Andhra HC (Pre-Telangana)
Gopal And Co. A Registered Partnership ... vs Kure Balarajaiah Siddiramulu, A Firm ... on 31 January, 1994
Equivalent citations: 1994(1)ALT410
JUDGMENT S. Parvatha Rao, J.
1. The appellant is the defendant is O.S. No. 21 of 1984 on the file of the learned Subordinate Judge's Court at Nizamabad and the respondent is the plaintiff who instituted the said suit for recovery of a sum of Rs. 59, 318-81 ps. with costs and future interest. That suit was decreed ex parte on 26-12-1988 as the defendant and his counsel were called absent. The defendant preferred I.A. No. 78 of 1989 under Order 9 Rule 13 of the Civil Procedure Code for setting aside the said ex parte decree of 26-12-1988. The learned Subordinate Judge, after hearing both sides, by his order dated 18-7-1989 set aside the ex parte decree on condition that the defendant should deposit half of the decretal amount and costs on or before 1-8-1989 and that "in case of failure to deposit on or before the said date", the I.A. would stand dismissed.
2. The defendant approached this Court on 18-7-1989 by way of Civil Miscellaneous Appeal No. 1109 of 1989. That C.M.A. was admitted on 28-7-1989 and on the same day in C.M.P. No. 10140 of 1989 this Court granted interim stay of all further proceedings pursuant to the said ex parte decree dated 26-12-1988 subject to the condition of his depositing Rs. 10,000/- on or before 15-9-1989 in default of which the petition would stand dismissed. On a petition (C.M.P. No. 11542 of 1989) to vacate the interim order of stay, this Court, by order dated 5-9-1989, made the interim order absolute and permitted the respondent (plaintiff) to withdraw the sum of Rs. 10,000/- after it was deposited, without furnishing security. Subsequently, on the petitions made by the defendant this Court granted further time for depositing Rs. 10,000/- and also permitted him to deposit the same in instalments. It is now not in dispute that the defendant deposited the entire sum of Rs. 10,000/- pursuant to the directions of this Court and that the same was withdrawn by the plaintiff.
3. When this matter came up before me on 16-12-1993 Mr. M. Chandrasekhara Rao appearing for the respondent (plaintiff) took a preliminary objection that the C.M.A. was not maintainable in view of Clause (d) of Rule 1 of Order 43 C.P.C. whereunder an appeal is provided only from "an order under Rule 13 of Order IX rejecting an application (in a case open to appeal) for an order to set aside a decree passed ex parte". He submitted that the learned Subordinate Judge allowed I.A. No. 78 of 1989 by setting aside the ex parte decree, though conditionally, granting time till 1-8-1989 to fulfil the condition and that if the said condition was not fulfilled on or before 1-8-1989 the said LA. would stand dismissed. The appeal against the said order having been presented on 27-7-1989 itself, the learned Counsel contended that it was not maintainable. He relied on the decision of this Court in Gadde Tirupathaiah v. Ambadipudi Sundara Ramaiah, . The learned Counsel appearing for the appellant (defendant) had not disputed that the proper remedy for the appellant was to approach this Court by way of Civil Revision Petition under Section 115 of the Civil Procedure Code, 1908 and not by way of an appeal under Order 43 Rule 1(d) and he prayed that the Civil Miscellaneous Appeal should be treated as a revision petition under Section 115 C.P.C. In view of the same, I directed the Office to number the present C.M.A. as C.R.P. and the present matter was numbered as C.R.P. No. 4288 of 1993 and I dictated the order therein after hearing the arguments advanced by the learned Counsel on both sides allowing the same and modifying the order of the learned Subordinate Judge by omitting the direction requiring the defendant to deposit half of the decretal amount keeping in view the fact that the defendant had already deposited Rs. 10,000/- pursuant to the directions of this Court which was already withdrawn by the plaintiff and directing that the ex parte decree of the learned Subordinate Judge should be set aside subject to the condition of the defendant depositing the costs of Rs. 3,731/- by 21-1-1994. I also directed that the amount of costs deposited and the amount of Rs. 10,000/- already received by the plaintiff shall be taken into consideration by the lower Court at the time of pronouncing judgment in the suit and would be subject to the result of the suit and directed the lower Court to expeditiously dispose of the suit preferably within six months.
