Supreme Court: Right of Appeal will not be extinguished on account of a dismissal of an application to set aside an Ex parte decree

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The Supreme Court reiterated that the statutory right of appeal will not be extinguished only on account of a dismissal of an application to set aside an ex parte decree under Order IX, Rule 13 of the Code of Civil Procedure (CPC). In the case before the Court, an adverse ex-parte ruling had been passed against the appellant in 2015 in a money suit. In the said suit, the appellant was the defendant. He claimed that he only became aware of the legal proceedings much after the suit was decreed ex-parte in favour of his opponent as the summons was sent to an outdated address at Trichy (whereas, the appellant had been residing in Chennai for over five years). The appellant, therefore, filed an application under Order IX, Rule 13 of the CPC to set aside the ex parte decree, arguing that he had sufficient cause explaining his non-appearance in the matter. This application, filed with a delay of 276 days, was however dismissed by the trial court. The dismissal was upheld by the High Court and the Supreme Court. Thereafter, the appellant filed an appeal challenging the decree itself under Section 96(2) of the CPC. However, this appeal was also not entertained by the High Court, in view of the fact that the appellant made the same submissions regarding the reasons for belatedly approaching the Court. Further, with the addition of the delay in filing the Order IX Rule 13 application, the appellant had filed the appeal after a cumulative delay of 546 days. The High Court’s dismissal of this appeal led to further appeal before the Supreme Court. The Supreme Court, in turn, took note that generally, a litigant against who an adverse ex-parte decree is passed, has two legal options before him; first, to file an application under Order IX Rule 13 CPC, and second, to file an appeal under Section 96(2) CPC.

Facts of the Case

The appellant-defendant is a businessman doing a business of tea and real estate. Case of the respondent-plaintiff is that on 10.01.2015, the appellant approached the respondent plaintiff for financial assistance for a sum of Rs.45,00,000/- for the purpose of his business needs. The respondent lent him the sum of Rs.45,00,000/- and there was no documentation for the same. According to the respondent, it was agreed that the said amount will be returned to the respondent with an interest of 18% per annum. The appellant agreed to return the said amount within two months, but the appellant has not paid the amount. On the other hand, the appellant is said to have issued two post-dated cheques to the respondent, one for an amount of Rs.25,00,000/- and another for an amount of Rs.20,00,000/-. When the said cheques were presented for collection on 10.03.2015, the same was returned with the endorsement that payments stopped by the drawer.

The respondent-plaintiff filed a civil suit in ADJ court and ex-parte order was passed in favour of respondent-plaintiff.

Arguments

Appellant filed an appeal to set aside the ex-parte decree in ADJ court with the application to condone the delay of 276 days. The appellant has stated that summons was sent to the appellant’s old address at Trichy and the same was returned unserved and the ex-parte decree was passed on 09.10.2015. It was averred in the said application that the appellant is residing in Chennai since January 2014. The ADJ set aside the decree. He then moved to High Court and then to the SC, but both rejected the application. The ex-parte decree passed in favour of respondent-plaintiff. The appellant-defendant filed an appeal in the ADJ court which was rejected, then he goes to the High Court and SC both Courts rejected the appeal on the ground that the appeal filed by the appellant beyond the period of limitation and the delay was not satisfactorily explained. Thereafter the appellant-defendant file an appeal under Section 96(2) CPC in High Court. However, this appeal was also not entertained by the High Court, in view of the fact that the appellant made the same submissions regarding the reasons for belatedly approaching the Court. The High Court’s dismissal of this appeal led to further appeal before the Supreme Court

Judgement of the Court

Supreme Court set aside the High Court judgment, condoned the delay and sent the case back to the High Court, on the condition that the appellant makes a deposit of Rs 20,00,000 apart from the Rs 25,00,000 he had already deposited.

[googlepdf url=”https://libertatem.in/wp-content/uploads/2019/11/27842_2018_5_1501_18304_Judgement_21-Nov-2019.pdf” download=”Download Judgement PDF” width=”100%” height=”900″]


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