Bombay High Court
Sunil B. Bhosale vs Kamal Organic Chemicals on 18 March, 2016
Bench: V.M. Kanade
appl.897.15.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL (L) NO.897 OF 2015
IN
NOTICE OF MOTION NO.1766 OF 2011
IN
SUIT NO.4351 OF 1996
WITH
NOTICE OF MOTION (L) NO.3283 OF 2015
IN
APPEAL (L) NO.897 OF 2015
IN
NOTICE OF MOTION NO.1766 OF 2011
ig IN
SUIT NO.4351 OF 1996
Sunil B. Bhosale
Indian Inhabitant carrying on
business in the name of
M/s.Hi-Tek Engineers as its
Sole Proprietor and having its office
at SaiSrushty River Valley Road,
Madonna Colony Extension,
Mandapeshwar, Borivali (W),
Bombay - 400 103. ...Appellant
Versus
Kamal Organic Chemicals
A Division of Kirti Manor Properties
and Hotels Private Limited, a Company
incorporated under the Companies
Act, 1956 and having its registered
office at Construction House - A,
Opposite Khar Telephone Exchange,
24th Road, Khar, Bombay. ...Respondent
SQ Pathan 1/26
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Mr. P. K. Dhakephalkar, Sr. Counsel with Mr. Y. V. Divekar, Ms. Ashwini
Pawar and Ms. Sayali Gharpure I/b M/s. Divekar & Co. for the Appellant.
Mr. K. R. Bulchandani with Mr. Anoop Sharma and Mr. Amit Nikam I/b
Mr. S. M. Kazi for the Respondent.
CORAM : V. M. KANADE &
REVATI MOHITE DERE, JJ.
RESERVED ON : 12th FEBRUARY, 2016.
PRONOUNCED ON : 18th MARCH, 2016
JUDGMENT ( Per Revati Mohite Dere, J.) :- :
1. The appellant has impugned the order dated 20 th November,
2015, passed by the learned Single Judge, by which his Notice of Motion,
seeking reconsideration of the condition, imposed by the learned Single
Court vide order dated 13th November, 2009 inasmuch as, it directs the
appellant to deposit a sum of Rs.1,50,00,000/-, came to be dismissed.
2. It will be necessary to set out in some detail, the factual matrix
of the case, as it has a chequered history ;
At the outset, we may note that the appellant is the original
defendant and the respondent, the original plaintiff. However, for the sake
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of convenience the parties will be referred hereinafter, as the 'defendant'
and the 'plaintiff'.
(a) The plaintiff filed a suit in this Court, being Suit
No.4351 of 1996 as against the defendant. According to the
plaintiff, the defendant was appointed as a Consultant for the project
and was entrusted with the work of consultancy - process design,
detailed engineering, fabrication and erection of the plant proposed
to be set up by the plaintiff at Lote Parshuram. The letter dated 30 th
October, 1993 appointing the defendant, also set out the scope of
work expected from the defendant. Pursuant to the said letter, the
defendant is stated to have submitted his quotation for the entire
work, as required for setting up of the said plant for the plaintiff.
