G. RATNA RAJ (D) BY LRS. versus SRI MUTHUKUMARASAMY PERMANENT FUND LTD. & ANR. on 1 February 2019

[2019] 1 S.C.R. 845

G. RATNA RAJ (D) BY LRS.

v.

SRI MUTHUKUMARASAMY PERMANENT

FUND LTD. & ANR.

(Civil Appeal Nos. 2582-2583 of 2011)

FEBRUARY 01, 2019

[ABHAY MANOHAR SAPRE ANDDINESH MAHESHWARI, JJ.]

Code of Civil Procedure, 1908 – Or.XVII, r.2, Explanation –Applicability of – In order to attract Explanation to Or.XVII, r.2, theparty which has led evidence and has led substantial part of theevidence if fails to appear on any day to which the hearing of thecase is adjourned, the Court may treat “such party” as “present”on that day and is accordingly empowered to proceed in the suit –In the instant case, the defendants were proceeded ex parte – It wasdefendant who did not lead the evidence and therefore, Explanationto Or.XVII, r.2 would not apply – Therefore, since the defendantswere proceeded ex parte and were found not to have led any evidencein the suit, the Court could only proceed under Or.XVII, r.3 (b) r/wOr.XVII, r.2 for disposal of the suit by taking recourse to one of themodes directed in that behalf by Or.IX of the Code – Trial court(Single Judge) had proceeded to hear the suit ex parte by takingrecourse to Or.IX, r.6 (a) in terms of Or.XVII, r.2 because on thatday, the plaintiff was present when the suit was called on for hearingwhereas the defendants were absent despite service of summonsand, accordingly, trial court passed the preliminary decree – Suchdecree was an “ex parte decree” within the meaning of Or.IX, r.6 (a)r/w Or.IX, r.13 of the Code and, therefore, could only be set asideunder Or.IX, r.13 on making out a sufficient ground by thedefendants – Division Bench of High Court was justified in allowingthe applications filed by defendant no.1 under Or.IX, r.13 and inconsequence was justified in setting aside the preliminary decreetreating the said decree as ‘ex parte decree’ – Interference with thesaid order is not called for – Trial court is directed to decide thesuit on merits in accordance with law – Ex parte decree – Party,appearance of.

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846SUPREME COURT REPORTS

ADismissing the appeals, the CourtHELD: In the instant case, the plaintiff’s evidence wasrecorded and his case was also closed. The defendants were placedex parte on the date when the case was fixed for recordingdefendants’ evidence but the same was not recorded due to theBdefendants’ absence on the said date. In such a situation arisingin the case, the case at hand would not fall under Explanation toOrder XVII Rule 2 because in order to attract the Explanation,“such party” which has led evidence or has led substantial partof the evidence, if fails to appear on any day to which the hearingof the case is adjourned, the Court may treat “such party” asC“present” on that day and is accordingly empowered to proceedin the suit. If the plaintiff had remained absent and was found tohave led evidence, the Court could have invoked its powers underExplanation to Order XVII Rule 2 treating the plaintiff as“present” for passing appropriate orders. Such is, however, notDthe case here. Similarly, in converse situation, if the defendantshad remained absent (as has happened in this case) on that dateand if it would have noticed that they had adduced the evidenceeither fully or substantially prior to the date on which they wereproceeded ex parte, the Court could have invoked its powersunder Explanation to Order XVII Rule 2 of the Code treating theEdefendants as “present” on that day for passing appropriate ordersin the suit. Such is, however, again not the case here. Since thedefendants were proceeded ex parte and were found not to haveled any evidence in the suit, the Court could only proceed underOrder XVII Rule 3 (b) read with Order XVII Rule 2 for disposalFof the suit by taking recourse to one of the modes directed inthat behalf by Order IX or could have made any other order as itthinks fit. The Trial Court (Single Judge) is directed to decidethe Original Suit on merits in accordance with law. [Paras 23-24,26-28, 33][853-A-C, D-F; 854-F]

GB. Janakiramaiah Chetty v. A.K. Parthasarthi & Ors.(2003) 5 SCC 641 : [2003] 3 SCR 369 – relied on.

