Salil Dutta vs T.M. And M.C. Private Ltd

Supreme Court5 February 1993B.P. Jeevan Reddy

SCC(1993) 2 SCC 185
Neutral1993 INSC 48
SCR[1993] 1 SCR 794

Ratio decidendi

The rule this decision rests on

An advocate is the agent of the party who engaged him, and his acts and statements made within the limits of authority given to him are the acts and statements of the party; a party cannot simply disown its advocate and seek relief from the consequences of the advocate's negligence or misdemeanour as an absolute rule, though the Court may in certain circumstances set aside a dismissal order or ex-parte decree in the interest of justice where it finds the client was an innocent litigant, but no such absolute immunity can be recognised as the principle must be understood contextually and not as an absolute proposition. Where a suit is posted for final hearing after years of pendency and the defendant is not a rustic villager unfamiliar with court procedures but a private limited company managed by educated businessmen with their head office at the place where the court is located, the Court will not set aside an ex-parte decree on the ground of the advocate's negligence or advice where the defendant chose to non-cooperate with the court and the story of the advocate's advice appears to be an after-thought contradicted by the evidence on record. The observations in Rafiq v. Munshilal regarding the suffering of innocent parties due to advocate negligence must be understood in the facts and circumstances of that case—involving a second appeal filed by an outstation villager—and cannot be applied as an absolute proposition to all cases.

Written by Miss Lucy from the judgment below, not taken from a headnote.

Judgment

As delivered

PETITIONER:SALIL DUTTA

Vs.

RESPONDENT:T.M. AND M.C. PRIVATE LTD.

DATE OF JUDGMENT05/02/1993

BENCH:JEEVAN REDDY, B.P. (J)BENCH:JEEVAN REDDY, B.P. (J)REDDY, K. JAYACHANDRA (J)

CITATION:1993 SCR (1) 794 1993 SCC (2) 185JT 1993 (4) 528 1993 SCALE (1)451

ACT:Code of Civil Procedure, 1908:Order 9, Rule 13-Setting aside ex-parte decree againstdefendant-Cause for non-appearance-Improper advice ofadvocate-Whether a sufficient cause-Held: Cannot as a rulebe accepted-party cannot disown its advocate and seekrelief.

HEADNOTE:The suit flied by the appellant for ejecting the respondentslimited company, from the suit premises, was decreed ex-parte by the trial court since neither the advocate nor therespondent-tenant, appeared when the case came up for final-hearing. Thereafter, the respondent-company flied anapplication to set aside the ex-parte decree, stating thatthe non-appearance of the respondent-tenant was due to theadvice tendered by the advocate-on-record to the effect thatthe respondent-tenant need not be present at the hearing ofthe suit till the disposal of the two interlocutoryapplications filed by the respondent-tenant According to it,there was sufficient cause to set aside the ex-parte decreewithin the meaning of Order 9 Rule 13 C.P.C. The trial courtdismissed the said application. The appeal against thetrial court's order was also dismissed by a Division Benchof the High Court. However, before the judgment was signedby the learned Judges, an application was moved by therespondent-tenant for alteration or modification and/orreconsideration of the judgment on the ground that therespondents' counsel could not bring to the notice of theCourt, the decision of the Supreme Court in the case ofRafiq and Anr. v. Munshilal and Anr., AIR 1981 SC 1400 whichsupported respondent-tenant's case. This was opposed by theappellant on the ground that once the judgment waspronounced in open court, it was final and that matter couldnot be reopened, just because a relevant decision was notbrought to the notice of the court. However, the DivisionBench reopened the case on the ground that technicalitiesshould not be allowed to stand in the way of doing justiceto the parties and allowed the appeal,794795relying on the decision.In the appeal before this Court on behalf of the appellantIt was contended that the decision in the case of Rafiq didnot support the respondents' case and the High Court haderred in holding otherwise, Inasmuch as the respondent-tenant in the Instant case was a private limited company,managed by persons who were not only well-educated but werepractical businessmen, unlike the appellant In the case ofRafiq, who was a rustic innocent villager, placing hisentire trust In his advocate.On behalf of the respondent-tenant it was submitted thatwhen the High Court had applied and acted upon a decision ofthis Court, it would not be proper to set aside their orderunder Article 136 of the Constitution, and that therespondent-company implicitly trusted their advocate andacted according to his advice and should not be penalisedtherefore.Allowing the appeal, this Court,HELD : 1.1. The advocate is the agent of the party. Hisacts and statements made within the limits of authoritygiven to him, are the acts and statements of the principal,i.e., the party who engaged him. It is true that in certainsituations, the Court may, in the interest of justice, setside a dismissal order or an ex-parte decree notwithstandingthe Negligence and/or misdemeanour of the advocate where Itfinds that the client was an innocent litigant, but there isno such absolute rule that a party can disown its advocateat any time and seek relief No such absolute immunity can berecognised. Such an absolute rule would make the working ofthe system extremely difficult. [801G]1.2. The instant case was an on-going suit posted for finalhearing after a lapse of seven years of its institution. Itwas not a second appeal riled by a villager residing awayfrom the city, where the Court is located. The respondentis also not a justice ignorant villager but a privatelimited company with its head-office at the place where thecourt is located and managed by educated businessmen whoknow where their interest lies. It is evident that whentheir interlocutory applications were not disposed of beforetaking up the suit for final hearing, they felt piqued andrefused to appear before the court. May be, it was part oftheir delaying tactics as alleged by the appellant. May benot. But one thing is clear they chose to non-cooperatewith the court. Having adopted such a stand towards the796Court, the respondent has no right to ask its Indulgence.Putting the entire blame upon the advocate and trying tomake It out as if they were totally unaware of the nature orsignificance of the proceedings Is a theory which cannot beaccepted and ought not to have been accepted. [802A-C]1.3. It is difficult. to believe that the respondentsimplicitly believed their advocate's advice. Being educatedbusinessmen they would have known that non-participation atthe final hearing of the suit would necessarily result In anadverse decision. This Court is not prepared to believethat such an advice was in fact tendered by the advocate.No advocate worth his salt would give such advice to hisclient. Secondly, there are several contradictions in hisdeposition. Therefore, the story set up by the respondent-company in its application under Order 9 Rule 13 is anafter-thought and ought not to have been accepted by theDivision Bench, more particularly, when it had rejected thevery case in its earlier judgment [800G-H, 801AE]Rafiq and Anr. v. Munshilal and Anr., A.I.R. 1981 S.C. 1400,distinguished.

JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 429 of 1993.From the Judgment and Order dated 3.3.92 of the CalcuttaHigh Court in A.O.O. No. 1036 of 1990.

A.K. Ganguli and H.K. Puri for the Appellant.N.S. Hegde, Anil Agrawala and L.P. Agrawala for theRespondents.

The Judgment of the Court was delivered byB.P. JEEVAN REDDY, J. Heard the counsel for the parties.Leave granted.

The appeal is preferred by the plaintiff against thejudgment and order of a Division Bench of the Calcutta HighCourt allowing the appeal preferred by therespondent/defendant. The appeal before the High Court wasdirected against an order of the City Civil Court, Calcuttadismissing an application filed by the defendant to setaside the ex-parte decree passed against him, under Order 9rule 13 of the Civil Procedure Code.

797The relevant facts may be noticed briefly.

The plaintiff/appellant filed a suit for ejecting thedefendant-tenant on the ground of default in paying rent andalso on the ground that the such premises are required forhis own use and occupation. The suit was posted for finalhearing on June 9, 1988 seven years after its institution.On an earlier occasion, the defendant had filed twointerlocutory applications, one under Order 14 rule 5 andthe other under Order 6 rule 16 C.P.C. On 19th May, 1988 theCity Civil Court had passed an order on the saidapplications observing that the said applications shall beconsidered at the final hearing of the suit. According tothe defendant (as per his statement made in the applicationfiled by him for setting aside the ex-parte decree) hisadvocate advised him that he need not be present at thehearing of the suit on 9.6.1988, and thereafter till theapplications filed by him under Order 14 rule 5 and Order 6rule 16 C.P.C. are disposed of Be that as it may, on 9thJune, 1988, the advocate for the defendant prayed for anadjournment till the next day. It was adjournedaccordingly. On 10th June, neither the advocate for thedefendant nor the defendant appeared, with the result thedefendant was set ex-parte. Hearing of the suit was com-menced and concluded on 11th June, 1988. The suit wasposted for delivery of judgment to 13th June, 1988. On 11thJune, 1988, an application was made on behalf of thedefendant stating the circumstances in which his advocatehad to retire from the case. This application, however,contained no prayer whatsoever. The suit was decreed ex-parte on 13th June, 1988. Thereafter the defendant filedthe application to set aside the ex-parte decree. In thisapplication he referred to the fact of his filing two inter-locutory applications aforesaid, the order of the courtthereon passed on 19th May, 1988 and then stated "due to theadvice of the learned advocate on-record that yourpetitioner need not be present at the hearing of the suit on9.6.1988 and thereafter till the disposal of the applicationfiled under Order 6 rule 16 and Order 14 rule 5 read withSection 151 of the Code of Civil Procedure in the abovesuit," the defendant did not appear before the Court. Itwas stated that Mr. Ravindran the Principal Officer of thedefendant Company was out of town on that date. It wassubmitted that because the defendant had acted on the basisof the advice given by the advocate-on-record of thedefendant, there was sufficient cause to set aside the ex-parte decree within the meaning of Order 9 rule 13 C.P.C.The Trial Court dismissed the said application against whichan appeal was preferred by the defendant to the CalcuttaHigh Court. The appeal was heard by a798Division Bench and judgment pronounced in open court on8.7.1991 dismissing the appeal. However, it appears, beforethe judgment was signed by the learned Judges constitutingthe Division Bench, an application was moved by thedefendant for alteration or modification and/or reconsidera-tion of the said judgment mainly on the ground that thedefendants' counsel could not bring to the notice of theDivision Bench the decision of this Court in Rafiq andanother v. Munshilal and another, AIR 1981 SC 1400 and thatthe said decision clearly supports the defendants, case.The counsel for the plaintiff opposed the said request. Hesubmitted that once the judgment was pronounced in opencourt, it was final and that matter cannot be reopened justbecause a relevant decision was not brought to the notice ofthe Court. After hearing the counsel for both the parties,the Division Bench reopened the appeal on the ground that"technicalities should not be allowed to stand in the way ofdoing justice to the parties.' The Bench observed that whenthey disposed of the appeal, their attention was