Satya Infrastructure Ltd & Ors vs Satya Builders Pvt Ltd
2015 Latest Caselaw 5692 Del

$~3.
*      IN THE HIGH COURT OF DELHI AT NEW DELHI
+      CS(OS) 483/2011
       SATYA INFRASTRUCTURE LTD & ORS             ..... Plaintiffs
                      Through: Ms. Sangeeta Goel, Advocate

                        versus

      SATYA BUILDERS PVT LTD                     ..... Defendant
                     Through: Mr. M.K. Sethi, Advocate with
                     Mr. Satinder Singh Bawa, Advocate
      CORAM:
      HON'BLE MS. JUSTICE HIMA KOHLI
                     ORDER

% 07.08.2015 I.A. 4344/2015 (by the defendant u/O IX R 13 CPC)

1. The present application has been filed by the defendant praying

inter alia for setting aside the ex-parte judgment and decree dated

30.4.2013.

2. Before referring to the arguments advanced by the learned counsel

for defendant, it is considered necessary to narrate the sequence of dates

and events that had led to the passing of the ex-parte judgment and

decree dated 30.4.2013.

3. The Plaintiff company, Satya Infrastructure Ltd. which is in the

business of real estate and has built a large number of commercial and

residential complexes all over India, has instituted the present suit for

permanent injunction, for restraining the defendant, "Satya Builders (P)

Ltd." from infringement of its registered trademark, "Satya" which also

appears to be its housemark since the year 1986.

4. As per the records, summons were issued in the suit on 28.2.2011,

returnable on 12.8.2011. On the same date, an exparte ad-interim

injunction order was passed restraining the defendant from using the

mark "Satya" or any other trademark/trading name containing the

trademark "Satya" or any of the composite marks of the plaintiff

containing the mark, "Satya", which would amount to infringement of the

plaintiff's registered trademark. The defendant/company had entered

appearance in the suit through Mr. Rajat Sharma, its Director on

05.10.2011. On the said date, the parties had stated that the case had

been amicably settled between them and a compromise application shall

be moved in due course. It was further requested that the case be placed

before the Court for the parties to make appropriate submissions in that

regard. At the joint request of the learned counsel for the plaintiff and the

representative of the defendant company, the case was directed to be

placed before the court on 01.12.2011.

5. On 01.12.2011, none had appeared for the defendant. Counsel for

the plaintiff had informed the court that the case had been amicably

settled between the parties, and he would be moving an application for

seeking withdrawal of the suit. At the request of the learned counsel for

plaintiff, the matter was first adjourned to 9.12.2011 and then to

15.12.2011.

6. In the meantime, on 09.12.2011, the parties had filed a joint

application under Order XXIII Rule 3 CPC registered as I.A. 20182/2011.

The said application was listed before the Court on 15.12.2011 and on the

said date, though the plaintiffs were duly represented, none had appeared

on behalf of defendant. As a result the said application was adjourned to

20.12.2011.

7. On 20.12.2011, counsel for plaintiff had sought leave to withdraw

the compromise application, which was accordingly dismissed as

withdrawn and the case was adjourned to 16.1.2012, for a settlement.

Pertinently, even on 20.12.2011 none had appeared for the defendant. On

16.1.2012, counsel for the plaintiff had stated that the draft compromise

application had been forwarded to the defendant and she had sought two

weeks time to file the same. At request, the case was adjourned to

18.4.2012. Thereafter, the case was adjourned on three occasions to

enable the parties to file the compromise application but no such

application came to be filed. Pertinently, in all this duration, none had

appeared for the defendant.

8. On 25.9.2012, having regard to the fact that the defendant had

stopped appearing after being served with the summons in the suit, it was

proceeded against ex-parte and the case was directed to be placed before

learned Joint Registrar for recording the plaintiff's ex-parte evidence. The

plaintiff's ex-parte evidence had concluded on 08.2.2013 and the suit was

placed before the Court on 18.4.2013. Finally, on 30.4.2013, the ex-parte

judgment and decree was passed in favour of the plaintiff in terms of the

prayers made in para 28 (i) & (ii) of the plaint and further, in view of the

fact that the defendant had deliberately stayed away from the present

proceedings after having entered appearance, damages to the tune of `2

lacs were awarded in favour of the plaintiff.

