1. Money suit — Ex-parte decree — Application to set aside decree under Order IX Rule 13 CPC dismissed — Subsequent first appeal under Section 96(2) CPC. (Para 2 , 3 , 4 , 5 )
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2019 Supreme(SC) 1291
SUPREME COURT OF INDIA
R. BANUMATHI, A.S. BOPANNA, HRISHIKESH ROY, JJ.
N. Mohan - Appellant
Versus
R. Madhu - Respondent
Civil Appeal No. 8898 of 2019 [Arising out of SLP(C) No.20686 of 2018]
Decided On : 21-11-2019
Advocates Appeared:
For the Petitioner(s):S. Mahendran, Advocate
For the Respondent(s):C. K. Sasi, Advocate
For the Petitioner(s):S. Mahendran, Advocate
For the Respondent(s):C. K. Sasi, Advocate
IMPORTANT POINTS
A litigant has two remedies against ex parte decree - either to file application for setting aside the same and/or file first appeal. While first appeal can be filed even after dismissal of application under order IX Rule 13, vice versa does not hold good.
If a litigant shows his bona fide, his delay in filing first appeal can be condoned.
Headnote:
(a) Code of Civil Procedure, 1908 - Section 96(2) - First appeal - Statutory and substantive right - Cannot be denied merely on the ground that the application filed under Order IX Rule 13 was earlier dismissed. (Para 10, 11, 15)
(b) Code of Civil Procedure, 1908 - Section 96(2) and Order IX Rule 13 - Application under Order IX Rule 13 cannot be filed after appeal u/s 96(2) challenging ex parte decree is dismissed. (Para 16)
(c) Administration of justice - Delay and laches - ex parte decree in money suit for recovery of 45 lacs - Delay of 276 days in filing application for setting aside ex parte decree - Dismissed up to Supreme Court - Filing first appeal after 546 days of ex parte decree - Sowing bona fide by depositing 25 lacs in Supreme Court - Deserves another opportunity - Directed to deposit the balance 20 lacs as condition precedent for condoning delay. (Para 19)
Facts of the case:
The appellant approached the respondent-plaintiff for financial assistance for a sum of Rs.45,00,000/-for the purpose of his business needs. The respondent lent him the sum of Rs.45,00,000/-and there was no documentation for the same. According to the respondent, it was agreed that the said amount will be returned to the respondent with an interest of 18% per annum. The appellant agreed to return the said amount within two months; but the appellant has not paid the amount. On the other hand, the appellant is said to have issued two post-dated cheques to the respondent, one for an amount of Rs.25,00,000/-and another for an amount of Rs.20,00,000/-. When the said cheques were presented for collection on 10.03.2015, the same were returned with the endorsement that “payments stopped by the drawer”. The respondent-plaintiff filed a civil suit being OS No.76 of 2015. The said suit was decreed ex-parte on 09.10.2015.
The appellant-defendant filed IA No.327 of 2016 in OS No.76 of 2015 under Section 5 of the Limitation Act to condone the delay of 276 days in filing the petition under Order IX Rule 13 CPC to set aside the ex-parte decree. The said petition was dismissed. The appellant challenged the said order by filing revision being before the High Court. Rejecting the contention of the appellant the learned Single Judge dismissed the said revision. The SLP(C) No.9829 of 2017 preferred against the said order also came to be dismissed.
After the dismissal of the SLP by the Supreme Court, the appellant-defendant filed the first appeal being AS(MD) SR No. 27805 of 2017 challenging the decree passed in OS No.76 of 2015 dated 09.10.2015 along with application being CMP(MD) No.6566 of 2017 praying to condone the delay of 546 days in filing the appeal. The High Court dismissed the application for condonation of delay.
Finding of the Court:
Appellant deserves another opportunity.
Result: Appeal allowed.
Legal Category Hierarchy
Table of Contents
2. Appellant claims statutory right to appeal under Section 96(2) CPC despite Order IX Rule 13 dismissal; Respondent argues issue attained finality and delay is unexplained. (Para 6 , 7 )
3. Right to appeal is a substantive statutory right; Order IX Rule 13 and Section 96(2) CPC provide distinct remedies with different scopes of inquiry. (Para 9 , 10 , 11 , 12 , 13 , 15 )
4. Dismissal of an application under Order IX Rule 13 CPC does not deprive a defendant of the statutory right to file a first appeal under Section 96(2) CPC. (Para 10 , 13 , 15 )
5. Delay in filing first appeal condoned subject to deposit of balance amount; impugned order set aside and appeal remanded to High Court. (Para 19 , 20 )
6. What remedies are available to a defendant against whom an ex-parte decree is passed?
The defendant has two options: filing an application under Order IX Rule 13 CPC to set aside the decree based on non-service or sufficient cause, or filing a regular first appeal under Section 96(2) CPC to challenge the decree on merits. (Para 9 , 13 , 14 )
7. Does the dismissal of an application under Order IX Rule 13 CPC bar a first appeal under Section 96(2) CPC?
No. The right to appeal is a substantive statutory right. Since the scope of inquiry under Order IX Rule 13 (service/cause for non-appearance) differs from Section 96(2) (merits of the decree), the latter remains maintainable despite the dismissal of the former. (Para 10 , 11 , 12 , 13 , 15 )
8. Can time spent pursuing a remedy under Order IX Rule 13 CPC be considered sufficient cause for condoning delay in a Section 96(2) appeal?