4. However, I subsequently noticed the judgment of a Division Bench of the Madras High Court in Ramayya v. Lakshmayya, AIR 1944 Madras 383 followed by Panchapakesa Aiyar, J., in Kotaiah v. Narasimham, AIR 1949 Madras 469 and Mach, J., in Balarama v. Subbarama, . In Ramayya v. Lakshmayya (2 supra) the Division bench was considering an order of the lower Court of 5-7-1943 setting aside an ex parte decree on condition that a sum of Rs. 100/- should be deposited towards costs on or before a particular date with a further direction as follows:-
"It is further ordered that in default of payment the petitions do stand dismissed with costs."
Mockett, J., observed that the said order of the lower Court was all comprehensive because nothing further was required to be done if the deposit of costs was not made. He rejected the preliminary objection raised that no appeal lay against the order holding as follows:-
"It must naturally be a matter of difficulty to construe such orders as this, whether they are final or whether they require a second order to complete them. I personally am glad to give a liberal construction to these matters and not by extreme technicality to shut out an appellant from being heard; for after all that is all that he asks for. It certainly seems to me that the order of 5th July concluded the matter and I do not suppose that either the Court or the parties had any other idea in their minds."
The other learned Judge constituting the Division Bench Bell, J., held as follows :-
"What more on 5th July 1943 was required from the Subordinate Judge's Court? If the last sentence of the decretal order be left out, clearly there would be something lacking, that is to say, a ruling as to the effect of any default on the part of the petitioners. But this the order provided for by saying: it is further ordered that in default of payment the petitions do stand dismissed with costs'. Nothing further was left to be said as to be final result of the petition."
The learned Judges distinguished the decision of Madhavan Nair, J., in Rajagopalachari v. Narasimha,. AIR 1925 Madras 1182 and of an earlier Division Bench in Venkatasami v. Shanmugham, AIR 1918 Madras 257. Following the decision in Kotaiah v. Narasimham, AIR 1949 Madras 469, Panchapakesa Aiyar, J., observed:
".....It has been definitely held that in the case (in Ramayya's case (2supra)) of an all comprehensive order, like the one passed by the District Munsif on 3rd July 1946, where the petitioner had to do certain things, namely, to deposit costs, etc., into Court; to get the ex parte order set aside, with a direction that if he did not do so, the petition was to stand dismissed with costs, the order would be a final one and the appeal should be filed within thirty days."
Mack, J., considered the matter more elaborately in Balarama v. Subbarama, . The learned Judge was considering the effect of the conditional orders passed setting aside ex parte decrees subject to fulfilment of certain conditions like payment of costs or decretal amount etc., with further direction that indefault the application for setting aside would stand dismissed. He observed as follows:-
"It is regarded as a final order, one favourable to the petitioner, if he complies with the conditions by the appointed date, whereas if he fails to do so, the order works itself out automatically as one of dismissal adverse to the petitioner.
xxxx xxxx xxxx Order 43, Rule 1(d) contemplates one appeal against the rejection of an application under Order 9, Rule 13. A single application cannot be rejected on two different dates to permit of two different criterion dates for limitation. The only practicable and possible view to take appears to be that the conditional order, which is the basis of the rejection of the application, is the only appealable order, if the petitioner is aggrieved by it in any way or finds it impossible to comply with the conditions as inequitable or onerous, in which case he should appeal against it within the prescribed period from the date of such order."
Different consequences might follow if in the conditional order setting aside the ex parte decree, no mention is made of the consequences for not fulfilling the condition and the matter is adjourned to a further date for reporting the fulfilment of the condition or for some other purpose. No appeal may lie against such an order under Order 43 Rule 1(d) of the Civil Procedure Code as held by K. Bhaskaran, J., (as he then was) in N. Karuppan v. M. Sankaran Nair, . In the present case, the order questioned clearly provided for the consequence in the following terms:
"......and in case of failure to deposit on or before the said date, the petition stands dismissed."
