Setting Aside Ex Parte Decree : Laches can be Corrected by awarding Curative Costs [Case Law]

Civil Procedure Code, 1908 - Order 9 Rule 13 - Setting aside decree ex parte against defendants - Laches on the part of the petitioners can be corrected by awarding curative costs.

Held, In the present case, from the beginning onwards, there was laches on the part of the petitioners in prosecuting the case. Even after getting summons of the Court, the petitioner has not cared to appear before the court in time and therefore, the ex parte decree was happened to be passed by the court below. The restoration application filed by him was also dismissed for the failure to take steps. It is true that there is laches on the part of the petitioners in prosecuting the case. The petitioners' counsel argued that the petitioners have got good case as against the respondent. The decree amount is Rs.9,01,423/-. The intention of the petitioners is to drag the matter without giving a chance to the respondent to execute the decree. As has been held in Sreedhara Kurup, I find that it is just and proper to take a liberal approach in the matter and the laches on the part of the petitioners can be corrected by awarding curative costs.

IN THE HIGH COURT OF KERALA AT ERNAKULAM

ANNIE JOHN, J.

O.P.(C) No. 1359 of 2016

Dated this the 21st day of May, 2018.

PETITIONER(S)

SUNIL AND 5 OTHERS

BY ADV.SRI.R.GOPAN 

RESPONDENT(S)

LALITHA

O R D E R 

The petitioners are the defendants 3 to 5 and 7 and 8 and the respondent is the plaintiff in the suit. The suit was filed for the realisation of Rs.9,01,423/- with interest at the rate of 12% per annum. The plaintiff claimed amount on the basis of a dishonoured cheque. The petitioners are the Trustee of the first defendant Trust. Even though summons was served to the defendants, they failed to appear before court. On 09.06.2008, the learned Sub Judge, Neyyattinkara as per Exts.P1 and P2 passed an ex parte decree allowing the plaintiff to realise Rs.9,01,423/- at the rate of 12% per annum from the date of suit till realisation with costs and a prohibitory injunction against the defendants from alienating the plaint schedule property till the realisation of the decree amount. The respondent/ plaintiff filed E.P. No. 59 of 2014 in O.S No. 50 of 2008 for realising the decree amount by attachment and sale of plaint schedule property. On 07.07.2008, the second defendant filed I.A No. 1118 of 2008 to set aside the ex parte decree. Even though notice has been ordered, no steps has been taken and accordingly, the IA was dismissed. The petitioners filed I.A No. 1627 of 2009 to restore I.A No. 1118 of 2018, which was dismissed for default on 26.11.2008. The petitioners have also filed I.A. No. 2139 of 2010 for condoning the delay of 297 days in filing I.A No. 1627 of 2009. On 05.01.2011, the learned Sub Judge dismissed both the IAs by Ext.P6 order. Hence this Original Petition.

2. The learned counsel for the petitioners submits that his Advocate Clerk has wrongly noted the posting date as 29.06.2008 and therefore, he could not take steps to serve notice to the respondent. The learned Sub Judge ought to have found that the petitioners filed I.A. No. 1118 of 2008 under Order IX Rule 13 CPC, which was dismissed for default. The petitioners opportunity to contest the suit was axed down which is unjustifiable. Order IX Rule 13 of CPC reads thus: 

"13. Setting aside decree ex parte against defendants.- In any case in which a decree is passed ex parte against a defendant, he may apply to the Court by which the decree was passed for an Order to set it aside; and if he satisfies the Court that the summons was not duly served, or that he was prevented by any sufficient cause from appearing when the suit was called on for hearing, the court shall make an order setting aside the decree as against him upon such terms as to costs, payment into court or otherwise as it thinks fit, and shall appoint a day for proceeding with the suit: 

Provided that where the decree is of such a nature that it cannot be set aside as against such defendant only it may be set aside as against all or any of the other defendants also: 

Provided further that no court shall set aside a decree passed ex parte merely on the ground that there has been an irregularity in the service of summons, if it is satisfied that the defendant had notice of the date of hearing and had sufficient time to appear and answer the plaintiff’s claim.

Explanation : Where there has been an appeal against a decree passed ex parte under this rule, and the appeal has been disposed of on any ground other than the ground that the appellant has withdrawn the appeal, no application shall lie under this rule of setting aside the ex parte decree." 

It is evident from the above that an ex-parte decree against a defendant can be set aside if the party satisfies the Court that summons had not been duly served or he was prevented by sufficient cause from appearing when the suit was called on for hearing. However, the court shall not set aside the said decree on mere irregularity in the service of summons or in a case where the defendant had notice of the date and sufficient time to appear in the court.

3. In Rajni Sharma v. Rajendra Kumar [2017 KHC 3074], it is held in paragraphs 7 and 8 as follows: 

[I]t has been held by Hon'ble Supreme Court in State (NCT of Delhi) vs. Ahmed Jaan, 2008 (1)) JT 179 that the expression 'sufficient cause' should be considered with pragmatism in justice oriented approach rather than the technical detection of sufficient cause for explaining every day's delay.

