CoramThe Honourable Mr v. M/s.Barton Trust,a Registered Partnership Firm

IN THE HIGH COURT OF JUDICATURE AT MADRASDated : 27-7-2007CoramThe Honourable Mr.Justice N.PAUL VASANTHAKUMARC.M.A.No.1656 of 2007 and M.P.No.2 of 2007C.M.A.No.1657 of 2007 and M.P.No.2 of 2007C.M.A.No.1656 of 2007D.K.Bhaskaran...Appellant/petitionerVs.M/s.Barton Trust,a Registered Partnership Firm,rep.by its Partner Mr.M.A.Chacko,Fair House, Porter Avenue,Coonoor, The Nilgris....Respondent/RespondentC.M.A.No.1057 of 20071.M/s.B.P.V.Classic Tea Factory Pvt.Ltd.,rep.by its Managing Director,Mr.D.K.Bhaskaran2.D.K.Bhaskaran...Appellants/PetitionersVs.M/s.Forbes and Company Tea Brokers,rep.by its Chief Executive andPower of Attorney AgentM.A.Chacko...Respondent/REspondentBoth these Civil Miscellaneous Appeals are preferred against the fairand decretal order 23.1.2007 made in I.A.No.151 of 2006 in O.S.No.1 of2005 and I.A.No.152 of 2006 in O.S.No.2 of 2005 respectively, on the fileof the learned District Judge, Nilgiris, Udhagamandalam.For Appellants:Mr.S.V.Jayaraman,Senior Counselfor M/s.A.Bobblie & L.MouliFor Respondents:Mr.Srinath Sridevan https://hcservices.ecourts.gov.in/hcservices/ J U D G M E N TThe above Civil Miscellaneous Appeals are filed against the fair anddecretal orders dated 23.1.2007 made in I.A.Nos.151 of 2006 in O.S.No.1 of2005 and I.A.No.152 of 2006 in O.S.No.2 of 2005 respectively, petitionsfiled under Order IX Rule 13 CPC to set aside the exparte decrees passedin the respective suits on 18.10.2005.2.The respondents herein filed O.S.No.1 of 2005 and 2 of 2005claiming a sum of Rs.5,41,030.88 and Rs.45,23,815.24 respectively with 18%interest per annum and for costs. As the defendants/appellants hereinremained absent on 18.10.2005, they were set exparte and the suits wereallowed as prayed for.3.To set aside the exparte decrees, the appellants herein filedI.A.Nos.151 of 2005 and 152 of 2005 respectively under Order IX Rule 13CPC stating that the the appellants were laid up with severe fever anddiarrhoea from 16.10.2005 to 25.10.2005 and when the suits were posted forcross examination of the plaintiffs on 18.10.2005, theappellants/defendants could not attend the Court nor instruct theircounsel and that the absence was not willful nor deliberate. The saidapplications were resisted by the respondents/plaintiffs herein contendingthat the applications were filed with mala fide intention to delay theexecution of the decrees and the reasons stated in the affidavit are false.4.The Trial Court, by separate orders dated 11.9.2006, directedthe appellants/respondents to deposit costs of Rs.44,573.25 andRs.3,71,175/- respectively on or before 4.10.2006 and in case of failureto comply with the said direction, ordered that the petitions shall standdismissed. The Trial Court posted the matter on 5.10.2006 for reportingcompliance of the direction. The case was posted before the Trial Courton several dates from 5.10.2006 to 23.1.2007 and on 23.1.2007 the TrialCourt passed the following order:"For production of High Court order. High Court ordercopy not produced. Costs not deposited. Petition isdismissed." It is against the said order, the defendants in the suits filed thepresent Civil Miscellaneous Appeals.5.I have heard the learned Senior Counsel appearing for theappellants as well as the learned counsel appearing for the respondents inthe light of the provisions contained in Order IX rule 13 CPC. https://hcservices.ecourts.gov.in/hcservices/

6.The point for consideration in these appeals is whether thediscretion exercised by the Trial Court while setting aside the expartedecrees ordering deposit of costs of the suits, is sustainable.7.The reason given by the appellants for their absence on18.10.2005 as stated in the affidavit filed in support of the petition toset aside the exparte decree is that the appellant was laid up with severefever and diarrhoea from 16.10.2005 to 25.10.2005 and he was bed-riddenand hence he could not move out. The learned Trial Judge, after holdingthat the sufficient cause is shown to set aside the ex parte decrees, byorder dated 11.9.2006 imposed a onerous condition to deposit the costsreferred above on or before 4.10.2006.8.It is true that the Court, which passes order in set asidepetitions, is vested with the discretion to allow the petition on terms.It has to be ascertained whether in this case, the course adopted by thetrial court is just and proper, in the circumstances of the case, whereinthe petitioner failed to appear before the Court due to his illness.9.Sufficient cause having been made out even as per the order ofthe Trial Court, onerous condition for restoration cannot be imposed whilesetting aside the exparte orders under Order IX Rule 13 CPC.The aboveissue is considered in a number of decisions.