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2006 (9) TMI 573 - SUPREME COURT OF INDIA

2006 (9) TMI 573 - SUPREME COURT OF INDIA - 2007 AIR 67, 2006 (6) Suppl. SCR 163, 2006 (12) SCC 104, 2006 (12) JT 9, 2006 (9) SCALE 223 - Appeal (Civil) 4100 of 2006 (Arising out of SLP (C) No.18059/2005) - Dated:- 13-9-2006 - S. B. Sinha And D. K. Jain, JJ. JUDGMENT S. B. Sinha, J. Leave granted. Interpretation and application of the provisions of Order IX Rule 13 of the Code of Civil Procedure, 1908 (for short, 'CPC') is in question in this appeal which arises out of a judgment and ord .....

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as filed for recording a decree under Order XII Rule 6 of Code of Civil Procedure on 23rd May, 2002. On the said application, notice of motion was to be served upon the defendants/respondents. The notice was returnable on 12th June, 2002. On the said notice, nobody had appeared on behalf of defendant No.1. A direction for filing of Affidavit in opposition was issued upon the plaintiff's application. Allegedly the said order was communicated to the respondent No.1 by Registered Post. The matt .....

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ppeal was dismissed. The defendant-respondent No.1, thereafter, filed an application for recalling the said ex-parte decree, inter alia, contending that they came to know about the institution of the said suit only when a memorandum of appeal together with a copy of the stay petition was served upon them in August, 2002. In terms of an order dated 7th December, 2004, a learned Single Judge found the said application to be thoroughly mischievous and devoid of any merit but still a direction for r .....

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f CPC, could not have imposed such a harsh condition, stating : "It is also stated before us that the appellant/petitioner was advised by the Lawyers not to appear before this Court without service of writ of summons. Admittedly, no writ of summons even today has been served upon the appellant/petitioner excepting that under the Original Side Rules of this Court Notice of Motion was taken out in respect of Order 12 Rule 6 of the Code and that notice has been served upon the appellant/petiti .....

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g a sum of ₹ 37 lacs, we feel that order cannot be sustained in law." Mr. Bhaskar P. Gupta, learned Senior Counsel appearing on behalf of the appellant would submit that the Division Bench committed a manifest error of law in so far as it failed to take into consideration that the Court had the power to direct furnishing of security as a pre-condition for recalling a money decree passed ex-parte. Mr. B. Raghunath, learned counsel appearing on behalf of the respondents, on the other ha .....

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the Court by which the decree was passed for an order to set it aside; and if he satisfies the Court that the summons was not duly served, or that he was prevented by any sufficient cause from appearing when the suit was called on for hearing, the Court shall make an order setting aside the decree as against him upon such terms as to costs, payment into Court or otherwise as it thinks fit, and shall appoint a day for proceeding with the suit; Provided that where the decree is of such a nature t .....

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parte under this rule, and the appeal has been disposed of on any ground other than the ground that the appellant has withdrawn the appeal, no application shall lie under this rule for setting aside the ex parte decree." We may at once notice that whereas Order IX Rule 7 postulates setting aside of orders passed by the Court upon such terms of costs or otherwise; Order IX Rule 13, inter alia, postulates "payment into Court". What would be the meaning of "payment into Court&q .....

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quot;sufficient cause" for non-appearance refers to the date on which the absence was made a ground for proceeding ex parte and cannot be stretched to rely upon other circumstances anterior in time. If "sufficient cause" is made out for non-appearance of the defendant on the date fixed for hearing when ex parte proceedings were initiated against him, he cannot be penalised for his previous negligence which had been overlooked and thereby condoned earlier. In a case where the defen .....

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#8377; 5 lakhs over and above the amount of ₹ 7 lakhs directed by the Court on an earlier occasion. No law has been, however, laid down therein. In Vijay Kumar Madan & Ors. vs. R.N. Gupta Technical Education Society & Ors. [(2002) 5 SCC 30], this Court deprecated the practice of imposing an undue condition and putting the defendant on onerous terms, stating : "Power in the court to impose costs and to put the defendant-applicant on terms is spelled out from the expression &quo .....

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hey became ex parte so as to convert the ex parte hearings into bi-parte. While exercising power of putting the defendant on terms under Rule 7 the court cannot pass an order which would have the effect of placing the defendant in a situation more worse off than what he would have been in if he had not applied under Rule 7. So also the conditions for taking benefit of the order should not be such as would have the effect of decreeing the suit itself. Similarly, the court may not in the garb of e .....

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dergo any amendment in the year 1976. The High Courts, for a long time, had been interpreting the said provision as conferring power upon the courts to issue certain directions which need not be confined to costs or otherwise. A discretionary jurisdiction has been conferred upon the court passing an order for setting aside an ex parte decree not only on the basis that the defendant had been able to prove sufficient cause for his non-appearance even on the date when the decree was passed, but als .....

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ivision Bench in holding that the learned Single Judge did not possess such power. The learned Single Judge exercised its discretionary jurisdiction keeping in view that the matter has been disposed of in fact finally at the interim stage at the back of defendant and it was in that view of the matter a chance was given to it to defend the suit, but, then the learned Single Judge was not correct to direct securing of the entire sum of ₹ 37 lakhs in the form of bank guarantee or deposit the .....

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otherwise as it thinks fit" as well. I do not think that the punctuation referred to above in the rule in any way lends support to the contention of the advocate for the petitioner. It looks to me that the Rule does not restrict the power of the Court to impose conditions for setting aside an ex parte decree to payment of costs only. The wording of the Rule is comprehensive enough to include conditions as to payment into Court of decretal amount or such other conditions as the Court thinks .....

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at all to impose such terms under any circumstances." In Somalal Nathalal Mistri vs. The Vasant Investment Corporation Ltd. & Anr. ILR (1954) Bom. 371, it was held : "The next question is whether the condition which has been imposed by the Court below is a reasonable condition. The expression "such terms as to costs, payment into Court or otherwise as it thinks fit" suggests that the matter is one of discretion, but the discretion is to be exercised in a judicial manner. .....

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e Court may come to the conclusion that the ends of justice will be met if the defendant is made to pay the amount of costs only. The true principle seem to me to be that while the Court has got power to impose conditions upon a defendant including the condition of the payment of the entire amount of the decree, the conditions to be imposed should be reasonable and should not be oppressive or at least should not be conditions which will result in the defendant not being able to defend the suit.& .....

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;The Court may, first of all, impose conditions as to the payment of costs, it may, secondly, impose conditions as to the payment into Court and, in my opinion, this covers the payment into Court of the decretal amount or some portion thereof or payment into Court of the costs. ....." I respectfully agree with the above view. The Court is competent to ask the defendant to pay a portion of the decretal amount or of the costs while setting aside the ex parte decree, but such conditions should .....

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rued widely. In Packwood vs. Union-Castle Mail Steamship Company Limited [(1903) 20 Times Law Reports 59], it was observed : ".....But the clause went on "or otherwise," and he thought that meant "in any other way," and that the clause did apply to the negligence of the butcher in allowing the dog to go loose and be lost." In Kavalappara Kottarathil Kochuni @ Moopil Nayar etc. vs. State of Madras & Kerala & Ors. [AIR 1960 SC 1080], this Court opined: "O .....

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