9. After about 22 months, the present application was filed by the

defendant for setting aside the ex-parte judgment and decree dated

30.04.2013. The explanation offered by learned counsel for the defendant

for setting aside the ex-parte judgment and decree is that after the

defendant was served with the summons in the suit, the directors of the

company had felt that they did not wish to get involved in a legal battle

and expressed their willingness to compromise the case with the plaintiffs

and pursuant thereto, an amicable settlement was arrived at between the

parties. He states that though the terms and conditions of the settlement

that had been arrived at between the parties were different, the

compromise application that came to be filed contained entirely different

terms of settlement and in his sheer innocence Mr.Rajat Sharma, the

director of the defendant had signed on blank papers in good faith and

under the assumption that the matter had stood settled, on his affixing his

signatures on the application, he did not appear in the court.

10. It has been averred by the defendant in para 4 of the application

that Mr. Rajat Sharma, Director of the defendant company was advised by

the counsel for the plaintiff that he need not appear in Court and the

compromise application itself would suffice for the purposes of settling the

matter. Reposing confidence in the assurance given to him, none had

appeared for the defendant in the case which went on behind the back of

the defendant and culminated in passing of the ex-parte judgment.

11. It is relevant to note that the ex-parte judgment and decree was

passed on 30.4.2013 whereas the present application came to be filed by

the defendant after about 22 months, on 17.2.2015. The explanation

offered for gaining knowledge of the date on which the ex-parte judgment

and decree was passed is that on 18.1.2015, the defendant had received a

legal notice from the counsel for the plaintiff informing it about the fact

that the present suit had been decreed on 30.4.2013. Immediately

thereafter, the defendant claims to have contacted the plaintiffs to

discover the background of the case and only then did they learn that the

plaintiff had filed the compromise application but had later on withdrawn

the same.

12. It is the submission of the learned counsel for the defendant that as

the defendant had remained under a bonafide impression that the matter

had been settled after Sh. Rajat Sharma, Director of the defendant

company had signed some "blank papers", the plaintiffs were under a

moral obligation to have had the suit decreed in accordance with the

agreed terms and conditions of the settlement whereas it has transpired

later on that the terms of settlement recorded in the compromise

application were entirely different. He contends that the correct terms

and conditions of settlement arrived between the parties have been set

out in para-2 of the present application.

13. The present application is opposed by learned counsel for plaintiff

who states that she has filed a reply in opposition to the present

application with a copy furnished to the other side. As the same is not on

the suit file, she hands over a copy thereof which is taken on record. She

states that the present application is liable to be dismissed on the ground

that it is hopelessly barred by limitation. In support of the said

submission, reference is made to Article 123 of the Limitation Act which

prescribes the period of limitation for filing an application under Order 9

Rule 13 CPC.

14. Learned counsel contends that the defendant has miserably failed to

offer any satisfactory explanation for seeking condonation of delay of

almost two years in filing the present application and nor has the other

side been able to explain as to what had prevented the defendant from

appearing in the case on several dates prior to the passing of the

judgment and decree. She adds that an amicable settlement was arrived

at between the parties and it was reduced into writing in the shape of a

compromise application which bears the signatures of Sh. Rajat Sharma,

the constituted attorney of the defendant, but after the said application

came to be filed, the defendant refused to abide by the terms and

conditions recorded therein thus leaving the plaintiffs with no other option

but to withdraw the said application. It is asserted that the defendant was

all along aware of the withdrawal of the compromise application and even

after the same was withdrawn, talks of settlement had continued between

the parties but they had eventually failed. Learned counsel argues that

thereafter, the defendant was under an obligation to have contested the

suit on merits but for reason best known to it, it had chosen to stay away

from the proceedings.

15. Refuting the contention of the other side that there has been any

delay on the part of the defendant in filing the present application, counsel

for the defendant states that passing of ex-parte judgment and decree

came to the knowledge of the defendant only on 18.1.2015, the date

when the legal notice was received from the plaintiffs' counsel and if the

period of limitation for filing an application under Order IX Rule 13 CPC is

calculated from the said date, it will be seen that the present application

came to be filed within 30 days therefrom. Therefore, it cannot be urged

that the application is barred by limitation and he submits that there being

no delay on their part in filing the present application, there is no good

reason for the defendant to have filed a condonation of delay application.

16. The Court has heard the rival contentions of the counsels for the

parties and considered their respective submissions in the light of the

material on the record.

