1999 Supreme(SC) 983

1999(7) Supreme 27
Supreme Court of India
(From Delhi High Court)
S. Saghir Ahmad & D.P. Mohapatra, JJ.
Balraj Taneja & Anr. -Appellants
versus
Sunil Madan & Anr. -Respondents
Civil Appeal No. 4968 of 1999
(Arising out of SLP (C) No. 14483 of 1998)
Decided on 8-9-1999
Counsel for the Parties :
For the Appellants : Rakesh Dwivedi, Sr. Advocate, Ashwani Bhardwaj, S.P. Sharma, Advocates.
For the Respondents : Kailash Vasdev, Advocate.

Important Points
1. Court should not proceed to pass judgment, under Order 8, Rule 10 of C.P.C., blindly merely because written statement has not been filed. Only on being satisfied that there is no fact which need to be proved on account of deemed admission Court can pass

Headnote:(i) Code of Civil Procedure, 1908-Order 8 Rule 10-Decree on failure of defendant to file written statement-Condition precedent-Court should not proceed to pass judgment blindly merely because written statement has not been filed-Only on being satisfied that there is no fact which need to be proved on account of deemed admission Court can pass judgment-Court has to write a judgment which must be in confirm­ity with Order 20, Rule 1.

       Held : Rule 10, was amended by the Code of Civil Procedure (Amendment) Act, 1976 (Act No. 104 of 1976). Prior to its amendment, it was held in a number of decisions that the rule can be invoked only in those situations where the Court has required the defendant to file the Written Statement in terms of Rule 9 of Order 8. A few other High Courts had taken the view that this Rule would be applicable even to those cases where a Written Statement was required to be filed under Order 8 Rule 1 CPC. The conflict of decisions has been set at rest by providing specifically under this rule that where a party from whom a Written Statement is required either under Rule 1 or Rule 9 of Order 8 fails to present the same within the time permit­ted or fixed by the Court, the Court shall pronounce judgment against him or make such order in relation to the suit as it thinks fit. Rule 10 thus governs both the situations where a Written Statement is required under Rule 1 of Order 8 as also where it has been demanded under Rule 9. In both the situations, if the Written Statement has not been filed by the defendant, it will be open to the Court to pronounce judgment against him or make such order in relation to the suit as it thinks fit. It is to be noticed that if the Written Statement is not filed, the Court is required to pronounce judgment against the defend­ant. The words “against him” are to be found in Rule 10 of Order 9 which obviously means that the judgment will be pronounced against the defendant. This rule also gives a discretion either to pronounce judgment against the defendant or “make such order in relation to the suit as it thinks fit.” These words are of immense significance, inas­much as they give a discretion to the Court not to pronounce judgment against the defendant and instead pass such order as it may think fit in relation to the suit. There are thus two separate and distinct provisions under which the Court can pronounce judgment on the failure of the defendant to file Written Statement. The failure may be either under Order 8 Rule 5(2) under which the Court may either pronounce judgment on the basis of the facts set out in the plaint or require the plaintiff to prove any such fact; or the failure may be under Order 8 Rule 10 CPC under which the Court is required to pronounce judgment against the defendant or to pass such order in relation to the suit as it thinks fit. (Paras 13 & 14)

       Under Order 12 Rule 6, the Court can, at an interlocutory stage of the proceedings, pass a judgment on the basis of admissions made by the defendant. But before the Court can act upon the admission, it has to be shown that the admission is unequivocal, clear and positive. This Rule empowers the Court to pass judgment and decree in respect of admitted claims pending adjudication of the disputed claims in the suit. In spite of admission of a fact having been made by a party to the suit, the Court may still require the plaintiff to prove the fact which has been admitted by the defendant. This is also in consonance with the provisions of Section 58 of the Evidence Act. The Proviso to this Section specifically gives a discretion to the Court to require the facts admitted to be proved otherwise than by such admission. The Proviso corresponds to the Proviso to Rule 5(1) Order 8 CPC. (Paras 19 & 20)

       The Court, at no stage, can act blindly or mechanically. While enabling the Court to pronounce judgment in a situation where no Written Statement is filed by the defendant, the Court has also been given the discretion to pass such order as it may think fit as an alternative. This is also the position under Order 8 Rule 10 CPC where the Court can either pronounce judg­ment against the defendant or pass such order as it may think fit. (Para 21)

