2001 Supreme(SC) 1081

2001(5) Supreme 741
Supreme Court of India
(From Bombay High Court)
Dr. A.S. Anand, CJI., R.C. Lahoti and K.G. Balakrishnan, JJ.
M/s. Plasto Pack, Mumbai & Anr. —Appellants/Defendants
versus
Ratnakar Bank Ltd. —Respondent/Plaintiff
Civil Appeal Nos. 5235-5237 of 2001
(@ SLP (C) Nos. 16073-16075 of 1999)
Decided on 10-8-2001.
Counsel for the Parties :
For the Appellants : Radhakrishna S. Hegde and P.P. Singh, Advocates.
For the Respondents : M.J. Paul, Advocate.

Important Point
High Court was not justified in refusing to set aside exparte decree dated 3.3.1995 as modified wrongly on 24.11.1997 on technical ground of being barred by limitation when there was sufficient cause to condone delay. Case remanded with directions for retrial.

Headnote:Civil Procedure Code, 1908—Order 8 Rule 10, Section 152, Order 9 Rule 13 and Order 43—Bank’s suit for recovery—Ex-parte decree granted on 4.3.1995 in terms of prayer in plaint—Decree amended ex-parte on 24.11.1997 changing reliefs granted—Application to set aside not entertained—Appeal against dismissed as time barred—Delay not condoned—Sufficient cause shown by appellant—Not taken into account sympathetically —Appeal to Supreme Court—Efforts of settlement—Amount of Principal deposited in Court—Bank refusing—Decision on merits—Whether High Court was right in not entertaining appeal? (No)—Result—Appeal allowed—Case remanded for Trial with directions.

       Held : Having heard learned counsel for the parties we are satisfied that the High Court was not justified in refusing to set aside the ex-parte decree dated 3.3.1995 as modified on 24.11.1997. A perusal of the affidavit filed by the defendant-appellants in support of notice of motion seeking setting aside of the ex-parte decree did make out a case for allowing the notice of motion. We have no reason to disbelieve the bona fides of the defendant-appellants. They were making a genuine effort with the respondent-bank for settlement of the dispute. They were justifiably hopeful of the settlement because their offer was reasonable and the family and the business circumstances of the appellants brought to the notice of the respondent-bank should have normally evoked sympathy of the respondent-bank on humanistic considerations. There was nothing wrong in the appellants expecting that the respondent-bank would, instead of indulging in litigation, settle the matter giving such just and equitable relief to the appellants as they deserved. There was no counter proposal made nor the appellants’ proposal was at any time turned down by any written communication made by the respondent-bank. Apart from the facts and circumstances stated in the affidavit in support of notice of motion the interest of justice also demanded the decree being set aside. By order dated 3.3.1995 relief (a) set out in the plaint was granted ‘as it was’, without specifying the exact decretal amount and the rate of interest allowed by the Court. Such of the prayers as were not granted by decree dated 3.3.1995 would be deemed to have been refused and to that extent the suit shall be deemed to have been dismissed. More than two years and eight months later the Court could not have, on a mere notice of motion, substituted almost a new decree in place of the old one by granting such reliefs as were not granted earlier and that too without noticing the defendant-appellants. As held in K. Rajamouli v. AVKN Swamy, (2001) 5 SCC 37 = (2001) 4 Supreme 294 power to amend a decree cannot be exercised so as to add to or subtract from any relief granted earlier. A case for setting aside the decree was earlier made out. In the facts and circumstances of the case the Division Bench ought to have taken a liberal view of the events and entertained the appeal for consideration on merits by condoning the delay in filing the same. However, that was not done. We are satisfied that grave injustice has been done to the appellants by denying them an opportunity of hearing and contesting the suit on its merits. We are also of the opinion that the respondent-bank ought to have taken a reasonable stand and should have sympathetically considered the proposal of the appellants which was not lacking in bona fides and in the interest of avoiding litigation and early recovery of outstanding debts the respondent should have compromised the suit. Even if the appellants’ proposal was not acceptable to the respondent, at least a counter-proposal should have been made in which case across the table discussion between the parties with the assistance of their learned counsel would have brought out a mutually accepted resolution and an end to the litigation. We are constrained to observe that this litigation is being perpetuated because of the unreasonable and rigid attitude of the respondent-bank. In ordinary course we would have remanded the matter back to the Division Bench for hearing the appeal but we are of the opinion that that course is unwarranted. As we are satisfied that decree dated 4.3.1995 and the order dated 24.11.1996 amending the decree both suffer from serious legal infirmities and error of jurisdiction and as such the same deserve to be set aside; more so when we are also satisfied on the affidavit of the defendant-appellants that there was a sufficient cause for their non-appearance in the suit. For the foregoing reasons the appeals are allowed. The judgment of the High Court dated 26.7.1999, the decree dated 3.3.1995 and the order 24.11.1997 are all set aside. The suit is restored on the file of the High Court. It shall be taken up for hearing and decided afresh after affording the defendant-appellants an opportunity of contesting the suit on its merits. The amount of Rs.7,61,000/- deposited by the appellants with the Registry of this Court shall be refunded to the appellants as the decree has been set aside and settlement has failed. Costs up to this stage shall be borne by the parties as incurred. Before parting we expect the respondent-bank to take a sympathetic view of the appellants’ proposal and still try to reach a settlement. The High Court may also make an effort to settle the dispute by trying a conciliation. In any case, we make it clear that on the abovesaid amount of Rs.7,61,000/- interest shall cease with effect from 31.7.2000, the date on which the respondent-bank had notice of the deposit and yet it unreasonably refused to accept the tender of such amount. (Paras 8, 9, 10, 11, 12, 13)