1976 (8) TMI 170 - HC - Indian Laws

Court sets aside ex-parte decrees in Civil Suits, allows petitioner appearance on deposit

Asian Steel and Metals (P.) Ltd. Versus Pari Maganlal Hiralal and Anr.

Asian Steel and Metals (P.) Ltd. Versus Pari Maganlal Hiralal and Anr. - (1977) 18 GLR 606 Issues Involved:1. Legality of the order dismissing the application to set aside the ex-parte decree.2. Applicability of Order 37 Rule 4 of the Code of Civil Procedure.3. Applicability of Article 137 or Article 123 of the Limitation Act, 1963.4. Sufficiency of cause for condonation of delay under Section 5 of the Limitation Act.Detailed Analysis:1. Legality of the Order Dismissing the Application to Set Aside the Ex-Parte Decree:The petitioner, Asian Steel and Metals Private Limited, challenged the order of the City Civil Court Judge dated 30th April 1976, which dismissed their application to set aside the ex-parte decree in three suits. The petitioner sought to participate in and defend the suits, which were dismissed with costs. The three Civil Revision Applications were consolidated due to identical parties and contentions.2. Applicability of Order 37 Rule 4 of the Code of Civil Procedure:The petitioner argued that their application to set aside the ex-parte decree should be governed by Order 37 Rule 4 of the Code of Civil Procedure. They contended that the relevant Article of the Limitation Act should be the residuary Article 137, allowing a three-year limitation period. However, the court noted that the suits were summary suits under Order 37, and the petitioner had been granted unconditional leave to defend, transferring the suits to the Long Cause List. The court concluded that the jurisdictional facts for invoking Rule 4 were not established, as the petitioner had been properly served, applied for leave to defend, and was granted unconditional leave. Therefore, Rule 4 could not be invoked, and the decision in P.N. Films v. Overseas Films Corp. could not assist the petitioner.3. Applicability of Article 137 or Article 123 of the Limitation Act, 1963:The court determined that the application for restoration was governed by Article 123 of the Limitation Act, 1963, which provides a limitation of 30 days from the date of the decree. Since the summons was duly served, the limitation period began from the date of the decree. The petitioner filed the application on 24th February 1975, beyond the 30-day limitation period, making the application time-barred under Article 123.4. Sufficiency of Cause for Condonation of Delay under Section 5 of the Limitation Act:The petitioner argued that they were prevented by sufficient cause from filing the application in time and invoked Section 5 of the Limitation Act for condonation of delay. The court examined the evidence, including the absence of the petitioner's director due to travel and illness, and concluded that the petitioner failed to show sufficient cause. The court emphasized that the approach to determining 'sufficient cause' should be broad and liberal, not narrow and technical. The court found that the learned Judge misdirected himself by not applying the correct legal principles and thus led to manifest injustice.The court noted that the petitioner moved swiftly after learning about the decree and was not guilty of inaction. Therefore, the delay should have been condoned. The court decided to exercise discretion in favor of the petitioner, allowing the applications on the condition that the petitioner deposits Rs. 2500 in each suit within four weeks. The ex-parte decrees were set aside, and the suits were to be tried de novo from the stage of recording evidence.Conclusion:The court allowed the three revision applications, set aside the ex-parte decrees in Civil Suits Nos. 1942, 2161, and 1941 of 1972, and permitted the petitioner to appear in the suits on the condition of depositing Rs. 2500 in each suit within four weeks. The suits were to be tried afresh from the stage of recording evidence, with no order as to costs.