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1989 Supreme(All) 65

IN THE HIGH COURT OF ALLAHABAD
M. P. SINGH
JAYSHREE DISTRIBUTION PIPLANI KATRA - Appellant
Versus
JAYSHREE T.AND R.PRODUCTS - Respondents
CIV. REVN. 1 Of 1989
Decided On : 01/18/1989

Advocates Appeared:
SUDHIR CHANDRA AGARWAL, U.K.Pandey

The court has the jurisdiction to impose the condition of furnishing a bank guarantee as a condition for setting aside an ex parte decree under O. 9, R. 13, C. P. C.

Headnote:

O. 9, R. 13, C. P. C. - Setting Aside Ex Parte Decree - Conditions - Bank Guarantee - Legality and Propriety.

Fact of the Case:

The defendants filed an application under O. 9, R. 13, C. P. C. to set aside an ex parte decree passed against them. The trial court allowed the application on the condition that the defendants furnish a bank guarantee of 50% of the decretal amount within 15 days. The defendants challenged this condition in revision.

Finding of the Court:

The court held that the trial court had the jurisdiction to impose the condition of furnishing a bank guarantee as a condition for setting aside the ex parte decree. The court found that the defendants had admitted their liability for a substantial portion of the decretal amount and that they had not taken any steps to deposit the amount despite being given time to do so. The court also held that the condition imposed by the trial court was not onerous and that it was necessary to protect the interests of the plaintiff.

Issues: 1. Whether the trial court had the jurisdiction to impose the condition of furnishing a bank guarantee as a condition for setting aside the ex parte decree? 2. Whether the condition imposed by the trial court was onerous and arbitrary?

Ratio Decidendi: 1. The court held that the trial court had the jurisdiction to impose the condition of furnishing a bank guarantee as a condition for setting aside the ex parte decree under O. 9, R. 13, C. P. C. The court found that the words "otherwise" and "as it thinks fit" in the rule gave the court the power to impose such a condition. 2. The court held that the condition imposed by the trial court was not onerous and arbitrary. The court found that the defendants had admitted their liability for a substantial portion of the decretal amount and that they had not taken any steps to deposit the amount despite being given time to do so. The court also found that the condition was necessary to protect the interests of the plaintiff.

Final Decision: The court dismissed the revision petition and upheld the order of the trial court.

M. P. SINGH, J.

( 1 ) THIS is a defendants revision against the order of the learned Civil Judge imposing certain conditions while allowing their application under O. 9, R. 13, C. P. C.

( 2 ) THE plaintiff-opposite party 1 Jayshree Tyres and Rubber Products carries on the business of manufacture and sale of cycle, rickshaw tyres and tubes. The plaintiff supplied tyres and tubes to the defendant applicants from time to time and an amount of Rs. 9 lacs and odd became due.

( 3 ) BY means of different letters the defendants have admitted the claim of the plaintiff so far as the principal amount is concerned but the rate of interest was disputed.


( 4 ) ULTIMATELY the matter was referred to the Arbitrator as mutually agreed upon between the parties on 9-6-1986. The Arbitrator gave an award on 30-08-1986 holding that the plaintiff was entitled for a sum of Rs. 9,09,926. 26 poise as principal. Interest at the rate of 18% per annum shall be paid on the same from 15-2-1986 to the date of reference i. e. 26th June, 1986. This award was in the knowledge of the defendants but the same has not been challenged.

( 5 ) ON 19-12-1987 by the order of Civil Judge the award was made rule of the Court under S. 17 of the Arbitration Act. Thereafter the execution proceeded.

( 6 ) ON 1-8-1988 the defendants moved an application under O. 9, R. 13, C. P. C. for Setting aside the order dated 19-12-1987. The plaintiff filed an objection. The Court allowed the said application imposing conditions that the defendants would furnish bank guarantee of 50% of the decretal amount within 15 days from the date of passing of the order along with Rs. 250/- as costs. Against this part of the order the present revision has been filed.

( 7 ) HEARD Sri Rajeshwari Prasad, learned counsel for the applicants and Sri Sudhir Chandra learned counsel for the opposite parties.

( 8 ) THE first contention of the learned counsel for the applicant was that since the Court was satisfied that summons were not properly served, there was no necessity for imposing any condition regarding furnishing of the bank guarantee. In support of his contention he has relied upon the case reported in AIR 1979 All 370, Raj Kumar Soni v. Mohan Meakin Breweries Ltd. The facts of that case were the trial Court while setting aside the ex parte decree had passed an order to deposit Rs. 2 lacs in cash within 60 days from the date of the order, against which the revision was filed It was held that -"where the Court set aside ex parte decree on a clear finding that the defendant had sufficient cause for being absent on the day the ex parte decree was passed, as he was not informed of the date fixed for hearing, imposition of condition that the defendant should deposit 1/5 of the amount claimed in suit (Rs. 2 lacs) within 60 days for setting aside the, ex parte decree was improper. Unless the party is at fault normally no condition should be imposed for payment of money or furnishing of security while setting aside the ex parte decree. The Court can always award costs to compensate the other side for inconvenience and loss caused to the said party. Where the Court finds that the defendant is at fault or there was omission on his part or it was because of his act that there had been delay in the disposal of the case, the Court may impose reasonable terms. An order directing the party to deposit 1/5th of the decretal amount is not justified when the amount claimed in the suit is large one. There are other modes of Safeguarding the interest of this plaintiff. If the Curt finds that the defendant is disposing of his properties or moving away from the jurisdiction of the Court or has been delaying the proceedings in the suit, the Court would be justified in imposing the terms for the payment of money into Court or furnishing of security, and if need he for the entire amount claimed in the suit. "


( 9 ) ANOTHER case relied upon by him is reported in, AIR 1958 Raj 237, Chhagan Raj v. Sugan Mal, which is very much sim















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