17. Taking the first argument advanced by counsel for the plaintiffs that

the present application is barred by limitation, it is necessary to examine

the legal position. The relevant Article under the Schedule attached to the

Limitation Act is Article 123, which is reproduced herein below for ready

reference:-

            Description of Period     of    Time    from    which
           appeal          limitation       period begins to run
      123. To set aside a Thirty days       The date of the
           decree passed                    decree or where the
           ex-parte or to                   summons or notice
           re-hear      an                  was not duly served,
           appeal                           when the applicant
           decreed      or                  had knowledge of the
           heard ex-parte                   decree.

18. A glance at the aforesaid Article makes it abundantly clear that the

prescribed period of limitation for applying to set aside the ex-parte

decree is 30 days from the date of passing of the decree. However, in

circumstances where the summons or notice was not served on the

applicant, the period of 30 days would have to be reckoned from the date

of knowledge of the decree. In the present case, as noted above, the

defendant had entered appearance on its own on 05.10.2011, through Sh.

Rajat Sharma, its Director, who is the very same person, who had signed

the compromise application.

19. Therefore, it cannot be urged by the counsel for the defendant that

the prescribed period of 30 days available under the Statute for filing an

application under Order IX Rule 13 CPC for setting aside the ex-parte

decree must be reckoned from the date when the defendant had gained

knowledge of the decree. On the contrary, as per the limitation prescribed

under Article 123 of the Limitation Act, in circumstances where the

summons have been served in the suit, the period of 30 days would have

to be reckoned from the date of passing of the decree. In the instant

case, the defendant had appeared in the suit on 05.10.2011 and the suit

was decreed vide judgment dated 30.4.2013. Based on the prescription

contained in Article 123, the period of 30 days reckoned from 30.4.2013,

would have expired on 29.5.2013, whereas the defendant has filed the

present application on 18.2.2015.

20. In this background, it was incumbent for the defendant company to

have filed an application for seeking condonation of delay of almost two

years in filing the present application. However, no such steps have been

taken by the defendant. Even today, the assertion made by learned

counsel is that the period of 30 days ought to be reckoned from

18.1.2015, the date when the defendant was served with a legal notice by

the plaintiffs' counsel. The fallacy in the said argument has been spelt out

above and the same is rejected as untenable. In the absence of an

application for condonation of delay, the present application for setting

aside the ex-parte judgment and decree dated 30.4.2013, is not

maintainable and ought to be rejected.

21. Having upheld the argument of the counsel for the plaintiffs, that

the present application is barred by the limitation and in the absence of

any supporting application for seeking condonation of delay, the same is

liable to be rejected, the Court need not proceed further to examine the

merits of the application as sought to be urged by the defendant.

However, keeping aside the said objection for a moment, the stand taken

by the defendant is being examined only to determine its validity.

22. Learned counsel for the defendant has laid much stress on the fact

that the defendant company did not have any knowledge about the

contents of the compromise application that was signed in good faith by

Mr.Rajat Sharma, its Director and constituted attorney and it was at the

insistence of the plaintiffs that he had signed some blank documents and

thereafter he had stopped appearing in the case under the bonafide belief

that the compromise application would be considered by the Court and

appropriate orders passed even in their absence.

23. Before proceeding to test the above explanation on the anvil of its

sufficiency and adequacy for exercising the discretion vested in the Court,

it has been inquired from the counsel for the parties if their clients are

still ready and willing to adhere to the terms and conditions of settlement

recorded in the compromise application(I.A. No. 20182/2011), that was

ultimately withdrawn by the plaintiff. Counsel for the plaintiff is agreeable

but counsel for the defendant has flatly declined and he reiterates that his

client is unwilling to abide by the said terms and conditions because these

were not the "agreed terms" that had been worked out with the plaintiff.

