The failure to demonstrate 'special circumstances' under Order 37 Rule 4 of the CPC precludes a party from setting aside an ex parte decree for non-appearance.

1. Having failed to persuade the learned Single Judge and the Division Bench of the Bombay High Court to entertain its prayer for setting aside the decree passed in favour of the respondent under O.37 R.3 of the Code of Civil Procedure , the appellant has filed this petition.

2. The appellant and respondent entered into an agreement whereby the respondent provided 54 mobile phone connections to the former in 2003. Due to non - payment of the amount due, the respondent sent legal notice dated 22.9.2004 and demanded Rs.13,31,800.59. After some time, the respondent filed a petition under S.433 and S.434 of the Companies Act, 1956 , which came to be registered as Company Petition No. 910/2005 for winding up of the appellant by alleging that it has failed to pay Rs.19,69,417.11 despite demand. The learned Company Judge passed order dated 13.4.2006 and directed the appellant to deposit a sum of Rs.11,00,000/- to avoid advertisement of the petition filed by the respondent.

3. The respondent also filed a Summary Suit No. 1989/2006 under O.37 for passing a decree of Rs.25,83,078.35 with interest at the rate of 30% per annum from the date of suit. The summon issued by the Court was duly served upon the appellant, but neither an application was filed for leave to defend nor any one appeared on the date specified in the summons. Therefore, the learned Single Judge passed order dated 7.11.2006 and decreed the suit in terms of clauses (a) and (b) of the plaint.

4. Soon thereafter, the appellant filed application dated 18.12.2006 in the form of an affidavit of its Company Secretary Shri Mahesh Katudia and prayed for setting aside decree dated 7.11.2006. In paragraphs 5 and 6 of his affidavit, Shri Katudia referred to order dated 13.4.2006 passed by the learned Company Judge in Company Petition No. 910/2005 and averred that a sum of Rs.11,00,000/- was deposited by the appellant on 8.6.2006. In paragraph 7, he averred that Shri Pradeep Bhandekar, who was working as Executive Assistant to the Chairman had resigned in September, 2006 and on that count, proper instructions could not be given to Shri. R. A. Shaikh, Advocate. It was also averred that summons for judgment was served on Shri. R. A. Shaikh, Advocate in September, 2006 but no application for leave to defend was filed and that resulted in passing of ex parte decree dated 7.11.2006.

5. When the appellant's prayer for setting aside decree dated 7.11.2006 was taken up for consideration, counsel appearing on its behalf relied upon O.9 R.13 CPC. The learned Single Judge referred to the relevant provision and held that the two grounds contemplated by R.13 are not available for setting aside decree dated 7.11.2006. The learned Judge observed that it is not a case in which the summons had not been served upon the judgment debtor or that there was sufficient cause for its non - appearance on 7.11.2006.

6. The appellant appealed against the order of the learned Single Judge but could not convince the Division Bench of the High Court to entertain its prayer for setting aside decree dated 7.11.2006. Paragraphs 4 and 5 of the judgment of the Division Bench, which contain the reasons for dismissal of the appeal read as under:
"4. The question of going into the infirmity or legality or illegality pertaining to the rate of interest or to what extent the amount has already been paid by the appellant would have arisen in case there was any material placed by the appellant in that regard before the learned Single Judge after obtaining necessary leave to defend the suit in accordance with the l