The total price quoted by the defendant for different aspects of the
project was Rs.17.34 lakhs. The defendant is stated to have also
guaranteed the design workmanship and MMOC for a period of one
year from the date of supply. Accordingly, the plaintiff asked the
defendant to proceed with the work ; and is stated to have paid a
sum of Rs.11,25,000/- from time to time to the defendant, towards
supply of material and services rendered by the defendant, for the
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erection and commissioning of the plant. It is the plaintiff's case
that it was obligatory on the part of the defendant to erect and
commission the said plant and to provide back up services, in
respect of design, workmanship etc, for a period of one year from
the date of commissioning of the plant. The plaintiff has further
claimed that the defendant instead of undertaking the work of
commissioning of the plant, wrote a letter dated 14 th December,
1994 to them, stating that the commissioning of the plant cannot be
undertaken, for want of certain on-site facilities as enumerated in the
said letter. Thereafter, there was a series of correspondence
exchanged between the parties, each one defending their claim. It is
the plaintiff's claim, that despite payments being made to the
defendant, and the defendant having agreed to provide necessary
rectifications and service which were material for successfully
running the plant, failed to provide the same, as a result of which,
the plaintiff could not successfully run the machinery, resulting in
cost escalation and losses to the plaintiff. The plaintiff therefore,
vide Advocate's Notice dated 22nd March, 1996 called upon the
defendant to pay a sum of Rs.21,79,175/- being the loss suffered by
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the plaintiff on account of deficiencies in the erection and
commissioning of the plant, as per the debit note sent by the plaintiff
to the defendant. The defendant vide letter dated 8.9.1996 stated that
the debit note was unwarranted, unethical and unsubstantiated by
facts. According to the plaintiff, as the defendant failed and
neglected to pay the same, there was no alternative but to initiate
legal proceedings for recovery of the said amount. The plaintiff
relied on the correspondences exchanged between the parties to
show that the defendant had failed to erect and commission the said
plant, in accordance with the terms and conditions of the quotation
given by the defendant. The plaintiff has claimed that there were
several variations, contrary to the terms agreed upon by the parties,
in setting up of the plant, resulting in improper and dangerous
installation of the distillation column, sub-standard and second hand
quality of pipes valves and instruments and the defective fabrication
and improper laying of the pipe line by the defendant. The plaintiff
has further claimed that as a result of the aforesaid, they were
required to carry out the repairs and had to replace various portions
of the plant, to get proper results from the same, thus delaying the
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production. According to the plaintiff, as the actual production
started late, there was an escalation in the costs of the production,
resulting in net losses. Pursuant thereto, the plaintiff filed the
aforesaid suit on the premise, that the defendant had committed
breach of the terms and conditions and prayed that the defendant be
ordered to pay a sum of Rs.1,87,81,685/- with further interest on
Rs.1,50,24,900/- at the rate of Rs.10.5% per annum from the date of
the suit till payment and/or realisation. The said suit as filed on 7 th
November, 1996;
(b) On 23rd August, 2007, the suit was placed before the
learned Single Judge under the caption 'Undefended Suit for Ex-
parte Decree'. The learned Single Judge proceeded to hear the said
suit by observing that the defendant was served, however, he had
chosen not to contest the suit and that no written statement was
filed. Accordingly, the learned Single Judge decreed the suit in terms
of prayer clause (a) of the plaint with modification of the rate of
further interest i.e. at the rate of 6% per annum instead of 10.5% per
annum from the date of suit till payment of Rs.1,50,24,900/-. The
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suit was accordingly disposed of and decreed ex-parte ;
(c) Pursuant to the ex-parte decree passed by this Court vide
order dated 23rd August, 2007, the defendant took out a Notice of
Motion, being Notice of Motion No.3207 of 2009 in Suit No.4351
of 1996 seeking setting aside of the ex-parte decree. A preliminary
objection with regard to the maintainability of the said Notice of
Motion was taken by the plaintiff, however, the said objection was
not accepted and the Notice of Motion was held to be maintainable.
The learned Single Judge vide order dated 13 th November, 2009
allowed the Notice of Motion and set aside the ex-parte decree, on
the condition that if the defendant deposits a sum of
Rs.1,50,00,000/- within 12 weeks, the ex-parte order dated 23 rd
August, 2007 shall stand set aside. The aforesaid sum of
Rs.1,50,00,000/- was directed to be deposited with the Prothonotary
& Senior Master, High Court, Bombay, and invested in a Fixed
Deposit with a Nationalized Bank. Upon depositing the amount, the
defendant was permitted to file a written statement within eight
weeks from the date of the deposit. As per the order, if there was a
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default in compliance of the deposit of the aforesaid amount, the
decree would stand and the plaintiff would be entitled to execute
the same in accordance with law ;
(d) The said order dated 13th November, 2009, inasmuch as,
it directed the defendant to deposit a sum of Rs.1,50,00,000/-, was
challenged by the defendant before the Division Bench of this
Court, vide Appeal No.100 of 2010. It appears that the plaintiff too
had challenged the order dated 13th November, 2009, which set aside
the ex-parte decree. The Division Bench of this Court was pleased to
dismiss the said Appeals vide order dated 12th April, 2010.
