N. MOHAN v. R. MADHU

Code of Civil Procedure, 1908 – Or. IX, r.13 and s.96(2) – Respondent-plaintiff case was that he lent appellant a sum of Rs.45,00,000/- and appellant-defendant failed to return the said amount – The suit was decreed ex-parte – Thereafter, appellant filed application u/s.5 of the Limitation Act to condone delay of 276 days in filing the petition u/Or. IX, r.13 CPC to set aside the ex-parte decree – The petition was dismissed by the Trial Court and revision against the same was dismissed by the High Court – The SLP preferred against the said order also came to be dismissed by the Supreme Court – After dismissal of SLP, the appellant filed first appeal along with application to condone the delay of 546 days – High Court dismissed the application for condonation of delay on the ground that in the earlier proceedings u/Or. IX, r. 13 CPC, the appellant had stated the same reasons to set aside the ex-parte decree and same was not accepted by the Trial Court, High Court and the Supreme Court – On appeal, held: Right to file and appeal u/s.96(2) CPC is a statutory remedy – The right to appeal is not mere matter of procedure; but is a substantive right – Right to appeal u/s.96(2) CPC challenging the original decree passed ex-parte, being a statutory right, the defendant cannot be deprived of the statutory right thereby on the ground that the application filed u/or. IX, r. 13 CPC was earlier dismissed – Whether the defendant has adopted dilatory tactics or where there is a lack of bona fide in pursuing the remedy of appeal u/s. 96 (2) CPC, has to be considered depending upon facts and circumstances of each case – In the instant case, the appellant has shown his bonafide by depositing Rs. 25,00,000/ - in the compliance with the orders of the Supreme Court – Considering the facts and circumstances of the case and in the 156 N. MOHAN v. R. MADHU 157 interest of justice, appellant granted opportunity to put forth his defence in the suit for recovery of money – To avail this opportunity, appellant directed to deposit the balance amount of Rs. 20,00,000/-, the delay of 546 days in filing the first appeal condoned. Disposing the appeal, the Court HELD : 1. The defendant against whom an ex-parte decree is passed, has two options. First option is to file an application under Order IX Rule 13 CPC and second option is to file an appeal under Section 96(2) CPC. The question to be considered is whether the two options are to be exercised simultaneously or can also be exercised consecutively. An unscrupulous litigant may, of course, firstly file an application under Order IX Rule 13 CPC and carry the matter up to the highest forum; thereafter may opt to file appeal under Section 96(2) CPC challenging the ex-parte decree. In that event, considerable time would be lost for the plaintiff. The question falling for consideration is that whether the remedies provided as simultaneous can be converted into consecutive remedies. [Para 14] [165-G-H; 166-A-B]

#2. An appeal under Section 96(2) CPC is a statutory right, the defendant cannot be deprived of the statutory right merely on the ground that earlier, the application filed under Order IX Rule 13 CPC was dismissed. Whether the defendant has adopted dilatory tactics or where there is a lack of bona fide in pursuing the remedy of appeal under Section 96(2) of the Code, has to be considered depending upon the facts and circumstances of each case. In case the court is satisfied that the defendant has adopted dilatory tactics or where there is lack of bona fide, the court may decline to condone the delay in filing the first appeal under Section 96(2) CPC. But where the defendant has been pursuing the remedy bona fide under Order IX Rule 13 CPC, if the court refuses to condone the delay in the time spent in pursuing the remedy under Order IX Rule 13 CPC, the defendant would be deprived of the statutory right of appeal. Whether the defendant has adopted dilatory tactics or where there is lack of bona fide in pursuing the remedy of appeal under Section 96(2) of the code A B C D E F G H 158 SUPREME COURT REPORTS [2019] 14 S.C.R. after the dismissal of the application under Order IX Rule 13 CPC, is a question of fact and the same has to be considered depending upon the facts and circumstances of each case. [Para 15] [166-B-E]

#3. When the defendant filed appeal under Section 96(2) CPC against an ex-parte decree and if the said appeal has been dismissed, thereafter, the defendant cannot file an application under Order IX Rule 13 CPC. This is because after the appeal filed under Section 96(2) of the Code has been dismissed, the original decree passed in the suit merges with the decree of the appellate court. Hence, after dismissal of the appeal filed under Section 96(2) CPC, the appellant cannot fall back upon the remedy under Order IX Rule 13 CPC. [Para 16] [166-F-G]

#4. In the present case, the respondent has filed the Money Suit being OS No.76 of 2015 for recovery of Rs.46,98,500/- together with interest and the said suit was decreed ex-parte on 09.10.2015. Execution petition being EP No.95 of 2016 was also filed for execution of the decree. The appellant has filed application being IA No.327 of 2016 to condone the delay of 276 days in filing the application to set aside the ex-parte decree. In the said application, the appellant has stated that he has been residing at Chennai; whereas the notice was served at Trichy and therefore, he did not have knowledge about the filing of the said suit in OS No.76 of 2015 before the ADJ Court at Tiruchirappalli and the ex-parte decree was passed on 09.10.2015. The appellant has further averred that he came to know about the ex-parte decree and the execution petition only at the time when he appeared in CC No.240 of 2016 at Karur on 29.07.2016. The said application filed by the appellant seeking condonation of delay of 276 days in filing the application to set aside the ex-parte decree was dismissed by the order dated 04.01.2017. The revision and the SLP preferred by the appellant also came to be dismissed. [Para 17] [166-G-H; 167-A-C]

#5. Thereafter, the appellant has preferred the first appeal with the application to condone the delay of 546 days in filing the first appeal. As pointed out earlier, there was a delay of 276 days A B C D E F G H N. MOHAN v. R. MADHU 159 in filing the application to set aside the ex-parte decree. Pursuing the proceedings in the application filed under Order IX Rule 13 CPC has caused further delay of 270 days. Thus, there has been a total delay of about 546 days in filing the first appeal. In the application for condonation of delay, of course, the appellant has raised the very same ground which was taken in the application filed under Section 5 of the Limitation Act to set aside the ex- parte decree which was not accepted in the earlier proceedings. [Para 18] [167-D-E]

#6. All that is to be pointed out is that the appellant would have been well advised that if he had filed the first appeal simultaneously along with the application under Order IX Rule 13 CPC. The appellant has however shown his bona fide by depositing Rs. 25,00,000/- in compliance with the orders of this Court dated 13.08.2018. The said amount of Rs. 25,00,000/- was permitted to be withdrawn by the respondent-plaintiff. Considering the facts and circumstances of the case and in the interest of justice, in our view, the appellant deserves an opportunity to put forth his defence in the suit for recovery of money. But to avail this opportunity, he must deposit the balance amount of Rs.20,00,000/- as a condition precedent for condonation of delay. In these terms, the impugned judgment is accordingly liable to be set aside. [Para 19] [167-G-H; 168-A-B]