Sam Higginbottom Institute of Agriculture Technology and Science v. Acurite Contractors and Engineers
2024-08-27
J.J.MUNIR
body2024
DigiLaw.ai
JUDGMENT : J.J. Munir, J. 1. This revision is directed against an order passed by the learned Civil Judge (Sr. Div.), F.T.C., Prayagraj dated 27. 09.2023 in Misc. Case No.11 of 2018, rejecting the defendant's application under Order XXXVI Rule 4 of the Code of Civil Procedure, 1908 (for short, 'the Code'), to set aside the decree under special circumstances. 2. The facts giving rise to this revision are these: Sam Higginbottom Institute of Agriculture, Technology and Sciences, Naini, Allahabad (formerly the Allahabad Agricultural Institute Deemed University) awarded a works contract for some construction work to be done on their premises to M/s. Acurite Contractors & Engineers, Banjara Hills, Hyderabad, a partnership firm. The former shall hereinafter be called 'the defendant' and the latter 'the plaintiff'. For the purpose of giving effect to their covenants carried in the works contract, the plaintiff and the defendant signed a memorandum of understanding dated 19.12.2006, where both parties agreed that the total value of the work, to be executed under the contract by the plaintiff, would be Rs.26,32,72,391/-. It was also covenanted that after deducting the moneys already paid to the plaintiff in liquidation of the running bills, balance would be paid by the defendant to the plaintiff in three equal installments. Original Suit No.1014 of 2012 was instituted by the plaintiff against the defendant with a case that after deducting the money paid by the defendant, the defendant was obliged, according to the terms settled under the memorandum of understanding dated 19.12.2006, to pay the plaintiff the balance of a sum of Rs.4,96,00,751/-, besides interest at the rate of 12% per annum w.e.f. 19.08.2009, which the defendant did not. The defendant, in answer to the summons for appearance, entered appearance, and, later on, in answer to the summons for judgment, applied for leave to defend. The Trial Judge by his order dated 25.07.2013 granted unconditional leave. A written statement was filed by the defendant in compliance with the said order. The order of the Trial Court dated 25.07.2013, granting unconditional leave to defendant, was impugned by the plaintiff vide Civil Revision No.380 of 2013, preferred to this Court.
The Trial Judge by his order dated 25.07.2013 granted unconditional leave. A written statement was filed by the defendant in compliance with the said order. The order of the Trial Court dated 25.07.2013, granting unconditional leave to defendant, was impugned by the plaintiff vide Civil Revision No.380 of 2013, preferred to this Court. The said revision was allowed in part vide judgment and order dated 23.09.2014, modifying the leave and making it conditional upon: (a) deposit of 50% of the total sum of money claimed by the plaintiff, in cash; and, (b) furnishing adequate security for the balance to the satisfaction of the Trial Court, all to be done by the judgment debtor within six weeks from the date of the order made by this Court. 3. This order was challenged by the defendant preferring a petition for special leave to appeal to the Supreme Court. The special leave petition was dismissed by their Lordships vide order dated 15.12.2014. The time to deposit 50% of the total sum of money claimed by the plaintiff was extended by two weeks from the date of the order passed by the Supreme Court. While the special leave petition was pending before the Supreme Court, an application was made on 10.11.2014 by the defendant before the Trial Judge, praying that the defendant be granted opportunity to cross-examine the plaintiff's witnesses and liberty to address the Court on legal issues. This application was rejected by the order dated 10.11.2014 passed by the Trial Judge. The said order was challenged by means of Civil Revision No.14 of 2015 carried before this Court. This Court by judgment and order dated 11.07.2016 allowed the revision in part, by which the sole relief that was granted was that the application made to the Trial Court stands allowed to the extent that the defendant would have liberty to raise a question about the jurisdiction of the Court to try the suit as one under Order XXXVII of the Code “by pointing out non-applicability of Order XXXVII of the Code to the suit of the nature instituted against the defendant. But, while doing so, the defendant-revisionist would not have a right to lay its defense.” The order dated 10.11.2014, to the extent that it declined the prayer to allow cross-examination of the plaintiff's witnesses, was affirmed. 4.