(e) Being aggrieved by the aforesaid orders, to the extent
that it directed the defendant to deposit a sum of Rs. 1,50,00,000/-,
the defendant approached the Apex Court by way of an SLP, being
Special Leave to Appeal (Civil) No.24070 of 2010. On 6 th
December, 2010, the Apex Court issued notice to the plaintiffs,
subject to the defendant depositing a sum of Rs.50,00,000/- with the
Prothonotary and Senior Master of the Bombay High Court, within
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eight weeks from the date of the order. During the pendency of the
said SLP, the execution of the decree was stayed. Pursuant to the
said order, the defendant deposited a sum of Rs.50,00,000/- as
directed by the Apex Court with the Prothonotary and Senior Master
within the stipulated period. On 13 th May, 2011, when the matter
came up before the Apex Court, the learned counsel appearing on
behalf of the defendant sought permission to withdraw the SLP with
liberty to move the learned Single Judge for reconsideration of the
condition imposed for setting aside the ex-parte decree. Accordingly,
the SLP was dismissed as withdrawn. It was noted in the said order
dated 13th May, 2011 that if the defendant files an application as
proposed by him by 17th June, 2011, the learned Single Judge of the
High Court shall pass appropriate orders on it, after hearing both the
sides, in accordance with law. It may be noted, that the learned
senior counsel appearing for the plaintiff made a statement before
the Apex Court that the plaintiff will not execute the decree till the
final order is passed on the application filed by the defendant;
(f) Pursuant to the aforesaid order dated 13th May, 2011, the
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defendant filed an application before the learned Single Judge on
16th June, 2011 seeking reconsideration of the order of deposit of
Rs.1,50,00,000/- passed by the learned Single Judge;
(g) The aforesaid Notice of Motion which was filed by the
defendant came up before two learned Single Judges, who vide
orders dated 5th September, 2013 and 12th October, 2015 directed the
defendant to take steps to place the Notice of Motion before the
same Judge who had passed the order dated 13 th November, 2009,
more particularly, as it was for reconsideration of the order dated
13th November, 2009. Accordingly, the said Notice of Motion
No.1776 of 2011 filed in Suit No.4351 of 1996 was placed before
the learned Single Judge, who had passed the order dated 13 th
November, 2009. The learned Single Judge, after hearing the
parties, dismissed the Notice of Motion vide order dated 20th
November, 2015, observing that it was not a fit case for modifying
the condition of deposit already imposed vide order dated 13th
November, 2009. The present appeal is filed against the said order
dated 20th November, 2015.
SQ Pathan 10/26
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3. Mr. Dhakephalkar, learned Senior Counsel for the
defendant submitted that ex-parte was set-aside by the learned
Single Judge, after accepting the defendants explanation for not
remaining present in the proceedings. He contended that once having
accepted that the defendant was not served with the writ of summons as
required by law, the conditional order directing deposit of Rs.1,50,00,000/-
for setting aside the ex-parte decree was harsh and unwarranted. He
submitted that the condition directing the defendant to deposit a sum of Rs.
1,50,00,000/- was exorbitant and as such prayed for reconsideration/
modification of the said condition. He submitted that the Apex Court vide
order dated 13th May, 2011 had permitted the defendant to file an
application before the learned Single Judge for reconsideration of the order
of deposit of Rs. 1,50,00,000/- and as such, the learned Single Judge ought
to have considered the prayer of the defendant for modification of the
condition of deposit. He further submitted that the suit filed by the plaintiff
was a suit for damages which could be quantified, only after the evidence
was recorded and that it would be travesty of justice, if the defendant is
directed to deposit the said amount, without the damages being assessed.
He further submitted that the defendant with respect to the same transaction
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has also filed proceedings in the City Civil Court, being BCC Suit No.7617
of 1997, as against the plaintiff, which is pending. He further submitted
that the machinery which was supplied by the defendant to the plaintiff
admittedly was for a sum of Rs.17.34 lacs and as such the condition
seeking deposit of the decretal amount of Rs. 1,50,00,000/- was exorbitant
and harsh. He submitted that pursuant to the order of the Apex Court, the
defendant has deposited a sum of Rs. 50,00,000/- before the Prothonotary
and Senior Master, Mumbai in 2011 and that the defendant is ready to
deposit a sum of Rs. 25,00,000/-, without prejudice to his rights and
contention. According to Mr. Dhakephalkar, the secured amount as of
today, is over and above the actual machinery sold by the defendant to the
plaintiff. He therefore prayed that the condition imposed by the learned
Single Judge of deposit of Rs. 1,50,00,000/- before the Prothonotary and
Senior Master, Mumbai, be reconsidered/modified in the peculiar facts and
circumstances of the case.
