Modern Trading Co. (Delhi) Pvt. Ltd. vs Chand Industries

P.K. Bahri, J.—This appeal is directed against order or Commercial Sub-Judge dated September 10, 1975 by which an application moved by the Appellant under Order 9 Rule 13 read with Section 151 of the CPC was dismissed on two ground, firstly that the application under Order 9 Rule 13 was not competent as the judgment which had been passed by his predecessor was a judgment on merits taking resort to Order 17 Rule 3 CPC and secondly on merits also, the learned Judge came to the conclusion that the Appellant has not shown sufficient cause for non-appearance on the date of hearing fixed in the trial court.

The facts of the case, in brief, are that a suit for recovery of Rs. 22,567.90 paise was brought which was based on the fact that certain goods had been supplied to the Defendant/Appellant and the Defendant/Appellant had failed to pay the price of the goods. The suit was hotly contested by the Appellant by taking various pleas. One of the pleas was that the goods supplied were defective and that were returned and the Appellant was not liable to pay any amount to the Respondent/plaintiff.

Only two issues were framed in the case. The first issue was only with regard to institution of the plaint and the second issue was on merits as to whether the Defendant had returned the defective goods, as alleged, and if so, its effect. Obviously, the onus was on Defendant to prove the facts for succeeding in the suit.

The Plaintiff, after examining his affirmative evidence, had closed the evidence and the Defendant had also examined four witnesses out of the list of seven witnesses and the proceedings of the Court show that then the case was being got adjourned to enable the parties to effect compromise and in this way the case was adjourned from February 28, 1973 to March 17, 1973 and then to March 30, 1973 and it was recorded in the order on the last date that compromise has not been effected and the case was fixed for Defendant''s/Appellant''s evidence on July 28, 1973. On July 28, 1993, on request being made on behalf of the Appellant for grant of one more opportunity for leading the remaining evidence, an order was made by the Court mentioning that last opportunity is granted to the Appellant subject to payment of Rs. 50/-as costs and case was adjourned to October 4, 1973 with the directions that the Appellant would be responsible for effecting the Service on witnesses.

On October 4, 1973, there was no appearance put in on behalf of the Appellant and Court recorded that despite repeated calls, on one has appeared on behalf of the Defendant and that the case was fixed for recording the evidence of the Defendant. As no one had appeared for the Defendant, so the evidence of the Defendant was closed and the case was adjourned to October 8, 1973 for hearing arguments and then it was adjourned to October 10, 1973 when arguments were heard and the case was adjourned to October 18, 1973 when decree was passed against the Appellant.

The short question which arises for decision is at first whether this decree which had been passed by the Commercial Sub Judge can be treated to be a judgment given forthwith in accordance with the Order 17 Rule 3 CPC as it stood before its amendment.

There has been a conflict of law as to in what circumstances a particular judgment could be considered to have been delivered under Order 17 Rule 3 CPC There are judgments which have taken a view that Order 17 Rule 3 CPC could be invoked if both the parties are present in Court where as some other judgments have taken a view that Order 17 Rule 3 CPC could be invoked even in absence of the parties if a particular adjournment had been given on special request of a particular party to do a particular act and the party so taking the adjournment fails to take such steps which hinders the further progress of case.

Be as it may, I need not refer to those judgment because this Court in case of Hoshiar Singh Vs. Ram Dev and Others, , has taken this view that where the parties are absent, then resort cannot be had to Order 17 Rule 3 CPC and any order made against the Defendant can be challenged by filing an application under Order 9 Rule 13 of the Code of Civil Procedure.

The learned Judge has placed reliance on a judgment of the Supreme Court in Arjun Singh v. Mohinder Kumar AIR 1964 SC 1993 wherein it has been observed by the Supreme Court that Order 9 covers the whole ambit of situations with regard to the trial of the suit and one of the provisions mentioned therein is where the Defendant is absent and order is made against such a Defendant and how that order could be set aside by taking resort to provisions of Order 9 Rule 13 or Order 9 Rule 7 Code of Civil Procedure, whichever may be applicable in that particular situation.

Following this judgment, I hold that Commercial Sub-Judge was not right in taking the view that in the present case the judgment had been given on merits under Order 17 Rule 3 CPC and thus, no application under Order 9 Rule 13 CPC was maintainable. I hold that the application under Order 9 Rule 13 CPC moved by the Appellant was maintainable.

As far as merits are concerned, the Appellant had pleaded that Sh. S.C. Sharda was the senior counsel representing the company in its various litigation and in the suit, the company had engaged Sh. PL Bhandari, Advocate who was appearing for the Appellant on various dates of hearing in the suit and Sh. Sharda was requested to move in and try to bring about some compromise with the opposite party. Sh. Sharda is stated to have taken a few adjournments for getting the compromise effected and after his efforts failed, he had submitted a letter to the Appellant''s Managing Director Sh. A.B. Moolchandani informing him that talks of compromise had failed and Court had, with great difficulty, granted last adjournment for completing the evidence subject to payment of Rs. 50/- as costs and the Appellant should take proper steps for completing the evidence. In that letter, the next date of hearing mentioned was November 4, 1973 although it transpires that Court had fixed date of hearing as October 4, 1973.

