G. Ratna Raj (Dead) By Lrs. vs Sri Muthukumarasamy Permanent Fund Ltd. and Another

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL Nos.2582­2583 OF 2011

G. Ratna Raj (D) by LRs. ….Appellant(s)

VERSUS

Sri Muthukumarasamy Permanent Fund Ltd. & Anr. ….Respondent(s)

JUDGMENT

Abhay Manohar Sapre, J.

1. Application for substitution is allowed.

2. These appeals are directed against the final

judgment and order dated 11.01.2008 passed by

the High Court of Judicature at Madras in O.S.A.

Signature Not Verified Nos.299 & 300 of 2006 whereby the Division Bench Digitally signed by ANITA MALHOTRA Date: 2019.02.01 16:16:30 IST Reason: 1 of the High Court allowed the appeals filed by

respondent No.1 herein.

3. The controversy involved in these appeals lies

in a narrow compass. However, in order to

appreciate the same, few relevant facts need

mention hereinbelow.

4. The original appellant­G Ratna Raj (since dead

and now represented by his legal representatives)

was the plaintiff whereas respondent No.1 was

defendant No.1 in the civil suit out of which these

appeals arise. Respondent No.2 is impleaded as

party respondent in this Court by order dated

06.02.2014.

5. The original plaintiff (appellant herein)­G

Ratna Raj filed a Civil Suit No.131/1999 against

the defendants (Sri Muthukumaraswamy Fund Ltd.­

Respondent No.1 herein and Balajee & Ors.) in the

High Court of Madras on its original side

2 jurisdiction for redemption of mortgage and for

permanent injunction in relation to the mortgaged

property.

6. The defendants on being served entered their

appearance and filed their written statement. The

Trial Court, on the basis of pleadings, framed the

issues. The plaintiff examined himself as PW­1. The

defendants cross­examined the plaintiff. Thereafter,

the plaintiff closed his case. The case was

accordingly posted for recording defendants’

evidence.

7. At that stage of the proceedings, the

defendants did not appear in the suit and,

therefore, the Court proceeded ex parte against

them. The proceedings in the suit then continued as

ex parte against the defendants. The plaintiff then

got himself re­examined in the proceedings. He,

however, could not be re­cross­examined by the

3 defendants because they were already proceeded ex

parte in the proceedings.

8. The Trial Court (Single Judge) by

judgment/decree dated 25.02.2003 passed a

preliminary decree against the defendants in

relation to the suit property. This led to filing of the

two applications (IA No.340/2006 and IA No.

341/2006) by defendant No.1 before the Trial

Court.

9. So far as IA No. 341/2006 is concerned, it was

filed under Order 9 Rule 13 of Code of Civil

Procedure, 1908 (hereinafter referred to as “the

Code”) for setting aside of the preliminary decree

dated 25.02.2003 and so far as IA No.340/2006 is

concerned, it was filed for condonation of delay in

filing the application under Order 9 Rule 13 of the

Code.

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10. By order dated 14.03.2006, the Single Judge

dismissed both the applications and held that the

application filed by defendant No.1 under Order 9

Rule 13 of the Code was not maintainable because

the preliminary decree dated 25.02.2003 was not

an "ex parte decree". In other words, he was of the

view that since the preliminary decree dated

25.02.2003 was not an ex parte decree, an

application under Order 9 Rule 13 of the Code

could not be filed for its setting aside.

11. Defendant No.1 felt aggrieved and filed

appeals before the Division Bench of the High

Court. By impugned order, the Division Bench

allowed the appeals and set aside the order of the

Single Judge. The Division Bench held that the

preliminary decree dated 25.02.2003 was an ex

parte decree passed in the civil suit by the Trial

Court (Single Judge) and, therefore, the application

5 filed by defendant No.1 under Order 9 Rule 13 of

the Code was maintainable with a view to find out

as to whether such decree could be set aside under

Order 9 Rule 13 of the Code or not.

12. The Division Bench, therefore, allowed the

application filed by defendant No.1 under Order 9

Rule 13 of the Code subject to their paying a cost of

Rs.10,000/­ to the plaintiff. The civil suit was

accordingly restored to its original file for its

disposal on merits in accordance with law. It is

against this order, the plaintiff has felt aggrieved

and filed the present appeals by way of special leave

in this Court.

13. The short question, which arises for

consideration in these appeals, is whether the

Division Bench was justified in setting aside the

preliminary decree dated 25.02.2003 by holding the

6 same to be an "ex parte decree" for the purpose of

Order 9 Rule 13 of the Code.

14. Heard learned counsel for the parties.

15. Having heard the learned counsel for the

parties and on perusal of the record of the case, we

find no merit in these appeals.

16. In our opinion, the question involved in these

appeals is required to be decided keeping in view

the provisions of Order 9 Rule 6 (a) and Order 17

Rules 2 and 3 of the Code.

