Najmal Babu and Noushad, Sulthana Group vs State Bank of India

Pius C. Kuriakose, J.—Under challenge in this appeal is what is described by the appellants as the excessive cost that was ordered by the court below for setting aside the ex parte decree which was passed in favour of the respondent State Bank of India. It was a simple suit for money amounting to 4,71,144/- with interest and cost that was filed by the Bank in the year 2007. Ex parte decree was passed against the appellants. The court, though was not fully convinced by the explanation offered by the appellant for his absence on the date the suit was decreed, allowed the application imposing condition that the appellants shall deposit an amount of Rs. 1 Lakh towards the plaint claim and the further condition that the appellants shall pay a sum of Rs. 1000/- as cost to the Bank. According to the appellants, imposition of cost of Rs. 1 Lakh is highly excessive and runs contrary to the principles of law laid down by a learned Single Judge of this Court Deepu Zachariah v. Xavier 2005 KHC 1186.

In this appeal several grounds have been raised assailing the impugned order and we have heard the submissions of Sri Sunil J. Chakkalackal, learned Counsel for the appellants and those of Sri P.V. Surendranath, learned Counsel appearing for the respondent Bank. Apart from addressing arguments on the basis of the various grounds raised, Sri Sunil J.Chakalackal drew our attention to the judgment of the Supreme Court in Tea Auction Ltd. Vs. Grace Hill Tea Industry and Another, . The learned Counsel argued that the Supreme Court has very clearly laid down that while courts exercise their discretionary power to impose conditions for setting aside the ex parte decree, courts are expected to impose only reasonable conditions. Relying on the same judgment, the learned Counsel submitted that reasonable condition, which can be imposed in the present case, is a condition for furnishing security for the plaint claim. The learned Counsel submitted that in this particular case very valuable immovable property belonging to the appellants is already under attachment by the Bank and hence even calling upon the appellants to furnish further security will not be justified.

Per contra, Sri P.V. Surendranath would place strong reliance on the judgment of the Supreme Court in V.K. Industries and Others Vs. Madhya Pradesh Electricity Board, Rampur, Jabalpur, , a judgment authored by a Bench of three Judges unlike the judgment in Tea Auction Ltd.''s case (supra) which is authored by a Bench of two judges only. Sri Surendranath submitted that V.T.K. Industries Case (supra) was one where the claim of the plaintiff was for a sum of Rs. 3,34,455.44 and High Court imposed a condition for setting aside the ex parte decree that Rupees Two Lakhs be deposited. The Supreme Court interfering with that decision, took the view that the proper amount to be deposited is Rs. 1 Lakh. Therefore, according to the learned Counsel, in this particular case there is every justification for imposing a condition to deposit Rs. 1 Lakh as is done under the impugned judgment.

We have very anxiously considered the rival submissions addressed at the Bar in the light of the ratio emerging from the two Supreme Court decisions stated before us. As already noticed, the judgment cited by the learned Counsel for the Bank is authored by a Bench of more strength and in our opinion on facts, also the same seems to be more apposite than the judgment in Tea Auction Ltd. (supra). It is true that an item of immovable property belonging to the appellant has been attached before judgment. But there is no material before us to notice as to what is the value of the property under attachment. At the same time, we feel that, on the facts which obtain in this case, the direction to remit Rs. 1 Lakh was excessive. We are of the view that the conditions imposed by the learned Sub Judge can be modified and the appeal can be disposed of in the following terms;

The impugned order is modified to the following extent:

i). The condition (b) under the impugned order is modified and it is ordered that the appellants/defendants shall deposit a sum of Rs. 50,000/- towards the plaint claim on or before 8/4/2010.

ii). Condition (c) will stand deleted and will be substituted by the following conditions;

a). The appellants shall pay a sum of Rs. 2,500/- as cost to the Respondent Bank either directly or through their counsel in this Court within three weeks from today.

b). The appellants shall also pay a further amount of Rs. 1500/- to the High Court Legal Service Committee on or before 22/3/2010.

c). The receipts against the payment of the above amounts will be produced by the appellants before the court below.

iii). If any of the conditions stipulated above are not complied with by the appellants, the impugned order will stand confirmed and the appeal will stand dismissed.

Once the Court below notices that the appellants have complied with the conditions imposed herein and that court, the learned sub judge will include the suit for trial in the earliest available special list and try the same on day to day basis and dispose of the suit in accordance with law at his earliest.

The appeal will stand disposed of as above. No costs.