Bombay High Court
M/S. Shakti Bioscience Ltd vs M/S. Mody Chemi Pharma Pvt. Ltd on 26 September, 2016
Bench: Dr. Shalini Phansalkar-Joshi
(25) FAST 25938-16
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
Amk
FIRST APPEAL (STAMP) NO. 25938 OF 2016
WITH
CIVIL APPLICATION NO. 4212 OF 2016
WITH
CIVIL APPLICATION NO. 4213 OF 2016
IN
FIRST APPEAL (STAMP) NO. 25938 OF 2016
M/s. Shakti Bioscience Ltd. ]
a Company registered under the ]
Companies Act, 1956, having its ]
Factory and Office at Plot No.411/1, ]
L.I.C. Sector, Silvassa Road, G.I.D.C.
ig ]
Vapi - 396 195, Gujarat. ] .. Appellant
Vs.
1. M/s. Mody Chemi Pharma Pvt. Ltd. ]
a Company registered under the ]
Companies Act, 1956, having its ]
Office at Unit No.407/408/409, ]
Swastik Disa Corporate Park, ]
Near Kotak Mahindra Bank, ]
Opp. Shreyas Cinema, ]
L.B.S. Marg, Ghatkopar (West), ]
Mumbai - 400 020. ]
2. Mr. Sadashiv Kanyana Shetty ]
Managing Director of Defendant No.1, ]
residing at 18/A, Tower 'D', ]
Viceroy Park, Opp. Thakur Cinema, ]
Thakur Village, Kandivali (East), ]
Mumbai - 400 101. ].. Respondents
Mr. O. S. Kutty for the Appellant.
Mr. N. S. Charipalli for Respondent No.1.
Mr. Subi S. for Respondent No.2.
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(25) FAST 25938-16
CORAM : DR. SHALINI PHANSALKAR-JOSHI, J.
DATE : 26th SEPTEMBER, 2016.
ORAL JUDGMENT
1. Admit. With consent of learned counsel for both the parties,
heard finally at the stage of admission itself as the issue involved in this
appeal is very short one.
2. This appeal is preferred against the ex parte Judgment and
decree dated 04.11.2015 passed by the City Civil Court, Mumbai under the
provisions of Order 37 Rule 2 of the CPC in a summary suit instituted by
respondent No.1 against the appellant.
3. As per the appellant, the summons of the said suit was not
served on the appellant on its addresses both at Mumbai and also at Vapi,
Gujarat. Only when the appellant came to know about the execution
proceedings and received the notice thereof from the Court, the appellant
made inquiry and came to know about the passing of ex parte decree.
The appellant, therefore, filed Notice of Motion No. 2342 of 2016 before
the Trial Court for setting aside the ex parte decree. The said Notice of
Motion was filed under Order 37 Rule 4 of the CPC. The Trial Court
however rejected the said Notice of Motion vide its order dated
11.08.2016. Hence, being aggrieved thereby, this appeal is preferred
challenging ex parte Judgment and decree as passed by the Trial Court
(25) FAST 25938-16
and also challenging the order dated 11.08.2016 on the Notice of Motion
by submitting that the Trial Court vide the said order rejected the Notice of
Motion filed by the appellant for setting aside the ex parte decree as the
Trial Court considered the application as if it was for review of the
Judgment and decree.
4. It is urged by learned counsel for the appellant that the
provisions of Order 37 Rule 4 of the CPC specifically empower the Trial
Court to set aside the ex parte decree under special circumstances and
gives leave to the defendant to appear and defend the suit, if, it is deemed
reasonable to do so and on such terms as the Court may think fit. In the
instant case, it is submitted by the learned counsel for the appellant that
the Trial Court has totally ignored the relevant provisions of the law laid
down in the various authorities relied upon by the learned counsel for the
appellant, to point out that the failure to serve the summons is a special
circumstance for setting aside the ex parte decree, under Order 37 Rule 4
of the CPC.
