Ex parte Decree; Prabha Agarwal Vs. Aditi Oil Mill [Calcutta High Court, 10-06-2016]

In an application for recalling of an ex parte decree, the court is entitled to consider as to whether or not the defendant has a plausible defence to the plaintiff’s claim and the defendant is obliged to disclose the same in the recalling application.

# Application for recalling of an ex parte decree


In the High Court At Calcutta

Ordinary Original Civil Jurisdiction Original Side

Before : The Hon’ble Justice Arijit Banerjee

Judgment On : 10.06.2016

GA 3031 of 2015 CS 271 of 2014

Prabha Agarwal -Vs.- Aditi Oil Mill

For the petitioner/defendant : Mr. S. Banerjee, Adv. Ms. S. Majumdar, Adv. For the respondent/plaintiff : Mr. N. Dasgupta, Adv. Mr. R. L. Mitra, Adv.

Arijit Banerjee, J.

(1) The defendant in the suit has taken out this application for recalling the judgment and decree dated 15 June, 2015 passed in the suit. The decree was passed ex parte when the suit appeared in the undefended list since the defendant had failed to file its written statement.

(2) Ld. Counsel for the plaintiff has taken a preliminary objection to the maintainability of the application. He contended that the decree was completed, perfected, drawn up and filed prior to the instant application being filed and as such this Court has no jurisdiction to entertain the instant application for recalling of the decree. On merits of the application, Ld. Counsel contended that the explanation given by the defendant for not filing the written statement and/or not being able to contest the suit is unacceptable and as such the application should be dismissed.

(3) Two points, therefore, arise for consideration of this Court in the instant application.

Firstly, whether or not this Court retains the jurisdiction to entertain the instant application after completion, perfection and filing of the decree.

Secondly, if it be held that this Court has jurisdiction to entertain the application, has the defendant made out a sufficient cause for recalling of the decree?

(4) On the first point of maintainability, Ld. Counsel for the plaintiff relied on a decision of a Division Bench of this Court in the case of

# M/s. Nanalal M. Verma & Co. (Gunnies) P. Ltd.-vs.-Gordhandas Jerambhai, AIR 1965 Cal 547.

In that case a suit was placed in the special list under Chapter X Rule 35 of the Original Side Rules of this Court and notice was served on the plaintiff’s solicitor. On the prayer of the Solicitor for adjournment, the case was adjourned and placed in the next special list. On the adjourned dated no one on behalf of any of the parties appeared and the suit was struck out. The order dismissing the suit was drawn up and filed and only thereafter an application was made for setting aside the dismissal order. The said application was dismissed. The appeal against such dismissal of the application was rejected on the ground that the order was not appealable. In that context, the Hon’ble Division Bench observed that the order of dismissal of the plaintiff’s application for setting aside the order of dismissal of the suit was justified on merits. When the order dismissing the suit had been drawn up and filed, the jurisdiction of the court came to an end and, thereafter, it had no power to reconsider the matter on the application made by the plaintiff to set it aside. In paragraphs 14, 15a and 16 of the judgment, the Hon’ble Division Bench observed as follows:-

“14. The same view was taken in our court by Buckland J., in an application to vacate an order dismissing a suit for default under Chapter X Rule 36 (now Rule 35) of the Original Side Rules. His Lordship was of the view that the principle that where an order had been perfected the Judge had no power to re-consider the matter applied equally well to an order of dismissal for default under this Rule. The jurisdiction comes to an end once the order is completed: vide

# Sarupchand v. Madhoram, AIR 1925 Cal 83.

15a. This rule is in consonance with the principle that where an order has not been perfected the Judge has power to reconsider it. The Judge has also the power to vary an order which has been drawn up; but not completed or filed:

# In the Matter of Steel Construction Co. Ltd., 39 Cal WN 1259.

But once the order has been settled, passed and entered by the Registrar it can be varied only when it contains an adjudication on a matter on which the court never adjudicated thus bringing it into accordance with the order actually pronounced:

# Mulchand v. G.R. Martindale, AIR 1928 Cal 756.

16. It is clear, therefore, that the learned trial Judge in the instant case had no jurisdiction to interfere with the order he had made on the 30th August, 1961, which was drawn up and filed on the 14th December, 1961, on an application made on the 24th January, 1962.”

(5) Ld. Counsel for the plaintiff also drew this Court’s attention to a decision of a Division Bench of this court in the case of

# Castron Technologies Limited-vs.-Castron Mining Limited, (2013) 3 CLT 592 (HC)

wherein at paragraph 17 of the judgment the Hon’ble Division Bench after noting several decisions including the decision in the case of M/s. Nanalal M. Verma (supra) held that where a suit is dismissed and the decree is drawn up, completed and filed it could be restored if an application has been filed within the period of limitation in view of the inherent power of the Court. Ld. Counsel submitted that in the instant case the defendant did not file the application within the period of limitation i.e. thirty days and as such the application is not maintainable.