Yes, provided the defendant pursued the remedy bona fide. However, if the court finds the defendant adopted dilatory tactics or lacked bona fides, it may decline to condone the delay in filing the first appeal. (Para 15 )
9. Can a defendant file an application under Order IX Rule 13 CPC after a first appeal under Section 96(2) CPC has been dismissed?
No. Once a first appeal under Section 96(2) CPC is dismissed, the original ex-parte decree merges with the appellate court's decree, making a subsequent application under Order IX Rule 13 CPC unmaintainable. (Para 12 , 16 )
JUDGMENT :
R. BANUMATHI, J.
1. Leave granted.
2. This appeal arises out of the impugned order dated 24.04.2018 passed by the High Court of Madras at Madurai Bench in CMP(MD) No.6566 of 2017 in AS(MD) SR No. 27805 of 2017 in and by which the High Court has refused to condone the delay of 546 days in filing the first appeal against the judgment and decree passed in OS No.76 of 2015 dated 09.10.2015.
3. Brief facts which led to filing of this appeal are as follows:-
The appellant-defendant is a businessman doing business of tea and real estate. Case of the respondent-plaintiff is that on 10.01.2015, the appellant approached the respondent-plaintiff for financial assistance for a sum of Rs.45,00,000/-for the purpose of his business needs. The respondent lent him the sum of Rs.45,00,000/-and there was no documentation for the same. According to the respondent, it was agreed that the said amount will be returned to the respondent with an interest of 18% per annum. The appellant agreed to return the said amount within two months; but the appellant has not paid the amount. On the other hand, the appellant is said to have issued two post-dated cheques to the respondent, one for an amount of Rs.25,00,000/-and another for an amount of Rs.20,00,000/-. When the said cheques were presented for collection on 10.03.2015, the same were returned with the endorsement that “payments stopped by the drawer”. The respondent-plaintiff filed a civil suit being OS No.76 of 2015 before the Additional District Judge, Tiruchirappalli. The said suit was decreed ex-parte on 09.10.2015.
4. Order IX Rule 13 CPC Proceedings:- The appellant-defendant filed IA No.327 of 2016 in OS No.76 of 2015 under Section 5 of the Limitation Act to condone the delay of 276 days in filing the petition under Order IX Rule 13 CPC to set aside the ex-parte decree. In the said application, the appellant has stated that summons was sent to the appellant’s old address at Trichy and the same was returned unserved and the ex-parte decree was passed on 09.10.2015. It was averred in the said application that the appellant is residing in Chennai since January, 2014. The appellant has alleged that when he went to attend a case in CC No.240/2016 at Karur Court on 29.07.2016, he came to know about the passing of the ex-parte decree in OS No.76 of 2015. Thereafter, the appellant has taken steps to set aside the ex-parte decree and filed application under Section 5 of the Limitation Act -IA No.327 of 2016 to condone the delay of 276 days in filing the petition under Order IX Rule 13 CPC to set aside the ex-parte decree. The said petition was dismissed by the Additional District Judge by order dated 04.01.2017. The appellant has challenged the said order by filing revision being CRP (MD) No.257 of 2017 (NPD) before the High Court. Rejecting the contention of the appellant that he has been residing in Chennai, the learned Single Judge dismissed the said revision being CRP (MD) No.257 of 2017 (NPD) by order dated 08.02.2017. The SLP(C) No.9829 of 2017 preferred against the said order also came to be dismissed by the Supreme Court by order dated 07.04.2017.
5. First appeal filed by the appellant in AS(MD) SR No. 27805 of 2017:-After the dismissal of the SLP by the Supreme Court, the appellant-defendant has filed the first appeal being AS(MD) SR No. 27805 of 2017 challenging the decree passed in OS No.76 of 2015 dated 09.10.2015 along with application being CMP(MD) No.6566 of 2017 praying to condone the delay of 546 days in filing the appeal. In the said application, the appellant raised the very same grounds that he is having residence at Chennai and that the summons was not served on him and that summons was taken to Trichy’s address and thereafter, ex-parte decree was passed against him on 09.10.2015 and hence, prayed for condonation of delay. The High Court dismissed the application for condonation of delay on the ground that in the earlier proceedings under Order IX Rule 13 CPC, the appellant has