5. Learned counsel for the appellant has also drawn attention of
this Court to the affidavit filed by the appellant herein stating that the
service of summons was not made on the appellant at its Head Office at A-
103, Bhakti Apartment, Jambli Gali, Opp. Jain Temple, Near Moksh Plaza
Mall, Borivali (West), Mumbai - 400 092 or its registered office and factory
(25) FAST 25938-16
address at Plot No.411/1, L.I.C. Sector, Silvassa Road, G.I.D.C., Vapi,
Gujarat. It is urged that, in view of this affidavit and also considering the
provisions of Order 37 Rule 4 of the CPC, the Notice of Motion preferred
by the appellant before the Trial Court for setting aside the ex parte decree
needs to be allowed, so that the appellant will get an opportunity to contest
the suit on merits, especially, when the appellant is having strong case of
defence. Learned counsel for the appellant submits that the appellant is
ready to abide by any conditions imposed by this Court, like the payment
of costs to respondent No.1 and also for expeditious hearing of the suit.
6. Learned counsel for respondent No.1 has, however, submitted
that the Trial Court has, only after being satisfied on the basis of affidavit of
service filed by respondent No.1 herein, passed the order of proceeding
with the suit ex parte. The Trial Court has then considered all the
evidence produced by respondent No.1 and thereafter only decreed the
suit. Now, the said decree is also put to execution. Therefore, according
to learned counsel for respondent No.1, no case is made out for setting
aside the ex parte decree and the Trial Court has rightly rejected the
Notice of Motion.
7. Having heard submissions advanced by the learned counsel
for both the parties, certain facts need to be noted. In the first place,
admittedly the suit was filed before the Trial Court as a Summary Suit No.
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3624 of 2013. It was clearly a money suit for the recovery of sum of
Rs.41,43,235/- with further interest, towards the sale of goods. Therefore,
the suit was filed under the provisions of Order 37 of the CPC. Para 5 of
the impugned Judgment of the Trial Court Court reveals that the Writ of
Summons was transmitted through RPAD and was duly served on the
present appellant while another Writ of Summons forwarded to respondent
No.2 returned unclaimed. The Trial Court considered it to be a good
service and as none of the defendants therein i.e. the appellant and
respondent No.2 appeared, the suit was proceeded ex parte.
8. Immediately, when the appellant came to know about the ex
parte decree passed in the suit, when the appellant received the notice of
execution proceeding, the appellant filed Notice of Motion No. 2342 of
2016 before the Trial Court with a specific averment made therein that this
Notice of Motion was under Order 37 Rule 4 of the CPC for setting aside
the ex parte decree. The provisions of Order 37 Rule 4 of the CPC read
as follows:
"4. Power to set aside decree.- After decree the Court
may, under special circumstances set aside the decree, and
if necessary stay or set aside execution, and may give leave
to the defendant to appear to the summons and to defend
the suit, if it seems reasonable to the Court so to do, and on
such terms as the Court thinks fit."
9. These provisions abundantly make it clear that whenever a
decree is passed in a summary suit, the Court has the special power to set
(25) FAST 25938-16
aside the said decree under special circumstances and to grant leave to
the defendant to appear to the summons and to defend the suit, if it seems
reasonable to the Court to do so and on such terms as the Court thinks fit.
These powers conferred under Order 37 Rule 4 of the CPC aim at
dispensing substantial cause of justice to the parties so as to decide the
matter on merits. This provision thus specifically provide for setting aside
the ex parte decree and giving leave to the defendant to defend the suit in
special circumstances. What can be the special circumstances, is also
laid down in various authorities like; (1) P.N. Films Ltd. and Anr. Vs.