(6) Ld. Counsel for the plaintiff then submitted that the power to recall an order would be exercised by the Court in very limited situations and if a remedy by way of appeal or revision is available but not taken recourse to, an application for recalling of a judgment or order should be rejected. In this connection Ld. Counsel relied on a decision of the Hon’ble Supreme Court in the case of

# Budhia Swain-vs.- Gopinath Deb, (1999) 4 SCC 396

wherein at paragraph 8 of the judgment the Hon’ble Supreme Court held as follows:-

“8. In our opinion a tribunal or a court may recall an order earlier made by it if

(i) the proceedings culminating into an order suffer from the inherent lack of jurisdiction and such lack of jurisdiction is patent,

(ii) there exists fraud or collusion in obtaining the judgment,

(iii) there has been a mistake of the court prejudicing a party or

(iv) a judgment was rendered in ignorance of the fact that a necessary party had not been served at all or had died and the estate was not represented.

The power to recall a judgment will not be exercised when the ground for re-opening the proceedings or vacating the judgment was available to be pleaded in the original action but was not done or where a proper remedy in some other proceeding such as by way of appeal or revision was available but was not availed. The right to seek vacation of a judgment may be lost by waiver, estoppel or acquiescence.”

(7) Ld. Counsel also relied on a decision of the Hon’ble Supreme Court in the case of

# Iridium India Telecom Ltd.-vs.-Motorola Inc., AIR 2005 SC 514

in support of his contention that as far as Chartered High Courts are concerned, Section 129 of the CPC invests such High Courts with the power to make rules with regard to the regulation of their own procedure which may be inconsistent with the CPC itself, as long as such rules are consistent with the Letters Patent establishing the High Court.

(8) Per contra, Ld. Counsel for the defendant submitted that the decision in the case of M/s. Nanalal M. Verma (supra) was overruled by the Hon’ble Apex Court in the case of

# Firdous Omer (D) By LRs.-vs.- Bankim Chandra Daw (D) By LRs., AIR 2006 SC 2759.

In paragraph 10 of the judgment the Hon’ble Apex Court held as follows:-

“10. Keeping out for the moment, the Rules of the Original Side of the Calcutta High Court or the practice followed in that Court, it appears to us that it was a case where the suit was dismissed for default or for non- prosecution. Such a dismissal, no doubt, was on the basis that the suit was placed before a Judge trying the cause under Rule 35 of Chapter X of the Original Side Rules. But the dismissal still remains a dismissal for default of the plaintiff. It could be a dismissal under Rule 3 of Order IX, if both sides were not present when the suit was called on for hearing or it could be a dismissal under Rule 8 of Order IX, if the defendant alone appeared and the plaintiff did not appear. In either case, the plaintiff could apply either under Rule 4 or under Rule 9 of Order IX of the Code for restoration of the suit, on showing sufficient cause for non-appearance. The application, no doubt, had to be made within the period prescribed therefor under the Limitation Act, which is 30 days from the date of dismissal, under Article 122 of the Limitation Act, 1963. Apparently, under the practice followed in the Calcutta High Court on the Original Side, the order is drawn up, completed and filed after the expiry of 30 days from the date of the order. Section 5 of the Limitation Act of 1908 proprio vigore did not apply to proceedings under Order IX of the Code of Civil Procedure and the decision of the Calcutta High Court in M/s Nanalal M. Varma and Co. (Gunnies) P. LTD. Vs. Gordhandas Jerambhai & Ors. (supra) dealt with a case which arose when the 1908 Act was in force and Section 5 of the Limitation Act was not applicable. But after the enactment of the Limitation Act, 1963, Section 5 has application to all applications other than an application under Order XXI of the Code of Civil Procedure subject to any special law. That means that time for filing an application under Rule 4 or under Rule 9 of Order IX of the Code, or under any other provision, unless excluded, could be extended if sufficient cause is made out therefor. Therefore, the fact that on the expiry of 30 days from the date of the order, the order was drawn up, completed and filed, would not make the court concerned functus officio since that court in an appropriate case can exercise its jurisdiction under Section 5 of the Limitation Act and extend the time for filing the application under Rule 9 or Rule 4 of Order IX of the Code. Thus, it appears to us that in view of the applicability of Section 5 of the Limitation Act, to proceedings under Order IX of the Code, the position adopted in M/s Nanalal M. Varma and Co. (Gunnies) P. LTD. Vs. Gordhandas Jerambhai & Ors. (supra) and followed subsequently by the Calcutta High Court cannot now be adopted.”

