M/S GMG ENGINEERING INDUSTRIES Vs M/S ISAA GREEN POWER SOLUTION & ORS.
Bench: T.S. THAKUR,R. BANUMATHI
Case number: C.A. No.-004472-004472 / 2015
Diary number: 18651 / 2013
Advocates: SATYA MITRA GARG Vs
Page 1
REPORTABLE
IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 4472 /2015 (Arising out of S.L.P.(C) No. 21762 of 2013)
M/S GMG ENGINEERING INDUSTRIES & ORS. ..Appellants
Versus
M/S ISSA GREEN POWER SOLUTION & ORS. ..Respondents
WITH
CIVIL APPEAL NO. 4473 /2015 (Arising out of S.L.P.(C) No. 22156 of 2013)
A.C. GOVINDARAJ AND ORS. ..Appellants
Versus
M. KRISHNAMOORTHY & ORS. ..Respondents
J U D G M E N T
R. BANUMATHI, J .
Leave granted.
2. These appeals arise out of common order dated
16.04.2013, passed by the High Court of Madras, Madurai
1
Page 2
Bench in C.R.P. (NPD) (MD) No.4/2013 and C.R.P. (NPD) (MD)
No.5/2013 respectively, confirming the order dated 4.12.2012
passed by the Principal District Judge, Thanjavur, imposing
conditions to deposit Rs.1,50,00,000/- and Rs.10,00,000/-, as
a condition to condone the delay in filing the applications to
set aside the ex-parte decrees passed in O.S.No.3 of 2011 and
O.S. No.6 of 2011.
3. Appellants and respondents entered into an agreement
of sale on 1.08.2008, under which the respondents agreed to
purchase the property of the appellants being the factory
premise for a sum of Rs.5,00,00,000/- and the respondents
paid Rs.1,50,00,000/- towards part of sale consideration. The
sale transaction could not be completed. The respondents
issued legal notice dated 24.11.2010 calling upon the
appellants either to execute the sale deed or refund the
advance amount of Rs.1,50,00,000/- with interest at the rate
of 12% p.a. The appellants received the said notice and sent
the reply offering to return the said amount but without
interest. The respondents filed the suit being O.S.No.3/2011
for recovery of the sum of Rs. 1,50,00,000/- with interest. The
2
Page 3
case was adjourned from time to time on various dates. On
16.06.2011, the appellants-defendants were set ex-parte in the
suit. After recording evidence adduced by the
respondents-plaintiffs on 5.07.2011, the said suit was decreed
ex-parte by the Principal District Judge, Thanjavur.
4. Respondents have also filed another suit O.S. No.6 of
2011 for recovery of a sum of Rs.10,00,000/- said to have
been paid by them to the appellants by way of an advance
towards the purchase of another property. The said suit was
decreed ex-parte on 16.06.2011. The appellants have filed I.A.
No.78 of 2012 to set aside the ex-parte decree alongwith
application to condone the delay of 382 days under
Section 5 of the Limitation Act. The said application was
allowed by the Principal District Judge, Thanjavur by order
dated 4.12.2012 imposing condition to deposit a sum of
Rs.10,00,000/-.
5. The appellants filed I.A.No.77 of 2012 and I.A. No.78 of
2012 in both the suits praying for condonation of delay of
355 days and 382 days respectively in filing the applications
under Order IX Rule 13 CPC, for setting aside the ex-parte
3
Page 4
decrees. The appellants averred that they came to know about
the ex-parte decrees only on 13.07.2012, when they saw a
public notice in the daily newspaper regarding the attachment
of the suit property. The Principal District Judge, Thanjavur
vide separate order dated 4.12.12 condoned the delay of 355
days and 382 days in filing the applications under Order IX
Rule 13 CPC for setting aside the ex-parte decree and allowed
the applications in IA No.77 of 2012 and I.A. No.78 of 2012
but subject to condition that the appellants should deposit
Rs.1,50,00,000/- and Rs.10,00,000/- respectively in the court
on or before 3.01.2013, failing which the applications will
automatically stand dismissed. Being aggrieved by the
stringent condition, the appellants filed revision petitions
before the High Court. The High Court vide impugned order
dated 16.04.13 upheld the order imposing condition to deposit
Rs.1,50,00,000/- and Rs.10,00,000/- as a condition precedent
to condone the delay in filing application to set aside the
ex-parte decrees and thereby dismissed the revisions which
are under challenge in these appeals.
4
Page 5
6. Learned counsel for the appellants contended that the
direction to deposit the entire decreetal amount of
Rs.1,50,00,000/- in O.S. No.3 of 2011 and the decreetal
amount of Rs.10,00,000/- in O.S. No.6 of 2011 as a condition
precedent to set aside the ex-parte decrees is onerous and
unreasonable and prayed to set aside the impugned order. In
support of his contention, learned Senior Counsel
Mr. Brijender Chahar for the appellants placed reliance upon
the judgment of this Court in V.K. Industries and Ors. vs. M.P.
Electricity Board, Rampur, Jabalpur, (2002) 3 SCC 159.
