Andhra HC (Pre-Telangana)
Vakati Prabhakar Reddy vs Tenali Mohan Rao on 14 June, 2002
Equivalent citations: 2003(2)ALT76
Author: B. Sudershan Reddy
Bench: B. Sudershan Reddy, G. Rohini
ORDER B. Sudershan Reddy, J.
1. The fourth defendant in O.S.No. 87 of 1990 on the file of the learned Senior Civil Judge, Nellore is the appellant in this Letters Patent Appeal. The respondent-plaintiff filed the said suit against the appellant who is the fourth defendant and three others including the State of A.P. as defendants 1 to 3 for recovery of Rs. 1,98,774/-. The appellant herein having entered his appearance through his Advocate failed to file his written statement. The appellant was accordingly set ex parte by the trial Court on 3-12-1990. Thereafter he filed I.A.No. 59 of 1991 purported to be under Rule 7 of Order IX C.P.C. to set aside the ex parte order against him. The learned trial Judge allowed the said application and the order setting him ex parte was set aside. Thereafter the matter under went several adjournments in order to enable the appellant herein to file his written statement. The appellant herein did not file his written statement till 13-12-1991 and did not even pay the costs imposed against him. The trial court listed the matter for framing of issues, however without passing any order setting the appellant herein ex parte.
2. The trial court by its Judgment dated 28-1-1996 dismissed the suit filed by the respondent-plaintiff as against the defendants 1 to 3 but decreed the suit as against the appellant for the amount claimed by the plaintiff.
3. The appellant filed LA. No. 374 of 1997 with a prayer to set aside the ex parte decree passed by the trial court. It is not necessary to notice the reasons stated by the appellant in the affidavit filed in support of the said application. Suffice it to notice that the respondent herein opposed the application filed by the appellant. The respondent herein contended that the decree against the appellant is not an ex parte decree and the petition to set aside the ex parte decree itself is hopelessly barred by time. The respondent herein also contended that the appellant herein all through has been negligent in prosecuting the matter. The decree passed against the appellant herein cannot be set aside, is the case of the respondent.
4. The trial court dismissed I.A.No. 374 of 1997 filed by the appellant herein holding that the decree passed against the appellant is not an ex parte decree. The court also held that the petition filed by him is hopelessly barred by time.
5. The appellant herein preferred C.M.A.No. 2517 of 2001 questioning the correctness of the order passed by the trial Court.
6. In the said appeal, it was contended before the learned Single Judge that the decree passed against the appellant is an ex parte decree, though he was not formally set ex parte in the suit, since the appellant admittedly did not appear before the Court and adduce any evidence in the suit during the trial. The respondent herein contended before the learned Single Judge that the decree was passed on 27-11-1996 and the application filed by the appellant on 27-10-1997 is hopelessly barred by time, since an application to set aside the ex parte decree is required to be filed within 30 days from the date of decree as per Article 123 of the Limitation Act. Admittedly, the appellant herein did not file any application to condone the delay in filing an application to set aside the ex parte decree. The learned Single Judge upon an elaborate consideration of the matter came to the conclusion that non-filing of the application under Section 5 of the Limitation Act by itself is not a ground to dismiss the petition filed under Rule 13 of Order IX of C.P.C., provided the applicant is able to establish that there are sufficient grounds for condoning the delay. The learned trial (sic. appellate) Judge in this regard relied upon the ratio in the decision of a Division Bench of this Court in Ramachander Rao v. Seshaiah, 1957 (2) An.W.R. 106. The learned Judge accordingly held that filing of a formal petition under Section 5 of Limitation Act is not the sine qua non for the Court exercising its power under Section 5 of the Limitation Act if the delay in filing the petition is properly explained in the affidavit filed in support of the petition filed under Rule 13 of Order IX C.P.C. The learned Judge held that the court has ample power to condone the delay even without a separate application under Section 5 of the Limitation Act, provided the affidavit filed in support of the application to set aside the ex parte decree reveals sufficient cause.
7. The learned Judge, having regard to the totality of the facts and circumstances of the case, allowed the application filed by the appellant under Rule 13 of Order IX of C.P.C. and accordingly set aside the ex parte decree granted by the trial Court. The learned Single Judge reversed the order passed by the trial court dismissing the application to set aside the ex parte decree. In the result, the learned Judge allowed the appeal. However, the learned Judge having taken note of the conduct of the appellant herein came to the conclusion that the appellant filed the petition to set aside the ex parte decree with a view to delay the execution of the decree and to drag on the proceedings as long time as possible. In such view of the matter, the learned Judge as a condition precedent for setting aside the ex parte decree directed the appellant to deposit 75% of the decretal amount i.e., 75% of the principal and interest accrued thereon as per the decree up to the date of deposit and entire costs awarded in the decree and in addition thereto Rs. 10,000/-as costs to the respondent for condoning the inordinate delay in filing the petition under Rule 13 of Order IX C.P.C. The learned Judge also held that the appellant herein is not entitled to put the clock back by seeking permission to file his written statement. The learned Judge accordingly permitted the appellant to cross-examine P.Ws. already examined by the trial Court. The learned Judge however granted liberty to the appellant to adduce his evidence. The learned Judge gave liberty to both the parties to adduce such evidence as they may wish to do so.
