N. Mohan Vs. R. Madhu - (Supreme Court) (21 Nov 2019)

Right to appeal being a statutory right, Defendant cannot be deprived of same merely on ground that, application to set aside ex-parte order was earlier dismissed

MANU/SC/1601/2019

Limitation

Present appeal arises out of the impugned order passed by the High Court by which the High Court has refused to condone the delay of 546 days in filing the first appeal against the judgment and decree passed in Original Suit.

The Appellant-Defendant is a businessman doing business of tea and real estate. Case of the Respondent-Plaintiff is that, the Appellant approached the Respondent-Plaintiff for financial assistance for a sum of Rs. 45,00,000 for the purpose of his business needs. The Respondent lent him the sum of Rs. 45,00,000 and there was no documentation for the same. According to the Respondent, it was agreed that the said amount will be returned to the Respondent with an interest of 18% per annum. The Appellant agreed to return the said amount within two months; but the Appellant has not paid the amount. On the other hand, the Appellant is said to have issued two post-dated cheques to the Respondent, one for an amount of Rs. 25,00,000 and Anr. for an amount of Rs. 20,00,000. When the said cheques were presented for collection, the same were returned with the endorsement that "payments stopped by the drawer". The Respondent-Plaintiff filed a civil suit before the Additional District Judge. The said suit was decreed ex-parte.

The points arise for consideration in this appeal that, (i) After dismissal of the application filed under Order IX Rule 13 of Code of Civil Procedure, 1908 (CPC) for condonation of delay in filing the appeal, whether the appeal filed under Section 96(2) of CPC against the ex-parte decree dated 9th October, 2015 is maintainable. Whether the time spent in the proceedings to set aside the ex-parte decree be taken as "sufficient cause" within the meaning of Section 5 of the Limitation Act, 1908 so as to condone the delay in preferring the first appeal.

Right to file an appeal under Section 96(2) of CPC is a statutory remedy. The right to appeal is not a mere matter of procedure; but is a substantive right. Right to appeal under Section 96(2) of CPC challenging the original decree passed ex-parte, being a statutory right, the Defendant cannot be deprived of the statutory right merely on the ground that the application filed under Order IX Rule 13 of 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 under Section 96(2) of CPC, 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) of CPC. But where the Defendant has been pursuing the remedy bona fide under Order IX Rule 13 of CPC, if the Court refuses to condone the delay in the time spent in pursuing the remedy under Order IX Rule 13 of CPC, the Defendant would be deprived of the statutory right of appeal.

In the present case, the Respondent has filed the Money Suit for recovery of Rs. 46, 98,500 together with interest and the said suit was decreed ex-parte. Execution petition was also filed for execution of the decree. The Appellant has filed application 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 before the ADJ Court at Tiruchirappalli and the ex-parte decree was passed.

Thereafter, the Appellant has preferred the first appeal with the application to condone the delay of 546 days in filing the first appeal. There was a delay of 276 days in filing the application to set aside the ex-parte decree. Pursuing the proceedings in the application filed Under Order IX Rule 13 Code of Civil Procedure 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, 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.

The Appellant has however shown his bona fide by depositing Rs. 25, 00,000 in compliance with the orders of present Court dated 13th August, 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, 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. The delay of 546 days in filing the first appeal shall therefore be condoned with condition.

Tags : DELAY CONDONATION EX-PARTE DECREE