(a)In the decision reported in AIR 1958 Madras 522 (Sri KrishnaRice Mills v. P.Rajagopala Konar) while setting aside an exparte decree,this Court awarded cost of Rs.75/- to compensate the respondent for thewaste of time, money and energy caused to him and the suit was restoredfor fresh disposal.(b)In 1965 (1) MLJ 209 (Dhanalakshmi Ammal v. Shanbagalakshmi Ammaland others) a condition imposed to deposit the cost to hear theapplication to set aside the exparte decree was found erroneous and setaside and it is held that the conditional order can be passed forrestoration of the suit which must be just and reasonable.(c)In AIR 1972 Allahabad 166 (Nanak Chand v. Goswami Preetam Lal) alearned Judge of the Allahabad High Court, following a Division Benchdecision of that Court reported in AIR 1926 Allahabad 142 (Ahmad Hussainv. Har Dayal), held that an order restoring the case for default ofcondition of payment of a reasonable amount of the cost to the oppositeparty can be passed under Order IX Rule 13 CPC. https://hcservices.ecourts.gov.in/hcservices/ (d)A Division Bench of the Calcutta High Court in the decisionreported in AIR 1977 Calcutta 428 (Foundation Overseas Ltd. v. PunjabNational Bank Ltd.) considered a direction to restore the suit, which wasdismissed for default to furnish security as condition precedent, was heldnot valid. (e)The Allahabad High Court in AIR 1979 Allahabad 370 (Raj Kumar v.Mohan Meakin Breweries) held that the direction to deposit 1/5th of thesuit amount as condition precedent to set aside exparte decree even aftergiving a clear finding that there had been sufficient cause for beingabsent on the date when exparte decree was passed was held illegal.(f)In AIR 1987 Calcutta 197 (LIC of India v. Anjan Kumar) theCalcutta High Court held that while setting aside the exparte decreeimposing of condition must be reasonable and must have some justificationhaving regard to the attending circumstances and the same cannot beimposed arbitrarily.(g)A Direction to pay mesne profit as condition precedent forsetting aside the exparte decree was cancelled by the Honourable SupremeCourt in the decision reported in 1996 (7) Scale 410 (Kumud Lata Das v.Indu Prasad).(h)A direction to deposit the entire decree amount as well as costfor restoration of the suit was set aside by the Honourable Supreme Courtin the decision reported in (1996) 10 SCC 93 (State of Orissa v. SibaramBaral).(i)Sufficient cause for non-appearance to be proved on the date ofhearing alone and not anterior or posterior to the said date wasconsidered by the Honourable Supreme Court in the decision reported in(2000) 3 SCC 54 (G.P.Srivastava v. R.K.Raizade and others). In paragraph 7of the Judgment the Supreme Court held thus,"7.Under Order 9 Rule 13 CPC an ex parte decreepassed against a defendant can be set aside uponsatisfaction of the Court that either the summons werenot duly served upon the defendant or he was preventedby any “sufficient cause” from appearing when the suitwas called on for hearing. Unless “sufficient cause” isshown for non-appearance of the defendant in the caseon the date of hearing, the court has no power to setaside an ex parte decree. The words “was prevented by https://hcservices.ecourts.gov.in/hcservices/ any sufficient cause from appearing” must be liberallyconstrued to enable the court to do complete justicebetween the parties particularly when no negligence orinaction is imputable to the erring party. Sufficientcause for the purpose of Order 9 Rule 13 has to beconstrued as an elastic expression for which no hardand fast guidelines can be prescribed. The courts havea wide discretion in deciding the sufficient causekeeping in view the peculiar facts and