Reasonable conditions on setting aside an ex parte decree were required; excessive deposit and guarantee terms were modified.

When an ex parte decree is set aside for non-service of summons, it cannot be treated as enforceable in the same manner, and any conditions imposed for restoring the matter must be reasonable in the facts. The court recognised that terms such as costs, part-payment or security may be imposed, but found that requiring a substantial deposit and a bank guarantee before trial was excessive and unjustified. The conditions were therefore modified, with only an additional deposit of Rs. 50,000 directed and the remaining deposit and bank guarantee requirement set aside.

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Issues: Whether the conditions imposed while setting aside the ex parte decree were so onerous, harsh and unreasonable as to require modification.

Analysis: The ex parte decree had been set aside on the ground of non-service of summons, so the decree could not be treated as existing for execution in the same manner. While a court may impose terms such as deposit of costs, decretal amount, part of the amount, or security when restoring a matter, such conditions must be reasonable in the facts and circumstances. The requirement to deposit a substantial sum and furnish a bank guarantee for the balance before trial was found to be excessive and unjustified.

Conclusion: The conditions were modified. The appellants were directed to deposit a further sum of Rs. 50,000 within four weeks, and the direction to deposit Rs. 2,00,000 and furnish a bank guarantee for the remaining claim was set aside to that extent.

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