(9) Ld. Counsel then relied on a decision in the case of

# G.P. Srivastava-vs.-Sri R. K. Raizada, AIR 2000 SC 1221

in support of his contention that the words ‘was prevented by any sufficient cause from appearing’ in O. 9 R. 13 of the CPC must be liberally construed to enable the Court to do complete justice between the parties particularly when no negligence or inaction is imputable to the erring party. In that case, the Hon’ble Supreme Court observed that sufficient cause for the purpose of O. 9 R. 13 of the CPC has to be construed as an elastic expression for which no hard and fast guidelines can be prescribed. The courts have wide discretion in deciding the sufficient cause keeping in view the peculiar facts and circumstances of each case. In a case where the defendant approaches the court immediately and within the statutory time period specified, the discretion is normally exercised in his favour, provided the absence was not mala fide or intentional.

(10) Ld. Counsel then relied on a decision of the Division Bench of this Court in the case of

# West Bengal State Electricity Board-vs.-Gilloram Gouri Shankar, (2006) 1 CHN 380.

In that case, in the facts before it, the Hon’ble Division Bench condoned the delay in making the application for setting aside an ex parte decree and set aside the decree. The Hon’ble Division Bench observed, inter alia, that so far as the setting aside of an ex parte decree is concerned, from the legislative intent it is clear that the court should liberally exercise its discretionary power in setting aside an ex parte decree. An order refusing to set aside an ex parte decree is made expressly appealable under O. 43 R. 1(d) of the CPC but an order allowing a setting aside application has deliberately not been made appealable.

(11) Ld. Counsel for the defendant also relied on a decision of a Ld. Single Judge of this court in the case of

# Sujit Paul-vs.-Mousomi Paul, (2010) 2 CHN 497.

In that case, the Ld. Trial Judge had set aside an ex parte decree holding that the clerk of the defendant’s lawyer was responsible for the unfortunate situation under which the suit was decreed ex parte. The order was challenged by the plaintiff by way of a revisional application before this Court. This court held that there was no perversity in the impugned order. The defendant engaged a lawyer to contest the suit on her behalf. If the suit was decreed ex parte due to negligence on the part of her lawyer and his clerk, she cannot be penalized for the default of her lawyer on whom she had reposed full confidence for defending the suit. The court further held that O. 9 R. 13 of the CPC can be resorted to for setting aside an ex parte divorce decree even though such decree is appealable under section 28(1) of the Hindu Marriage Act.

# Court’s View

(12) Taking up the issue of jurisdiction of this court to entertain the present application, in my opinion, the same must be decided in favour of the defendant/applicant for the reasons that follow.

(13) In the case of Firdous Omer (supra), no doubt the Hon’ble Apex Court was dealing with an application for restoration of a suit dismissed for default and in that context held that although such an application was required to be made within thirty days as per Article 122 of the First Schedule to the Limitation Act, 1963, Section 5 of the Limitation Act would apply and if sufficient cause was shown by the plaintiff for the delay in filing the application beyond thirty days, the delay could be condoned and the application could be entertained. The Hon’ble Supreme Court noted the practice followed in this Court on the Original Side that an order is drawn up, completed and filed after the expiry of thirty days from the date of the order. However, the Hon’ble Apex Court went on to hold that even after the order was drawn, completed and filed, the court would not become functus officio and would not lose jurisdiction in the matter. The Hon’ble Apex Court specifically referred to the decision in M/s. Nanalal M. Verma (supra), and held that when that case was decided, the Limitation Act, 1908 was in force and Section 5 of the Limitation Act was not applicable. However, since Section 5 of the Limitation Act, 1963 applies to proceedings under O. 9 of the CPC, the position adopted in M/s. Nanalal M. Verma (supra) cannot now be adopted.

In other words, the Hon’ble Apex Court expressly overruled the decision in M/s. Nanalal M. Verma (supra) to the extent it held that once an order is drawn up, completed and filed, the court passing the order losses jurisdiction in the matter and cannot entertain an application for recalling or modification of the order.

(14) In Castron Technologies Ltd. (supra) a Division Bench of this court held that even after an order is drawn up, completed and filed, an application for recalling of the order is maintainable if the same is filed within the prescribed period of limitation. If that be so, then an application for recalling of an ex parte decree would be maintainable even after expiry of the prescribed period of limitation if sufficient cause is shown by the defendant for condonation of the delay since Section 5 of the Limitation Act, 1963 is applicable to such an application as held by the Hon’ble Supreme Court.

