IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Sahai Endlaw, Amit Bansal, JJ.
Grand Auto Capital & Ors. - Appellants
Versus
Jindal Dyechem Industries Pvt. Ltd. - Respondent
F.A.O. (Comm) No. 20 of 2021; C.M. No. 11388 of 2021
Decided On : 20-05-2021
CPC - Setting Aside Ex Parte Decree - 1908 - [Ejectment, Recovery of Arrears of Rent and Mesne Profits] - Order IX Rule 13 - Summary: The court dismissed the appeal against the order of dismissal of an application under Order IX Rule 13 of the CPC for setting aside the ex parte decree of ejectment and recovery of arrears of rent and mesne profits. The court found that the appellants were not contesting the ejectment decree and that the mesne profits decreed were marginally above the agreed rent. The court modified the ex-parte decree by reducing the rate of mesne profits from Rs.30,000/- per day to Rs.7,18,750/- per month, and granted liberty to the appellants to make a claim for security deposit and for the respondent to contest the same. The Commercial Court was directed to make the requisite modification in the decree under execution.
Fact of the Case:
The appellants filed an appeal against the order of dismissal of their application under Order IX Rule 13 of the CPC for setting aside an ex parte decree of ejectment and recovery of arrears of rent and mesne profits. The court found that the appellants were not contesting the ejectment decree and that the mesne profits decreed were marginally above the agreed rent. The court modified the ex-parte decree by reducing the rate of mesne profits and granted liberty to the appellants to make a claim for security deposit and for the respondent to contest the same.
Finding of the Court:
The court found that the appellants were not contesting the ejectment decree and that the mesne profits decreed were marginally above the agreed rent. The court modified the ex-parte decree by reducing the rate of mesne profits and granted liberty to the appellants to make a claim for security deposit and for the respondent to contest the same.
Issues: The issues involved in the case were the dismissal of the application under Order IX Rule 13 of the CPC for setting aside the ex parte decree of ejectment and recovery of arrears of rent and mesne profits, and the modification of the ex-parte decree by reducing the rate of mesne profits and granting liberty to the appellants to make a claim for security deposit and for the respondent to contest the same.
Ratio Decidendi: The court decided that the appellants were not contesting the ejectment decree and that the mesne profits decreed were marginally above the agreed rent. The court modified the ex-parte decree by reducing the rate of mesne profits and granted liberty to the appellants to make a claim for security deposit and for the respondent to contest the same.
Final Decision: The appeal was dismissed, but the ex-parte judgment and decree were directed to be modified by reducing the rate of mesne profits and granting liberty to the appellants to make a claim for security deposit and for the respondent to contest the same. The Commercial Court was directed to make the requisite modification in the decree under execution.
JUDGMENT
Rajiv Sahai Endlaw, J. - This appeal was filed, impugning the order (dated 26th October, 2020 of the Commercial Court, North West District, Delhi, in Misc. D.J No. 223/2020 in CS (COMM) No. 77/2019) of dismissal of an application of the appellants/defendants under Order IX Rule 13 of the Code of Civil Procedure, 1908 (CPC) for setting aside of the ex parte decree dated 19th February, 2020 of ejectment of the appellants/defendants from immovable property (earlier in the tenancy of the appellants/defendants under the respondent/plaintiff on the terms and conditions contained in the registered lease deed between the parties) and for recovery from the appellants/defendants, of arrears of rent and mesne profits.
2. It was the case of the appellants/defendants, that they learnt of the ex-parte decree, only on receiving notice of the petition filed for execution thereof and were never served with the summons of the suit.
3. Notice of this appeal was ordered to be issued. However, finding (i) that none appeared for the appellants/defendants on 27th January, 2021 and on 1st February, 2021 and, (ii) that the appellants/defendants, when appeared, were not resisting delivery of possession and that the mesne profits decreed were only marginally above the agreed rent, when none appeared for the appellants/defendants on 9th February, 2021 also, the appeal was dismissed in default.
4. The appellants/defendants filed CM 11388/2021 for restoration of the appeal. The said application came up before us on 22nd March, 2021 but on which date the counsel for the appellants/defendants, when asked to argue on the appeal itself, sought adjournment. On 22nd March, 2021, inter alia the following order was passed:-
"5. We have already recorded our observations in the order dated 9th February, 2021, though dismissing the appeal in default.
6. On enquiry, the counsel for the respondent states that possession has not been delivered, as yet.
7. We have enquired from the counsel for the appellants, whether has any objection to delivery of possession of the premises to the respondent.
8. The counsel for the appellants states that the appellants are not in possession. On enquiry, who else is in possession, the counsel has no answer. On further enquiry, whether there is any document of handing over of possession to the respondent, the counsel for the appellants states that though there is no such document, but there is an email.
9. The counsel for the respondent states that premises where the appellants were earlier running a Skoda showroom, are lying locked and the Executing Court has issued warrants of possession, giving opportunity to the appellants to remove their goods inside the premises, by 25th March, 2021.
10. The counsel for the appellants has no objection to the respondent breaking open the locks and doors on its own without waiting for the same to be done in execution and to enter into possession.
11. The respondent may accordingly so enter into vacant, peaceful and physical possession of the premises today itself and would be deemed to have been put in possession of the premises today, without prejudice to the rights and contentions of the parties.
12. Now, the counsel for the appellants states that the plant and machinery of the appellants are lying inside the premises and time be given to remove them.
13. The same exposes the falsity of the claim earlier being made by the appellants of not being in possession of the premises. Had the appellants been not in possession, there would have been no question of the plant and machinery of the appellants lying inside the premises.
14. Now the counsel for the appellants again changes his stand and states that the respondent may take possession and do whatsoever it likes with whatever is found inside therein and the appellants would have no claim in that regard.
15. The respondent may break open lock and door of premises and take possession of the same together with whatsoever may be lying therein, free from any c
Ambalal Sarabhai Enterprises Limited vs. K.S. Infraspace LLP
The main legal point established in the judgment is that an ex-parte decree is to be set aside only if grounds therefor are made out and if such setting aside is necessary to enable the defendant to ....
The court clarified that an ex-parte decree can only be set aside if necessary to enable the defendant to contest the claim, and the absence of a defense justifies upholding the decree.
The court upheld the principle that an ex-parte decree should not be set aside if the defendant has no valid defence, and emphasized the need for expediency in commercial dispute resolutions.
Mesne profits can only be claimed from the date of the eviction decree, not from the date of filing the suit, as possession remains lawful until the decree is passed.
The admission of possession and absence of evidence of termination of the lease deed influenced the court's decision in dismissing the revision petition.
(1) Once a decree for possession has been passed and execution is delayed depriving decree holder to reap fruits, it is necessary for Appellate Court to pass appropriate orders fixing reasonable mesn....
The court ruled that conditions for stay of execution cannot include mesne profits payments without proper ascertainment, ensuring rights of both parties are preserved during appeals.
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