4. Mr. Bulchandani, learned Counsel for the plaintiff vehemently
opposed the prayer for reconsideration/modification of the condition of
deposit of Rs.1,50,00,000/-. He submitted that the defendant has all around
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being procrastinating the case which was filed by the plaintiff in 1996. He
submitted that despite liberty being granted by the Apex Court in 2011, to
file an application before the learned Single Judge for reconsideration of
the prayer for deposit on/before 17th June, 2011, the defendant filed the said
application only on 16th June, 2011 and took no steps thereafter, to have the
said application listed before the appropriate Court. He submitted that
although he had not raised an objection before the learned Single Judge,
with regard to the maintainability of the application filed by the defendant,
seeking reconsideration of the order dated 13th May, 2011, he now wishes
to raise an objection with regard to the maintainability of the application.
He submits that the said application seeks review of the order dated 13 th
May, 2011 and as such is not maintainable. He submitted that the plaintiff
had suffered huge losses, due to the failure of the defendant to install the
machinery as per the terms and conditions, resulting in the plaintiff having
to shut down the plant. He submitted that considering the conduct of the
defendant, no indulgence whatsoever was warranted in the order, which is
impugned before us.
5. At the outset, we may mention that Mr.Bulchandani, learned
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counsel for the plaintiff, had raised a preliminary objection regarding the
maintainability of this appeal. In view of the objection raised, we heard
both the learned counsel for the defendant and the plaintiff and decided the
said issue vide order dated 28th January, 2016, and held that the said appeal
is maintainable.
6. Perused the papers and the impugned order. It appears that the
plaintiff had filed the suit in the year 1996 and as none appeared for the
defendant, the suit was placed before the learned Single Judge under the
caption of 'undefended suit for ex-parte decree'. It was observed in para 16
of the Judgment and order dated 23rd August, 2007 passed by the learned
Single Judge that the defendant was served, however, he has chosen not to
contest the suit and that no written statement was filed by the defendant.
The learned Single Judge having regard to the averments of the plaint and
the affidavit of Mr.Kanagali, Director of the plaintiff and the documents on
which the plaintiff placed reliance by leading his evidence, decreed the suit
in terms of prayer clause (a) of the plaint with modification in the rate of
interest. Accordingly, the defendant was directed to pay a sum of Rs.
1,50,24,900/- with interest at the rate of 6% per annum from the date of the
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suit till payment of the said amount.
7. Pursuant to the aforesaid ex-parte decree, which was passed by
the learned Single Judge on 23rd August, 2007, the defendant filed a Notice
of Motion seeking setting aside of the said ex-parte decree, alongwith a
motion for condonation of delay. The learned Single Judge was pleased
vide order dated 13th November, 2009 to condone the delay, as the delay
was explained satisfactorily and in the larger interest of justice and also
directed the defendant to pay costs of Rs.5,000/- to the plaintiff's advocate.
After condoning the delay, the learned Single Judge heard the parties and
allowed the notice of motion, and set aside the ex-parte decree vide order
dated 13th November, 2009. The Learned Single Judge in the said order
dated 13th November, 2009 observed in paras 7, 10 and 11 as follows :
"7] This takes me to the application itself. Mr.Kumbhakoni
submits that although the suit is instituted in the year 1996, the
writ of summons. has been served on 2nd July 2003. That writ of
summons is served in July 2003 is apparent from the
endorsement on the original writ of summons. He submits that
even the endorsement on the packet will show that the writ of
summons is served at an addressed from where the defendant
had already shifted business. Inviting my attention to the
acknowledgement card, Mr.Kumbhakoni submits that in the
affidavit in support of the notice of motion, the defendant has
pointed out on 3rd April 2000 that the partnership firm in the
name and style of which the defendant was carrying on business
SQ Pathan 15/26
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sold the office premises which were located at the address
mentioned in the acknowledgement card to one M/s.Sterling
Engineering and Consultancy Services Pvt.Ltd. The physical
possession was also handed over. Since April 2000, the
defendant is not in possession of the said premises. The office
has shifted to the address mentioned in the title of the present
notice of motion. The suit is filed against the defendant in his
personal capacity. The suit summons does not indicate that it
was served upon the defendant inasmuch as the
acknowledgement/ signature is not that of the defendant. In
these circumstances, this is a fit case where the ex parte decree
passed in the subject suit be set aside and an opportunity be
given to the defendant to defend the suit. It is also contended
that there is a cross suit filed by the defendant against the
plaintiff and the same is pending in this Court. In such
circumstances, interest of justice would be sub served if the ex
parte decree is set aside."