Overseas Films Corporation Ltd. AIR 1958 Bom 10, (2) Fountainhead
Promotions of Events Pvt. Ltd. Vs. Gitanjali Lifestyl Ltd., Notice of
Motion No. 1902 of 2012 in Summary Suit No. 874 of 2012 decided on
15.07.2013 and (3) Rajnikumar Vs. Suresh Kumar Malhotra, Appeal
(Civil) No. 2538 of 2003, decided on 28.03.2003, which are relied upon by
the learned counsel for the appellant before the Trial Court and which the
Trial Court has considered in para 3 of its impugned order passed below
the Notice of Motion. It is stated that in all the authorities which are
mentioned in para 3 of the order, that failure to serve the summons is a
special circumstance for setting aside the ex parte decree as per Order 37
Rule 4 of the CPC.
10. In the instant case, the very ground on which the appellant is
seeking setting aside of the ex parte decree, is the non receipt of Writ of
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Summons. The appellant has filed the affidavit to that effect in the Notice
of Motion. In para 3 of the said affidavit, the appellant has made a
categorical statement that the appellant has not received the Writ of
Summons of the suit either on his address at Head Office in Borivali or at
registered office at factory at Vapi, Gujarat. In such situation, it goes
without saying that the Trial Court should have allowed the Notice of
Motion filed by the appellant herein for setting aside the ex parte decree.
11. The impugned order passed by the Trial Court, especially, the
observations made in para 8 of the said order however reveals that the
Trial Court has proceeded on the presumption that as the notice sent by
RPAD has returned with acknowledgment, it has to be presumed that the
notice was duly served on the appellant. When admittedly this
presumption is controverted by the appellant by filing affidavit on oath, the
Trial Court should have held the presumption to stand as rebutted and set
aside the ex parte decree. However, the observations made by the Trial
Court in para 11 of the impugned order reveal that the Trial Court has
considered that it cannot reverse its own order unless it comes within the
purview of Order 47 of the CPC. The Trial Court further observed that as
the Notice of Motion filed by the appellant was not an application for
review of the Judgment and decree, the Trial Court cannot take into
consideration the defence raised by the appellant herein and accordingly,
the Trial Court dismissed the said Notice of Motion. Needless to state that
(25) FAST 25938-16
the Trial Court has thus totally misguided itself while rejecting the said
Notice of Motion on consideration that the Notice of Motion is as good as a
review application. It, therefore, follows that the impugned order passed by
the Trial Court of rejecting the Notice of Motion cannot be upheld.
12. Once it is held that under Order 37 Rule 4 of the CPC non
service of summons is considered to be the special circumstance for
setting aside the ex parte decree, the Notice of Motion preferred by the
appellant on the very same ground needs to be allowed thereby giving an
opportunity to the appellant to defend the suit on such terms, as this Court
may think fit.
13. Considering that the decree is for the amount of
Rs.41,43,235/- along with future interest thereon, however the principal
amount was only of Rs.26,13,380/-, the decree can be set aside subject to
costs of Rs.50,000/- to be paid by the appellant to respondent No.1 and
also subject to condition that appellant deposits in the Trial Court the
principal amount of Rs.26,13,380/- and both the parties co-operate to the
Trial Court for expeditious disposal of the suit.
14. Accordingly, the appeal is allowed.
15. The impugned order passed by the Trial Court in Notice of
(25) FAST 25938-16
Motion No.2342 of 2016 is set aside. The said Notice of Motion is allowed.
16. As a result the ex parte Judgment and decree passed by the
Trial Court dated 04.11.2015 is set aside.
17. The appellant is granted leave to appear in the suit and to
defend the suit subject to payment of costs of Rs.50,000/- to respondent
No.1 and subject to deposit the principal sum of Rs.26,13,380/- within four
weeks from today in the Trial Court.
18. Both the parties are accordingly directed to appear before the
Trial Court on 30.11.2016.
19. Needless to state that both the parties will co-operate with the
Trial Court for expeditious hearing of the suit.
20. All the civil applications in this appeal, having become
infructuous, are also disposed of finally.
[DR. SHALINI PHANSALKAR-JOSHI, J.]