not invitedto the decision of this Court in Rafiq v. Munshilal and thatin view of the said judgment they were inclined to reopenthe matter. The Division Bench was of the opinion that"after a judgment is delivered by the High Court ignoringthe decision of the Supreme Court or in disobedience of aclear judgment of the Supreme Court, it would be treated asnonest and absolutely without jurisdiction....... when ourattention has been drawn that our Judgment is per incuriam,it is our duty to apply this decision and to hold that ourJudgment was wrong and liable to be recalled." (We expressno opinion on the correctness of the above premise since itis not put in issue in this appeal). Accordingly, theDivision Bench heard the counsel for the parties and by itsJudgment and Order dated 3rd March, 1992 allowed the appealmainly relying upon the decision of this Court in Rafiq.In this appeal Shri Ganguli, learned counsel for theappellant/plaintiff submitted that the decision in Rafiqdoes not support the defendant's case and that the CalcuttaHigh Court has erred in holding otherwise. It is submittedthat the defendant in this case is a private limitedcompany, managed by persons who are not only well-educatedbut are practical businessmen unlike the appellant in Rafiqwho was a rustic innocent villager placing his entire trustin his advocate. On the other hand, Shri Santosh Hegde, thelearned counsel for the defendant/respondent submitted thatwhen the High Court has applied and acted upon a decision ofthis Court, it would not be proper to set aside their orderunder Article799136 of the Constitution. He submitted that thedefendant/company implicitly trusted their advocate andacted according to his advice and should not be penalisedtherefore.

Since the judgment under appeal is exclusively based uponthe decision of this Court in Rafiq it is necessary toascertain what precisely does the said decision say. Theappellant Rafiq had preferred a second appeal in theAllahabad High Court through an advocate. His advocate wasnot present when the second appeal was taken up for hearingwith the result it was dismissed for default. The appellantthen moved an application to set aside the order ofdismissal for default which was dismissed by the High Court.The correctness of the said order was questioned in thisCourt. The matter came up before a Bench comprising D.A.Desai and Baharul Islam, JJ. D.A. Desai J. speaking for theBench observed thus:

"The disturbing feature of the case is thatunder our present adversary legal system wherethe parties generally appear through theiradvocates, the obligation of the parties is toselect his advocate, brief him, pay the feesdemanded by him and then trust the learnedadvocate to do the rest of the things. Theparty may be a villager or may belong to arural area and may have no knowledge of theCourt's procedure. After engaging a lawyer,the party may remain supremely confident thatthe lawyer will look after his interest. Atthe time of the hearing of the appeal thepersonal appearance of the party is not onlynot required but hardly useful. Therefore,the party having done everything in his powerto effectively participate in the proceedingscan rest assured that he has neither to go tothe High Court to inquire as to what ishappening in the High Court with regard to hisappeal nor is he to act as a watch-dog of theadvocate that the latter appears in the matterwhen it is listed. it is no part of his job.'It was then argued by the counsel for the respondent in thatappeal that a practice has grown up in the High Court ofAllahabad among the lawyers to remain absent when they didnot like a particular bench and that the absence of theappellant's advocate in the High Court was in accordancewith the said practice, which should not be encouraged.While800expressing no opinion upon the existence or justification ofsuch practice, the learned Judge observed that if thedismissal order is not set aside "the only one who wouldsuffer would not be the lawyer who did not appear but theparty whose interest he represented," and then made thefollowing further observations:

"The problem that agitates us is whether it isproper that the party should suffer for theinaction, deliberate omission, or misdemeanourof his agent. The answer obviously is in thenegative. May be that the learned advocateabsented himself deliberately orintentionally. We have no material forascertaining that aspect of the matter. Wesay nothing more on that aspect of the matter.However, we cannot be a party to an innocentparty suffering injustice merely because hischosen advocate defaulted."