24. The provision of Order IX Rule 13 CPC reads as below:-

"13. Setting aside decree ex-parte against defendant:- In any case in which a decree is passed ex-parte against a defendant, he may apply to the Court by which the decree was passed for an order to set it aside; and if he satisfies the Court that the summons was not duly served, or that he was prevented by any sufficient cause from appearing when the suit was called on for hearing, the Court shall make an order setting aside the decree as against him upon such terms as to costs, payment into Court or otherwise as it thinks fit, and shall appoint a day for proceeding with the suit;

xxx

Provided further that no Court shall set aside a decree passed ex- parte merely on the ground that there has been an irregularity in the service of summons, if it is satisfied that the defendant had notice of the date of hearing and had sufficient time to appear and answer the plaintiff's claim.

xxx"

25. A bare perusal of the aforesaid provision makes it evident that an

ex-parte decree against the defendant can be set aside if the applicant

satisfies the Court that the summons have not been duly served or he

was prevented by sufficient cause from appearing when the suit was

taken up for hearing. However, on the ground of mere irregularity in the

service of the summons or in a case, where the defendant had notice of

the date and had sufficient time to appear in the Court, the Court shall

not set aside the decree. The second proviso to the aforesaid provision

has been made mandatory in nature by the legislature and therefore, it

is impermissible for the Court to ignore the conditions prescribed in the

second proviso and allow an application contrary thereto.

26. It is also a settled legal position that when sufficient cause is not

shown by the applicant, who applies for setting aside the ex-parte order

and the application is based on vague, evasive and false averments, then

in such cases, the ex-parte decree shall not be set aside. In the case of

Parimal vs. Veena @ Bharti reported as (2011) 3 SCC 545, when

examining the scope of Order IX Rule 13 CPC, after analysing several

judicial precedents on the said provision including in the case of Ramlal

and Ors. v. Rewa Coalfields Ltd. reported as AIR 1962 SC

361; Sarpanch, Lonand Gram panchayat v. Ramgiri Gosavi and

Anr. reported as AIR 1968 SC 222; Surinder Singh Sibia v. Vijay Kumar

Sood reported as AIR 1992 SC 1540; and Oriental Aroma Chemical

Industries Limited v. Gujarat Industrial Development Corporation and Anr.

reported as (2010) 5 SCC 459, the Supreme Court had held as under:-

"9. "Sufficient Cause" is an expression which has been used in large number of Statutes. The meaning of the word "sufficient" is "adequate" or "enough", in as much as may be necessary to answer the purpose intended. Therefore, word "sufficient" embraces no more than that which provides a platitude which when the act done suffices to accomplish the purpose intended in the facts and circumstances existing in a case and duly examined from the view point of a reasonable standard of a cautious man. In this context, "sufficient cause" means that party had not acted in a negligent manner or there was a want of bona fide on its part in view of the facts and circumstances of a case or the party cannot be alleged to have been "not acting diligently" or "remaining inactive". However, the facts and circumstances of each case must afford sufficient ground to enable the Court concerned to exercise discretion for the reason that whenever the court exercises discretion, it has to be exercised judiciously.

10. In Arjun Singh v. Mohindra Kumar and Ors. (AIR 1964 SC

993), this Court observed that every good cause is a sufficient cause and must offer an explanation for non-appearance. The only difference between a "good cause" and "sufficient cause" is that the requirement of a good cause is complied with on a lesser degree of proof than that of a "sufficient cause". (See also: Brij Indar Singh v. Lala Kanshi Ram and Ors. AIR 1917 P.C. 156; Manindra Land and Building Corporation Ltd. v. Bhutnath Banerjee and Ors. AIR 1964 SC 1336; and Mata Din v. A. Narayanan: AIR 1970 SC 1953.

11. While deciding whether there is a sufficient cause or not, the court must bear in mind the object of doing substantial justice to all the parties concernedand that the technicalities of the law

should not prevent the court from doing substantial justice and doing away the illegality perpetuated on the basis of the judgment impugned before it. (Vide: State of Bihar and Ors. v. Kameshwar Prasad Singh and Anr.:AIR 2000 SC 2306; Madanlalv. Shyamlal : AIR 2002 SC 100; Davinder Pal Sehgal and Anr. v. Partap Steel Rolling Mills (P) Ltd. and Ors.: AIR 2002 SC 451; Ram Nath Sao alias Ram Nath Sao and Ors. v. Gobardhan Sao and Ors.: AIR 2002 SC 1201; Kaushalya Devi v. Prem Chand and Anr. (2005) 10 SCC 127; Srei International Finance Ltd., v. Fair growth Financial Services Ltd. and Anr. (2005) 13 SCC 95; and Reena Sadh v. Anjana Enterprises : AIR 2008 SC 2054).