8. In this appeal Sri Someshwar Kumar, learned counsel for the appellant contends that this Court has no power to direct the defendant (appellant herein) to deposit the decretal amount or any portion thereof as condition precedent for setting aside the ex parte decree. It is also contended that the condition imposed by this court is onerous and the same would result in grave hardship.
9. Sri P. Sridhar Reddy, learned counsel for the respondent contends that the Court in exercise of its discretion is entitled to impose such condition as it may consider necessary depending upon the facts in each case. Learned counsel contends that it is not a question of jurisdiction or power but exercise of discretion in the given case. It is submitted that in the facts and circumstances the condition imposed by this court is a reasonable one.
10. It is true, this Court in Jeypore Sugar Co. Ltd. v. Parnerla Suryarao, , held that the court while setting aside the ex parte decree cannot impose a condition to pay the suit claim or any portion thereof. It is observed that:
"It is trite to state that once an application under Order 9 Rule 13 C.P.C. is allowed and the ex parte decree is set aside, ex parte decree extinguishes. In other words ordering an application under Order 9 Rule 13 C.P.C. obliterates ex parte decree from records. If that is so, a liability flowing from such ex parte decree should also cease to be operative. Setting aside a decree cannot be equated with suspension of operation of a decree because in the latter case despite suspension the decree continues to exist though it is not operative. Therefore, the Courts will not be justified in imposing conditions as to payment of part of decretal amount while allowing an application under Order 9 Rule 13 C.P.C. as they normally do while suspending operation of decrees in the appeals. Therefore, the applicant-defendant cannot be saddled with a liability in full or part flowing from an ex parte decree, which is no longer in existence. Secondly, an ex parte decree is an outcome or a consequence or a result of an ex parte proceeding and is based on bilateral plea of the plaintiff. Allowing the application under Order 9 Rule 13 C.P.C. enables the defendant to contest the claim of the plaintiff. If that is so, it will be unreasonable, illogical and arbitrary for the Court to impose a liability on defendant to pay the suit claim even before adjudication on rival claims takes place and the court decides to decree the suit. However, the Court while allowing an application under Order 9 Rule 13 C.P.C, in appropriate cases, order costs of the application including the advocate's fee. In the present case, the learned trial Judge has directed the revision petitioner-defendant to pay not only the costs of the decree but also Rs. 10,000/- being l/5th of the suit claim to the plaintiff, not to the credit of the suit, that too, without any condition. If the suit after adjudication is dismissed, that will force the defendant to initiate proceedings to recover sums of money paid to the plaintiff, if the plaintiff does not voluntarily repay the same, resulting in unnecessary and avoidable litigation. Therefore, it should be held that the direction to pay a part of the suit claim is quite onerous and unjustified as contended by the learned counsel for the petitioner."
11. Similar is the view taken by this Court in Budapati Rajendra Prasad v. Kolamudi Ramachandra Rao, . The court while interpreting Rule 13 of Order 9 C.P.C. held that the Court in appropriate cases, if the case is made out, may set aside the decree passed ex parte, upon such terms as to costs, payment into court or otherwise as it thinks fit. The Court held that no other condition is contemplated or can be imposed. The term to be imposed has been with reference to only costs and not to the suit amount. In the circumstances, the condition imposed by the learned Subordinate Judge in the said case directing the defendants therein to deposit 50% of the decretal amount has been set aside. In S. Guru Murthy v. R. Lakshmana Rao, another learned Single Judge of this Court had also taken the same view and accordingly set aside the condition imposed by the lower appellate Court directing deposit of 3/4ths of the decretal amount. The learned Judge relied upon the decision reported in V. Kasturi Bai v. P. Varalakshmi, 1983 (1) ALT 402 = 1983 (2) An.W.R. 194 = 1983 (1) APLJ 305.
12. But we are required to notice that the Supreme Court in Ramesh v. Ratnakar Bank Ltd., 2001 AIR SCW 4759 (2) directed the appellant therein to deposit a further sum of Rs. 5 lakhs within ten weeks from the date of the order as a condition for setting aside the ex parte decree and for restoration of the suit. The facts in the said case may briefly be noticed. The respondent therein filed a suit for recovery of Rs. 19.60 lakhs. The appellant therein did not file any written statement within the time granted by the Court. An ex parte decree was passed on 10-11-1997. The trial Court dismissed the application to condone the delay in filing the application to set aside the ex parte decree. The High Court initially passed an order on 27-9-1999 directing the appellant to deposit Rs. 20 lakhs. The said amount was not deposited. Thereafter the High Court passed the order refusing to set aside the ex parte decree. On a further appeal, the Supreme Court interfered in the matter and accordingly directed the appellant to deposit a further sum of Rs. 5 lakhs apart from the amounts already deposited as a condition for setting aside the ex parte decree and for restoration of the suit.
