Andhra HC (Pre-Telangana)
Polasani Sucharitha vs Margadarsi Chit Fund Ltd. And Ors. on 21 June, 2007
Equivalent citations: 2007(5)ALD293, AIR 2007 (NOC) 2253 (A.P.)
JUDGMENT G. Bhavani Prasad, J.
1. The reference arose out of the order of the learned Single Judge for determination of issues arising out of Order IX Rule 13 of the Code of Civil Procedure (for short "C.P.C.") in view of the contradictory judgments on the interpretation of the provision.
2. In I.A. No. 1916 of 1999 in O.S. No. 282 of 1998 on the file of the Principal Junior Civil Judge's Court at Karimnagar, the ex parte decree in the suit dated 22-7-1999 was requested to be set aside, which was resisted by the plaintiff. The trial Court passed an order on 21-12-1999 on perusing and considering the averments that the petitioner shall deposit Rs. 10,112/-without prejudice to her rights and averments raised in the written statement on or before 21-1-2000 and ordered the petition to be called on the said date for compliance. The same is challenged in CRP No. 379 of 2000 as being in excess of jurisdiction and materially irregular without following the precedents from the apex Court and this Court. When the revision came up for hearing, the learned Single Judge passed the order leading to this reference.
3. Sri Ashok Anand Kumar, learned Counsel for the petitioner and Sri A. V. Sesha Sai, learned Counsel for the 1st respondent-plaintiff extended their able assistance to the Court by placing the relevant decisional law in respect of the scope and ambit of Order IX Rule 13 C.P.C.
4. Order IX Rule 13 C.P.C. provides for setting aside a decree passed ex parte against a defendant on application on satisfaction that summons was not duly served, or that the applicant was prevented by any sufficient cause from appearing when the suit was called on for hearing. The provision mandates that the Court shall make an order setting aside the decree on such application and satisfaction "upon such terms as to costs, payment into Court or otherwise as it thinks fit."
5. In Tadikonda Sreeramulu v. M.V.N. Brahmanandam 1979 (2) APLJ 177 (HC), the learned Single Judge observed that while conferring power on the Court to set aside an ex parte decree on the ground of sufficiency of cause, the Legislature mandates the Court in unambiguous terms to impose such terms as to costs, payment into Court or otherwise as it thinks fit and that the expression enjoins a legal obligation on the Court to impose terms for setting aside an ex parte decree even on being satisfied with the sufficiency of cause. The learned Judge held that imposition of terms as to costs, at least, is a condition precedent for setting aside an ex parte decree. The decision in Surayya v. Thayaramma , was followed, wherein it was observed that the intendment of Order IX Rule 13 C.P.C. 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, though 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 security therefor etc. The other decisions to the same effect were also referred to and followed.
6. In R. Rama Rao v. V. Venkateswarlu , the imposition of conditions to deposit the costs of the suit and Rs. 15,000/- towards the suit amount to set aside the ex parte decree was modified into deposit of Rs. 10,000/-plus costs.
7. In H.E.H. the Nizam VIII v. Banque Indosuez Bank , the distinction between Order IX Rule 13 and Order XXXVII Rule 4 C.P.C. was noted while observing that under Order IX Rule 13 a conditional order can be made while setting aside an ex parte decree. The decision in Rajeswara Industries v. State Bank of Hyderabad, Karimnagar , was referred to, wherein it was held that the Court cannot even before going into the merits of the application filed under Order IX Rule 13 C.P.C. impose conditions upon the defendants for depositing the costs or part or whole of the suit amount as a condition precedent for entertaining the said application.
8. In Kumud Lata Das v. Indu Prasad AIR 1997 SC 34, the condition imposed was considered onerous, and it was observed that such onerous condition is not valid though discretionary.
9. In Ramesh v. Ratnakar Bank Ltd. 2001 AIR SCW 4759 (2), the apex Court directed a deposit of Rs. 7.00 lakhs during the pendency of the appeal against the order refusing to set aside the ex parte decree and further directed a deposit of Rs. 5.00 lakhs as a condition for setting aside the ex parte decree and for restoration of the suit.
10. In Gopal & Co. v. Kure Balarajaiah Siddiramulu , it was laid down that onerous conditions shall not be imposed unless there are exceptional reasons for doing so which have to be clearly stated in the order.
