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HIGH COURT OF MADRAS
Honourable Mr Justice M. NIRMAL KUMAR
MOONSTAR LINES PRIVATE LTD – Appellant
Versus
BARKATH EXPORTS – Respondent
Execution - Conditional Deposit - Section 148 - The court modified the condition imposed by the trial court, reducing the required deposit from 50% to 25% of the decree amount, aligning with past judgments that emphasize reasonableness in such conditions.
Fact of the Case:
The petitioners, defendants in a suit, faced an exparte decree and sought to set it aside. The trial court allowed setting aside but imposed a condition to deposit 50% of the decree amount, which the petitioners failed to comply with, leading to the present challenge.
Finding of the Court:
The court found the condition to deposit 50% of the decree amount onerous and unfair. It referred to a precedent from the Supreme Court, which criticized such high deposits as disproportionate, thus modifying the condition to a deposit of 25%.
Issues: Whether the imposition of a 50% deposit condition was justified and reasonable in the context of setting aside the exparte decree.
Ratio Decidendi: The court established that conditions for setting aside orders should be reasonable and proportional to the circumstances, referencing a Supreme Court judgment to support the reduction of the deposit requirement.
Final Decision: The court ordered the petitioners to deposit 25% of the decree amount within 15 days, setting aside the previous order and directing expeditious proceedings.
O R D E R
This Civil Revision Petition has been filed to set aside the order dated 01.02.2024 passed in E.A.No.1 of 2024 in E.P.No.9 of 2023 in C.O.S.No.373 of 2022 on the file of the Commercial Court.
2. The petitioners are the defendants in O.S. No. 7624 of 2019. They have suffered an exparte decree dated 09.01.2023. Thereafter, they filed an application to set aside the exparte decree on 31.01.2023 and the same is yet to be numbered. In the meanwhile, the respondent/plaintiff had initiated the execution proceedings in E.P.No.9 of 2023. In the Execution Petition also, the petitioners/defendants were set exparte by order dated 23.11.2023. Thereafter the petitioners filed E.A.No.1 of 2024 to set aside the exparte decree dated 23.11.2023 and the same was allowed on 01.02.2024 with condition that the petitioners shall make a fixed deposit of Rs.4,90,000/- on or before 15.03.2024. The said order could not be complied with within the stipulated time and hence the petitioners have filed the petition under Section 148 seeking extension of time till 30.03.2024 in E.A.No.1 of 2024. Finding that the condition has not been complied with in E.A. No.1 of 2024 the said application was dismissed. The petitioners herein now challenge the onerous condition of directing them to deposit almost 50% of the decree amount as not proper. Further reference was made to the Judgment of the Supreme Court in Trois Corporation HK Ltd., Vs. National Ventures Pvt., Limited, reported in 2024 SCC Online SC 263 wherein, the Apex Court at paragraph No. 21 as held as follows:-
"21. In this backdrop, the order of the High Court directing a deposit of 75% of the suit claim as a condition precedent for condoning the delay and for setting aside the exparte decree was unwarranted. The ends of justice would have been met if an order of costs was imposed on the appellant as a condition precedent for condoning the delay and for setting aside the exparte decree. Imposing a requirement of a deposit of 75% of the suit claim is disproportionate and would have to be set aside."
Hence, the learned counsel sought to set aside the order passed in E.A.No.1 of
2024 dated 01.02.2024.
3. The learned counsel for the respondent submitted that the suit has been filed by the respondent/plaintiff in O.S. No. 7624 of 2019 to direct the petitioners/defendants to pay a sum of Rs.6,02,407/- towards the cost of goods together with damages at 24% per annum from the date of invoice viz., 28.05.2018 till the realization. This suit was later transfered to the Commercial Court in C.S.O. No. 373 of 2022. The respondent/plaintiff has been evading service of summons and thereafter exparte decree passed on 09.01.2023. After filing Execution Petition the respondent had filed the above petition and despite the Trial Court passing an conditional order directing the petitioners to pay a sum of Rs.4,90,000/- on or before 15.03.2024, they did not comply with the same. The amount has not been deposited subsequently after extension of time. In spite of several extension granted to comply the order in E.A.1 of 2024 the petitioners, by giving one reason or the other, failed to comply with the order, hence, the trial Court finding that these petitions filed only to further drag on the proceedings dismissed all the petitions.
4. It is clear that petitioners suffered an exparte decree and thereafter, they were also set exparte in the execution proceedings. Now they have come forward with the present application seeking modification. Further, he submits to contest the suit on merits an opportunity must be given to them by setting aside the order passed by the Court below and the same has not considered. Further, the conditions imposed by the Court below is onerous and therefore also they could not comply with the same in time.
5. The learned counsel for the respondent submits he has no serious objection and his only requirement is that the petitioners participate in the proceedings and complete the proceedings without a
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