The expression 'sufficient cause' should, therefore, receive a liberal construction so as to advance substantial justice when no negligence or inaction or want of bona fide is imputable to a party. Whether explanation furnished would constitute 'sufficient cause' or not will be dependant upon facts of each case. There cannot be a straitjacket formula for accepting or rejecting explanation furnished for the delay caused in taking steps. However, courts should not proceed with the tendency of finding fault with the cause shown and reject the petition by a slipshod order in over jubilation of disposal drive. Acceptance of explanation furnished should be the rule and refusal an exception more so when no negligence or inaction or want of bona fide can be imputed to the defaulting party. On the other hand, while considering the matter the courts should not lose sight of the fact that by not taking steps within the time prescribed, a valuable right has accrued to the other party which should not lightly be defeated by condoning delay in a routine like manner. However by taking a pedantic and hyper technical view of the matter the explanation furnished should not be rejected when stakes are high, causing enormous loss and irreparable injury to the party against whom the lis terminates and defeating valuable right of such a party to have the decision on merits. The courts should strike balance between the resultant effect of the order it was going to pass upon the parties either way." 

4. The learned counsel for the petitioners has placed reliance on the decision on Plantation Corporation of Kerala Ltd. V. Hussain, 1998(1) KLT 1008 in which it is held that when sufficient cause is shown, the re-opening of the case is mandatory and when sufficient cause is not shown, it is discretionary and the court should exercise its discretion depending upon the facts of each case. It is also held that while considering the expression 'sufficient cause', the legislature has intended to use it as an elastic expression so as to apply the law in a meaningful manner which subserves the ends of justice that being the life-purpose for the existence of the institution of courts.

5. The sole issue to be considered is whether there was any laches on the part of the petitioner in prosecuting the case. According to the petitioners, there was no laches on the part of the petitioners in prosecuting the case and the Court may take a lenient view in the matter.

6. The learned Sub Judge has attached about 6 acres and 35 of cents of land, where Victory Vocational Higher Secondary School is situated, for realisation of the decree debt. The learned counsel for the petitioner has also placed reliance on Sreedhara Kurup v. Michael, 1968 KLT 599 in which it is held that the broad principle of natural justice that informs our judicial institution is that the litigant should not be deprived of a hearing unless there has been something equivalent to misconduct or gross negligence on his part. It is also held that the right of a party to be heard should be negatived only if there is gross negligence or gross carelessness and that if some steps have been taken and application for restoration has been made with some diligence and some evidence adduced making out a sufficient cause for absence, restoration should be ordered, minor misconduct or laches being corrected by the common curative of costs.

7. In fact, the suit was decreed ex parte on 19.06.2008. The onset reason projected in the petition by the petitioners' counsel is that the Advocate Clerk has wrongly noted the posting date. An affidavit has also been filed along with Ext.P4 application before the court below. The court below dismissed the applications finding that the petitioner was not diligent in prosecuting the case. The court below has relied on the decision in Sunil Poddar v. Union of India (2008 (2) KLT SN 15 (Case No. 16) SC, in which it is held that if the court is convinced that the defendant had otherwise knowledge of proceedings and he could have appeared, he cannot put forward a ground of non-service of summons for setting aside ex parte decree by invoking Order IX, Rule13 of CPC. The learned Sub Judge has come to the conclusion that the petitioners were aware of the pendency of the criminal case. The court below has also relied on the decision in Joseph John v. Joseph (2001 (3) KLT 525), in which it is held that if there is gross negligence and failure to show sufficient cause for the failure to appear before the court on the day the case was posted for filing written statement, the suit need not be restored. It is also held in that decision that the suit can be set aside only if there is minor negligence or laches.

8. In the present case, from the beginning onwards, there was laches on the part of the petitioners in prosecuting the case. Even after getting summons of the Court, the petitioner has not cared to appear before the court in time and therefore, the ex parte decree was happened to be passed by the court below. The restoration application filed by him was also dismissed for the failure to take steps.

9. It is true that there is laches on the part of the petitioners in prosecuting the case. The petitioners' counsel argued that the petitioners have got good case as against the respondent. The decree amount is Rs.9,01,423/-. The intention of the petitioners is to drag the matter without giving a chance to the respondent to execute the decree. As has been held in Sreedhara Kurup, I find that it is just and proper to take a liberal approach in the matter and the laches on the part of the petitioners can be corrected by awarding curative costs.

10. Considering the facts and circumstances of the case, I am inclined to allow O.P.(C) as prayed for on certain conditions. The trial court shall take an earnest endeavour to expedite the proceedings without granting any adjournment to the parties, within three months of receipt of a copy of this judgment.

In the result, this petition is allowed and the orders in I.A.Nos. 1627 of 2009 and 2139 of 2010 in OS. No. 50 of 2008 on the file of Sub Court, Neyyattinkara is set aside and the matter is restored to file on condition that the petitioners shall deposit an amount of Rs.2,00,000/- (Rupees two lakhs only) before the trial court and shall pay an amount of Rs.10,000/- (Rupees ten thousand only) to the Legal Service Authority of the Sub Court, Neyyattinkara on or before 30.06.2018, failing which this petition shall stand dismissed.