Madhya Pradesh High Court
Nandlal Kanoria vs National Industrial Development ... on 25 July, 1997
Equivalent citations: AIR1998MP236, 1998(1)MPLJ546, AIR 1998 MADHYA PRADESH 236, (1998) 1 MPLJ 546 (1998) 3 CIVLJ 380, (1998) 3 CIVLJ 380
Author: Dipak Misra
Bench: Dipak Misra
JUDGMENT Dipak Mishra, J.
1. This appeal has been directed against the order refusing to set aside a final decree :in Civil Suit No. 6-A/70 by the Additional District Judge, Burhanpur which was passed ex parte and without notice to one of the defendants, the appellant herein,
2. The respondent No. 1 National Industrial Development Corporation Ltd. instituted the aforesaid suit against the father of the present appellant i.e. Bhagirath and 3 others defendants 2 to 4 herein for recovery of Rs. 28,90,387/- and seeking a decree for sale of mortgaged property for the realisation of the aforesaid amount. The suit was contested by the defendants by filing their written statements but eventually an exparte preliminary decree was passed against all the defendants on 25-3-1994.
3. After passing of the preliminary decree as occasion arose the decree holder filed an application on 20-3-1995 for passing of a final decree as contemplated under Order 34, Rules 5 and 6 of the Code of Civil Procedure (in short the 'CPC'). The defendants were proceeded ex parte and the Court below decreed that the mortgaged property mentioned in the preliminary decree be sold and the money realised by such sale be paid in the Court. The appellant who was a party to the proceeding' was not served with summons for making the preliminary decree final. After coming to know about the same he filed an application under Order 9, Rule 13 of the CPC for setting aside the final decree. The application filed by the present appellant was resisted by the decree holder on the ground that there was no need to give any notice to the appellant as he had already been proceeded ex parte before passing of the preliminary decree. The Court below considering the averments of the parties came to hold that as the petitioner, the applicant in the proceeding under Order 9, Rule 13, C. P. C., was proceeded ex parte in the suit, there was no necessity of service of notice in the final decree proceedings. Being of this view he rejected the application preferred by the present appellant by the impugned order. Thus this appeal by the appellant herein.
4. Shri Abhay Sapre learned counsel for the applicant has contended that the Court below has absolutely fallen into error by opining that the appellant was not entitled to be noticed because of his ex pane status during the suit. His further submission is that the view taken by the learned Additional District Judge is against the accepted norms and contrary to the principles of natural justice. To butteress his submission he has relied upon ,the decisions rendered in the cases of Hirekhan Motikhan v. Narbada Bai, AIR 1952 Nag 177, Tikaram Namaji v. Tarachand Gujaba, AIR 1954 Nag 135 and Mahajan Raghubirprasad v. Pyarelal Amarchand Kalar, AIR 1944 Nag 181.
5. Mr. A.K. Verma learned counsel for the respondent No. 1, refuting the submission of Shri Sapre, has contended that notice to defendant between the preliminary and final decree is not necessary and, therefore, a final decree passed ex parte cannot be set aside under Order 9, Rule 13, C. P. C. To substantiate his contentions, he has placed reliance on Mahadeo Pandey v. Somnath Pandey, AIR 1926 All 757, Mohim Chandra Cuba Deb Verman v. Nabchandra Choudhary, AIR 1931 Cal 58 and Surendra Kumar Singh v. Mukundlal Sana, AIR 1949 Pat. 68.
6. On a perusal of the impugned order it is quite apparent that after initiation of the final decree proceeding by order dated 21 -3-1995 the Court had issued notices to the defendants'therein. The same could not be served on the present appellant, Nandlal. It is not disputed that by order 19-12-1995 the Court passed an order to the effect that as the said defendant had been proceeded ex parte during the preliminary decree proceeding there was no necessity to issue-summons to him. Accordingly he was proceeded ex parte and eventually the final decree was drawn on 15-4-1996. The Court below modified its own order relating to issuance of summons to Nandlal as it was thought appropriate in the facts and circumstances of the case not to issue notice to the said defendant. This has been done as the Court below has taken the view that it was not necessary to send a notice to the defendant in the final decree proceeding as he was ex parte at the earlier stage. In this regard let me first refer to the decisions relied on by the learned counsel for the appellant. In the decision rendered in the case of Hirekhan and Motikhan (supra), it has been held as follows :--
"Notices to the defts. of an application for final decree are necessary. If, however, a final decree is passed against a deft. without notice to him he can apply to have it set aside on proof of the circumstances contained in Order 9, Rule 13. But unless the deft, comes forward to apply for setting aside the 'ex parte' final decree that decree would be effective and enforceable."
