Jolly Issac vs Shakkela Shukoor

P. Bhavadasan, J.—Petitioner in I.A.476 of 2009 in A.S. 92 of 2006 aggrieved by the order dated 1.12.2010 has come up in appeal.

Appellant is the fifth Respondent in A.S.92 of 2006 before the Additional District Court, Kottayam. An ex-parte decree was passed in the appeal on 22.9.2008. It is claimed that on coming to know about the ex-parte decree, the Appellant herein filed I.A.476 of 2009 invoking Order 41 Rule 21 of the CPC to rehear the appeal since the fifth Respondent, who was the Petitioner before the court below had not been duly served with notice. The District Court found that there was no proper service of notice. But the circumstances showed that she was fully aware of the pendency of the appeal and was in know of things. But considering the fact that she was not served with notice, the I.A. was allowed on condition of the Petitioner deposits Rs. 10,000/- before the court below as costs of the Respondent. That order was under challenge.

Learned Counsel appearing for the Appellant pointed out that the lower appellate court has not considered the appeal on merits and was not justified in imposing a sum of Rs. 10,000/- as costs especially when it was found that there was no proper service of notice. It was also pointed out that the Respondent before the court below was fully aware of the correct address of the Petitioner and she deliberately concealing the said fact managed substituted service of notice on the Appellant. These facts are sufficient to show that the Appellant herein was not aware of the pendency of the appeal and the petition filed to restore the suit was a bona fide one.

Though the argument looks attractive at the first blush, on a close scrutiny it can be found to be without any basis whatsoever. Insolvency proceedings were initiated against the Appellant and Ors. before the Sub Court, Kottayam as I.P. 2 of 2004. The allegations are very serious and it is seen that there were about seven Respondents in the insolvency petition. The Appellant herein is the fifth Respondent in the petition. There are various allegations regarding the money received by the Respondents in the insolvency petition among which one of the allegations is that the Appellant, who is the fifth Respondent before the insolvency court is a partner of one of the firms which has received money from persons similarly situated like the Petitioner before the court below. Going by the averments in the petition, it is seen that the Respondents in the insolvency petition have received about Rs. 8 crores and when the money was sought back by the creditors they were unable to pay the same and they left the place locking the place. However, the insolvency court dismissed the petition on certain grounds.

Petitioner before the trial court carried the matter in appeal as A.S. 92 of 2006. The appellate court found that the trial court was not justified in dismissing the petition and it allowed the appeal.

It is true that the lower appellate court has found that there is defect in the service of notice to the Appellant herein. One needs to notice that the Appellant herein had changed her residence during the pendency of the proceedings and had not left behind her proper address in the post office concerned. However, it appears that in another proceedings between the parties, the Appellant before the court below was also a party and she was aware of the then address of the Appellant herein but still had taken out notice in the earlier address. Even though the Appellant therein could not be found fault with, the lower appellate court was of the view that that is a circumstance which enables the Appellant herein to be heard in the appeal. However the lower appellate court formed an opinion that going by the facts disclosed in the petition as well as in the counter affidavit, it is very evident that the Appellant herein was aware of the pendency of the appeal. It was in those circumstances the petition was allowed imposing costs on the Appellant.

The contention of the Learned Counsel for the Appellant was that the lower appellate court ought not to have imposed such heavy costs. The facts of the case speak for themselves. It is significant to notice that there were seven Respondents in the insolvency petition and in the appeal also. None of them appeared before the court below. It is clear that the Appellant was taking advantage of the position that the Respondent before the court below though aware of the current address had taken out notice in the earlier address which was shown in the petition before the trial court. Even though this Court finds no reason to interfere with the finding of the lower appellate court, it is felt that the imposition of Rs. 10,000/- is on the higher side.

Hence, in the interests of justice, the costs awarded by the lower appellate court is reduced to Rs. 7,500/- instead of Rs. 10,000/- as done by the court below. With this modification, this appeal is dismissed.