11. Thus, it is clear that the employment of words "upon such terms as to costs, payment into Court or otherwise as it (the Court) thinks fit" confers a power and imposes a legal obligation 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, provided onerous conditions shall not be imposed except under special circumstances and for exceptional reasons which have to be stated in the order. However, imposition of conditions for depositing the costs or part or whole of the suit amount as a condition precedent for entertaining the application even before going into its merits is not permissible. The imposition of terms or conditions for setting aside an ex parte decree is in the exercise of judicial discretion of the Court and whether the terms or conditions imposed are reasonable or onerous is a question of fact on the circumstances of each case. No hard and fast rules can be laid down with mathematical precision to govern the exercise of judicial discretion of the Court in arriving at reasonable, equitable and just terms or conditions for setting aside an ex parte decree.
12. While so, in Jeypore Sugar Co. Ltd. v. Pamerla Saryarao 1996 (2) ALD 350, the learned Single Judge observed that Courts will not be justified in imposing conditions as to payment of part of decretal amount while allowing an application under Order IX Rule 13 C.P.C. as they normally do while suspending operation of decrees in the appeals and therefore, the applicant cannot be saddled with a liability in full or part flowing from an ex parte decree, which is no longer in existence. The learned Single Judge also observed that it will be unreasonable, illogical and arbitrary for the Court to impose a liability on the defendant to pay the suit claim even before adjudication on rival claims takes place and the Court decides to decree the suit, while, however the Court in appropriate cases can order costs of the application including the advocate's fee. Consequently, the learned Single Judge held that the direction to pay a part of the suit claim is quite onerous and unjustified, but upheld the direction to pay costs of the decree. The observations of the learned Single Judge run counter to the settled principles flowing from precedential law illustratively referred to above, while the direction to deposit 1/5th of the suit amount in that case was obviously set aside on facts as onerous and unjustified.
13. While this decision in Jeypore Sugar Co. Ltd's case (supra), gave rise to this reference, the question was the subject of consideration in the meanwhile by another Division Bench in V. Prabhakara Reddy v. Tenali Mohana Rao 2002 (2) DT 192 (AP). His Lordship Hon'ble Sri Justice B. Sudershan Reddy (as His Lordship then was referred to Jeypore Sugar Co. Ltd's case (supra), B. Rajendra Prasad v. K. Ramachandra Rao 1997 (6) ALD 755 and S. Guru Murthy v. R. Lakshmana Rao 2001 (6) ALD 524, laying down that the Court while setting aside an ex parte decree cannot impose a condition to pay the suit claim or any portion thereof and held them to be no longer good law in the light of Ramesh's case (supra) and V.K. Industries v. M.P. Electricity Board, Rampur . V. Kasturi Bai v. P. Varalakshmi 1983 (1) APLJ 305, was held to be to the same effect. The Division Bench laid down that the Court may impose such condition as it may consider necessary to set aside an ex parte decree and to restore a suit and such condition may include direction to deposit costs or the decretal amount or any portion thereof, which condition, of course, should be reasonable and not harshly excessive, which depends upon the facts and circumstances of each case. The Division Bench further held that the discretion has to be properly and judiciously exercised by the Court while imposing such condition and 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, as obviously exercise of such discretion depends upon the facts and circumstances of each case. We are in respectful agreement with the views expressed in V. Prabhakara Reddy's case (supra).
14. Therefore, the reference is answered in the following terms:
(a) The employment of words "upon such terms as to costs, payment into Court or otherwise as it (the Court) thinks fit" confers a power and imposes a legal obligation 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, provided onerous conditions shall not be imposed except under special circumstances and for exceptional reasons which have to be stated in the order.
(b) However, imposition of conditions for depositing the costs or part or whole of the suit amount as a condition precedent for entertaining the application even before going into its merits is not permissible.
(c) The imposition of terms or conditions for setting aside an ex parte decree is in the exercise of judicial discretion of the Court and whether the terms or conditions imposed are reasonable or onerous is a question of fact on the circumstances of each case.
(d) No hard and fast rules can be laid down with mathematical precision to govern the exercise of judicial discretion of the Court in arriving at reasonable, equitable and just terms or conditions for setting aside an ex parte decree.
15. The civil revision petition shall be placed before appropriate Bench as per roster for hearing and disposal.