10] With the assistance of the learned Counsel for both
sides, I have perused this notice of motion and the affidavits in
support and reply. I have also perused the Annexures thereto as
well, including the writ of summons. While it is true that the suit
is instituted in the year 1996-97 and that there was a letter
addressed by defendant's Advocate, then engaged, yet, it is not
clear as to whether a vakalatnama was filed by the said Advocate
in terms of his letter. The record indicates that in a suit filed in
the year 1996, the writ of summons was served in the year 2003
and, thereafter, the suit came to be placed for ex parte decree.
Thus, there is some substance in the contention of
Mr.Kumbhakoni that the plaintiff cannot proceed on the basis
that the defendant had knowledge of the suit and the proceedings.
The record, prima facie, indicates that the suit summons was
served at an address set out in the cause title of the plaint.
Defendant claims to have shifted his business from this address.
Although, Ms.Castellino would urge that the shifting is nothing
but to next door premises, the Court cannot straight away ignore
the pleas raised by the defendant. In these circumstances, the
presumption about the regularity of service and knowledge of the
institution as well as hearing of the suit cannot be raised.
SQ Pathan 16/26
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Assuming that the communication from the defendant's Advocate
takes the matter out of the first part of Order IX Rule 13 of CPC
and the second proviso to the same is attracted, et, it is not as if
the ex parte decree cannot be set aside. The Court can also set it
aside if the defendant was prevented by any sufficient cause from
appearing when the suit was called out. I am satisfied that this
case on account of shifting of his premises and by the
Advocate's inaction the defendant is prevented from appearing
and defending the claim on merits. The defendant has made
out a cause for setting aside the ex parte decree.
11] The law on the point is well settled. Unless the conduct
is exhibiting utter negligence, callousness and complete lack of
bonafides,the Court must grant an opportunity to the parties to
prove their case and also defend a claim. Such an opportunity
should not be denied merely because there is some omission on
the part of the Pleader or Advocate engaged. In the present case,
it is not the case of the plaintiff that before the year 2003, the
copy of the plaint was served on the Advocate who had addressed
a letter and it is, thereafter, the negligence of the defendant and
their Advocate for which plaintiff cannot be blamed. The
defendant has pointed out on oath that he became aware of the
proceedings and the decree only when the attachment notice was
served. It is, thereafter, that he took steps and when he inspected
the record, it is revealed as aforementioned."
(Emphasis supplied)
8. It thus appears, that the learned Single Judge had accepted the
contention of the defendant, that on account of shifting of his premises and
due to the inaction of the Advocate, the defendant was prevented from
appearing and defending his claim on merits and on this count, set-aside the
ex-parte decree. The learned Judge while allowing the Notice of Motion,
imposed a condition directing the defendant to deposit a sum of Rs.
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1,50,00,000/- within twelve weeks, pursuant to which, the ex-parte decree
would be set-aside. It was further observed that if there was a default in
compliance of the said condition, the decree will stand and thereafter the
plaintiff was at liberty to execute the same in accordance with law.
9. It is also not in dispute, that the said order, only to the extent
that it imposed a condition of deposit of Rs.1,50,00,000/- on the
defendant, was challenged by the defendant before the Division Bench of
this Court. The Division Bench of this Court was pleased to dismiss the
appeal, preferred by the defendant essentially on the premise, that neither
had the defendant deposited the money within the stipulated period nor
had he got the time to deposit the money extended, nor had he secured any
interim relief, as a consequence of which the order never took effect and
the decree remained as it is. Consequently, the appeal preferred by the
plaintiff against the very same order, setting aside the ex-parte decree, was
also dismissed. Against the said orders, the defendant filed an SLP in the
Apex Court. Vide order dated 6th December, 2010, the Apex Court was
pleased to pass the following order :
"Issue notice subject to the petitioner depositing Rs.