       The Court has not to act blindly upon the admission of a fact made by the defendant in his Written Statement nor the Court should proceed to pass judgment blindly merely because a Written Statement has not been filed by the defendant traversing the facts set out by the plaintiff in the plaint filed in the Court. In a case, specially where a Written Statement has not been filed by the defendant, the Court should be a little cautious in proceeding under Order 8 Rule 10 CPC. Before passing the judgment against the defendant it must see to it that even if the facts set out in the plaint are treated to have been admitted, a judgment could possibly be passed in favour of the plaintiff without requiring him to prove any fact men­tioned in the plaint. It is a matter of Court’s satisfaction and, therefore, only on being satisfied that there is no fact which need be proved on account of deemed admission, the Court can conveniently pass a judgment against the defendant who has not filed the Written State­ment. But if the plaint itself indicates that there are disputed questions of fact involved in the case regarding which two different versions are set out in the plaint itself, it would not be safe for the Court to pass a judgment without requiring the plaintiff to prove the facts so as to settle the factual controversy. Such a case would be covered by the expression “the Court may, in its discretion, re­quire any such fact to be proved” used in sub-rule (2) of Rule 5 of Order 8, or the expression “may make such order in relation to the suit as it thinks fit” used in Rule 10 of Order 8. (Para 23)

       Whether it is a case which is contested by the defendants by filing a written statement, or a case which proceeds ex-parts and is ultimately decided as an ex-parte case, or is a case in which the written statement is not filed and the case is decided under Order 8 Rule 10, the Court has to write a judgment which must be in conformity with the provisions of the Code or at least set out the reasoning by which the controversy is resolved. (Para 36)

       In the instant case the averment in suit for specific performance was that the defendant was to get income tax clearance certificate upon which the plaintiff would pay the balance amount of sale consid­eration and get the sale deed executed and registered. The case of respondent No. 1 (plaintiff), as set out in the plaint itself, was that while defendants, namely, the present appellants as also respond­ent No. 2 maintained that they had obtained the necessary permission from the Income Tax Department and had sent the same to him, respond­ent No. 1, disputed that fact and maintained that this was not correct and no Certificate (Permission) of the Income Tax Department was ever sent to him by the appellants or respondent No. 2. The trial Court passed judgment in favour of the plaintiff on ground that the defend­ants, despite repeated adjournments, failed file written statement.

       Held : The plaint itself showed a serious disputed question of fact involved between the par­ties with regard to the obtaining of Certificate (permission) from the Income Tax Department and its communication by the defendants to the plaintiff (Respondent No. 1). Since this question of fact was reflec­tive of the attitude of the plaintiff, whether he was ready and will­ing to perform his part of the contract, it had to be proved as a fact that the Certificate (permission) from the Income Tax Department had not been obtained by the defendants and, therefore, there was no occasion of sending it to him. If the pleadings of respondent No. 1 were limited in character that he had pleaded only this much that the defendants had not obtained the Certificate (permission) from the Income Tax Department and had not sent it to him, this fact would have stood admitted on account of non-filing of the Written Statement by the defendants. But Respondent No. 1, as plaintiff, himself pleaded that “defendants insisted that they had obtained the Certificate (permission) from the Income Tax Department and sent it to him”. He denied its having been obtained or sent to him. Non-filing of the Written Statement would not resolve this controversy. The plaint allegations, even if treated as admitted, would keep the controversy alive. This fact, therefore, had to be proved by the plaintiff and the Court could not have legally proceeded to pass a judgment unless it was established clearly that the defendants had committed default in not obtaining the Certificate (permission) from the Income Tax Depart­ment and sending the same to the plaintiff. The High Court did not consider this fact and proceeded almost blindly to pass a decree in favour of the plaintiff merely because Written Statement had not been filed in the case. The Judgment was set aside and the case was remanded back to the High Court for fresh decision. (Paras 21, 29 and 31)

       (ii) Specific Relief Act, 1963-Section 10-Code of Civil Procedure, 1908-Order 8, Rule 10- Suit for specific performance of sale agree­ment-Plaintiff’s case was that defendant was to get income tax clear­ance certificate but failed to do so-Plaint itself stated that defend­ants took the stand that they had obtained income tax clearance cer­tificate and sent same to plaintiff which was false-Court passing judgment in favour of plaintiff on ground of defendants failure to file written statement within time-Not sustainable-Plaint itself indicates disputed question of fact which required to be proved-High Court not correct in invoking Order 8 Rule 10.