“Order 9 Rule 6 (1)(a)

6. Procedure when only plaintiff appears­ (1) Where the plaintiff appears and the defendant does not appear when the suit is called on for hearing, then­

(a) When summons duly served – If it is proved that the summons was duly served, the Court may make an order that the suit be heard ex parte;”

17. Rule 6(1)(a) provides that where the plaintiff

appears and the defendant does not appear when

the suit is called on for hearing, then if the

7 summons is held duly served on the defendant, the

Court may make an order that the suit be heard ex

parte.

18. Order 17 Rules 2 and 3 read as under :

“Order 17 Rules 2 & 3

2. Procedure if parties fail to appear on day fixed.—Where, on any day to which the hearing of the suit is adjourned, the parties or any of them fail to appear, the court may proceed to dispose of the suit in one of the modes directed in that behalf by Order IX or make such other order as it thinks fit.

Explanation.—Where the evidence or a substantial portion of the evidence of any party has already been recorded and such party fails to appear on any day to which the hearing of the suit is adjourned, the court may, in its discretion, proceed with the case as if such party were present.

3. Court may proceed notwithstanding either party fails to produce evidence, etc.— Where any party to a suit to whom time has been granted fails to produce his evidence, or to cause the attendance of his witnesses, or to perform any other act necessary to the further progress of the suit, for which time has been allowed, the court may, notwithstanding such default,—

(a) if the parties are present, proceed to decide the suit forthwith; or

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(b) if the parties are, or any of them is, absent, proceed under Rule 2.”

19. Order 17 Rule 2 of the Code provides that

where, on any day to which the hearing of the suit

is adjourned, the parties or any of them fail to

appear, the Court may proceed to dispose of the suit

in one of the modes directed in that behalf by order

IX or make such other order as it thinks fit.

20. The Explanation appended to Order 17 Rule 2

of the Code provides that where the evidence or a

substantial portion of the evidence of any party has

already been recorded and such party fails to

appear on any day to which the hearing of the suit

is adjourned, the court may, in its discretion,

proceed with the case as if such party was present.

21. Order 17 Rule 3 of the Code, however,

provides that where any party to a suit to whom

time has been granted fails to produce his evidence,

or to cause the attendance of his witnesses, or to

9 perform any other act necessary to the further

progress of the suit, for which time has been

allowed, the Court may, notwithstanding such

default, (a) if the parties are present, proceed to

decide the suit forthwith, or (b) if the parties are, or

any of them is, absent, proceed under Rule 2.

22. The scope of Order 17 Rule 2 and Order 17

Rule 3 of the Code came up for consideration before

this Court in the case of B. Janakiramaiah Chetty

vs. A.K. Parthasarthi & Ors., (2003) 5 SCC 641

wherein Justice Arijit Pasayat speaking for the

Bench held in paras 7 to 10 as under:

“7. In order to determine whether the remedy under Order 9 is lost or not what is necessary to be seen is whether in the first instance the Court had resorted to the Explanation of Rule 2.

8. The Explanation permits the court in its discretion to proceed with a case where substantial portion of evidence of any party has already been recorded and such party fails to appear on any day to which the hearing of the suit is adjourned. As the

10 provision itself shows, discretionary power given to the court is to be exercised in a given circumstance. For application of the provision, the court has to satisfy itself that:

(a) substantial portion of the evidence of any party has been already recorded; (b) such party has failed to appear on any day; and (c) the day is one to which the hearing of the suit is adjourned. Rule 2 permits the court to adopt any of the modes provided in Order 9 or to make such order as he thinks fit when on any day to which the hearing of the suit is adjourned, the parties or any of them fail to appear. The Explanation is in the nature of an exception to the general power given under the rule, conferring discretion on the court to act under the specified circumstance i.e. where evidence or a substantial portion of evidence of any party has been already recorded and such party fails to appear on the date to which hearing of the suit has been adjourned. If such is the factual situation, the court may in its discretion deem as if such party was present. Under Order 9 Rule 3 the court may make an order directing that the suit be dismissed when neither party appears when the suit is called on for hearing. There are other provisions for dismissal of the suit contained in Rules 2, 6 and 8. We are primarily concerned with a situation covered by Rule 6. The crucial words in the Explanation are “proceed with the case”. Therefore, on the facts it has to be seen in each case as to whether the Explanation was applied by the court or not.

9. In Rule 2, the expression used is “make such order as it thinks fit”, as an alternative

11 to adopting one of the modes directed in that behalf by Order 9. Under Order 17 Rule 3(b), the only course open to the court is to proceed under Rule 2, when a party is absent. Explanation thereto gives a discretion to the court to proceed under Rule 3 even if a party is absent. But such a course can be adopted only when the absentee party has already led evidence or a substantial part thereof. If the position is not so, the court has no option but to proceed as provided in Rule 2. Rules 2 and 3 operate in different and distinct sets of circumstances. Rule 2 applies when an adjournment has been generally granted and not for any special purpose. On the other hand, Rule 3 operates where the adjournment has been given for one of the purposes mentioned in the rule. While Rule 2 speaks of disposal of the suit in one of the specified modes, Rule 3 empowers the court to decide the suit forthwith. The basic distinction between the two rules, however, is that in the former, any party has failed to appear at the hearing, while in the latter the party though present has committed any one or more of the enumerated defaults. Combined effect of the Explanation to Rule 2 and Rule 3 is that a discretion has been conferred on the court. The power conferred is permissive and not mandatory. The Explanation is in the nature of a deeming provision, when under given circumstances, the absentee party is deemed to be present.