But, while doing so, the defendant-revisionist would not have a right to lay its defense.” The order dated 10.11.2014, to the extent that it declined the prayer to allow cross-examination of the plaintiff's witnesses, was affirmed. 4. The defendant says that on 11.11.2014, the Trial Court suo motu, without a prayer by the plaintiff, directed it to file certain documents, which form basis of the suit and in the absence whereof, the suit would be dismissed. The objection of the defendant was that the Trial Court could not permit a document that was basis of the suit to be filed at the hearing. The order dated 11.11.2014 was challenged by the defendant, assailing it to be one in breach of Order VII Rule 14 of the Code, by means of Civil Misc. Writ Petition No.6007 of 2015. This writ petition was initially entertained and a stay of the order dated 11.11.2014 granted, but on 13.10.2015, this Court rejected the writ petition on the ground that the order of the Trial Judge dated 11.11.2014 was purely interlocutory in nature. The defendant carried this matter too in a special leave petition to the Supreme Court, which was admittedly dismissed. The defendant then moved another application before the Trial Judge with a prayer that the original fixed deposit receipts be accepted and sent to the Bank for endorsement of lien. Another application was moved on behalf of the defendant to accept these securities. Both the applications were rejected by the Trial Judge vide order dated 01.01.2005 on ground that the defendant has not complied with the orders of this Court dated 23.09.2014, regarding deposit of 50% of the sum of money claimed and for the balance, furnishing security within the time allowed. The defendant filed a petition under Article 227 of the Constitution against the order dated 23.09.2014, being Matter under Article 227 No.4541 of 2016. Initially, this Court entertained the petition and granted a stay order, but, later on, vide order dated 27.10.2017, the petition was dismissed and the Trial Court directed to decide the suit expeditiously. 5. The defendant then moved an application dated 5. 01.2015 before the Trial Judge, praying that fixed deposit receipts be accepted, which the Trial Court rejected on ground that according to the order dated 23.09.2014, 50% cash had to be deposited.
5. The defendant then moved an application dated 5. 01.2015 before the Trial Judge, praying that fixed deposit receipts be accepted, which the Trial Court rejected on ground that according to the order dated 23.09.2014, 50% cash had to be deposited. Undaunted the defendant moved still another application before the Trial Judge on 04.12.2015, with a prayer that the defendant be permitted to encash the fixed deposit receipts, as the Trial Court has not accepted the FDRs. The defendant in the main urged on point of jurisdiction that the claim of the plaintiff is barred by time and the suit being one not based on bills of exchange, hundies or promissory notes or a written contract, essential under Order XXXVII of the Code, is not maintainable. 6. On 21.10.2018, the Trial Judge decreed the summary suit. The defendant describes this as an ex parte decree, and, in any case moved an application under Order XXXVII Rule 4 of the Code, which was numbered as Misc. Case No.11 of 2018. The application was made to set aside the decree passed in the suit under special circumstances. By the impugned order dated 27.09.2023, the said application, giving rise to Misc. Case No.11 of 2018, has been rejected by the Trial Judge. 7. Aggrieved, this revision has been filed. 8. Heard Mr. Saurabh Raj Srivastava, learned Counsel for the defendant in support of the motion to admit this revision to hearing and Mr. Rajesh Kumar Singh, learned Counsel appearing on behalf of the plaintiff. 9. As the record of proceedings and the provisions of Order XXXVII of the Code would show that this is not a case where the summary suit proceeded to judgment without the defendant entering appearance, or after appearance, not availing the opportunity in response to the summons for judgment to seek leave to defend. Admittedly, the defendant entered appearance, and upon service of summons for judgment, applied for leave to defend. The defendant was granted unconditional leave by the learned Trial Judge, but upon a revision to this Court by the plaintiff, being Civil Revision No.380 of 2013 decided on 23. 09.2014, the order of the Trial Court was modified, granting conditional leave under Order XXXVII Rule 3 (5) (6) of the Code.
