D. Murugesan, J.

1. The appeal is directed against the judgment and decree dated 23. 2006 made in Application No.1039 of 2006 in C.S.No.1622 of 1992.

2. For convenience, the parties will be referred to as arrayed in the suit and the appeal arises under the following circumstances:

The plaintiff is engaged in finance business and granting loans on securities and also extending hire purchase and leasing facilities for vehicles and machineries etc. The first defendant approached the plaintiff for a loan of Rs.20,00,000/- and an agreement was also entered into on 11. 91. The first defendant created an equitable mortgage of deposit of title deeds of the property for the value of Rs.20,00,000/- and the second defendant stood as a guarantor. As the first defendant failed to pay the first instalment, the plaintiff issued legal notices dated 29. 91 to both the principal debtor and the guarantor namely, the defendants and the legal notice sent to the second defendant was acknowledged on behalf of him on 29. 91. However, the legal notice sent to the first defendant was not served. Thereafter, the appellant/plaintiff-M/s The Motor and General Finance Limited filed a suit in C.S.No.1622 of 1992 under Order XXXVII Rule 1 of Original Side Rules and Order IV Rule 1 of Original Side Rules read with Order XXXIV Rule 1 and Section 26 of Civil Procedure Code for a judgment and decree directing the defendants to pay to the plaintiff the sum of Rs.26,45,000/- together with further interest at the rate of 2.5% per month from the date of plaint till the date of realisation on the sum of Rs.23,00,000/-within the time stipulated by this Court and in the event of default by the defendants of the payment of the amount, the property set out in the schedule to be brought to sale after defraying the expenses and appropriate the sale proceeds towards the amount decreed and should there be any deficiency, directing the defendants to pay such deficiency personally and also to pay costs.

3. Both the defendants were set ex parte on 10. 2002. Evidence was taken on 10. 2002 and the suit was decreed ex parte against both the defendants. The decree was transferred to the Court of the City Civil Judge, Bangalore for execution and the executing Court ordered attachment of the mortgaged property on 22. 2006.

4. The second defendant filed Application Nos.1039 and 1040 of 2006 in C.S.No.1622 of 1992 before this Court to set aside the ex parte decree and to stay the decree pending the said applications. By order dated 23. 2006, the learned Judge set aside the ex parte decree against both the defendants with a condition that the second defendant should deposit a sum of Rs.15,00,000/- within a period of eight weeks. The said order is questioned in this appeal.

5. We have heard Mr. T.K. Seshadri, learned senior counsel appearing for the plaintiff and Mr. A.R.L. Sundaresan, learned senior counsel appearing for the second defendant.

6. The challenge to the order under appeal is mainly on the following grounds:

(i) The ex parte decree was passed on 10. 2002. Even though the second defendant was served with the lawyers notice dated 29. 91, the subsequent summons could not be served as he has shifted his place of residence without informing the plaintiff and therefore substituted service was taken on 10. 2002 and the publication was effected and in spite of the paper publication, both the defendants did not appear and therefore the ex parte decree came to be passed on 10. 2002. As both the defendants were served and they had the knowledge of the suit, in the absence of any application for condonation of delay, the application filed by the second defendant to set aside the ex parte decree dated 10. 2002 ought not to have been entertained and should have been rejected.

(ii) Inasmuch as the decree is joint and severable, it could be executed against any one of the defendants in terms of the proviso to Order IX Rule 13 of Civil Procedure Code, the learned Judge ought not to hav