The aforesaid decision was rendered placing reliance on the case of Mahajan Raghubirprasad (supra) wherein Vivian Bose, J. (as his Lordship then was) laid down as under :
"A Court has power to set aside an ex parte final decree for foreclosure. Although a preliminary decree is passed, the provisions of Order 9, Rule 13 and Order 17, Rule 2 apply. A person may be a judgment debtor for some purposes and yet remain a defendant for others. So long as the suit is in being (and by preliminary decree a suit is not disposed of) the person against whom it is being prosecuted must be a defendant."
Similar view has been taken in Tikaram and Namaji (supra) wherein the Division Bench held thus ;
"Though there is no express provision in the Code for issue of notice to the defendant mortgagor of an application for making a preliminary decree final it is necessary that such a notice must be issued to him as the mortgagor is entitied to make payment into Court at any time before a final decree is passed and is also entitled to extension of time on good cause being shown. Moreover, the well known maxim 'audi alteram partem' which is a fundamental rule of judicial procedure governs such cases."
7. The learned counsel for the respondent has referred me to the decisions in the cases of Mahadeo Pandey (supra) and Surendra Kumar Singh (supra). The Allahabad High Court in Mahadeo Pandey's case (supra) has expressed the view that no notice to the mortgagor is necessary between the preliminary and the final decree. Later on the said High Court in the case of Bhojai v. Salim Ullah and Ors., AIR 1967 All 221, has held as follows :--
"Although the Civil P.C. does not expressly require notice of an application for the preparation of final decree to be served upon the persons against whom the decree is sought to be passed, but having regard to the fundamental rule of judicial procedure expressed in the maxim 'audi alteram partem', it has been consistently held that notice of such an application must be issued, and that a person against whom final decree has been passed without notice is entitled to have it set aside.
In the case of Smt. Savitri Devi v. Laxmi Narain and others, AIR 1966 Raj 261 it has been held as under (at page 262):
"It is one of the fundamental principles of judicial procedure that no order should be passed to the prejudice of a party without any opportunity of hearing being afforded to him. The view, therefore, that before a Court passes a final decree on the basis of a preliminary decree earlier passed by it, it should give a notice to the defendants before the final decree, is passed, best accords with this view".
The view taken by the Madras High Court in the case of Mochi Dola Behera and others v. Jujisti Janni and others, AIR 1935 Mad 716 and the Calcutta High Court in Suresh Chandra Banerjee and another v. United Bank of India Ltd. and another, AIR 1961 Cal 534, are to the same effect. There is also change of view of the High Court of Patna as has been expressed in Abdul Haj v. Rahatullah Mian and Anr., AIR 1974 Pat 244.
8. From the aforesaid it is clear as day that the view of Nagpur High Court is quite consistent that service of notice is essential before the decree can be made final. The decision of the Nagpur High Court is a binding precedent.
9. Quite apart from above in the case of Tikaram Namaji (supra) the Court referring to the maxim 'Audi Alteram Partem' has held that the said principle governs such cases. While respectfully agreeing with the said view I would like to add that the concept of the Natural Justice has been described as "substantial requirements of justice" by Kerl of Selbome, L.C. in Arthur John Spockmen v. The Plustood District Board of Works (1884-85) 10 Appeal Cases 229, 240. In the case of Maneka Gandhi v. Union of India, AIR 1978 SC 597 Bhagwati J. (as his Lordship then was) emphasised "on fair play in action". A duty to act fairly having respect for what is right and wrong is the quitessence of principles of natural justice. The otherside has to be heared before any adverse order is passed. In this context I may also refer to the principle embodied in 'Qui aliquid statuerit, parte inasudita altera, aequum licet deserit, haud aequum facerit", that is, he who determines any matter without hearing both sides, though he may have decided right, has not done justice. It is well settled in law that justice should not only be done but should manifestly be seen to be done. Therefore, when in final proceeding the defendants can have some say to avoid sale of the mortgaged property, indubitably he has to be heard and a notice has to be served on him. That is the basic requirement.
10. Learned counsel for the respondents has submitted that even if the impugned order is set aside and appellant is to be heard in the final decree proceeding the whole decree, that is to say the decree against other defendants, should not be set aside. In my view the aforesaid submission does not merit consideration in the present case as the whole decree has to be set aside to avoid anomaly.
11. In view of the aforesaid analysis I am of the considered view that the impugned order is indefensible and the same deserves to be set aside. As a consequence, the impugned order is set aside and the application for setting aside the final decree is allowed. The final decree shall proceed from the stage of notice. To avoid delay the present appellant shall appear before the Court below on 29-8-1997 on which date the Court below shall fix a date for hearing. As other defendants have chosen not to appear before this Court it is directed that the trial Court also would serve notices on them in accordance with law and the plaintiff shall take prompt steps to see that the notices are served. Effective steps should be taken to serve notices on the said defendants. As the proceeding is pending for a considerable length of time the Court below would do well to dispose of the final decree proceeding by end of November, 1997 positively and intimate the facts of disposal to the Registry of this Court.
12. In the result, the appeal is allowed but there shall be no order as to costs.