The defendant was granted unconditional leave by the learned Trial Judge, but upon a revision to this Court by the plaintiff, being Civil Revision No.380 of 2013 decided on 23. 09.2014, the order of the Trial Court was modified, granting conditional leave under Order XXXVII Rule 3 (5) (6) of the Code. The condition was that 50% of the total amount claimed by the plaintiff was to be deposited with the Court in cash and for the rest, adequate security had to be furnished to the satisfaction of the Trial Court within six weeks. This order was upheld by the Supreme Court, extending time to comply with the condition by a further period of two weeks from the date of their Lordships' orders in the special leave petition. It is also not in dispute that the defendant did not comply with the conditions of leave granted by this Court. Instead, repeat applications were made, seeking extension of time or for modification of terms of leave, to the Trial Court, with some challenge before this Court, all of which remained unsuccessful. Ex facie, the terms of the conditional leave, that was granted by this Court remaining uncomplied with within the period of time granted by this Court to fulfill the same, leave to defend would stand refused. Upon breach of the condition as to security, subject to which leave was granted to the defendant by this Court, the plaintiff would be entitled to judgment forthwith under Order XXXVII Rule 3(6) (b) of the Code. 10. The only other matter for consideration is that during the proceedings before the Trial Court and in its endeavours to rid itself of the clutches of the procedure of a summary suit, the defendant, after committing breach of the conditions, subject to which leave was granted, moved an application before the Trial Judge to cross-examine the plaintiff's witnesses under Section 151 of the Code and “argue the matter on legal points”, as this Court has described the defendant's application aforesaid in the judgment and order dated 11.07.2016 passed in Civil Revision No.14 of 2015. By that order, the defendant was granted limited relief to the extent that before the Trial Judge, it would be open to the defendant to raise a question as to the jurisdiction of the Court to try the suit under Order XXXVII of the Code.
By that order, the defendant was granted limited relief to the extent that before the Trial Judge, it would be open to the defendant to raise a question as to the jurisdiction of the Court to try the suit under Order XXXVII of the Code. Now, this order was passed on 11.07.2016 in the revision aforesaid by this Court, while the summary suit was still pending before the Trial Judge. Obviously, this Court had made a niche for the defendant, to address the Court on the issue if the suit did not fall within the four-corners of the requirements of Order XXXVII of the Code, and, therefore, not triable as a summary suit. The Trial Judge, before proceeding to judgment, took note of our directions made in Civil Revision No.14 of 2015 and did not pronounce judgment forthwith upon breach of the conditions, subject to which leave was granted. The judgment of the Trial Court would show that the question if the suit was maintainable under Order XXXVII of the Code was considered by the Trial Judge, before he proceeded to judgment, in terms of the following remarks in his judgment and decree dated 21.02.2018: 11. Now, the only matter, as already said, therefore, that deserves consideration, is if the judgment and decree dated 21. 02.2018 can be set aside, invoking the provisions of Order XXXVII Rule 4 of the Code. We do not think so. The reason is that the provisions of Order XXXVII Rule 4 are attracted to a case where the defendant did not have opportunity to put in appearance or having put in appearance, lost the opportunity to apply for leave to defend by some kind of a default, leading to the suit being decreed. It is a power akin to Order IX Rule 13 of the Code, exercisable in the case of ordinary suits, but on very different parameters. What is common between the power under Order IX Rule 13 is that the defendant must be absent and in default, according to the differing procedures applicable to these suits.