Case Law Reference

[2003] 3 SCR 369relied on

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CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.2582-2583 of 2011.

From the Judgment and Order dated 11.01.2008 of the High Courtof Judicature at Madras in OSA Nos. 299 & 300 of 2006.

Ambhoj Kumar Sinha, Ashwariya Sinha, Advs. for the Appellants.

R.Anand Padmanabhan, Prawal Chaturvedi, Ms. Nishaka Tyagi,Pramod Dayal, S. Gowthaman, Advs. for the Respondents.

The Judgment of the Court was delivered by ABHAY MANOHAR SAPRE, J. 1. Application for substitutionis allowed.

2. These appeals are directed against the final judgment and orderdated 11.01.2008 passed by the High Court of Judicature at Madras inO.S.A. Nos.299 & 300 of 2006 whereby the Division Bench of the HighCourt allowed the appeals filed by respondent No.1 herein.

3. The controversy involved in these appeals lies in a narrowcompass. However, in order to appreciate the same, few relevant factsneed mention hereinbelow.

4. The original appellant-G Ratna Raj (since dead and nowrepresented by his legal representatives) was the plaintiff whereasrespondent No.1 was defendant No.1 in the civil suit out of which theseappeals arise. Respondent No.2 is impleaded as party respondent in thisCourt by order dated 06.02.2014.

5. The original plaintiff (appellant herein)-G Ratna Raj filed a CivilSuit No.131/1999 against the defendants (Sri Muthukumaraswamy FundLtd.-Respondent No.1 herein and Balajee & Ors.) in the High Court ofMadras on its original side jurisdiction for redemption of mortgage andfor permanent injunction in relation to the mortgaged property.

6. The defendants on being served entered their appearance andfiled their written statement. The Trial Court, on the basis of pleadings,framed the issues. The plaintiff examined himself as PW-1. Thedefendants cross-examined the plaintiff. Thereafter, the plaintiff closedhis case. The case was accordingly posted for recording defendants’evidence.

7. At that stage of the proceedings, the defendants did not appearin the suit and, therefore, the Court proceeded ex parte against them.

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AThe proceedings in the suit then continued as ex parte against thedefendants. The plaintiff then got himself re-examined in the proceedings.He, however, could not be re-cross-examined by the defendants becausethey were already proceeded ex parte in the proceedings.

8. The Trial Court (Single Judge) by judgment/decree datedB25.02.2003 passed a preliminary decree against the defendants in relationto the suit property. This led to filing of the two applications (IA No.340/2006 and IA No. 341/2006) by defendant No.1 before the Trial Court.

9. So far as IA No. 341/2006 is concerned, it was filed underOrder 9 Rule 13 of Code of Civil Procedure, 1908 (hereinafter referredCto as “the Code”) for setting aside of the preliminary decree dated25.02.2003 and so far as IA No.340/2006 is concerned, it was filed forcondonation of delay in filing the application under Order 9 Rule 13 ofthe Code.

10. By order dated 14.03.2006, the Single Judge dismissed bothDthe applications and held that the application filed by defendant No.1under Order 9 Rule 13 of the Code was not maintainable because thepreliminary decree dated 25.02.2003 was not an “ex parte decree”. Inother words, he was of the view that since the preliminary decree dated25.02.2003 was not an ex parte decree, an application under Order 9Rule 13 of the Code could not be filed for its setting aside.E

11. Defendant No.1 felt aggrieved and filed appeals before theDivision Bench of the High Court. By impugned order, the Division Benchallowed the appeals and set aside the order of the Single Judge. TheDivision Bench held that the preliminary decree dated 25.02.2003 wasan ex parte decree passed in the civil suit by the Trial Court (SingleFJudge) and, therefore, the application filed by defendant No.1 underOrder 9 Rule 13 of the Code was maintainable with a view to find out asto whether such decree could be set aside under Order 9 Rule 13 of theCode or not.

