T. Kalyanasundaram vs M.S. Arumuganayakar

R. Balasubramanian, J.—This appeal was admitted on 24.6.2005. Having regard to the controversy involved in the appeal we wanted to

find out from Mr. T.P. Manoharan, learned counsel, who had entered caveat for the respondent, as to whether we can dispose of the appeal itself

on merits after calling for the records. Mr. T.P. Manoharan, learned counsel appearing for the respondent, readily agreed. Therefore, we directed

the office to call for the records on 24.6.2005 itself when the appeal was admitted. Heard the learned counsel on either side.

The defendant in O.S. No. 44 of 2002 on the file of Additional Sub-Judge, Pondicherry is the appellant in this appeal. In that suit he filed LA.

No. 341 of 2003 under Order 9, Rule 13, to have the decree dated 13.10.2003, which according to him had been passed ex parte, set aside. The

learned Trial Judge dismissed that application on the ground that as the suit stands disposed of on merits, the application under Order 9, Rule 13 of

the CPC is misconceived. Mr. R. Subramanian, learned counsel appearing for the appellant would submit that though the judgment of the Trial

Court in the suit indicates that it is a decree on merits, yet, in Law, it cannot be so treated. Learned counsel would then submit that it is true that the

Trial Court had the evidence in chief of P.Ws. 1 to 5 and they are yet to be cross-examined. Learned counsel would then add that the defendant

had neither let in any oral evidence nor documentary evidence though he was given an opportunity. Therefore according to him, on a reading of

Order 17, Rules 2 and 3 together, the Court has no other option except, on the facts available in this case as noted above, to decree the suit ex

parte only and it has no option to decree the suit on merits. If that is accepted, then, the application filed under Order 9, Rule 13, is maintainable.

Learned counsel also relied upon a judgment of the Supreme Court Janakiramaiah Chetty v. Parthasarathi 2003 (2) CTC 242 : 2003 (2) MLJ 186

(SC) wherein the scope of Order 17, Rules 2 and 3 came up for consideration and analysis. On the contra, learned counsel appearing for the

respondent would submit that if the explanation to Rule 2 of Order 17, is taken into account, then on the evidence in chief of P.Ws. 1 to 5 available

on record, the Court has a discretion to dispose of the suit as contemplated under Order 17, Rule 3(a) of the Code of Civil Procedure.

Having regard to the submissions made by the learned counsel on either side, we went into the materials. The fact remains that P.Ws. 1 to 5

have been examined in chief. It is seen from the order in challenge that since the defendant did not cross examine the witnesses, the plaintiff''s side

was closed and the suit stood adjourned for defence. Since even thereafter the defendant did not take part, the Decree came to be passed on

13.10.2003. This position is not controverted at all. On 13.10.2003 the defendant was absent. The defendant''s lawyer was also absent. The

learned Trial Judge, as contended by the learned counsel for the plaintiff, analysed the evidence in chief of P.Ws. 1 to 5 coupled with the

documentary evidence made available on the side of the plaintiff marked as Exs.A-1 to A-6 and decreed the suit on merits. The question is

whether in the above stated circumstances and undisputed facts, can the Court proceed to dispose of the suit on merits or should it necessarily

resort to the procedure contemplated under Order 9 of the CPC ?

To resolve this issue, one has to necessarily read Order 17, Rules 2 and 3 of the Code of Civil Procedure, which we extract hereunder:

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 9 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

(added by Act 104 of 1976)

Court may proceed not withstanding 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

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

Explanation to Rule 2 of Order 17, was introduced by Amending Act 104 of 1976. Prior to Explanation, on the date to which the hearing of the

suit stood adjourned, if the parties or any of them fail to appear, the Court stood directed to dispose of the suit in one of the modes directed in that

behalf by Order 9 or make such other order as it thinks fit. The insertion of Explanation had enlarged the power of the Court while it is confronted

with a situation covered under Rules 2 and 3. We will refer Rule 2 later with the impact of the inserted Explanation on the power of the Court,

when it is facing a situation as contemplated under Order 17, Rules 2 and 3 of the Code of Civil Procedure. Order 17, Rule 3 of the CPC declares

as to what should be done if 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 and 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. Rule 3 of Order 17, operates in a case where trial had already commenced.

The Supreme Court in the judgment referred to earlier had said so clearly.

Let us now examine Rule 3 on the established facts in this case. The plaintiff had examined P.Ws. 1 to 5 in chief. Therefore it is clear that the

defendant is given time to cross examine those witnesses already examined on the side of the plaintiff. Since he did not do that the plaintiff''s side

was closed and the suit stood adjourned to a future date for defence. The defendant neither took steps to recall P.Ws. 1 to 5 to cross examine

them nor let in any evidence. Therefore it could be taken to mean that the defendant is called upon to perform an act necessary to the further

progress of the suit. Admittedly, in this case, the defendant did not perform such act namely, the act of cross examining P.Ws. 1 to 5 or letting in

his evidence. Therefore on the above noted position, namely, when the defendant did not perform the act of cross examining the witnesses

examined on the side of the plaintiff on the date fixed and did not let in any evidence at all on his side, what should the Court do, is set out, as

already noted, in Sub-clauses (a) and (b). Under Sub-clause (a) of Rule 3, if the parties are present meaning thereby the plaintiff and the

defendant, then the Court is at liberty to proceed to decide the suit forthwith or under Sub-clause (b) if the parties are, or any of them is absent,

then it shall proceed only under Rule 2. In this case, admittedly, the defendant was absent on 13.10.2003. Sub-clause (a) of Rule 3 would not get

attracted to the case on hand because if the sub clause has to apply, the parties to the suit must be present. Since one of the parties to the suit (i.e.)

