Hoechst Ag & Ors. vs Unisule Pvt. Ltd.
1998 Latest Caselaw 202 Del

ORDER

K.S.Gupta, J.

1. This order will govern the disposal of IAs 9808/96 & 78/97.

2. In IA 4949/96 under Order IX Rule 13 read with Section 151 CPC, the defendant has filed IA No. 9808/96 under Section 151 CPC wherein it is alleged that the plaintiffs filed suit for permanent injunction, infringement of trade mark, passing off, copy right and damages etc. against the defendant. By an order dated 12.2.96 defendant was proceeded ex parte on the basis of the service report dated 11.7.95, 28.11.95 and 8.2.96. Defendant was, however, not served with the summons of the suit on any of the said dates and it came to know for the first time on 19.5.96 in regard to the suit having been decreed from a news item in 'Times of India'. Immediately thereafter defendant engaged and instructed the counsel to have the inspection of the record. It is alleged that the plaintiff has taken out execution being No. 149/96 and in case the experte decree is executed, the defendant will suffer irreparable injury. Defendant has got a prima facie case and balance of convenience also lies in its favour. It was prayed that till the disposal of IA No. 4949/96, execution of ex parte decree be stayed.

3. In the reply, plaintiffs have inter-alia alleged that defendant was served with the process through the process server on 11.7.95 28.11.95, 13.1.96 & 8.2.96. Defendant also filed caveat petition in the Court. Despite service of the summons/notice the defendant failed to appear in Court, therefore, it was proceeded ex parte. It is stated that the story set up by the defendant is an afterthought and it was fully aware about the pendency of the suit from the very beginning. Preliminary decree for Rs. 5,00, 000/- as well as of the costs of the suit to the tune of Rs. 10,407.45 stand passed against the defendant and the execution can be stayed only on deposit of the said amounts.

4. IA 78/97 was filed by the plaintiffs with the prayer that the defendant be directed to deposit the decretal amount.

5. Relying on the decisions in Kunj Behari Lal aliaunji Las Vs. Kashi Prasad and Narayanan Chettiar Vs. Chidambaram Chettiar, AIR 1940 Madras 585, the submission advanced by the learned counsel of the defendant was that no order requiring the defendant to deposit the amounts of damages and costs or to furnish security in lieu thereof can be legally passed at this juncture in IA No.9808/96 and the order dated 18.10.96 whereby execution of the money part of the decree was stayed thus deserves to be made absolute. On the other hand, relying on the decisions in Lakshmi Oil Co. Vs. Aggarwal Oil Co. 1974 RLR 682 and Brahm Sarup Vs. Dhapi Nahata, 1982 RLR 118, contention advanced by the learned counsel for the plaintiffs was that the provision contained in Order IX Rule 13 CPC does not prohibit the Court in directing the defendant to deposit the amounts of the damages and costs or furnish security as a condition for stay of the execution proceedings. As a part of this submission it was further argued by him that the defendant was served three times with the summons of the suit and had knowledge of the pendency the case, still it failed to appear in Court. Therefore, the execution be stayed only on deposit of the amounts of damages and costs in Court. In both the decisions in Kunj Behari Lal and Narayanan Chettiar's cases (supra) rendered by the Allahabad and Madras High Courts respectively it was held that under Order IX Rule 13 CPC stay of the execution of the ex parte decree cannot be made conditional. However, as per the ratio in Lakshmi Oil Co. and Brahm Sarup's cases (supra) rendered by this Court, order of stay of execution of ex parte decree can be made conditional by the Executing Court. Agreeing with the view expressed in both the said cases, submission referred to above advanced on behalf of the defendant is repelled being without merit.

6. This takes me to the latter limb of the argument advanced on behalf of the plaintiffs. Defendant is alleged to have been served with the summons thrice on 11.7.95, 28.11.95 and 8.2.96. As per the report of the process server one Lalit, manager export of the defendant received the summons on 11.7.95. Endorsement on the back of the summons also bears the initials of Sh. Lalit besides the stamp of the defendant-company. Report dated 28.11.95 of the process server on the back of the summons suggests that the summons was delivered on the manager of the defendant-company. Signature of one Vinay Dutt with the seal of defendant-company appears on the back of summons in taken of having received a copy thereof. Further summons was re-

ceived by one Puran Singh on behalf of the defendant-company on 8.2.96 as per the report and the endorsement appearing on the back of the summons issued for 12.2.96. In view of the stand taken by the defendant in regard to non-service of the summons, statements of Pavail Garg, managing director of the defendant and Rajiv Malhotra, employed with the defendant-company during the period February 1994 to August 1996, were recorded on 20.3.97. It is in the statement of said Pavail Garg that no person by the name of Vinay Dutt or Puran Singh was in the employment of the defendant-company at any point of time. Lalit Narang was employed with the defendant but the person who signed the summons on 11.7.95 is not that Lalit not did he sign it. It is further in his statement that Pradeep Narang, brother of Lalit Narang is working with the defendant-company for the last five years and both Pradeep and Lalit Narang are living together at Sonepat. It is in the statement of Rajiv Malhotra that the pay-rolls of the employees whether of the offices of Sonepat or Delhi, are maintained at Sonepat and he can bring the pay-roll of the employees tomorrow or any other date. After having recorded the said statements, defendant was directed to produce Lalit Narang and the pay-roll and attendance register of the employees of the defendant both at Delhi and Sonepat on 3.4.97. After having taken dates to comply with that order finally on 11.9.97 Sh. Sanjeev Sachdeva appearing for the defendant made the statement that Lalit Narang is no more in the service with the defendant and that although he had intimated the defendant to make available the requisite record nobody has responded on its behalf and he is not in a position to produce the records. Observation particularly made in paras No. 17 & 18 in Brahm Sarup's case (supra) which are relevant read thus:

"However, in relation to the application u/s 151 of the CPC for ad interim relief one has really to examine the question of prima facie nature of the case balance of convenience and irreparable lose. In examining prima facie nature of the case, the court can examine prima facie the circumstances on which the decree was Obtained, the prima facie nature of the claim of the tenant the premises in dispute, namely latrine and bath room `were part of the tenancy in relation to room on the mezzanine floor. It appears to me that this aspect of the case has been completely overlooked by the learned trial court and instead application was rejected on the ground that it was premature and on the principle of lack of irreparable loss without going into the question of prima facie nature of the case and balance of convenience. Since the grounds on which the application was rejected are erroneous.I am constrained to set aside the order.

Looking at all circumstances of the case I also direct in exercise of submit powers of this court that the application for setting aside the ex parte decree be transferred to another court and further direct that the application filed u/s 151, CPC for staying of the ex parte decree shall be heard again by the transferee court and decided afresh.

7. Considering the prima facie nature of this case, I feel that the execution deserves to be stayed only on the defendant's depositing in cash 1/4th amount of the damages and costs and furnishing of the security for the balance 3/4th amount in question to the satisfaction of the Registrar within two weeks from today. Order accordingly.