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2024 Supreme(SC) 211
SUPREME COURT OF INDIA
Dhananjaya Y Chandrachud, CJI., J B Pardiwala, Manoj Misra, JJ.
M/s Trois Corporation HK Ltd - Appellant
Versus
M/s National Ventures Pvt. Limited - Respondent
Civil Appeal Nos. 3806-3807 of 2024 (Arising out of SLP (C) Nos 4012-4013 of 2024)
Decided On : 04-03-2024
Advocate Appeared:
For the Petitioner: Mr. Huzefa Ahmadi, Sr. Adv., Mr. Abhishek Bharti, Adv., Mr. Vishal Seth, Adv., Ms. Rashmi Singh, Adv., Ms. Aarti Mahto, Adv., Mr. Rohan Sharma, Adv., Mr. Balaji Srinivasan, AOR
For the Respondent: Mr. M. Yogesh Kanna, AOR, Ms Monica Saini, Adv., Mr. Vasu Kalra, Adv.
The main legal point established in the judgment is that the compliance with the rules for service of summons and the proportionality of conditions imposed for setting aside an ex parte decree are crucial in ensuring justice.
Headnote:
Judges Summons - Recovery of Debt - Code of Civil Procedure 1908, Order XIV Rule 8, Order II Rule 3 - The judgment discusses the application of Order XIV Rule 8 of the Original Side Rules, Clause 14 of the Letters Patent of the High Court of Madras, and Order II Rule 3 of the Code of Civil Procedure 1908 in the context of seeking to recover a debt.
Fact of the Case:
The respondent filed a draft plaint seeking to recover a sum of Rs 3.42 crores. The appellant, based in Hong Kong, filed a reply to the Judges Summons before the High Court. An ex parte decree was passed against the appellant, who then filed an application to set it aside.
Finding of the Court:
The High Court directed that the ex parte decree shall be set aside subject to the appellant depositing 75% of the suit claim within a period of four weeks. The Division Bench dismissed the appeal, leading to the proceedings reaching the Supreme Court.
Issues: The issues revolved around the compliance with the rules for service of summons, the setting aside of the ex parte decree, and the conditions imposed for the same.
Ratio Decidendi: The court found that the provisions of the Original Side Rules relating to service of summons on a defendant outside the jurisdiction were not complied with. The court also held that the requirement of a deposit of 75% of the suit claim for setting aside the ex parte decree was unwarranted.
Final Decision: The Supreme Court allowed the appeals, set aside the impugned orders of the High Court, and directed the appellant to deposit costs payable to the respondent. The delay in filing an application for setting aside the ex parte decree was condoned, and the written statement filed by the appellant was to be taken on the record upon the restoration of the suit.
ORDER :
1. Leave granted.
2. The appeals arise from the orders dated 14 September 2023 and 12 December 2023 of the High Court of Judicature at Madras.
3. On 31 October 2019, the respondent filed a draft plaint in CS SR No 139761 of 2020 seeking to recover a sum of Rs 3.42 crores. Together with the plaint, the respondent filed a Judges Summons under Order XIV Rule 8 of the Original Side Rules read with Clause 14 of the Letters Patent of the High Court of Madras and Order II Rule 3 of the Code of Civil Procedure 1908. The Judges summons was numbered as A No 8720 of 2019.
4. The petitioner, who is based in Hong Kong, filed its reply dated 9 January 2020 to the Judges Summons before the High Court of Judicature at Madras.
By an order dated 24 January 2020, the High Court granted the respondent leave to sue. Pursuant to the order granting leave to sue, the plaint lodged by the respondent in CS SR No 139761 of 2019 was registered on 27 February 2020 as CS No 87 of 2020 before the High Court.
6. On 9 March 2022, the Advocate for the respondent issued a communication to the appellant in the following terms :
| “To, |
| M/s TROIS CORPORATION HK LTD Rep by its Director Ankush Shah RM 1903, 19/F, Emperor Group Centre 288, Hennessey Road, Wanchai Hong Kong |
| My client M/s National Ventures Pvt Limited rep by its Director A. Bhanu Prasad, has filed the suit against you in CS. No.87 of 2020 and it came up for further hearing on 08.03.2022 before the Assistant Registrar-I (OS) on the file of Hon’ble High Court of Madras was pleased to order private notice to you returnable by 22-03-2022. Kindly take notice and appear on the said date, either in person or through a counsel failing which the matter will be heard and decided off on merits.” |
The appellant received a copy of the letter on 14 March 2022.
7. By an order dated 02 August 2022, the High Court recorded the submission of the respondent that the suit summons was served on the appellant on 14 March 2022 and directed that the suit should proceed ex parte. On 30 August 2022, an ex parte decree was passed against the appellant by the High Court.
8. On 21 June 2023, the appellant received a notice that the respondent had commenced execution proceedings in Hong Kong.
9. Aggrieved by the ex parte decree, the appellant filed a Judges Summons, inter alia, under Order XIV Rule 8 of the OS Rules and Order IX Rule 13 of the Code of Civil Procedure on 15 July 2023 for setting aside the ex parte decree. An application for condonation of delay was also filed. A response was filed by the Respondent.
10. On 14 September 2023, a Single Judge of the High Court directed that the ex parte decree shall be set aside subject to the appellant depositing 75% of the suit claim within a period of four weeks. Subject to compliance with the above term, the application for condonation of delay in filing the application to set aside the ex parte decree was allowed.
11. The order of the Single Judge was carried in appeal before the Division Bench. The appeal was dismissed on the ground that it was not maintainable.
12. The proceedings have travelled to this Court.
13. Order IV of the Madras High Court Original Side Rules deals with the institution of ordinary suits and service of summons. Rule 1 stipulates that a suit shall be instituted by presenting to the Registrar a plaint in Form No 5 of Appendix II containing the particulars prescribed by the Code. The plaint is to contain a list of the of documents which have been filed. Rule 2 stipulates that the plaintiff shall, together with the plaint, bring into Court a sufficient number of copies of the plaint and summons in duplicate and an application for service on the parties concerned. In terms of Rule 3, after the plaint is admitted, the Registrar or other officer of the Court shall issue summons to the defendant to appear, and if the defendant is resident out of the jurisdiction, he shall transmit the same to the prope