the defendant is absent in this case, the Court has no other option except to proceed to dispose of the suit under Rule 2 of Order 17. As we

already noted, but for the Explanation added by Amending Act 104 of 1976, the Court under Rule 2 normally proceeds to dispose of the suit by

following the modes directed in that behalf by order 9, which means, an ex parte decree. But after the insertion of Explanation, the Court''s power

stands enlarged. Under the Explanation, if 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... the Court may at its discretion proceed with the case as if such party were present. This only means that when

the suit is covered under Rule 3 of Order 17, and even if one of the parties, who had already let in evidence or substantial portion thereof, is

absent, even then he is deemed to be present for the purpose of Rule 3(a) and the Court can proceed to decide the suit forthwith. The expressions

any party"", ""such party"" and ""such party"" appearing in various portions of the Explanation to Rule 2 refer only to one party namely, a party, whose

evidence or a substantial portion of the evidence had already been recorded and such party failing to appear. In this case, the plaintiff had

examined all his witnesses in chief. As the defendant did not cross examine them, the plaintiff''s side was closed and the defendant was called upon

to produce his evidence, which he failed. If the Explanation to Rule 2 of Order 17, gets attracted, then, the Court may exercise its power under

Order 17, Rule 3(a) of the Code of Civil Procedure. Therefore the absence of a party which has let in his evidence or a substantial portion of his

evidence alone is a relevant factor to be taken into account in resorting to the Explanation to Rule 2 of Order 17 of the Code of Civil Procedure. In

this case, the defendant was absent and no evidence at all is on record on his behalf. Therefore the Explanation to Rule 2 does not get attract to the

case on hand. If that is so, then on a reading of Order 17, Rule 3(b) and Rule 2 of Order 17, alone without the aid of Explanation to Rule 2, the

Court can dispose of the suit in one of the modes directed in that behalf by Order 9.

The Honourable Supreme Court of India in the judgment referred to earlier while interpreting Order 17, Rules 2 and 3 had laid down the Law

as hereunder:

In Rule 2, the expression used is ""make such order as it deems fit"", as an alternative to adopting one of the modes directed in that behalf by Order

Under Order 17, Rule 3(b) 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 on 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.

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 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. This clearly has imprints of an ex parte adjudication and not of a decision on

merits. There is not even any indication as to what evidence was evaluated and/or whether the merits were tested.

From the above, it is clear that Law laid down by the Supreme Court in the above referred to judgment is binding on us. In fact, we are guided

only by the above referred to judgment in holding that the Trial Court in this case had no jurisdiction to pass a decree on merits and it ought to have

disposed of the suit only in terms of Order 17, Rule 2, without the aid of the Explanation to the said sub rule. In the light of our decision, namely,

the decree dated 13.10.2003 would only be an ex parte decree and not a decree on merits, we have no other go except to hold that the

application under Order 9, Rule 13 filed by the defendant is maintainable.

At this stage, Mr. T.P. Manoharan, learned counsel appearing for the respondent, would submit that assuming that the decree passed is ex parte

yet, on facts pleaded in the affidavit filed by the defendant to set aside the ex parte decree, no relief could be granted to him. Since we are not

concerned with that issue in this appeal, we made it very clear that we will have the least objection to set aside the order in challenge on the

grounds referred to above by us and remit the application to the learned Trial Judge for disposal on merits with regard to the facts available.

However, the learned counsel appearing for the respondent would fairly state that if an order of remand is passed, it would result in further delay in

the disposal of the suit and therefore, this Court may direct the suit itself to be disposed of at an early date. The learned counsel would further

submit that the defendant is a Court staff working in the very same Court and, he sitting as a cat on the wall, is watching the proceedings to be

dragged on as long as possible; files the application in time; sees that it was kept unnumbered and ultimately, when the execution petition is filed,

brings the application before the Court for disposal and therefore, the defendant must be put on some terms. We heard Mr. R. Subramanian on

this aspect. He would state that the application was filed in November 2003, numbered early in the year 2004, and the plaintiff filed his counter

some time in June 2004 and therefore, no latches can be attributed to his client. We leave the matter as it is.

Accordingly, in the light of the discussions referred to above, we hold that the decree passed in this suit is not a decree on merits; it is only an ex

parte decree; the defendant has made out a case to have that decree set aside and accordingly, the order in challenge is quashed. The civil

miscellaneous appeal is allowed with no orders as to the costs. Consequently, LA. No. 341 of 2004 would stand ordered as prayed for. Having

regard to the fact that the suit is of the year 2002, and when the claim in the suit is in the nature of refund of the amount paid as advance under an

agreement of sale, we direct the learned Additional Sub Judge, Pondicherry, to dispose of the suit in accordance with law, in any event not later

than 30th September 2005.