10. The crucial expression in the Explanation is “where the evidence or a substantial portion of the evidence of a party”. There is a positive purpose in this legislative

12 expression. It obviously means that the evidence on record is sufficient to substantiate the absentee party’s stand and for disposal of the suit. The absentee party is deemed to be present for this obvious purpose. The court while acting under the Explanation may proceed with the case if that prima facie is the position. The court has to be satisfied on the facts of each case about this requisite aspect. It would be also imperative for the court to record its satisfaction in that perspective. It cannot be said that the requirement of substantial portion of the evidence or the evidence having been led for applying the Explanation is without any purpose. If the evidence on record is sufficient for disposal of the suit, there is no need for adjourning the suit or deferring the decision.”

23. Now when we examine the facts of the case at

hand keeping in view the law laid down in the case

of B Janakiramaiah Chetty (supra), we find that

the plaintiff’s evidence was recorded and his case

was also closed. It is not in dispute that the

defendants were placed ex parte on the date when

the case was fixed for recording defendants’

evidence but the same was not recorded due to the

13 defendants’ absence on the said date. In other

words, it was a case where the defendants did not

lead any evidence.

24. In such a situation arising in the case, in our

view, the case at hand would not fall under

Explanation to Order 17 Rule 2 of the Code because

in order to attract the Explanation, "such party"

which has led evidence or has led substantial part

of the evidence, if fails to appear on any day to

which the hearing of the case is adjourned, the

Court may treat “such party” as "present" on that

day and is accordingly empowered to proceed in the

suit.

25. In this case, the party, who was absent and

was proceeded ex parte was the "defendants" and

they had not led any evidence whereas it was the

plaintiff, who was present and had led his evidence.

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26. In other words, if the plaintiff had remained

absent and was found to have led evidence, the

Court could have invoked its powers under

Explanation to Order 17 Rule 2 of the Code treating

the plaintiff as "present" for passing appropriate

orders. Such is, however, not the case here.

27. Similarly, in converse situation, if the

defendants had remained absent (as has happened

in this case) on that date and if it would have

noticed that they had adduced the evidence either

fully or substantially prior to the date on which they

were proceeded ex parte, the Court could have

invoked its powers under Explanation to Order 17

Rule 2 of the Code treating the defendants as

"present" on that day for passing appropriate orders

in the suit. Such is, however, again not the case

here.

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28. We are, therefore, of the view that since the

defendants were proceeded ex parte and were found

not to have led any evidence in the suit, the Court

could only proceed under Order 17 Rule 3 (b) read

with Order 17 Rule 2 of the Code for disposal of the

suit by taking recourse to one of the modes directed

in that behalf by Order 9 of the Code or could have

made any other order as it thinks fit.

29. As mentioned above, the Trial Court did

proceed to hear the suit ex parte by taking recourse

to the Order 9 Rule 6 (a) in terms of Order 17 Rule 2

of the Code because on that day, the plaintiff was

present when the suit was called on for hearing

whereas the defendants were absent despite service

of summons and accordingly the Trial Court passed

16 the preliminary decree. Such decree, in our opinion,

was an "ex parte decree" within the meaning of

Order 9 Rule 6 (a) read with Order 9 Rule 13 of the

Code and, therefore, could be set aside under Order

9 Rule 13 on making out a sufficient ground by the

defendants.

30. In view of the foregoing discussion, we are of

the view that the Division Bench was justified in

allowing the applications filed by defendant No.1

under Order 9 Rule 13 of the Code and, in

consequence, was justified in setting aside the

preliminary decree dated 25.02.2003 passed in

O.S. No.131/1999 treating the said decree as "ex

parte decree".

31. So far as the finding on the question of

sufficient ground for setting aside of the ex parte

decree is concerned, suffice it to say, it being a pure

question of fact, the same does not call for any

17 interference by this Court. A finding on such

question is binding on this Court. Moreover, we find

that the Division Bench imposed a cost of

Rs.10,000/­ on defendant No.1 payable to the

plaintiff as condition for setting aside the ex parte

decree. Defendant No.1, therefore, must pay the

cost to the plaintiff.

32. As a result of the foregoing discussion, we find

no merit in these appeals, which are accordingly

dismissed.

33. The Trial Court (Single Judge) is now directed

to decide the Original Suit No. 131/1999 on merits

in accordance with law preferably within a period of

one year as an outer limit. Since the original

plaintiff has died and his legal representatives are

already brought on record in these appeals, the

Trial Court will permit the plaintiff to amend the

cause title in the plaint and bring on record the

18 legal representatives(appellants herein) to enable

them to prosecute the suit on merits in accordance

with law.

………...................................J. [ABHAY MANOHAR SAPRE]

....……..................................J. [DINESH MAHESHWARI]

New Delhi;

February 01, 2019.

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