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2023 Supreme(Cal) 1572

IN THE HIGH COURT AT CALCUTTA
SIDDHARTHA ROY CHOWDHURY, J.
India Power Corporation Limited (IPCL) – Petitioner
Versus
Jefferies India Private Limited & Anr. – Respondents
C.O. 900 of 2022 with C.O. 904 of 2022
Decided On : 23-08-2023

Advocates Appeared:
For the Petitioner: Mr. Saptangsu Basu, Sr. Adv., Mr. Rahul Karmakar, Adv., Mr. Jibantaraj Dan Roy, Adv., Mr. Nishant Choudhury, Adv.
For the Respondents: Mr. Debnath Ghosh, Adv., Ms. Pubali Sinha Chowdhury, Adv.

Headnote:(A) Code of Civil Procedure, 1908 - Sections 151, Order V Rule 1, Order VII Rule 11, Order IX Rule 7 - Commercial Courts Act, 2015 - Defendant's right to participate in proceedings after appearing - The learned Trial Court improperly rejected the defendant’s application under Section 151 to lift the ex parte designation of the suit, failing to observe the principles of natural justice and misapplying procedural rules regarding the ex parte hearing. Though the defendant did not file an application under Order IX Rule 7, the court should have allowed participation, violating procedural mandates laid out in the CPC and the Commercial Courts Act. (Paras 10, 34, 66)

(B) Jurisdictional Error - The Court ruled that the learned Commercial Court did not adhere to the provisions for timely judgment delivery outlined in the Commercial Courts Act, and disregarded the principles of natural justice in dismissing the application to contest the suit. (Paras 66, 70)

(C) Fair Play - The right to a fair hearing was denied by not allowing the defendant to contest after entering appearance, exacerbated by a lack of proper notice of the transfer to the Commercial Court. (Paras 10, 12, 66)

Findings of Court:
The orders of the learned Commercial Court are set aside, and the defendant is permitted to join the trial and contest the application filed under Order VII Rule 11. (Paras 71, 72)

Issues: The primary issues pertained to whether proper notice was given concerning the transfer to the Commercial Court and the defendant's right to participate post-appearance.

Ratio Decidendi: The court emphasized the necessity of allowing the defendant to participate in judicial proceedings once they present themselves in court, adhering closely to fair play and statutory requirements.

Result: Revisional applications permitted; orders set aside.

JUDGMENT :

(Siddhartha Roy Chowdhury, J.)

1. For the sake of convenience and brevity this Court proposes to dispose of both the revisional applications by a common judgement. C.O. 900 of 2022 impeaches the order no. 26 dated 7th January, 2022 passed by learned Judge, Commercial Court at Rajarhat, North 24 Parganas in Money Suit No. 32 of 2019.

2. By the impugned order learned Trial Court was pleased to reject the application under Section 151 of the Code of Civil Procedure filed by the defendant seeking order “for removal of the case record from ex parte board after condoning the latches” and further observing that the defendants entered into appearance after the elapse of time to file written statement, learned Trial Court, taking into consideration the provision of Order V Rule 1 (1) of the Code of Civil Procedure posted the suit for ex parte hearing on 14th March, 2022.

3. On 14th March, 2022 the defendant entered into appearance and sought for adjournment with further prayer before the learned Trial Court to take up the petition under Order VII Rule 11 of the Code of Civil Procedure, filed by the defendant, before the ex parte hearing of the suit. Learned Trial Court rejected the petition for adjournment, took written notes of argument filed by the plaintiff and posted the suit for further ex parte hearing on 21st April, 2022, with liberty to the defendant to file written notes of argument. This order no. 27 passed on 14th March, 2022 is the subject matter of CO 904 of 2022.

4. For the sake of convenience the parties will be referred to as they were arrayed before the learned Trial Court.

5. Briefly stated, the plaintiff filed the Money Suit against the defendant, claiming decree for Rs. 9,01,8,185/- together with interest @ 18% per annum among other relief. The suit was registered as Money Suit No. 29 of 2018 before the learned Civil Judge (Senior Division) 2nd Court, Barasat. Pursuant to the notification no. 4282A dated 2nd July, 2019 of the High Court at Calcutta, the said suit was transferred to the learned Commercial Court at Rajarhat on 3rd July, 2019 and was re-numbered as Money Suit No. 32 of 2019.

6. Summon was served upon the defendant in due course of time and the defendant with a mind to contest the claim of the plaintiff engaged an advocate to take steps in the proceeding. But the learned advocate lost the brief while shifting the chamber and the clerk of learned Advocate also lost track of the matter and could not follow up the proceeding. When the defendant came to know that no step was taken by the learned Advocate, the defendant engaged another lawyer sometime in June, 2019 and instructed him to take appropriate steps.

7. Due to advent of pandemic Covid-19 no effective step, however, could be taken and learned Commercial Court vide its order dated 20th September, 2019 was pleased to fix the suit for ex parte hearing.

8. It is contended by the defendant that the suit was transferred on 3rd July, 2019 to the learned Commercial Court at Rajarhat but no notice was served upon the defendant, in the month of July, 2021 the defendant could trace out the suit and its status.

9. Immediately thereafter the defendant entered into appearance, filed an application before the learned Commercial Court seeking effectively an appropriate order to contest the suit and also filed an application under Order VII Rule 11 of the Code of Civil Procedure for rejection of the plaint of the suit. The said application was taken up for hearing and on 7th January, 2022 the prayer was rejected, suit was posted for ex parte argument on 14th March, 2022. On 14th March, 2022, the defendant prayed for an adjournment and also for posting the petition under Order VII Rule 11 of the Code of Civil Procedure for hearing. Learned Trial Court, however, held that the suit since was posted for ex parte hearing the petitioner was not competent to file application under Order VII Rule 11 of the Code of Civil Procedure, it was vexatious and not maintainable i

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