12. In order to determine the application under Order IX, Rule 13 CPC, the test has to be applied is whether the defendant honestly and sincerely intended to remain present when the suit was called on for hearing and did his best to do so. Sufficient cause is thus the cause for which the defendant could not be blamed for his absence. Therefore, the applicant must approach the court with a reasonable defence. Sufficient cause is a question of fact and the court has to exercise its discretion in the varied and special circumstances in the case at hand. There cannot be a strait-jacket formula of universal application." (emphasis added)

27. In the instant case, the Court is quite unconvinced by the

explanation sought to be offered on behalf of the defendant company for

remaining inactive. Nor has the defendant been able to explain away the

signatures of Mr.Rajat Sharma, its constituted attorney appended on the

face of each and every page of the compromise application. The Court

cannot overlook the fact that the said application is duly supported by the

affidavit of Mr. Rajat Sharma. Pertinently, the authorized signatories of the

plaintiffs and the defendant have not only affixed their signatures on each

and every page of the application, they have also appended their

signatures on each other's affidavits. The cloak of doubt sought to be

thrown by the counsel for the defendant on the genuineness of the

compromise application by raising a plea that the affidavit executed on

behalf of the plaintiffs could not have borne the signatures of the

defendant and vice versa, can hardly be a ground to disbelieve the

submission made by learned counsel for the plaintiffs that the parties had

voluntarily entered into a settlement and the terms and conditions of the

settlement were reduced into writing by virtue of the compromise

application, that had been signed by both sides with eyes wide open.

28. Learned counsel for the defendant has not been able to furnish any

document to substantiate his submission that the terms and conditions of

the settlement as set out in para-4 of the application ought to be treated

as the ones that were finalised between the parties and duly accepted by

the defendant. In fact, the compromise application (I.A. No. 20182/2011)

that fell through, comprises of seven pages and it bears the signatures of

Shri Kamal Gupta, the constituted attorney of the plaintiff and Shri Rajat

Sharma, Director of the defendant on each and every page. Further, the

said application is supported by the affidavit of Mr.Kamal Gupta,

constituted attorney of the plaintiffs and of Sh. Rajat Sharma, constituted

attorney of the defendant and both of the affidavits were duly sworn

before the Oath Commissioner on the same date, i.e. 09.12.2012.All these

facts go to show that both the parties had worked in tandem to tool out

the terms of settlement and they had a similar understanding of the

agreed terms.

29. The facts and circumstances of the case as noted above reveal that

the defendant company had entered appearance in the case through its

Director on 5.10.2011 and both sides had stated that the case had been

amicably settled between them and they would be filing a compromise

application. Thereafter, the defendant had deliberately and wilfully stayed

away from the suit proceedings. Learned counsel for the defendant has

not offered any valid justification or sufficient cause for the Court to

exercise its discretion in favour of the defendant for setting aside the ex-

parte judgment and decree dated 30.04.2013. Such an order cannot be

passed merely on the asking of the applicant unless and until the Court is

convinced that it is a fit case where it ought to exercise its discretion in

favour of the applicant.

30. The defendant has miserably failed to discharge the onus placed on

it by satisfactorily demonstrating to the Court that it was prevented by

any sufficient cause from appearing in the suit when it was called on for

hearing. As noticed above, the defendant had ample notice of the date of

hearing and its constituted attorney had appeared before the Court of his

own on 05.10.2011. In these circumstances, it cannot be stated that

there was any irregularity in the service of the summons. Rather, the facts

of the case clearly reveal that the defendant had notice of the date of

hearing in the suit and had sufficient time to appear and answer the

plaintiffs' claim but on the very first date, the Director of the defendant

had voluntarily made a statement that the matter had been amicably

settled between the parties and a compromise application shall be moved

in due course. In such circumstances, the mandatory nature of the

second proviso to Order IX Rule 13 CPC would come into play, thus

making it impermissible for the Court to allow an application for setting

aside the ex-parte decree against the defendant, as prayed for.

31. To conclude, it is rather ironical that though the entire litigation in

the suit revolves around a dispute pertaining to the use of the mark,

"Satya", a Hindi word that means the "truth", the explanation offered by

the defendant company for staying away from the suit proceedings rings

far from the truth and hits a false note from the beginning to the end.

Resultantly, the present application is dismissed not only on the ground

that it is barred by limitation, but also because it is found to be devoid of

merits.

HIMA KOHLI, J AUGUST 07, 2015 rkb/mk/rs/ap