In Gadde Tirupathaiah's case (1 supra) these questions did not arise and therefore, the decision in that case is not of any help in the present case.
5. In view of the above legal position, I directed the matter to be posted for being mentioned on 18-1-1994. The learned Counsel on both sides took time to consider the effect of the decisions of the Madras High Court in Ramayya v. Lakshmayya (2 supra), Kotaiah v. Narasimham (3 supra) and Balarama v. Subbarama (4 supra). On 24-1-1994, to which date the matter was posted again, the learned Counsel for the respondent (plaintiff), Mr. M. Chandrasekhara Rao, agreed that the appeal was the correct remedy against the order of the learned Subordinate Judge in I.A. No. 78 of 1989 dated 18-7-1989. In the circumstances, I recalled my earlier order dated 16-12-1993 converting the Civil Miscellaneous Appeal into Civil Revision Petition and directed the Office to reconvert the Civil Revision Petition into Civil Miscellaneous Appeal and restore to it the original number i.e., C.M.A. No. 1109 of 1989. The learned Counsel have agreed that the C.M.A. may be disposed of without any further arguments on merits.
6. The learned Counsel for the appellant (defendant) has submitted that the learned Subordinate Judge imposed a severely onerous condition of requiring the appellant to deposit half of the decretal amount with costs as a pre-condition for setting aside the ex parte decree and that there was no justification for imposing such an onerous condition. He has submitted that already the appellant deposited a sum of Rs. 10,000/- pursuant to the interim directions of this Court and that the same was already withdrawn by the respondent and that the circumstances of the case do not warrant any further amount to bedeposited as a condition precedent for setting aside the ex parte decree. The case of the appellant is that when the suit was posted on 26-12-1988 his Counsel was not doing well and was asked to take bed rest for 21 days and that the partner of the appellant-firm Vittal Das Soni who was looking after the suit was also not well and therefore could not attend the Court on that date. Vittal Das Soni filed an affidavit to that effect. The learned Subordinate Judge had not given any finding as regards the illness of the Advocate appearing for the appellant before him: it was the Advocate who had to cross-examine the witness of the plaintiff on 26-12-1988. On the other hand, the learned Counsel for the respondent has contended very vehemently that it was open to the Court to impose conditions while setting aside the ex parte decree and that the condition imposed is reasonable on the facts and circumstances of the case. He has drawn my attention to the observations of the learned Subordinate Judge in his order that the suit was adjourned to 13-12-1988, then to 21-12-1988, and then again to 26-12-1988 on which date also the Counsel for the defendant was not present and there was no representation on his behalf and that under those circumstances the suit was decreed ex parte.
7. The short question that arises in this case is whether the condition imposed by the learned Subordinate Judge requiring the appellant to deposit half of the decretal amount and costs is reasonable.
8. In V. Kasturi Bai v. P. Varalakshmi, 1983 (1) APLJ 305, K. Ramaswamy, J., as he then was held as follows:-
"The exercise of the discretion should be judicious. No doubt the Court has power to direct deposit part of the amount decreed exparte, but that power has to be exercised only in special circumstances obtainable on the facts in that case and the Court has to give reasons thereof. Discretion cannot be put on the pedestal of whim of the Court but to be exercised carefully taking into account the well settled principles of law to advance the cause of justice depending upon the facts and circumstances in each case. That is the reason why, perhaps, the legislature has confided in the Court discretionary power of wide aplitude. In this case the exercise of discretion is not properly made, nor the reason assigned therefor. Therefore, the order of the lower Court to the extent of directing the appellants to deposit 'half of the decretal amount' is set aside, while retaining the discretion exercised by the lower Court, ordering deposit of suit costs by the appellants. But however such deposit of costs will be subject to the ultimate result of the suit."