12. The Division Bench, therefore, allowed the application filedGby defendant No.1 under Order 9 Rule 13 of the Code subject to theirpaying a cost of Rs.10,000/- to the plaintiff. The civil suit was accordinglyrestored to its original file for its disposal on merits in accordance withlaw. It is against this order, the plaintiff has felt aggrieved and filed thepresent appeals by way of special leave in this Court.

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G. RATNA RAJ (D) BY LRS. v. SRI MUTHUKUMARASAMYPERMANENT FUND LTD. [ABHAY MANOHAR SAPRE, J.]

13. The short question, which arises for consideration in theseappeals, is whether the Division Bench was justified in setting aside thepreliminary decree dated 25.02.2003 by holding the same to be an “exparte decree” for the purpose of Order 9 Rule 13 of the Code.

14. Heard learned counsel for the parties.

15. Having heard the learned counsel for the parties and on perusalof the record of the case, we find no merit in these appeals.

16. In our opinion, the question involved in these appeals is requiredto be decided keeping in view the provisions of Order 9 Rule 6 (a) andOrder 17 Rules 2 and 3 of the Code.

“Order 9 Rule 6 (1)(a)

6. Procedure when only plaintiff appears- (1) Where theplaintiff appears and the defendant does not appear whenthe suit is called on for hearing, then- (a) When summons duly served – If it is proved that thesummons was duly served, the Court may make an orderthat the suit be heard ex parte;”

17. Rule 6(1)(a) provides that where the plaintiff appears and thedefendant does not appear when the suit is called on for hearing, then ifthe summons is held duly served on the defendant, the Court may makean order that the suit be heard ex parte.

18. Order 17 Rules 2 and 3 read as under :

“Order 17 Rules 2 & 3

2. Procedure if parties fail to appear on day fixed.—Where,on any day to which the hearing of the suit is adjourned, theparties or any of them fail to appear, the court may proceedto dispose of the suit in one of the modes directed in thatbehalf by Order IX or make such other order as it thinksfit.

Explanation.—Where the evidence or a substantial portionof the evidence of any party has already been recorded andsuch party fails to appear on any day to which the hearing ofthe suit is adjourned, the court may, in its discretion,proceed with the case as if such party were present.

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A3. Court may proceed notwithstanding either party fails toproduce evidence, etc.—Where any party to a suit to whomtime has been granted fails to produce his evidence, or tocause the attendance of his witnesses, or to perform anyother act necessary to the further progress of the suit, forwhich time has been allowed, the court may, notwithstandingBsuch default,—

(a) if the parties are present, proceed to decide the suitforthwith; or (b) if the parties are, or any of them is, absent, proceedCunder Rule 2.”

19. Order 17 Rule 2 of the Code provides that where, on any dayto which the hearing of the suit is adjourned, the parties or any of themfail to appear, the Court may proceed to dispose of the suit in one of themodes directed in that behalf by order IX or make such other order as itthinks fit.D

20. The Explanation appended to Order 17 Rule 2 of the Codeprovides that where the evidence or a substantial portion of the evidenceof any party has already been recorded and such party fails to appear onany day to which the hearing of the suit is adjourned, the court may, in itsdiscretion, proceed with the case as if such party was present.

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21. Order 17 Rule 3 of the Code, however, provides that whereany party to a suit to whom time has been granted fails to produce hisevidence, or to cause the attendance of his witnesses, or to perform anyother act necessary to the further progress of the suit, for which timehas been allowed, the Court may, notwithstanding such default, (a) if theFparties are present, proceed to decide the suit forthwith, or (b) if theparties are, or any of them is, absent, proceed under Rule 2.

