1. Recovery suit — Ex parte decree for failure to file written statement — Application to set aside decree and condone delay dismissed. (Para 2 )
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2000 Supreme(SC) 1224
SUPREME COURT OF INDIA
Doraiswamy Raju : J.Jagannadha Rao
Ramesh
Versus
Ratnakar Bank Limited
Case No. : nil of 2000
Date of Decision : 7/31/00
The court may set aside an ex-parte decree and restore a suit on the condition that the defendant deposits a specified amount of the suit money, which remains subject to the final outcome of the litigation.
Headnote:(A) Civil Procedure - Ex-parte Decree - Setting aside and Restoration of Suit - Condition for setting aside an ex-parte decree - Court may direct the deposit of a portion of the suit amount as a condition for restoration of the suit and setting aside the ex-parte order - Such deposits are subject to the final result of the suit and can be adjusted towards the suit amount. (Paras 4, 5)
Facts of the case:
A suit for recovery of money was filed. Due to the failure of the defendant to file a written statement within the stipulated time, an ex-parte decree was passed. Subsequent applications to set aside the decree and condone the delay were dismissed by the trial court. The High Court also refused to set aside the decree after the defendant failed to comply with a direction to deposit a specific sum.
Findings of Court:
The court directed that the ex-parte decree be set aside and the suit be restored to the file of the trial court, provided the appellant deposits a further sum of Rs. 5 lakhs within ten weeks, in addition to the Rs. 7 lakhs already deposited. The trial court is then to issue notice and fix a date for filing the written statement.
Issues: Whether the ex-parte decree should be set aside and the suit restored, and if so, under what conditions.
Ratio Decidendi: The court exercised its discretion to allow the restoration of the suit and the setting aside of the ex-parte decree on the condition of a monetary deposit to protect the interests of the decree-holder while allowing the defendant an opportunity to contest the case on merits.
Result: Appeal disposed of in terms of the directions.
Legal Category Hierarchy
Table of Contents
2. Appellant seeks setting aside of an ex parte decree and restoration of the suit after the High Court refused the same. (Para 2 )
3. The court considers the necessity of deposits to balance interests while allowing the restoration of the suit and setting aside of the ex parte decree. (Para 3 , 4 )
4. Restoration of a suit and setting aside of an ex parte decree may be granted subject to the fulfillment of conditional deposits. (Para 4 )
5. Ex parte decree set aside and suit restored conditional upon the deposit of a further specified sum within ten weeks. (Para 4 , 5 )
6. Can an ex parte decree be set aside on conditional terms?
Yes, the court may set aside an ex parte decree and restore a suit on the condition that the appellant deposits a specified sum of money within a stipulated period. (Para 4 )
7. How are deposits made for the restoration of a suit treated?
Deposits made as a condition for restoration may be withdrawn by the respondent and adjusted against the suit amount, subject to the final outcome of the suit. (Para 5 )
8. What is the effect of non-compliance with a court-ordered deposit for setting aside an ex parte decree?
Failure to deposit the directed amount within the specified timeframe results in the dismissal of the appeal seeking the setting aside of the ex parte decree. (Para 5 )
M.JAGANNADHA RAO, J.
(1) LEAVE granted.
(2) THE respondent-Bank filed a suit in the year 1996 for recovery of Rs. 19.60 lakhs. It appears that the respondent was also a tenant of the appellants in the building constructed, by utilisation of the loan granted by the Bank. Inasmuch as the appellant did not file any written statement within the time granted by the Court, an exparte decree was passed on 10-11-1997. The applications filed thereafter for setting aside the said order and for condoning the delay in filing the said application were dismissed by the trial Court on 10-2-1999. The High Court initially passed an order on 27-9-99 directing the appellant to deposit Rs. 20 lakhs. The appellant was not able to deposit the said amount. Thereafter, the High Court passed the present order (impugned order) on 11-10-99 refusing to set aside the exparte decree. It is against the said order that this appeal is preferred.
(3) THIS Court passed an order on 24-4- 2000 directing the appellant to deposit Rs.7,00,000/- (Rs. Seven lakhs) within eight weeks. The said amount has been deposited.
(4) AS a condition for setting aside the exparte decree and for restoration of the suit, we direct the appellant to deposit a further sum of Rs. 5 lakhs within ten weeks from today and that if the amount is so deposited within the said period, the exparte order passed by the trial Court on 10- 11-97 shall stand set aside and the suit will stand restored to the file of the trial Court. The trial Court shall then issue notice to the appellant and fix a date for filing written statement and thereafter proceed in accordance with law.
(5) THE amount already deposited by the. appellant will be permitted to be withdrawn by the respondent Bank and will be adjusted towards the suit amount. The further amount to be deposited, in case it is deposited, shall also be permitted to be withdrawn by the respondent-Bank and adjusted towards the suit amount. In case the further amount of 5.00.000/- (Rs. five lakhs), as directed in this order is not deposited within the period of 10 weeks now granted, this appeal shall stand dismissed without further reference to Court. The said deposit and the withdrawal of the same shall be subject to the result of the suit. The appeal is disposed of in terms of the above direction.