The question is whether the principle of the said decisioncomes to the rescue of the defendant respondent herein.Firstly, in the case before us it was not an appealpreferred by an outstation litigant but a suit which wasposted for final hearing seven years after the institutionof the suit. The defendant is a private limited companyhaving its registered office at Calcutta itself. Thepersons incharge of the defendant-company are not rusticvillagers nor they are innocent illiterates unaware of Courtprocedures. Prior to the suit coming up for final hearingon 9th June, 1988 the defendant had filed two applicationswhereupon the Court ordered that they will be considered atthe time of the final hearing of the suit. The plaintiff'scase no doubt is that the said applications were part ofdelaying tactics being adopted by the defendant-tenants witha view to protract the suit. Be that as it may, thedefendant thereafter refused to appear before the court.According to the defendant, their advocate advised them thatuntil the interlocutory applications filed by them aredisposed of, the defendant need not appear before the Courtwhich means that the defendants need not appear at the finalhearing of the suit. It may be remembered that the Courtproposed to consider the said interlocutory applications atthe final hearing of the suit. It is difficult to believethat the defendants implicitly believed their advocate'sadvice. Being educated businessmen they would have knownthat non-participation at the final hearing of the suitwould necessarily result in an adverse decision. Indeed. weare not prepared to believe that such an advice was in facttendered by801the advocate. No advocate worth his salt would give suchadvice to his client. Secondly, the several contradictionsin his deposition which are pointed out by the DivisionBench in the impugned order go to show that the whole storyis a later fabrication. The following are the observationsmade in the Judgment of the Division Bench with respect tothe conduct of the said advocate: "we found that the saidlearned advocate conducted the proceedings in a mostimproper manner and that his absence on 10th June, 1988 andon subsequent date was not only discourteous but possibly adereliction of duty to his client........ the learnedadvocate had forgotten his professional duty in not makinginquiry to the Court as to what happened on 10th, 11th and13th June, 1988........ the learned advocate acted in a mostperfunctory manner in the matter and the learned advocatedealt with the matter in a most unusual manner. We havealso found that the said learned advocate had made seriouscontradiction in the deposition before the court below. Thelearned advocate in his deposition stated that he did notfile an application for adjournment on 9th June, 1988. Butfrom the record it was evident that it was on the basis ofthe application filed on 9th June, 1988, the case wasadjourned for cross-examination of the witnesses whoseexamination was called on the next date." The above factsstated in the deposition of the advocate show that he indeedmade an application for adjournment on the 9th June, 1988 toenable him to cross examine the witnesses on the next date.Therefore, his present stand that he advised his client notto participate in the trial from and including 9th June,1988 onwards is evidently untrue. We are, therefore, of theopinion that the story set up by the defendant in hisapplication under Order 9 rule 13 is an after-thought andought not to have been accepted by the Division Bench in itsorder dated 3rd March, 1992 more particular when it hadrejected the very case in its earlier Judgment dated8.7.1991.

The advocate is the agent of the party. His acts and statements, made within the limits of authority given to him, are the acts and statements of the principal i.e. the party who engaged him. It is true that in certain situations, the Court may, in the interest of justice, set a side a dismissal order or an ex-parte decree notwithstanding the negligence and/or misdemeanour of the advocate where it finds that the client was an innocent litigant but there is not such abso lute rule that a party can disown its advocate at any time and seek relief. No such absolute immunity can be recognised. Such an absolute rule would make the working of the system extremely difficult. The observations made in Rafiq must be understood in 802 the facts and circumstances of that case and cannot be understood as an absolute proposition. As we have mentioned hereinabove, this was an on-going suit posted for final hearing after a lapse of seven years of its institution. It was not a second appeal filed by a villager residing away from the city, where the Court is located. The defendant is also not a rustic ignorant villager but a private limited company with its head-office at Calcutta itself and managed by educated businessmen who know where their interest lies. It is evident that when their applications were not disposed of before taking up the suit for final hewing they felt piqued and refused to appear before the court. May be, it was part of their delaying tactics as alleged by the plaintiff. May be not. But one thing is clear they 'chose to non-cooperate with the court. Having adopted such a stand towards the Court, the defendant has no right to ask its indulgence. Putting the entire blame upon the advocate and trying to make it. out as if they were totally unaware of the nature or significance of the proceedings is a theory which cannot be accepted and ought not to have been accepted.

For the above reasons, the appeal is allowed. The order of the Division Bench of the Calcutta_High Court dated 33.1992 is set aside and its order dated 8.7.1991 is restored. The company-defendant shall bear the costs of the appellant in this appeal which are assessed at Rs. 5,000.

N.P.V. Appeal allowed. 804

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