It is a power akin to Order IX Rule 13 of the Code, exercisable in the case of ordinary suits, but on very different parameters. What is common between the power under Order IX Rule 13 is that the defendant must be absent and in default, according to the differing procedures applicable to these suits. What, however, is different is that while under Order IX Rule 13 of the Code, a Court can exercise its powers to set aside an ex parte decree on ground that the summons was not duly served or the defendant prevented by sufficient cause from appearing when the suit was called on for hearing, in case of Rule 4 of Order XXXVII, the power to set aside a decree, where the defendant has not put in appearance or did not apply for leave to defend, cannot be exercised merely on the parameters known to Rule 13 of Order IX of the Code, to wit, summons not being duly served or the defendant prevented by sufficient cause from appearing at the hearing of the summons for judgment. 12. Here, what has to be made out under Rule 4 of Order XXXVII is that the defendant has a case on facts, entitling him for leave to defend the suit. If the defendant can show that he has a plausible defence, the Court exercising power of Rule 4 of Order XXXVII can grant leave to the defendant to appear and defend the suit, if the Court considers it reasonable and on such terms as it thinks fit. In this regard, the law is summarized in Rajni Kumar v. Suresh Kumar Malhotra and another, (2003) 5 SCC 315 , where it has been held: “10. In considering an application to set aside ex parte decree, it is necessary to bear in mind the distinction between suits instituted in the ordinary manner and suits filed under Order 37 CPC. Rule 7 of Order 37 says that except as provided thereunder the procedure in suits under Order 37 shall be the same as the procedure in suits instituted in the ordinary manner. Rule 4 of Order 37 specifically provides for setting aside decree, therefore, provisions of Rule 13 of Order 9 will not apply to a suit filed under Order 37.
Rule 4 of Order 37 specifically provides for setting aside decree, therefore, provisions of Rule 13 of Order 9 will not apply to a suit filed under Order 37. In a suit filed in the ordinary manner a defendant has the right to contest the suit as a matter of course. Nonetheless, he may be declared ex parte if he does not appear in response to summons, or after entering appearance before framing issues; or during or after trial. Though addressing arguments is part of trial, one can loosely say that a defendant who remains absent at the stage of argument, is declared ex parte after the trial. In an application under Order 9 Rule 11, if a defendant is set ex parte and that order is set aside, he would be entitled to participate in the proceedings from the stage he was set ex parte. But an application under Order 9 Rule 13 could be filed on any of the grounds mentioned thereunder only after a decree is passed ex parte against the defendant. If the court is satisfied that (1) summons was not duly served, or (2) he was prevented by sufficient cause from appearing when the suit was called for hearing, it has to make an order setting aside the decree against him on such terms as to cost or payment into court or otherwise as it thinks fit and thereafter on the day fixed for hearing by court, the suit would proceed as if no ex parte decree had been passed. But in a suit under Order 37, the procedure for appearance of the defendant is governed by provisions of Rule 3 thereof. A defendant is not entitled to defend the suit unless he enters appearance within ten days of service of summons either in person or by a pleader and files in court an address for service of notices on him. In default of his entering an appearance, the plaintiff becomes entitled to a decree for any sum not exceeding the sum mentioned in the summons together with interest at the rate specified, if any, up to the date of the decree together with costs. The plaintiff will also be entitled to judgment in terms of sub-rule (6) of Rule 3. If the defendant enters an appearance, the plaintiff is required to serve on the defendant a summons for judgment in the prescribed form.
The plaintiff will also be entitled to judgment in terms of sub-rule (6) of Rule 3. If the defendant enters an appearance, the plaintiff is required to serve on the defendant a summons for judgment in the prescribed form. Within ten days from the service of such summons for judgment, the defendant may seek leave of the court to defend the suit, which will be granted on disclosing such facts as may be deemed sufficient to entitle him to defend and such leave may be granted to him either unconditionally or on such terms as the court may deem fit. Normally the court will not refuse leave unless the court is satisfied that facts disclosed by the defendant do not indicate substantial defence or that defence intended to be put up is frivolous or vexatious. Where a part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, no leave to defend the suit can be granted unless the admitted amount is deposited by him in court. Inasmuch as Order 37 does not speak of the procedure when leave to defend the suit is granted, the procedure applicable to suits instituted in the ordinary manner, will apply. 11. It is important to note here that the power under Rule 4 of Order 37 is not confined to setting aside the ex parte decree, it extends to staying or setting aside the execution and giving leave to appear to the summons and to defend the suit. We may point out that as the very purpose of Order 37 is to ensure an expeditious hearing and disposal of the suit filed thereunder, Rule 4 empowers the court to grant leave to the defendant to appear to summons and defend the suit if the court considers it reasonable so to do, on such terms as the court thinks fit in addition to setting aside the decree. Where on an application, more than one among the specified reliefs may be granted by the court, all such reliefs must be claimed in one application. It is not permissible to claim such reliefs in successive petitions as it would be contrary to the letter and spirit of the provision.