9. The principle as laid by Chandra Reddi J., in Surayya v. Thayaramma, is that odinarily the Court will not impose onerous condition on the defendant such as furnishing of security therefor and that conditions as to deposit of decretal amount or such similar terms are imposed only under Special circumstances. The learned Judge rejected the contention that the expression "such terms" in Order 9 Rule 13 did not authorise the Court to require the deposit of the decretal amount or any part of it, and held as follows:-
"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 fit. Ordinarily the Court will not impose onerous conditions upon the defendant, such as the payment into Court of the whole or part of the decretal amount or as to furnishing of security therefor etc. The conditions as to deposit of decretal amount or such similar terms are imposed only under special circumstances. It is one thing to say that it is either inequitable or unjust to put the defendant to such onerous terms, but it is quite a different thing to say that the Court has no jurisdiction at all to impose such terms under any circumstances.
xxxxx xxxxx xxxxx I am of opinion that the intendment of Order 9, Rule 13 is to confer power upon the Court to impose conditions for setting aside an ex parte decree as to costs, as to payment of the decretal amount whole or in part or as to such other conditions as the Court thinks fit."
10. A Division Bench of the Patna High Court in Shyam Lal v. Ram Narain, AIR 1920 Patna 660 elaborated on the conditions which can be imposed while setting aside an ex parte decree in the following manner:
"It seems to me that the terms which the Court has power to impose as a condition for restoring the case for rehearing are of a threefold nature. The Court may, first of all, impose conditions as to the payment of costs; it may, secondly, impose conditions as to 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 costs; and, thirdly, it may impose other conditions as it may think fit and whilst at the same time in cases where there is no default on the part of the party asking for a rehearing, such as for instance, where he has not been duly served, it would not be equitable for the Court to impose any conditions at all, nevertheless in other cases, such as the present where it is not absolutely clear that the illness of the defendant prevented him being represented at the trial, it is well within the competence of the Court to impose terms such as were imposed in the present case."
In that case the Division Bench held that the payment into Court of a sum equal to about one-fifth of the decretal amount imposes no real hardship upon the defendant and the order of the lower Court imposing such a condition need not be interfered with. In Chhagan Raj v. Sugan Mal, , K.N. Wanchoo, C.J., as he then was, speaking for the Division Bench of the Rajasthan High Court, explained the manner in which the Court should approach the question of imposing terms when setting aside an ex parte decree as follows:-
"There is no doubt that the Court has power to impose terms when setting aside an ex parte decree. These terms may include an order for payment of costs or even for giving security for the decretal amount or any other term which the Court considers reasonable. But the Court, before it comes to decide on what terms the decree is to be set aside, has got to satisfy itself that either the summons was not duly served or the defendant was prevented by sufficient cause from appearing.
xxxx xxxx xxxx Further, it is well settled that even where a further condition besides costs is imposed, it should not be of an onerous nature. Whether the condition is onerous or not will again depend on the circumstances of each case. But again, generally speaking, where a defendant is able to show that he had sufficient reasons for not appearing on the date fixed and there is nothing on the record to show that the defendant had been acting in such manner as to require some further condition being imposed on him, the Court should not impose any further condition besides the condition relating to costs."
A learned Single Judge of the Allahabad High Court has also taken a similar view in Raj Kumar v. Mohan Meakin Braveries, that the Court may impose reasonable terms where it finds that the defendant is at fault or there has been delay in the disposal of the case, but that it is not open to the Court at any time to impose onerous terms and that an order directing a party to deposit in cash 1/3rd or 1/5th of the decretal amount is not justified when the amount claimed in the suit is large one.