circumstances ofeach case. The “sufficient cause” for non-appearancerefers to the date on which the absence was made aground for proceeding ex parte and cannot be stretchedto rely upon other circumstances anterior in time. If“sufficient cause” is made out for non-appearance ofthe defendant on the date fixed for hearing when exparte proceedings were initiated against him, he cannotbe penalised for his previous negligence which had beenoverlooked and thereby condoned earlier. In a casewhere the defendant approaches the court immediatelyand within the statutory time specified, the discretionis normally exercised in his favour, provided theabsence was not ma la fide or intentional. For theabsence of a party in the case the other side can becompensated by adequate costs and the lis decided onmerits."(Emphasis Supplied) (j)An unreasonable condition imposed to restore the suit which wasdecreed exparte was found erroneous by the Honourable Supreme Court in thedecision reported in (2002) 3 SCC 159 (V.K. Industries v. M.P. ElectricityBoard), wherein in paragraphs 4 to 6 it is held thus,"4. The only grievance of the appellants is thatthe terms, upon which ex parte decree is set aside, areonerous and not reasonable. On behalf of therespondents submission was made supporting the saidterms as justified. https://hcservices.ecourts.gov.in/hcservices/

5. Ordinarily, a money decree is not stayedunconditionally and the judgment-debtor would be put onterms. Even so, such conditions must be reasonablehaving regard to all relevant factors. Although exparte decree was passed against the appellants, once itis set aside on the ground of non-service of suitsummons the money decree did not exist for execution.It is no doubt true that in restoring a case the courtmay impose conditions to deposit costs or the decretalamount or some portion thereof or to ask the defendantto give security but such conditions should bereasonable and not harshly excessive. In the impugnedorder the appellants are put on terms to deposit a sumof Rs.2,00,000 and to furnish a bank guarantee for theremaining suit claim within a period of two months. Inour view these terms are onerous, harsh andunreasonable in the facts and circumstances of the caseand that too even before the trial of the suit onmerits. 6. On 29-10-2001, the learned counsel for theappellants stated that within two weeks, a sum ofRs.50,000 shall be deposited in the trial court andnotice was issued on that day. During the course ofhearing the learned counsel informed that a sum ofRs.50,000 is already deposited in the trial court." 10.In the decision cited by the learned counsel for the respondentreported in AIR 1953 Madras 464 (Nalabala Chalamiah v. Nalabala Rubiah)this Court upheld the direction to deposit cost of the suit was not foundunreasonable and the same cannot be applied to the facts of this casesince cost of the suit in C.M.A.No.1656 of 2007 is Rs.3,39,287/- and inC.M.A.No.1657 of 2007, the cost imposed was Rs.44,573.25. The saidamounts having been huge amounts, I am of the view that the conditionimposed is onerous and the same is liable to be set aside. However,taking note of the expenses incurred by the respondent due to the absenceof the appellants in these appeals, cost of Rs.2,000/- is ordered to bepaid to the respondents in C.M.A.No.1656 of 2007 and Rs.3,000/- is orderedto be paid to the respondents in C.M.A.No.1657 of 2007 as compensatorycosts. The said amount shall be paid by the appellants within a period oftwo weeks from the date of receipt of copy of this order and file a memoto that effect before the Trial Court. On such memo being filed, theTrial Court is directed to restore the suits. The suits having been filedin the year 2005 and being money suits, the Trial Court is directed todispose of the suits within a period of two months from the date ofrestoration of the suits. https://hcservices.ecourts.gov.in/hcservices/ The Civil Miscellaneous Appeals are allowed with the abovedirections. No costs.vrSd/Asst. Registrar/true copy/Sub Asst.RegistrarTo1.The District Judge, Nilgiris, Udhagamandalam.+ 2 ccs to Mr. A. Bobblie Advocate sR 46864+ kone cc to Mra. Srinath Sridevan, Advocates SR 47297ASM (co)sg 10/08/07Judgment inC.M.A.No.1656 & 1657/200727-7-2007