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HIGH COURT OF CALCUTTA
S. A. Masud
RAHINI ROY - Appellant
Versus
JETHMULL BHOJRAJ - Respondent
Suit 96 Of 1967
Decided On : JUNE 19, 1968
ORDER XXXVII RULE 4 - SETTING ASIDE DECREE - NEGOTIABLE INSTRUMENTS ACT, 1881 - SECTIONS 27, 33, 37, 61, 91-93, 148 - SUMMARY PROCEDURE - SPECIAL CIRCUMSTANCES - COURT'S DISCRETION - INTERPRETATION OF SECTIONS.
Fact of the Case:
Petitioner, a partnership firm, applied to set aside a decree passed against it in a summary suit under Order XXXVII of the Code of Civil Procedure. The suit was based on three hundis drawn by the petitioner and accepted by one K. C. Sukla. The petitioner contended that K. K. Sukhani, who signed the hundis on behalf of the petitioner, had no authority to do so and that the acceptor, K. C. Sukla, was unknown to the petitioner. The petitioner also argued that the cause of action against it was not made out as required under Section 37 of the Negotiable Instruments Act, 1881.
Finding of the Court:
The court held that the decree could not be set aside under Order XXXVII Rule 4 of the Code of Civil Procedure as there were no special circumstances to justify the exercise of discretion in favor of the petitioner. The court noted that the petitioner had failed to comply with the conditional order passed by the trial judge requiring it to furnish security, had not pursued its appeal against the order, and had not filed an appeal against the decree within the limitation period. The court also found that the petitioner had not raised any new grounds or facts that were overlooked by the trial judge or the appellate court.
Issues: 1. Whether there were "special circumstances" within the meaning of Order XXXVII Rule 4 of the Code of Civil Procedure to set aside the decree passed against the petitioner. 2. Whether the petitioner had a good defense on merits to the suit on the hundis.
Ratio Decidendi: 1. The court held that the special circumstances required under Order XXXVII Rule 4 must be related to the procedure mentioned in the order itself. In this case, the petitioner had obtained leave to defend the suit and had entered appearance within the prescribed time. Therefore, the decree passed against the petitioner was not a decree within the meaning of Order XXXVII Rule 2(2), which contemplates a decree passed when the defendant has not obtained leave to defend or has not appeared and defended the suit. 2. The court declined to consider the merits of the petitioner's defense on the hundis, holding that such arguments should have been raised in the appeal against the decree.
Final Decision: The court dismissed the petitioner's application to set aside the decree with costs.
( 1 ) THIS is an application on behalf of the petitioner, a partnership firm, under Order XXXVII Rule 4 of the Code of Civil Procedure for setting aside a decree passed by me as an undefended suit on 8th September, 1967. Admittedly, this suit was instituted as a summary suit under Order XXXVII on three hundis for Rs. 10,000/- each payable to the plaintiff or order 180 days after the said date without grace. The said hundis were drawn by the petitioner firm, M/s. Jethmull Bhojraj on K. K. Sukhani and were purported to have been accepted by one K. C. Sukla, the defendant No. 2. The said hundis on maturity were duly presented to the defendant No, 2 for payment but were dishonoured by non-payment due notice of which was given to the defendant No. 1 also. The defendants having failed and neglected to pay the amounts of the said hundis, the present suit was instituted against the defendants for a decree for Rs. 35,365/- on 12th January, 1967. On 9th February, 1967, the defendant No. 1 was informed by one of its assistants that Writ of Summons in the said summary suit along with a notice dated 8th February, 1967, was purported to have been served upon the defendants. On 21st February, 1967, the firm by a Master's Summons taken out by its attorneys, Khaitan and Co. made an application in the said suit, inter alia, for setting aside the purported service of the writ of summons and alternatively, for leave to enter appearance and to defend the suit. On 28th June, 1967, the said application came up for hearing before R. M. Dutta, J. , who was pleased to grant him leave to defend on condition that the petitioner would furnish security to the extent of Rs. 30,000/- to the satisfaction of the Registrar within one month. His Lordship was further pleased to direct that in case no security is furnished, there would be no order on the said application. Thereafter, an application for leave to file the Memorandum of Appeal without a certified copy was presented before the Court of Appeal consisting of Ray and S. K. Mukherjee, JJ. , against the said order of R. M. Dutta, J. The said application however was withdrawn with the leave of the Appeal Court. The defendants having failed to deposit the sum of Rs. 30,000/- in pursuance of the order of Dutta, J. , the matter appeared in my undefended list on 8th September, 1967, and a decree was passed. It is alleged that the petitioner for the first time came to know of the ex parte decree on 21st December, 1967. On 2nd February, 1968, the Memorandum of Appeal was filed on behalf of the petitioner against the said decree. But the said Memorandum of Appeal was returned to the defendant No. 1's solicitor as the same was filed out of time. On 19th February, 1968, the petitioner made an application before the Appellate Court for condonation of delay in preferring the said appeal and for extension of time to file the Memorandum of Appeal. On 5th March, 1968, the said application came up for hearing before the Appellate Court and their Lordships were pleased to deliver a judgment by which the said application was dismissed. Thereafter, on 11th March, 1968, the present application is filed.
( 2 ) THE short point to be decided in this application is whether there are "special circumstances" within the meaning of Order XXXVII Rule 4 of the Code which would enable me to exercise my discretion to set aside the decree passed by me, Order XXXVII, Rule 4 reads as follows:"4.-- After the decree the Court may, under special circumstances, set aside the decree, and if necessary stay or set aside the execution, and may give leave to the defendant to appear to the summons and to defend the suit, if it seems reasonable to the Court so to do, and on such terms as the Court thinks fit. " The words "the decree" and "the summons" in Rule 4 must refer to Order XXXVII, Rule 2 which provides:2 (1 ).-- All suits upon Bills of Exchange, Hundis or Promissory Notes may, In case the plaintiff desires to proceed hereunde
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