50,00,000/- (Rupees fifty lakhs only) with the Prothonotary and
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Senior Master of the Bombay High Court within eight weeks
from today.
Mr. Dayan Krishnan, counsel accepts notice on behalf of
the contesting plaintiff.
Counter affidavit, if any, may be filed within eight weeks.
Put up immediately thereafter.
During the pendency of the special leave petition
execution of the decree shall remain stayed."
10. On 13th May, 2011, the Apex Court, was pleased to pass the
following order :
"In pursuance of order passed by this Court on
December 6, 2010, the petitioner has deposited a sum of Rs.
50,00,000/- (Rupees fifty lakhs only) with the Prothonotary and
Senior Master of the Bombay High Court.
After some arguments Mr. Ranjit Kumar, learned senior
counsel appearing for the special leave petition with liberty to
lmove the learned Single Judge for reconsideration of the
condition imposed for setting aside the ex-parte decree.
The special leave petition is dismissed as withdrawn.
In case, the petitioner files an application as proposed by
him by June 17, 2011, the learned Single Judge of the High Court
shall pass appropriate orders on it, after hearing both sides, in
accordance with law.
Mr. Mukul Gupta, learned senior counsel appearing for
the respondent states that the respondent shall not execute the
decree till the final order is passed on the application filed by the
petitioner."
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11. Admittedly, the defendant filed an application on 16th June,
2011. It appears prima-facie, that no steps were taken by the defendant to
have the matter listed on Board. Thereafter, the matter appeared on 5th
September, 2013 and 12th October, 2015. The learned Single Judges were
of the opinion that since the application was for modification of the order
dated 13th November, 2009, it would be appropriate to place the said
application before the same Judge who had passed the order dated 13th
November, 2009. Accordingly, the matter was placed before the learned
Single Judge, who after hearing the parties, passed the impugned order
dated 20th November, 2015. The learned Single Judge after hearing the
parties observed that it was not a fit case for modifying the condition of
deposit of Rs.1,50,00,000/-, for setting aside the ex-parte decree dated 23 rd
August, 2007. The learned Single Judge refused the request for
reconsideration of the condition of deposit, essentially on the ground, that
the initial order dated 13th November, 2009 was passed, after considering
the contentions of the parties and that merely because the matter was
carried to the Apex Court and liberty was granted to approach the Single
Judge, does not mean that the condition should be modified. It was also
observed that no material was brought on record to seek modification of
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the condition of deposit of Rs.1,50,00,000/-.
12. No doubt, the defendant has not been diligent in pursuing the
motion filed for reconsideration of the condition of deposit, inasmuch as,
he did not take any steps to pursue the motion, which was filed pursuant to
the liberty granted by the Apex Court in 2011. It also appears, that neither
had the plaintiff taken any steps to have the motion listed on board, more
particularly, as the statement made by the plaintiff's counsel before the
Apex Court, had bound them. However, certain facts cannot be ignored or
overlooked ; (i) that the ex-parte decree was set-aside by the learned
Single Judge vide order dated 13th November, 2009, after observing that
there was no proper service on the defendant and that the defendant had
made out a case for setting aside the ex-parte decree; (ii) that the
plaintiff's suit, is a suit for damages, which will have to be accessed and
quantified by leading evidence.
13. The plea raised by the learned Counsel for the plaintiff, before
us, that the motion seeking reconsideration of the condition of deposit was
infact, a review application and as such was not maintainable in law,
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cannot be accepted, as admittedly no such objection was raised by the
learned Counsel for the plaintiff, before the learned Single Judge. Even
otherwise, a motion seeking reconsideration/modification of the condition
of deposit of Rs.1,50,00,000/- cannot be said to be not maintainable.
14. It is not in dispute, that pursuant to the order passed by the
Apex Court, the defendant had deposited a sum of Rs. 50,00,000/- before
the Prothonotary and Senior Master, High Court, Bombay. The said amount
of Rs. 50,00,000/- has been invested by the Prothonotary and Senior
Master, in the year 2011 and as such, a substantial interest thereon must
have accrued till now. The learned counsel for the defendant has also
made a statement that the defendant is ready to deposit a further sum of
Rs.25,00,000/-, without prejudice to his rights.