13. In V.K. Industries v. M.P. Electricity Board, Rampur, the Supreme Court held that in restoring a case the court may impose conditions to deposit costs or the decretal amount or some portion thereof or to ask the defendant to give security but such conditions should be reasonable and not harshly excessive. It is not necessary to notice the further details and facts in that case, except to notice the principle. It is held that:
"Ordinarily, a money decree is not stayed unconditionally and the judgment-debtor would be put on terms. Even so, such conditions must be reasonable having regard to all relevant factors. Although ex parte decree was passed against the appellants, once it is set aside on the ground of non-service of suit summons the money decree did ant exist for execution. It is no doubt true that in restoring a case the court may impose conditions to deposit costs or the decretal amount or some portion thereof or to ask the defendant to give security but such conditions should be reasonable and not harshly excessive. In the impugned order the appellants are put on terms to deposit a sum of Rs. 2,00,000/- and to furnish a bank guarantee for the remaining suit claim within a period of two months. In our view these terms are onerous, harsh and unreasonable in the facts and circumstances of the case and that too even before the trial of the suit on merits."
14. It is needless to observe that in the light of the decisions referred to hereinabove, the view taken by this Court that the court has no power or jurisdiction to impose any condition directing the defendant to deposit either the decretal amount or any portion thereof as a condition precedent is no more good law. It is clear from the decisions of the Supreme Court referred to herin above, the court may impose such condition as it may consider necessary to set aside the ex parte decree and to restore the suit and such condition may include direction to deposit costs or the decretal amount or any portion thereof. It is true, as held by the Supreme Court that such condition should be a reasonable one and not harshly excessive. Obviously it depends upon the facts and circumstances of each given case. The discretion has to be properly and judiciously exercised by the Court, while imposing the condition for setting aside the ex parte decree and restoration of the suit.
15. This is exactly the view taken by Ramaswamy, J. (as His Lordship then was) in Valluru Kasturi Bai and Pamulapati Varalakshmi (5 supra). The learned Judge held that "no doubt the court has power to direct half of the amount decreed ex parte, but that power has to be exercised only in special circumstances obtainable on the facts of that case and the Court has to give reasons thereof. Discretion cannot be put on the pedestal of whims 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." The learned Judge in categorical terms held that the court has power to direct deposit of half of the amount decreed ex parte. This decision in V. Kasturi Bai (5 supra) in no manner supports the principle laid down by this Court in S. Guru Murthy (4 supra) to the effect that the court has no power or jurisdiction to direct the defendants to deposit the decretal amount or portion thereof as a condition precedent for setting aside the ex parte decree. On the other hand, the Judgment in categorical terms declares that the court has the power to impose such condition, but the same is required to be exercised judiciously. It is neither possible nor desirable to lay down any guidelines as to how and in what manner that discretion is required to be exercised by the Court. Obviously, exercise of such discretion depends upon the facts and circumstances of each case.
16. In the result, we hold that the view taken by this Court in Jeypore Sugar Co. (2 supra), Budati Rajendra Prasad (3 supra) and S. Guru Murthy (4 supra) is no more a good law in view of the subsequent decisions of the Supreme Court referred to hereinabove.
17. Accordingly we do not find any error to have been committed by the learned Judge in holding that in appropriate cases the court may impose such condition as it may consider necessary in order to set aside the ex parte decree and such condition may include direction to deposit the decretal amount or any substantial portion thereof together with costs.
18. But in the instant case the question that falls for consideration is as to whether the condition imposed by the learned Judge directing the appellant herein to deposit 75% of the decretal amount and the suit costs together with exemplary costs of Rs. 10.000/- for condoning the delay in filing the application to set aside the ex parte decree is proper?
19. The learned Judge having noticed the conduct of the appellant and the facts and circumstances of the case rightly came to the conclusion that it is a fit case where exemplary costs are to be awarded to condone the delay in filing the application to set aside the ex parte decree. We do not propose to interfere with the view taken by the learned Judge. However, the learned Judge directed deposit of 75% of the decretal amount together with suit costs within four weeks from the date of the Judgment. That particular condition imposed by the learned Judge directing the appellant to deposit 75% of the decretal amount in our considered opinion is onerous one. There are no particular reasons for imposing such onerous condition.
20. Ordinarily this Court in exercise of its Letters Patent Appeal jurisdiction does not interfere with such discretionary order as the one passed by the learned Judge. The Letters Patent Court is a court of correction of error. Normally it does not substitute its own discretion for that of the learned Single Judge. But for the fact that the condition imposed is too onerous and harsh, we would not have interfered in the matter.
21. Having regard to the facts and circumstances of the case, we consider it appropriate to modify that portion of the Judgment and accordingly direct the appellant herein to deposit a sum of Rs. 1 lakh (Rupees One lakh) together with the decretal costs within six weeks from to-day. In default of making such payment the appeal shall stand dismissed with costs.
22. In the result, the appellant is required to pay a sum of Rs. 10,000/- towards exemplary costs as directed by the learned Single Judge and make deposit of Rs. 1 lakh (Rupees One lakh) together with decretal costs within six weeks from to-day. The Letters Patent Appeal is partly allowed.