Delhi High Court: Sets Aside Ex-Parte Order in Recovery Suit Due to Procedural Irregularities
Case title: M/S Gardenia India LTD & ANR VS DR Rakesh Kumar (HUF)
Case no.: C.M.(M) 137 OF 2020, AND CM APPL. 4642 OF 2020
Dated on: 14TH May 2024
Quorum: Hon’ble Ms. Justice Shalinder Kaur.
FACTS OF THE CASE
The present petition has been preferred invoking the supervisory jurisdiction of this Court under Article 227 of the Constitution of India. The petitioners are aggrieved by the order dated 25.09.2019 passed by the learned District Judge-04, North-West, Rohini Courts, Delhi (hereinafter referred to as “Trial Court”) in Civil Suit bearing no. 662/2017, titled as “Dr. Rakesh Kumar HUF vs. M/s Gardenia India Ltd. & Ors.” wherein the learned Trial Court dismissed the application filed by the petitioners under Order IX Rule 7 of Civil Procedure Code, 1908 (hereinafter referred to as “CPC”) for setting aside the ex-parte order dated 06.12.2018.
CONTENTIONS OF THE APPELLANT
The learned counsel for petitioners submitted that petitioner no.1 is a body corporate and petitioner no.2 is the chairman of petitioner no.1 who have been impleaded as defendant nos.1 and 2 in the suit filed by the respondent seeking recovery of Rs. 40,60,000/- with pendente lite and future interest. Further submitted that from 29.01.2018 till 06.12.2018, fresh summons was not ordered to be served upon petitioner nos.1 and 2 as the respondent and his counsel kept taking adjournments on one pretext or the other. And also, he stated under Section 138 of the Negotiable Instrument Act. The petitioner company received the summons of the aforesaid case and appeared before the Court of the learned Metropolitan Magistrate, where they moved an application for compounding the case.
The learned counsel submitted that the respondent never informed the Court or the petitioners that a civil suit arising out of the same facts and on the basis of same dishonoured cheques has been filed and is pending before the learned Trial Court. The learned counsel submitted that on one occasion, an official of the petitioner company was trying to locate the orders of the complaint case and was shocked to discover on the website the pendency of a civil suit before the learned Trial Court. Thereafter, the petitioners engaged a counsel and upon inspection of the Trial Court record, it came to the knowledge of the petitioners that they had been proceeded ex-parte vide order dated 06.12.2018. The learned counsel also submitted that since the respondent was aware of the truth regarding the service reports, he did not even choose to furnish reply to the application moved on behalf of the petitioners under Order IX Rule 7 CPC. Nonetheless, the learned Trial Court chose to dismiss the application of the petitioners and imposed a cost of Rs. 5,000/-.
CONTENTIONS OF THE RESPONDENTS
The learned counsel for respondent controverted the submissions made on behalf of the petitioners and contended that the petitioners have filed an application seeking to set aside the ex-parte order dated 06.12.2018 passed against them on false and concocted facts. It was also submitted that the learned Trial Court has passed a detailed order regarding the service reports and the steps taken by the respondent to serve the summons on the petitioners. Further, the learned counsel submitted that the petitioners were well aware of the present proceedings and deliberately chose not only to avoid the summons of the present case but also failed to appear after being duly served with the summons, with the purpose of delaying the trial of the suit. This conduct of the petitioners has been aptly recorded by the learned Trial Court in the impugned order. It is submitted that the impugned order is based upon sound reasoning therefore does not require any interference by this Court.
LEGAL PROVISIONS
Order IX Rule 7 of Civil Procedure Code, 1908: It empowers the court to allow the defendant to contest the case.
Article 227 of the Constitution of India: Every High Court shall have superintendence over all courts and tribunals throughout the territories in relation to which it exercises jurisdiction
Section 138 of the Negotiable Instrument Act: Penalizes the dishonour of any cheque which has been issued in the discharge of the whole or part of “any debt or other liability”. And the liability of the guarantor and principal debtor is coextensive. Hence, the guarantor cannot escape liability under section 138, N.I.
COURT’S ANALYSIS AND JUDGEMENT
The respondent instituted the present civil suit, which came to be listed before the learned Trial Court on 04.08.2017. However, on that date, the learned Presiding Officer was on leave and the matter was posted for consideration on 11.08.2017. On the said date of hearing, the summons of the suit and notice of the interim application were ordered to be served on the petitioners on filing of PF/RC, returnable on 29.09.2017. After learning of this ex-parte order, the petitioners moved an application under Order IX Rule 7 CPC wherein the petitioners put forth the facts and circumstances of the case including the fraud played upon by the respondent in manipulating the service report and filing false affidavits contrary to the judicial record. However, the learned Trial Court did not consider the above submissions and summarily dismissed the application moved on behalf of the petitioners. The learned Trial Court passed directions for defendant no. 2 to file written statement within three weeks with copy to the opposite side and in the meanwhile, ordered for issuance of fresh summons of the suit and notice of the interim application against the petitioner nos. 1 and 2 returnable on 29.01.2018, the learned Presiding Officer was on leave and the respondent had moved an application under Order VIII Rule 1 and 10 CPC. For service of the petitioner nos. 1 & 2, steps were not taken by the respondent. On the subsequent date of hearing, no one had appeared on behalf of the petitioners and the matter was listed for 07.06.2018. On the said date of hearing, again there was no appearance on behalf of the petitioners. The counsel for the respondent requested an adjournment to furnish the service report on affidavit with respect to petitioner nos.1 and 2. Therefore, the matter was posted for adjourned for further proceedings to 12.07.2018. The learned Trial Court observed that the counsel for the respondent had filed two original postal receipts, both dated 26.12.2017, in the name of petitioner nos.1 and 2 along with a copy of the tracking report which was already on record. Further, the learned Trial Court observed that the service of petitioner nos.1 and 2 was complete as per the tracking record and deemed it to be a due service. Since the petitioners did not put an appearance on 06.12.2018 till 02:12 P.M., consequently, they were proceeded ex-parte with the learned Trial Court holding that they were not interested in defending the case. The matter came to be listed for ex-parte evidence by way of affidavit on 11.01.2019. Thereafter, the application was moved on behalf of the petitioners to set aside the said ex-parte order, which came to be dismissed vide the impugned order.
The copy of the notice issued to the petitioners in the complaint case filed under Section 138 Negotiable Instrument Act has also been placed on record. From the said notice, it transpires that the same address of petitioners has been mentioned, which has been disclosed in the present suit. However, before the learned Metropolitan Magistrate, the notices were served on the petitioners and they appeared before the Court. Having considered the above, the facts & circumstances as discerned, the impugned order dated 25.09.2019 is set aside and the ex parte order dated 06.12.2018 passed by the learned Trial Court is recalled, subject to cost of Rs. 30,000/- (Rupees Thirty Thousand only) to be paid to the respondent by the petitioners on the next date of hearing before the learned Trial Court. Consequently, the petition along with pending application is allowed.
“PRIME LEGAL is a full-service law firm that has won a National Award and has more than 20 years of experience in an array of sectors and practice areas. Prime legal fall into a category of best law firm, best lawyer, best family lawyer, best divorce lawyer, best divorce law firm, best criminal lawyer, best criminal law firm, best consumer lawyer, best civil lawyer.”
Judgement Reviewed by – HARIRAGHAVA JP
Click here to read the judgement