7. Learned Senior Counsel for the respondents Ms. Nalini
Chidambaram submitted that the trial court was constrained
to impose the said condition in view of the dilatory tactics
adopted by the appellants deliberately not being present for
hearing in the trial court on several occasions when the suits
were posted for trial. Learned Senior Counsel further
submitted that even after ex-parte decrees dated 5.07.2011
were brought to the notice of the appellants by a series of
telegrams (Annexures-R5/R1), the appellants did not file the
applications to set aside the ex-parte decree within the period
5
Page 6
of limitation and waited for more than a year. It was
submitted that the respondents are more than seventy years
old and had borrowed sum of Rs.1,50,00,000/- and
Rs.10,00,000/- from the bank and paid the said amount to
the appellants under the agreements for sale and the
appellants are paying interest on that amount to the bank. It
was contended that even though the appellants sold away
their property, they did not choose to refund the sum paid
towards part of sale consideration and if the suits are decreed,
the appellants have no assets to execute the decrees and the
rights of both the parties should be balanced and therefore the
impugned order does not warrant interference by this Court
under Article 136 of the Constitution.
8. It is well settled that the expression ‘sufficient cause’ is
to receive liberal construction so as to advance substantial
justice. When there is no negligence, inaction or want of
bonafide is imputable to the appellants, the delay has to be
condoned. The discretion is to be exercised like any other
judicial discretion with vigilance and circumspection. The
discretion is not to be exercised in any arbitrary, vague or
6
Page 7
fanciful manner. The true test is to see whether the applicant
has acted with due diligence.
9. While exercising the discretion for setting aside the
ex-parte decrees or condoning the delay in filing the
application to set aside the ex-parte decrees, the court is
competent to direct the defendants to pay a portion of the
decreetal amount or the cost. In Tea Auction Limited vs.
Grace Hill Tea Industry And Anr., (2006) 12 SCC 104: (2006)
9 SCALE 223, this Court has held as under:
“15. ….A discretionary jurisdiction has been conferred upon the court passing an order for setting aside an ex parte decree not only on the basis that the defendant had been able to prove sufficient cause for his non-appearance even on the date when the decree was passed, but also on other attending facts and circumstances. It may also consider the question as to whether the defendant should be put on terms. The court, indisputably, however, is not denuded of its power to put the defendants to terms. It is, however, trite that such terms should not be unreasonable or harshly excessive. Once unreasonable or harsh conditions are imposed, the appellate court would have power to interfere therewith…..”
10. In Vijay Kumar Madan and Ors. vs. R.N. Gupta
Technical Education Society and Ors., (2002) 5 SCC 30, this
Court has held as under:
“8. Costs should be so assessed as would reasonably compensate the plaintiff for the loss of time and inconvenience caused by relegating back the proceedings to an earlier stage. The terms which the court may direct may take care of the time or mode of proceedings required to be
7
Page 8
taken pursuant to the order under Rule 7. ….…the court cannot exercise its power to put the defendant-applicant on such terms as may have the effect of prejudging the controversy involved in the suit and virtually decreeing the suit though ex parte order has been set aside or to put the parties on such terms as may be too onerous……… That condition in the order of the trial court having been set aside by the High Court, we are inclined to sustain the order of the High Court but subject to certain modification. In our opinion the High Court was justified in setting aside the condition imposed by the trial court in its order which was too onerous, also vague, uncertain and suffering from want of clarity. The order of the High Court to the extent of setting aside the ex parte proceedings and directing the expeditious trial of the suit has to be sustained as it serves the ends of justice….”
The same view was reiterated in V.K. Industries case (supra).
11. In the present case, while the trial court has exercised
the discretion to condone the delay in filing the applications to
set aside the ex-parte decrees, in our view, the trial court
should not have imposed such an unreasonable and onerous
condition of depositing the entire suit claim of
Rs.1,50,00,000/- and Rs.10,00,000/- respectively in the suits
when the issues are yet to be decided on merits. While
considering the revision, the High Court should have kept in
view that the parties are yet to go for trial and the appellants
ought to have been afforded the opportunity to contest the
suits on merits. When the S.L.Ps came up for admission on
1.08.2013, this Court passed the conditional order that
8
Page 9
subject to deposit a sum of Rs.50,00,000/- before the trial
court, notice shall be issued to the respondents. In
compliance with the order dated 1.08.2013, the appellants
have deposited Rs.50,00,000/- before the trial court. Since
the appellants have satisfactorily explained the reasons for the
delay and with a view to provide an opportunity to the
appellants to contest the suit, the impugned order is liable to
be set aside.
12. The order dated 16.04.2013 of the High Court passed
in C.R.P. (NPD) (MD) No.4/2013 and C.R.P. (NPD) (MD)
No.5/2013, is set aside and these appeals are allowed. Delay
in filing the applications to set aside the ex-parte decrees is
condoned and the ex-parte decrees passed in O.S. No.3 of
2011 and O.S. No.6 of 2011 are set aside and the suits are
ordered to be restored to file. The appellants shall file their
written statements within a period of six weeks if not already
filed. Since the suits are of the year 2011 and the respondents
are stated to be senior citizens, the trial court is directed to
take up the suits at an early date and dispose of the suits
expeditiously. It is made clear that we have not expressed any
9
Page 10
opinion on the merits of the matter. The amount of
Rs.50,00,000/- deposited by the appellants before the trial
court shall be invested in a Nationalized Bank so that the
accrued interest may enure to the benefit of either party. In
the facts and circumstances of the case, we make no order as
to costs.
………………………J. (T.S. Thakur)
………………………J. (R. Banumathi)
New Delhi; May 15, 2015
10