22. The scope of Order 17 Rule 2 and Order 17 Rule 3 of theCode came up for consideration before this Court in the case of B.Janakiramaiah Chetty vs. A.K. Parthasarthi & Ors., (2003) 5 SCCG641 wherein Justice Arijit Pasayat speaking for the Bench held in paras7 to 10 as under:

“7. In order to determine whether the remedy under Order9 is lost or not what is necessary to be seen is whether inthe first instance the Court had resorted to the Explanationof Rule 2.

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G. RATNA RAJ (D) BY LRS. v. SRI MUTHUKUMARASAMYPERMANENT FUND LTD. [ABHAY MANOHAR SAPRE, J.]

8. The Explanation permits the court in its discretion toproceed with a case where substantial portion of evidenceof any party has already been recorded and such party failsto appear on any day to which the hearing of the suit isadjourned. As the provision itself shows, discretionarypower given to the court is to be exercised in a givencircumstance. For application of the provision, the courthas to satisfy itself that: (a) substantial portion of theevidence of any party has been already recorded; (b) suchparty has failed to appear on any day; and (c) the day is oneto which the hearing of the suit is adjourned. Rule 2 permitsthe court to adopt any of the modes provided in Order 9 orto make such order as he thinks fit when on any day towhich the hearing of the suit is adjourned, the parties orany of them fail to appear. The Explanation is in the natureof an exception to the general power given under the rule,conferring discretion on the court to act under the specifiedcircumstance i.e. where evidence or a substantial portionof evidence of any party has been already recorded and suchparty fails to appear on the date to which hearing of the suithas been adjourned. If such is the factual situation, the courtmay in its discretion deem as if such party was present.Under Order 9 Rule 3 the court may make an order directingthat the suit be dismissed when neither party appears whenthe suit is called on for hearing. There are other provisionsfor dismissal of the suit contained in Rules 2, 6 and 8. Weare primarily concerned with a situation covered by Rule6. The crucial words in the Explanation are “proceed withthe case”. Therefore, on the facts it has to be seen in eachcase as to whether the Explanation was applied by the courtor not.

9. In Rule 2, the expression used is “make such order as itthinks fit”, as an alternative to adopting one of the modesdirected in that behalf by Order 9. Under Order 17 Rule3(b), the only course open to the court is to proceed underRule 2, when a party is absent. Explanation thereto gives adiscretion to the court to proceed under Rule 3 even if aparty is absent. But such a course can be adopted only when ABCDEF

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Athe absentee party has already led evidence or a substantialpart thereof. If the position is not so, the court has no optionbut to proceed as provided in Rule 2. Rules 2 and 3 operatein different and distinct sets of circumstances. Rule 2 applieswhen an adjournment has been generally granted and notfor any special purpose. On the other hand, Rule 3 operatesBwhere the adjournment has been given for one of thepurposes mentioned in the rule. While Rule 2 speaks ofdisposal of the suit in one of the specified modes, Rule 3empowers the court to decide the suit forthwith. The basicdistinction between the two rules, however, is that in theCformer, any party has failed to appear at the hearing, whilein the latter the party though present has committed anyone or more of the enumerated defaults. Combined effectof the Explanation to Rule 2 and Rule 3 is that a discretionhas been conferred on the court. The power conferred ispermissive and not mandatory. The Explanation is in theDnature of a deeming provision, when under givencircumstances, the absentee party is deemed to be present.

10. The crucial expression in the Explanation is “wherethe evidence or a substantial portion of the evidence of aparty”. There is a positive purpose in this legislativeEexpression. It obviously means that the evidence on recordis sufficient to substantiate the absentee party’s stand andfor disposal of the suit. The absentee party is deemed tobe present for this obvious purpose. The court while actingunder the Explanation may proceed with the case if thatFprima facie is the position. The court has to be satisfied onthe facts of each case about this requisite aspect. It wouldbe also imperative for the court to record its satisfaction inthat perspective. It cannot be said that the requirement ofsubstantial portion of the evidence or the evidence havingbeen led for applying the Explanation is without anyGpurpose. If the evidence on record is sufficient for disposalof the suit, there is no need for adjourning the suit ordeferring the decision.”