(15) If a suit is decreed ex parte, for whatever reason, the defendant has a statutory right to apply for recalling of the decree within thirty days from the date of the decree. Arguendo, if the decree is drawn up, completed and filed with extreme expedition before expiry of thirty days, can it be said that the defendant loses the right to approach the court which passed the decree? In my opinion, the answer must be in the negative. If that be so and in the view of the fact that Section 5 of the Limitation Act, 1963 vests the Court with jurisdiction to condone the delay in recalling an ex parte decree, it cannot be said that the Court loses the jurisdiction to entertain an application for recalling of the decree upon the decree being drawn up, completed and filed, even if the application is made beyond the prescribed period of thirty days.

(16) Hence, this court holds that the instant application is maintainable and this court has jurisdiction to entertain the application.

(17) Coming to the second issue as to whether sufficient ground has been made out by the defendant for recalling of the ex parte decree, the case made out by the defendant in the recalling application is that one of its employees namely Malay Kumar Das was entrusted with the duty of looking after all pending litigations against the defendant company. The defendant believed that the said employee discharged his duties. The said employee left the service of the defendant from April, 2015 without prior notice. The defendant had no knowledge of the pending litigations that had been looked after by Malay Kumar Das. It was because of the default on the part of the said employee on whom the defendant company had relied completely that the suit came to be decreed ex parte.

(18) The aforesaid explanation sought to be given by the defendant is not acceptable to this court. The defendant is not a rustic old lady or an illiterate person. The defendant is a limited company and must be having its Board of Directors, Secretaries and other Officers. It is utterly incredible that the defendant entrusted a non-descript officer, whose designation has also not been revealed with the task of looking after all pending litigations against the defendant company. It is also not possible that the Board of Directors or the Secretary of the Company were not aware of the instant litigation. A commercial incorporated entity like the defendant company cannot be treated at par with an ordinary citizen who may not be aware of the legal procedures and the nitty-gritties of contesting a litigation. In my opinion, the explanation furnished does not amount to sufficient cause for recalling of the decree in question.

(19) Further, admittedly, on 15 June, 2015 the defendant through its Managing Director Mr. Ajay Kumar Agarwal came to know that the suit was being heard in court. It is on that date that the decree was passed, albeit ex parte since nobody represented the defendant. However, the defendant did not approach this Court till 6 August, 2015 when the present application was filed. This also shows the indifferent attitude of the defendant and the persons in charge of the administration and management of the affairs of the defendant. Apart from there being no ground for recalling of the decree in question, this court also does not find sufficient cause for condonation of the delay in filing the application. This court is of the opinion that for the purpose of filing the present application the defendant has woven a yarn which is totally incredible. It is a common ploy adopted by the defendant who has no defence to the plaintiff’s claim, to refrain from appearing in the suit and subsequently to apply for recalling of an ex parte decree that was passed by reason of the defendant not contesting the suit. By adopting this method, the defendant drags on the proceedings and deprives the plaintiff of its dues.

(20) It is also worth noting that no semblance of defence to the plaintiff’s claim in the suit has pleaded by the defendant in the present application. It is true that the company petition filed by the plaintiff against the defendant was disposed of without directing winding up of the defendant company but requiring it to furnish security for a sum of Rs. 13,74,309/- but that does not per se establish that the defendant has any reasonable defence to the plaintiff’s claim. In my opinion, in an application for recalling of an ex parte decree, the court is entitled to consider as to whether or not the defendant has a plausible defence to the plaintiff’s claim and the defendant is obliged to disclose the same in the recalling application. The defendant has not done so in this case.

(21) It is also significant that neither any of the directors, nor the secretary nor any principal officer of the defendant has affirmed the affidavit in support of the petition for recalling the decree. None of them has pledged their oath to the averments made in the petition. An alleged ‘authorised representative’ of the defendant has affirmed the affidavit in support of the petition. This amply demonstrates the cavalier approach of the defendant to the instant litigation. Further, this is also not in consonance with O. 29 R. 1 of the Code of Civil Procedure which provides that in suits by or against a corporation, any pleading may be signed and verified on behalf of the corporation by the secretary or by any director or other principal officer of the corporation who is able to depose to the facts of the case.

(22) For the reasons aforestated, this court is of the view that there is no merit in the application. No cause, far less, sufficient cause has been made out as to why the decree dated 15 June, 2015 should be recalled. Further, this court has been appraised that the decree has been put into execution and has been partly executed as well. In that view of the matter also, it would not be a proper exercise of discretion to recall the said decree.

(23) Accordingly, this application fails and is dismissed with costs assessed at Rs. 10,000/-.

(24) Urgent certified photocopy of this judgment and order, if applied for, be given to the parties upon compliance of necessary formalities.

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