order XVII Rule 3(b), only course open to the Court is to proceed under Rule 2, when a party is absent. Explanation thereto gives a discretion to the Court to proceed under Rule 3 even if a party is absent. But such a course can be adopted only when the absentee party has already led evidence or a substantial part thereof. If the position is not so, the Court has no option but to proceed as provided in Rule 2. Rules 2 and 3 operate in different and distinct sets of circumstances. But such a course can be adopted only when the absentee party has already led evidence or a substantial part thereof. If the position is not so, the Court has no option but to proceed as provided in Rule 2. Rules 2 and 3 operate in different and distinct sets of circumstances. Rule 2 applies when an adjournment has been generally granted and not for any special purpose. On the other hand, Rule 3 operates where the adjournment has been given for one of the purposes mentioned in the Rule. While Rule 2 speaks of disposal of the suit in one of the specified modes. Rule 3 empowers the Court to decide the suit forthwith. The basic distinction between the two Rules. However, is that in the former, any party has failed to appear at the hearing, while in the latter the party though present has committed any one or more of the enumerated defaults. Combined effect of the Explanation to Rule 2 and Rule 3 is that a discretion has been conferred on the Court. The power conferred is permissive and not mandatory. The Explanation is in the nature of a deeming provision, when under given circumstances, the absentee party is deemed to be present. 10. The crucial expression in the Explanation is “where the evidence or a substantial portion of the evidence of a party”. There is a positive purpose in this legislative expression. It obviously means that the evidence on record is sufficient to substantiate the absentee party’s stand and for disposal of the suit. The absentee party is deemed to be present for this obvious purpose. The Court while acting under the Explanation may proceed with the case if that prima facie is the position. The Court has to be satisfied on the facts of each case about this requisite aspect. It would be also imperative for the Court to record its satisfaction in that perspective. It cannot be said that the requirement of substantial portion of the evidence or the evidence having been led or applying the Explanation is without any purpose. If the evidence on record is sufficient for disposal of the suit, there is no need, for adjourning the suit or deferring the decision. 14. It cannot be said that the requirement of substantial portion of the evidence or the evidence having been led or applying the Explanation is without any purpose. If the evidence on record is sufficient for disposal of the suit, there is no need, for adjourning the suit or deferring the decision. 14. The provisions of Order XVII, Rule 2 and 3 of CPC also came up for consideration before the Supreme Court in its recent judgment titled G. Ratna Raj (D) by LRs vs Sri Muthukumarasamy Permanent Fund Ltd. & Anr, 2019 (2) SCJ 407 . 15. Having held that the judgment and decree dated 06.02.2014 was an ex parte judgment and decree and, therefore, amenable to be set aside under Order IX, Rule 13 of CPC, I would now advert to another aspect of the matter i.e, whether the appellant-defendant has made out a case for setting aside the ex parte judgment and decree dated 06.02.2014 on merits. The trial Court, though, held the application under Order IX Rule 13 CPC not maintainable against the judgment and decree dated 06.02.2014, yet proceeded to decide the same even on merits. The trial Court after considering the material on record and rival contentions of learned counsel appearing for the parties came to the conclusion that the appellant-defendants had failed to show that there was any sufficient or even reasonable cause which had prevented them from appearing in the suit when the judgment and decree was passed by the trial Court on 06.02.2014 in the suit. 16. On a bare glance at the findings of fact recorded by the trial Court, one would find that the trial Court has totally misconstrued the provisions of Order IX Rule 13 CPC. The trial Court was required to return a specific finding as to whether the appellant-defendants have furnished any sufficient cause which prevented them from appearing in the suit when it was called for hearing and the relevant date in this regard would be 30.01.2014 when the appellant-defendants were set ex parte by the trial Court. 17. The trial Court was required to return a specific finding as to whether the appellant-defendants have furnished any sufficient cause which prevented them from appearing in the suit when it was called for hearing and the relevant date in this regard would be 30.01.2014 when the appellant-defendants were set ex parte by the trial Court. 17. The scope of Order IX, Rule 13 is well explained in the judgment of the Apex Court relied upon by the respondents-plaintiffs in the case of Parimal vs Veena @ Bharti, 2011 (3) SCC 545 and a judgment of the Patna High Court in the case of Anil Kumar Sah and others vs Gita Devi, 2013(3) Civil L.J 883 which are also relied upon by the trial Court in the order impugned. 18. Second proviso to Order IX Rule 13 would be applicable only where an application for setting aside ex parte decree and judgment has been filed on the ground that there has been an irregularity in service of summons. In such a situation, if the Court is satisfied that the appellants-defendants had the notice of the date of hearing and had sufficient time to appear in the Court, the Court would not set aside the decree passed in ex parte only on the ground of irregularity in the service of summons. In the instant case, the appellant-defendants were set ex parte after they had appeared in the suit and participated in the proceedings. 19. In view of the foregoing discussion and the settled legal position enumerated hereinabove, I am of the considered view that the order impugned is not correct in law and, therefore, deserves to be set aside. Ordered accordingly. Let the parties appear on the date to be fixed by the trial Court in the matter on receipt of certified copy of this order. The application of the defendant filed under Order IX, Rule 13 CPC shall be considered afresh and appropriate orders shall be passed thereon by the trial Court as expeditiously as possible. 20. Whatever stated hereinabove is limited to the disposal of this appeal and shall not be construed as an expression of any opinion on the merits of the application which shall be decided by the trial Court afresh on its merits. Appeal is allowed in the above terms.