11. Where any portion of the amount claimed in the suit is admitted, it may be reasonable to require the defendant to deposit the entire admitted amount or part of it as was done by A. Venkatarami Reddy, J., in R. Rama Rao v. V. Venkateswarlu and Brothers, . The learned Judge has observed in that case that the imposition of the terms depends upon the various facts and circumstances of the case and that in the case before him, the defendant who sought the setting aside of the ex parte decree against him, admitted that some amount was due from him though the quantum was disputed, and under those circumstances was inclined to reduce the amount required to be deposited from Rs. 15,000/- (as per the order of the lower Court) to Rs. 10,000/-. In B. Padmavathi Rai v. Parvathiamma, AIR 1976 Kar. 97, K. Jagannatha Shetty, J., of the Karnataka High Court (as he then was) required the defendant to deposit the entire admitted portion of the suit claim as a condition for setting aside the ex parte decree observing that:
"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 not be unreasonable or illegal."
In L.I.C. of India v. Anjan Kumar, a Division Bench of the Calcutta High Court observed as follows:-
"While allowing an application for restoration the Court can certainly impose conditions and they are at times done. But such conditions must be reasonable and must have some justification having regard to the attending circumstances. Such conditions cannot be imposed just arbitrarily. Here in the present case neither of the conditions imposed by the learned Judge can be justified as those imposed in proper exercise of judicial discretion."
In that case the condition imposed was that a sum of Rs .50,000/- out of the claim of Rs. 65,000/- should be deposited with the Advocate on record and that interest derived there from should be paid to the plaintiff.
12. From the principles laid down by various High Courts adumbrated above. There is no doubt that in setting aside an ex parte decree, the Court ought not to impose onerous conditions unless there are exceptional reasons fordoing so which have to be clearly stated in the order. Requiring the defendant to deposit half of the decretal amount or even 1/3rd of the decretal amount is an onerous condition for which there must be a reasonable ground and unless such grounds are made out it would be an unreasonable condition. If the facts and circumstances of the case warrant an onerous condition to be imposed, the order imposing such conditions should be a speaking one giving out the reasons for imposing such conditions as stated in V. Kasturi Bai's case (8 supra). Such onerous conditions cannot be imposed by laconic and unspeaking orders.
13. On the facts of the present case, I do not find that any reasons are given by the learned Subordinate Judge in imposing the onerous condition of requiring the petitioner herein to deposit half of the decretal amount and costs as a condition precedent for setting aside the ex parte decree. If the learned Subordinate Judge was persuaded by interests of justice to set aside the exparte decree, it follows that onerous conditions are also out of place. The record discloses that the averments in the affidavit in support of the application for setting aside the ex parte decree in I.A. No. 78 of 1989, that the defendant's Advocate was not doing well and that he was advised to take rest, were not denied in the counter affidavit of the plaintiff. In Subbarayudu v. Rangiah, (1961) 1 An.W.R. 212 a Division Bench of this Court disagreed with the view of M.A. Ansari, J., in Thadlapalli Saraswathamma v. Thadlapalli Amruthamma, ILR (1957) A.P. 165 and held that:
"an affidavit is evidence in proceedings upon an application under Order 9, Rule 13, Civil Procedure Code."
When there is a specific averment in the affidavit filed on behalf of the defendant that the Advocate was unwell, there is no reason to disbelieve the same when especially the same was not disputed or questioned in the counter affidavit of the plaintiff. Unfortunately the learned Subordinate Judge did not advert to this aspect of the matter at all. If the Advocate of the defendant was unwell and could not attend the Court, the mere presence of the defendant would not have been of any avail because the suit was posted for cross-examination of one of the plaintiff's witnesses. In Shaik Aman Alli v. K. Venkata Rama, it was contended that though the Counsel was absent, nothing prevented the party from appearing in the Court, and that the reason for his absence being his illness he had not established the same by medical evidence. Referring to the Judgment of the Supreme Court in Savitri Amma v. Aratha Karthy, wherein it was held that the absence of the Counsel at the time when the case was called was a sufficient ground to set aside the order of dismissal for default, K. Ramaswamy, J., (as he then was) observed in that case that without the assistance of the Counsel nothing could be done and even if the parties were present, it could not advance the case any further except to adjourn the case to a future date, and that in view of the fact that the Counsel was not in the station on the day when the suit was posted, the view of the trial Court that the absence of the parties was not properly explained was erroneous.