15. We are conscious of the fact, that the defendant by his conduct
has tried to protract the hearing of the motion seeking reconsideration of
the condition of deposit, filed pursuant to the liberty granted by the Apex
Court. However, what cannot be ignored is the fact, that the ex-parte
decree was set-aside by the learned Single Judge, on the premise, that the
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defendant was not served with a copy of the writ of summons and after
being satisfied that on account of shifting of premises, due to Advocate's
inaction, the defendant was prevented from appearing and defending the
case. The defendant's plea in seeking to set aside the ex-parte decree also
cannot be said to be not bonafide, looking at the observations of the learned
Single Judge in setting aside the ex-parte decree. What also cannot be
ignored is that the plaintiff's suit is for damages, which will have to be
quantified by leading evidence and not on some admitted liability. What
also cannot be ignored is the fact, that the defendant has also filed a
recovery suit in the City Civil Court against the plaintiffs in 1997, with
respect to the same transaction, which is the subject matter of the Suit filed
by the plaintiff. It is well settled principle of law that a money decree is
not stayed unconditionally. The conditions must be reasonable, having
regard to all relevant factors and not onerous, harsh and unreasonable. We
are fortified, in our view, with the decision of the Apex Court in the case of
V.K.Industries and Others v/s M.P. Electricity Board, Rampur, Jabalpur 1.
In para 5 of the said judgment, it is observed thus :-
"5. Ordinarily, a money decree is not stayed unconditionally and the
judgment-debtor would be put on terms. Even so, such conditions must
1 (2002) 3 SCC 159
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be reasonable having regard to all relevant factors. Although ex parte
decree was passed against the appellants, once it is set aside on the
ground of non-service of suit summons the money decree did not exist
for execution. It is no doubt true that in restoring a case the court may
impose conditions to deposit costs or the decretal amount or some
portion thereof or to ask the defendant to give security but such
conditions should be reasonable and not harshly excessive. In the
impugned order the appellants are put on terms to deposit a sum of
Rs.2,00,000/- and to furnish a bank guarantee for the remaining suit
claim within a period of two months. In our view these terms are
onerous, harsh and unreasonable in the facts and circumstances of the
case and that too even before the trial of the suit on merits."
16. The defendant has already deposited Rs.50,00,000/- in 2011.
Mr.Dhakephalkar had made a statement that the defendant without
prejudice to his rights, is ready to deposit a further sum of Rs.25,00,000/-.
Keeping the aforesaid principles in mind, we are of the opinion, in the
peculiar facts and circumstances of this case, that it would be necessary
and in the interest of justice, to modify the condition of deposit of
Rs.1,50,00,000/- imposed vide order dated 13th September, 2009.
Accordingly, the defendant shall in addition to Rs.50,00,000/- which is
deposited in 2011, deposit an additional sum of Rs.25,00,000/- with the
Prothonotary and Senior Master, High Court, Bombay within six weeks
SQ Pathan 24/26
appl.897.15.doc
from today. The Prothonotary and Senior Master, High Court, Bombay to
invest the said amount in Fixed Deposit with a nationalized Bank, initially
for a period of one year, and which shall be renewed from time to time.
Upon depositing the said amount, the defendant is permitted to file his
written statement within one week from the date of deposit. Considering
that the Suit is of the year 1996, it would be open to the parties to approach
the learned Single Judge to request for an early hearing which would be
considered by the learned Judge, on its own merits. Needless to state, that
if there is a default in compliance of the deposit of the said amount of
Rs.25,00,000/- the decree would stand and the plaintiff will be entitled to
execute the same in accordance with law.
17. Considering the defendant's conduct in not taking the motion
seeking reconsideration of the order dated 13th September, 2009, directing
deposit of Rs.1,50,00,000/- on Board for almost 4 years, we deem it
appropriate to impose costs on the defendant, which is quantified at
Rs.1,00,000/-. The said costs be paid to the plaintiff within three weeks
from today.
SQ Pathan 25/26
appl.897.15.doc
18. Appeal stands disposed of on the aforesaid terms.
19. In view of the aforesaid, Notice of Motion does not survive and
is accordingly disposed of.
REVATI MOHITE DERE, J. V. M. KANADE, J.
SQ Pathan 26/26
