Order 9 Rule 7 CPC limits onerous conditions when setting aside an ex parte order, preserving a fair trial on merits.

Under Order 9 Rule 7 CPC, a court may set aside an ex parte order on terms, including costs, but those conditions must not prejudice the defendant or effectively decide the suit in advance. The Supreme Court upheld removal of an onerous condition requiring monthly deposits, confirmed that the suit should proceed on merits, and directed a fair retrial framework: witnesses already cross-examined need not be recalled, untested plaintiff witnesses may be recalled at the defendants' expense, and both sides may adduce additional evidence. It also required cooperation, payment of costs, and expeditious disposal.

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Issues: Whether, while setting aside ex parte proceedings under Order 9 Rule 7 of the Code of Civil Procedure, the court could impose a condition that the defendant deposit the monthly lease amount, and whether such condition was too onerous, vague, or capable of prejudging the suit.

Analysis: Order 9 Rule 7 permits the court to allow the defendant to participate in the suit upon such terms as to costs or otherwise as the court directs. That power is intended to compensate for the inconvenience caused by the defendant's earlier non-appearance and to regulate the conduct of the proceedings, but it cannot be used to place the defendant in a worse position than if no application under the rule had been made. A condition that effectively prejudges the controversy, operates as a virtual decree, or is otherwise too onerous cannot be sustained. The condition imposed by the trial court was also found to be vague and lacking in clarity.

Conclusion: The condition imposed by the trial court was unsustainable, and the High Court was justified in setting it aside. The ex parte proceedings were rightly set aside, while the suit was restored for expeditious trial, with appropriate modifications in light of subsequent events.

Final Conclusion: The decision upheld the setting aside of the ex parte order and rejected the onerous deposit condition, while preserving the restoration of the suit with tailored directions for further trial.

Ratio Decidendi: A court acting under Order 9 Rule 7 of the Code of Civil Procedure may impose reasonable compensatory or procedural terms, but not conditions that are onerous, uncertain, or that have the effect of virtually deciding the suit or placing the defendant in a worse position than if the application had not been made.

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