14. I am therefore satisfied that in the present case the appellant has established sufficient cause for not being able to proceed with the suit on 26-12-1988. On the same day the ex parte decree was passed. The appellant presented LA. No. 78 of 1989 on 18-1-1989. It is surprising that the learned Subordinate Judge observes:
"As the decree passed is a money decree and it is already five years old there is no justification for restoration of the suit."
and yet passes an order setting aside the ex parte decree subject to the condition of the appellant depositing half of the decretal amount with costs. The question that has to be enquried into in an application for setting aside an ex parte decree under Rule 13 of Order 9 C.P.C. is whether the summons was not duly served on the applicant or whether he was prevented by any sufficient cause for appearing when the suit was called on for hearing - the Court should be satisfied in this regard before proceeding further; if the Court is not satisfied in this regard the Court cannot make an order setting aside the exparte decree and the application will have to be dismissed. In the present case, the learned Subordinate Judge ought to have given a clear finding that there was sufficient cause preventing the appellant or his Advocate from appearing when the suit was called for cross-examination of the witness on the plaintiff's side, before setting aside the ex parte decree "in the interests of justice", as he puts it, because Rule 13 does not contemplate setting aside of ex parte decrees in the interests of justice even when the Court is not satisfied of the two alternatives i.e., that the summons was not duly served or that there was sufficient cause for non-appearance on the day when the suit was called.
15. The conditions to be imposed remain to be considered. In the counter affidavit filed in opposition to the I.A., the affort of the respondent had been to have onerous conditions imposed on the appellant. He stated that he filed the suit on 21-2-1984 and that the appellant herein i.e., the defendant, was set ex parte on 9-4-1984 and that the said orders setting him ex parte were set aside on 4-7-1984 and that he filed the written statement in August 1985. Thereafter the respondent's i.e., the plaintiff's, evidence was recorded on 7-12-1988. It cannot be said that the appellant was in any way responsible for the time taken between August 1985 and December 1988. No doubt, after 7-12-1988 the suit was adjourned for corss-examination of the witness on the plaintiff's side on two occasions i.e., on 13-12-1988 and 21-12-1988. Thereafter, it was posted to 26-12-1988 on which date the defendant was called absent and the suit was decreed ex parte. Soon thereafter the petitioner presented the LA. for setting aside the ex parte decree on 18-1-1989. It is not the case of the respondent that the appellant has admitted the suit claim or any portion of it. It is not as if the learned Subordinate Judge found that as a fact the learned Counsel for the appellant was not ill on 26-12-1988 - the respondent has not disputed the averment as regards the illness of the apellant's Advocate. Therefore I am of the view that the facts and circumstances of the case do not warrant any onerous conditions to be imposed. The only fact to be taken into consideration for imposing conditions is that atleast twice the matter was adjourned for cross-examination by the appellant's Counsel and that the third time there was no representation even, on behalf of the appellant.
16. In the circumstances, I modify the order of the learned Subordinate Judge by omitting the direction requiring the appellant to deposit half of the decretal amount. In view of the fact that the appellant had already deposited Rs. 10,000/- which was already withdrawn by the respondent herein, the ex parte decree of the learned Subordinate Judge shall be set aside subject to the condition of the petitioner depositing in the lower Court to the credit of the suit the costs of Rs. 3,731/- on or before 15-3-1994. The amount so deposited towards costs and the amount of Rs. 10,000/- received by the plaintiff shall be taken into consideration by the lower Court at the time of disposal of the suit and will be subject to the result of the suit. The lower Court is directed to expeditiously dispose of the suit, preferably within six months.
17. If the appellant fails to deposit the costs of Rs. 3,731/- on or before 15-3-1994 the ex parte decree shall stand without any further orders and the respondent herein shall be at liberty to execute the decree.
18. The Civil Miscellaneous Appeal is accordingly allowed. No costs.