23. Now when we examine the facts of the case at hand keepingin view the law laid down in the case of B Janakiramaiah ChettyH

(supra), we find that the plaintiff’s evidence was recorded and his casewas also closed. It is not in dispute that the defendants were placed exparte on the date when the case was fixed for recording defendants’evidence but the same was not recorded due to the defendants’ absenceon the said date. In other words, it was a case where the defendants didnot lead any evidence.

24. In such a situation arising in the case, in our view, the case athand would not fall under Explanation to Order 17 Rule 2 of the Codebecause in order to attract the Explanation, “such party” which has ledevidence or has led substantial part of the evidence, if fails to appear onany day to which the hearing of the case is adjourned, the Court maytreat “such party” as “present” on that day and is accordingly empoweredto proceed in the suit.

25. In this case, the party, who was absent and was proceededex parte was the “defendants” and they had not led any evidence whereasit was the plaintiff, who was present and had led his evidence.

26. In other words, if the plaintiff had remained absent and wasfound to have led evidence, the Court could have invoked its powersunder Explanation to Order 17 Rule 2 of the Code treating the plaintiffas “present” for passing appropriate orders. Such is, however, not thecase here.

27. Similarly, in converse situation, if the defendants had remainedabsent (as has happened in this case) on that date and if it would havenoticed that they had adduced the evidence either fully or substantiallyprior to the date on which they were proceeded ex parte, the Courtcould have invoked its powers under Explanation to Order 17 Rule 2 ofthe Code treating the defendants as “present” on that day for passingappropriate orders in the suit. Such is, however, again not the case here.

28. We are, therefore, of the view that since the defendantswere proceeded ex parte and were found not to have led any evidencein the suit, the Court could only proceed under Order 17 Rule 3 (b) readwith Order 17 Rule 2 of the Code for disposal of the suit by takingrecourse to one of the modes directed in that behalf by Order 9 of theCode or could have made any other order as it thinks fit.

29. As mentioned above, the Trial Court did proceed to hear thesuit ex parte by taking recourse to the Order 9 Rule 6 (a) in terms of A

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AOrder 17 Rule 2 of the Code because on that day, the plaintiff waspresent when the suit was called on for hearing whereas the defendantswere absent despite service of summons and accordingly the Trial Courtpassed the preliminary decree. Such decree, in our opinion, was an “exparte decree” within the meaning of Order 9 Rule 6 (a) read with Order9 Rule 13 of the Code and, therefore, could be set aside under Order 9

BRule 13 on making out a sufficient ground by the defendants.

30. In view of the foregoing discussion, we are of the view thatthe Division Bench was justified in allowing the applications filed bydefendant No.1 under Order 9 Rule 13 of the Code and, in consequence,was justified in setting aside the preliminary decree dated 25.02.2003passed in O.S. No.131/1999 treating the said decree as “ex parte decree”.

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31. So far as the finding on the question of sufficient ground forsetting aside of the ex parte decree is concerned, suffice it to say, itbeing a pure question of fact, the same does not call for any interferenceby this Court. A finding on such question is binding on this Court.DMoreover, we find that the Division Bench imposed a cost of Rs.10,000/-on defendant No.1 payable to the plaintiff as condition for setting asidethe ex parte decree. Defendant No.1, therefore, must pay the cost tothe plaintiff.

32. As a result of the foregoing discussion, we find no merit inEthese appeals, which are accordingly dismissed.

33. The Trial Court (Single Judge) is now directed to decide theOriginal Suit No. 131/1999 on merits in accordance with law preferablywithin a period of one year as an outer limit. Since the original plaintiffhas died and his legal representatives are already brought on record inFthese appeals, the Trial Court will permit the plaintiff to amend the causetitle in the plaint and bring on record the legal representatives(appellantsherein) to enable them to prosecute the suit on merits in accordancewith law.

GDevika Gujral

Appeals dismissed.

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