Indian Kanoon - Search engine for Indian Law

3. Both the defendants were set ex parte on 7.10.2002. Evidence was taken on 10.10.2002 and the suit was decreed ex parte against both the defendants. The decree was transferred to the Court of the City Civil Judge, Bangalore for execution and the executing Court ordered attachment of the mortgaged property on 27.2.2006.

4. The second defendant filed Application Nos.1039 and 1040 of 2006 in C.S.No.1622 of 1992 before this Court to set aside the ex parte decree and to stay the decree pending the said applications. By order dated 27.3.2006, the learned Judge set aside the ex parte decree against both the defendants with a condition that the second defendant should deposit a sum of Rs.15,00,000/- within a period of eight weeks. The said order is questioned in this appeal.

10. This leads us to the next question as to whether after the suit was laid, the second defendant was served. In fact paper publication was effected on 7.10.2002 and within a period of three days, the suit was decreed ex parte i.e., on 10.10.2002. This ex parte decree was not within the knowledge of the second defendant, as it is not the case of the plaintiff even. The said ex parte decree was transferred to the Court of the City Civil Judge, Bangalore for execution and the attachment was ordered on 27.2.2006. It is also not the case of the plaintiff that the summons under the execution petition were also served on the defendants. On the other hand, it is seen that both the summons were returned unserved leading to the order of attachment. In the application to set aside the ex parte decree, the second defendant has specifically stated that the property was leased out to an organisation by name M/s Bright Society which was running an orphanage in the said place for Srilankan refugee children. It appears that when the officers of the Court inspected the place of the property on 18.2.2006, the society came to know of the ex parte decree for sale of the property and therefore it had filed an obstruction petition and by order dated 1.3.2006, the City Civil Court, Bangalore ordered attachment of the property by 8.3.2006. The society thereafter informed the second defendant on 3.3.2006 and the application to set aside the ex parte decree on 6.3.2006 was filed. In the wake of the said explanation, it cannot be said that the second defendant had the knowledge of the ex parte decree till 3.3.2006. Article 123 of the Limitation Act , 1963 provides 30 days period for an application to be filed to set aside a decree passed ex parte from the date of the decree or where the summons or notice were not duly served when the applicant had the knowledge of the decree. Admittedly, in this case, summons or notices were not served and the applicant had the knowledge of the decree only on 3.3.2006. In this context, the explanation to Article 123 is also referable. By that explanation, the substituted service under Order V Rule 20 of Civil Procedure Code shall not be deemed to be due service. Hence, in our opinion, the substituted service dated 30.9.2002 is also not of any assistance in this case and the application filed on 6.3.2006 made within 30 days of the knowledge of the ex parte decree is maintainable and the argument of the learned senior counsel appearing for the plaintiff that the application for setting aside the ex parte decree ought not to have been entertained without there being any application for condonation of delay cannot be therefore accepted. Accordingly, we reject the first challenge to the impugned order.

11. Point No.(ii): The next contention is whether in terms of the proviso to Order IX Rule 13, an ex parte order could be set aside against both the defendants. Law on this is now well settled by the Apex Court in the recent judgment in Bank of India v. M/s Mehta Brothers & Others, 2009 (1) MLJ 81. It is the submission of the learned senior counsel for the plaintiff that in view of the said judgment, only if the decree is of such a nature that it cannot be set aside only against one defendant, it can be set aside against all the defendants. Inasmuch as the decree in question is joint and several, the learned Judge ought not to have set aside the decree against both the defendants. In this context, the learned senior counsel also relied upon Section 43 of the Indian Contract Act, 1872 and contended that when two or more persons make a joint promise, the promisee may, in the absence of express agreement to the contrary, compel any (one or more) of such joint promisors to perform the whole of the promise. When the plaintiff is entitled to compel the performance by one of the defendants, the decree ought not to have been set aside against the first defendant as well at the instance of the second defendant alone.

13. In this context, we may usefully refer to the judgment of the Apex Court in Bank of India v. M/s Mehta Brothers and others, 2009 (1) MLJ 81. That was a case where the Bank of India issued an irrevocable letter of credit for certain sum in favour of one M/s Bentrex and Company, Singapore, one of the defendants. The beneficiary drew a site draft for a certain amount and presented the same to one Deutsche Bank Asia, which was arrayed as the sixth defendant in the said suit. A suit was filed not only against the Bentrex and Company, Singapore and others as well as the sixth defendant. An ex parte decree was passed against the sixth defendant and the suit was dismissed against the other defendants 1 to 5. An application was taken out by the sixth defendant to set aside the ex parte decree and the learned single Judge of the High Court set aside the ex parte decree passed against the sixth defendant. By the same order, the learned Judge set aside that portion of the decree whereby the suit against the other defendants was also dismissed. That order was questioned in appeal before a Division Bench and the Division Bench set aside the order of the learned single Judge insofar as setting aside the ex parte decree against the defendants 1 to 5 and affirmed the order setting aside the ex parte decree against the sixth defendant. When the matter came up before the Apex Court, the question raised was whether by virtue of the proviso to Order IX Rule 13 of Civil Procedure Code the Court could set aside the decree in its entirety. Having referred to the provisions of Order IX Rule 13 which existed under the Code of Civil Procedure, 1882 and the provisions after the amendment, ultimately, the Apex Court found that under the said provision, an ex parte decree could ordinarily be set aside only against the defendant against whom the decree was ex parte and the suit could be revived only qua the said defendant applying for setting aside the ex parte decree. It is also held that in cases where the decree is of such a nature that the same cannot be set aside only as against the defendant applying for setting it aside, the decree could also be set aside against any or all of the other defendants. The proviso to Order IX Rule 13 therefore empowers the Court to set aside ex parte decree against all the defendants in an application filed by one of the defendants in the event the decree is of such a nature which could be either executed against both the defendants or any one of the defendants by getting the ex parte decree set aside may exercise his right of redemption over the property. If the ex parte decree in question is viewed from that angle, in our considered view, the decree could be set aside against all the defendants thereby paving a way for the second defendant to contest the suit and in the event a decree is passed for payment of money, he may honour the same and proceed against the principal debtor. On the facts of this case, as we have found that the decree in question is enforceable against both the defendants and the right conferred on the guarantor to redeem the property, the guarantor is entitled to either defend the suit or to submit to the decree for the purpose of payment of the claim of the plaintiff and to redeem the property. Hence the ex parte decree is liable to be set aside against both the defendants and we find no infirmity in the order of the learned single Judge in setting aside the decree against both the defendants.