Where on an application, more than one among the specified reliefs may be granted by the court, all such reliefs must be claimed in one application. It is not permissible to claim such reliefs in successive petitions as it would be contrary to the letter and spirit of the provision. That is why where an application under Rule 4 of Order 37 is filed to set aside a decree either because the defendant did not appear in response to summons and limitation expired, or having appeared, did not apply for leave to defend the suit in the prescribed period, the court is empowered to grant leave to the defendant to appear to the summons and to defend the suit in the same application. It is, therefore, not enough for the defendant to show special circumstances which prevented him from appearing or applying for leave to defend, he has also to show by affidavit or otherwise, facts which would entitle him leave to defend the suit. In this respect, Rule 4 of Order 37 is different from Rule 13 of Order 9. 12. Now adverting to the facts of this case, though the appellant has shown sufficient cause for his absence on the date of passing ex parte decree, he failed to disclose facts which would entitle him to defend the case. The respondent was right in his submission that in the application under Rule 4 of Order 37, the appellant did not say a word about any amount being in deposit with the respondent or that the suit was not maintainable under Order 37. From a perusal of the order under challenge, it appears to us that the High Court was right in accepting existence of special circumstances justifying his not seeking leave of the court to defend, but in declining to grant relief since he had mentioned no circumstances justifying any defence.” 13. Rajni Kumar (supra) has been followed by the Supreme Court in TVC Skyshop Limited v. Reliance Communication and Infrastructure Limited, (2013) 11 SCC 754 . No one disputes the power of the Court to set aside a decree made in a suit under Order XXXVII of the Code under Rule 4 thereof. The question is what kind of a decree can be set aside by the Court.
No one disputes the power of the Court to set aside a decree made in a suit under Order XXXVII of the Code under Rule 4 thereof. The question is what kind of a decree can be set aside by the Court. The facts in Rajni Kumar would show that summons for judgments sent to the defendant there by RP AD were deemed to be served upon the defendant, who did not appear on the date for answering the summons for judgment, leading to the suit being decreed ex parte on 12.08.1999. Here, it is not a case of a decree being passed because the defendant did not have opportunity to answer the summons for judgment or he defaulted. The defendant did answer the summons and secured unconditional leave from the Trial Court. On the plaintiff's revision, this Court converted the leave into a conditional one, the conditions whereof were not complied with by the defendant. This would entitle the plaintiff to judgment forthwith under Order XXXVII Rule 3(6)(b) of the Code. Still, the Trial Court in this case took note of the orders passed by this Court in Civil Revision No.14 of 2015 and went into the legal question if the suit was indeed competent under Order XXXVII of the Code, answering it for the plaintiff for reasons assigned. Now, it is not the office of the present revision to see if reasons assigned to hold that the suit was competent under Order XXXVII of the Code, are well founded or not; or, even if there is a jurisdictional error. That could be done in an appeal carried from the judgment and decree passed in the suit; not in a Revision from the order passed on the application under Order XXXVII Rule 4 of the Code. 14. So far as this revision is concerned, what we find is that the application under Order XXXVII Rule 4 of the Code was not competent because the judgment and decree dated 21.02.2018 passed in the suit is in no manner ex parte, but one on merits, where terms of the conditional leave were violated by the defendant. 15. We, therefore, do not find any good ground to admit this revision to hearing and dismiss the same.