DEFENDANT CANNOT BE DEPRIVED OF THE STATUTORY RIGHT MERELY ON THE GROUND THAT THE APPLICATION FILED

MOHAN VS. R. MADHU, CIVIL APPEAL NO. 8898 OF 2019 Arising out of SLP(C) No.20686 of 2018 – November 21, 2019

The bench constituting of Hon’ble Justice R. Banumathi, Hon’ble Justice A.S Bopanna and Hrishikesh Roy allowed the appeal arises out of the order passed by the High Court of Tamil Nadu which has refused to condone the delay of 546 days in filing the first appeal.

The appellant defendant filed interim application under Section 5 of the Limitation Act to condone the delay of 276 days in filing the petition under Order IX Rule 13 CPC to set aside the exparte decree. The said petition was dismissed by the Additional District Judge and then the appellant has challenged the said order by filing revision petition, the learned Single Judge also rejected the contention made by the appellant. The special leave petition preferred against the said order also came to be dismissed by the Supreme Court. After the dismissal of the SLP by the Supreme Court, the appellant-defendant has filed the first appeal

The Honourable Supreme Court considered the following issues in the instant case;

(i) After dismissal of the application filed under Order IX Rule 13 CPC for condonation of delay in filing the appeal, whether the appeal filed under Section 96(2) CPC against the ex-parte decree dated 09.10.2015 is maintainable?

(ii) 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?

The appellant made the contention before the Hon’ble Supreme Court that despite the fact that an application under Order IX Rule 13 CPC was dismissed, the first appeal under Section 96(2) CPC being a statutory right is still available, the learned counsel for the appellant placed reliance upon Bhivchandra Shankar More v. Balu Gangaram More and others (2019) 6 SCC 387.

The respondent rebelled on the contention made by the appellant by submitting that the earlier application for condonation of delay in filing the application for setting aside the exparte decree under Order IX Rule 13 CPC was not accepted by the trial court, High Court and the Supreme Court and the same has attained finality.  It was submitted that the appellant cannot reagitate the very same question which has attained finality in the earlier proceedings.

The honourable Supreme Court stated that

When an ex-parte decree is passed, the defendant has two remedies – (a) Either to file an application under Order IX Rule 13 CPC to set aside the ex-parte decree by satisfying the court that the summons was not served or if served, the defendant was prevented by “sufficient cause” from appearing in the court when the suit was called for hearing; (b) to file a regular appeal from the original decree to the first appellate court in terms of Section 96(2) CPC and challenge the ex-parte decree on merits.Right to file an appeal under Section 96(2) 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) 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 CPC was earlier dismissed.

The Supreme Court referred to Bhanu Kumar Jain and other judgments and observed  that the defendant can take recourse to both proceedings – Order IX Rule 13 CPC as well as the appeal under Section 96(2) CPC, in Neerja Realtors (P) Ltd. v. Janglu (Dead) Through Legal Representative (2018) 2 SCC 649.

The court declared that 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.

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.

The honourable Supreme Court considering the facts and circumstances of the present case and in the interest of justice finds that the appellant deserves an opportunity to put forth his defence in the suit for recovery of money and held that

The delay of 546 days in filing the first appeal shall therefore be condoned with condition that the appellant should deposit Rs.20,00,000/- before the trial court-Principal District Judge, Tiruchirappalli, to the credit of OS No.76 of 2015 on or before 28.02.2020, failing which, the application for condonation of delay shall stand dismissed.

Therefore, the Supreme Court concluded that the delay in filing the appeal is condoned.  The appeal shall be taken on file and the High Court shall proceed with the same in accordance with law. It made it clear that it have not expressed any opinion on the merits of the matter.  It is also made clear that the criminal complaints filed under Section 138 of NI Act be proceeded on its own merits without being influenced by any of the views expressed by this Court or by the High Court.

View/Download Judgment: N. MOHAN VS. R. MADHU

– Srutha R Elayidom

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