It was mentioned in the application that after receipt of the said letter, Sh. Moolchandani had forwarded the case file to Sh. Bhandari who was to conduct the case on behalf of the Appellant before the Trial Court. Sh. Bhandari had, due to some mistake, omitted to indicate this date of hearing, as communicated to him, in his diary and thus, no steps could be taken in the suit and ultimately when the decree was being executed and attachment had been sent to the bank of the Appellant, the Appellant came to know about the passing of the exparte decree. After making necessary enquiries and soon thereafter, the application under Order 9 Rule 13 CPC was moved. It is mentioned in the application that it was only on April 2, 1974 that this information was received from the bank regarding an attachment being received from the Court and thereafter the application was moved for setting aside of the ex-parte decree on April 4, 1974. The Respondent had controverted these facts in his reply to the application.

In support of the application, the Appellant had examined Sh. P.L Bhandari, Advocate, AW-1 and Sh. A.B. Moolchandani, AW-2, Managing Director of the Appellant company. Sh. Bhandari was subjected to a lengthy cross-examination which I have read and I find that there is no reason to disbelieve the statement of the Advocate. It is significant that actual date fixed in the case was October 4, 1973, yet in the letter, which Sh. Sharda had sent to the Company, the date of hearing mentioned was November 4,1973. It is obvious that there was a mistake made with the genuine one on the part of Sh. Sharda in mentioning that date and communicating same to the Appellant''s Managing Director. There is no reason to disbelieve Sh. Bhandari that he has not, by mistake, entered the date in his diary.

It has been argued by learned Counsel for the Respondent in case the date of hearing communicated was November 4,1973, there is no reason why the Appellant did not take proper steps to see as to what had happened in the case on November 4, 1973 and thus, there is a gross negligence on the part of the Appellant in prosecuting the case, It is to be remembered that the Appellant company had engaged a counsel who was to look after the case and the date November 4, 1973 had been even missed by the counsel as he did not record it in the diary and obviously for taking further steps in the suit, the counsel was to get in touch with the Appellant just a few days earlier to the date fixed and then guide his client regarding the evidence which is to be led on a particular date. As the date was missing from the diary of the counsel, he could not take any steps to intimate his clients about the steps to be taken on a particular date of hearing.

There is no reason for the Appellant to have willfully absented from the proceedings of the case when the case was being hotly contested. Even four witnesses had been examined and any three more witnesses remained to be examined. There is no reason to disbelieve even the Managing Director of the Appellant company that the Appellant company remained unaware of the happenings in the suit till the intimation was received from the bank regarding the attachment received by the bank.

However, there is slight negligence on the part of the Appellant in not keeping track of the case implicitly relying on the counsel to inform the Appellant about the further progress in the suit. The Appellant, of course, was aware in view of the contents of the letter by Sh. Sharda that a last opportunity had been given for leading evidence on behalf of the Appellant, yet in view of the circumstances appearing in the case and from the evidence led in the case, it is obvious that the Appellant had made out sufficient cause for non-appearance on the date off hearing i.e. October 4, 1973,

As far as limitation is concerned, it is evident that there is 30 days time granted for filing application under Order 9 Rule 13 CPC for setting aside of ex-parte decree jand the period of limitation commences from the date of the judgment but the delay in filing the application under Order 9 Rule 13 could be condoned for sufficient reasons again.

In the present case, the delay is liable to be condoned inasmuch as the Appellant remained unaware of the passing of the ex-parte decree till April 2, 1973 and thereafter immediate steps were taken for filing the present application. I condone the delay In moving the application under Order 9 Rule 13 CPC and I also allow this application and hold that the ex-parte judgment and decree is liable to be set aside.

I allow this appeal and set aside the ex-parte judgment and decree of the lower Court. However, in view of the negligence of the Appellant, I impose Rs. 500/- as costs subject to payment of which the ex-parte decree will stand set aside.

The Respondent had already obtained the decreetal amount on the basis of bank guarantee. ''I make it clear that the Respondent shall keep the bank guarantee alive till the final disposal of the suit by the Trial Court and the Trial Court would determine the question of awarding interest, if any, if the Appellant is found to be entitled to return whole of the amount or any part of the amount. In case the Respondent fails to keep the bank guarantee alive, the Appellant would be entitled to immediate restitution of the amount without waiting for the decision by the Trial Court. Parties are, how ever, left to bear own costs in this appeal.

The parties are directed to appear before the Trial Court for further proceedings on 30th August, 1993. The Trial Court file shall be returned to the Trial Court positively before that date.