       Held : In a suit for specific performance it is mandatorily required by Section 16 of the Specific Relief Act to plead readiness and willing­ness of the plaintiff to perform his part of the contract. The Court, before acting under Order 8 Rule 10 has to scrutinise the facts set out in the plaint to find out whether all the requirements, specially those indicated in Section 16 of the Specific Relief Act, have been complied with or not. Readiness and willingness of the plaintiff to perform his part of the contract is a condition precedent to the passing of a decree for specific performance in favour of the plain­tiff. (Para 24)

       On the own plead­ings of respondent No. l, as set out in his plaint, there was a dis­pute between the parties, namely, plaintiff and defendants, whether permission from the Income Tax Department had been obtained by the defendants (the present appellants and respondent No. 2) and sent to plaintiff (present respondent No. 1) or the said permission was, at no time, obtained by the defendants nor had the defendants sent it to the plaintiff (respondent No. 1). This was a vital fact which had an important bearing upon the conduct of respondent No. 1. That is to say, if it was established that the Certificate (permis­sion) from the Income Tax Department had already been obtained by the defendants and sent to him, the denial of the plaintiff would be reflective of his attitude that he was not ready and willing to perform his part of the contract. On the contrary, if it was found that defendants had not obtained the Certificate, the question whether specific performance could still be decreed would have immediately arisen particularly because of the relevant provisions of the Income Tax Act. Now, the agreement in question stipulated that the defendants would obtain permission from the Income Tax Department and send the same to the plaintiff whereupon the plaintiff would pay a sum of Rs. 2.25 lakhs to the defendants and the balance amount of Rs. 75,000/- would be paid at the time of the registration of the sale deed. Since, on the own showing of the plaintiff, as set out in the plaint, the defendants had been asserting that they had obtained the permission and sent the same to the plaintiff, which was not accepted by the plaintiff, there arose between the parties a disputed question of fact which had to be investigated and decided particularly as it was likely to reflect upon the conduct of the plaintiff whether he was willing to perform his part of the contract or not. It had, therefore, to be proved as a fact that permission of the Income Tax Department had not been obtained by the defendants nor had that Certificate (permission) been sent to the plaintiff. The judgment was, therefore, set aside and the case was remanded back to the High Court for fresh decision (Paras 26 & 39)

       (iii) Code of Civil Procedure, 1908-Section 2(9) r/w Order 20, Rule 1(2)-Judgment-What should contained in-Applicability of Order 20 Rule 4(2) to judgment passed under Order 8, Rule 10.

       Held : “Judgment” as defined in Section 2(9) of the Code of Civil Pro­cedure means the statement given by the Judge of the grounds for a decree or order. What a judgment should contain is indicated in Order 20, Rule 4(2). It should be a self-contained document from which it should appear as to what were the facts of the case and what was the controversy which was tried to be settled by the Court and in what manner. The process of reasoning by which the Court came to the ultimate conclusion and decreed the suit should be reflected clearly in the judgment. (Para 33)

       Whether it is a case which is contested by the defendants by filing a written statement, or a case which proceeds ex-parts and is ultimately decided as an ex-parte case, or is a case in which the written statement is not filed and the case is decided under Order 8 Rule 10, the Court has to write a judgment which must be in conformity with the provisions of the Code or at least set out the reasoning by which the controversy is resolved. (Para 36)

       Even if the defini­tion were not contained in Section 2(9) or the contents thereof were not indicated in Order 20 Rule 1(2) CPC, the judgment would still mean the process of reasoning by which a Judge decides a case in favour of one party and against the other. In judicial proceedings, there cannot be arbitrary orders. A Judge cannot merely say “Suit decreed” or “Suit dismissed”. The whole process of reasoning has to be set out for deciding the case one way or the other. (Para 37)

       (iv) Constitution of India-Arti­cle 136-SLP - Discretion of Sup­reme Court-Scope and ambit.

       Held : It is true that the jurisdic­tion under Article 136 of the Constitution is a discretionary juris­diction and notwith­standing that a judgment may not be wholly correct or in accordance with law, this Court is not bound to interfere in exercise of its discretionary jurisdiction. But in the instant case, as we have already seen above, it is not merely a matter of the de­fendants’ conduct in not filing the Written Statement but the question of law as to what the Court should do in a case where Written State­ment is not filed, is involved, and this question has to be decided so as to provide for all the lower courts as to how the court should proceed in a situation of this nature. (Para 38)