Ahsan Ahmad Malik vs Basharat Feroz
2025 Latest Caselaw 795 J&K/2

Jammu & Kashmir High Court - Srinagar Bench

Ahsan Ahmad Malik vs Basharat Feroz on 21 February, 2025

Author: Sanjay Dhar

Bench: Sanjay Dhar

     HIGH COURT OF JAMMU & KASHMIR AND LADAKH
                    AT SRINAGAR

                           RFA No.88/2024

                                         Reserved On: 12.02.2025
                                         Pronounced On :21.02.2025

 AHSAN AHMAD MALIK                                 ...APPELLANT(S)

                              Through: Mr. Zahid Hussain,
                                       Advocate.
 Vs.
 BASHARAT FEROZ                                  ...RESPONDENT(S)
 GANIE                        Through: Mr. T. A. Lone,
                                      Advocate

CORAM:HON'BLE MR. JUSTICE SANJAY DHAR, JUDGE.

                              JUDGMENT

1. Through the medium of present appeal, the appellant has

challenged judgment and decree dated 16.03.2023 passed by the Court

of learned Additional District Judge, Pulwama, in a suit filed by

respondent against the appellant. By virtue of the impugned judgment

and decree, the respondent/plaintiff has been held entitled to recovery of

an amount of Rs.7,32,000/ along with interest @6% per annum from the

appellant/defendant in a suit filed by the respondent against the appellant

under Order 37 of Civil Procedure Code.

2. It appears that the respondent/plaintiff had filed a suit for

recovery of an amount of Rs.7,32,000/ against the appellant/defendant

by invoking the provisions contained in Order 37 of the Code of Civil

Procedure. According to the respondent/plaintiff, the appellant/

defendant had purchased cardboard boxes from him and after settlement

of accounts, the defendant had to pay an amount of Rs.7,82,000/ to the

plaintiff. In discharge of the said debt, the defendant is stated to have

issued six cheques for a total amount of Rs.7,82,000/ on different dates

but when these cheques were presented for encashment, the same were

returned unpaid to the plaintiff on account of insufficiency of funds. A

legal notice of demand is stated to have been served by the plaintiff upon

the defendant but he paid only an amount of Rs.50,000/ to the plaintiff

and rest of the amount i.e. Rs.7,32,000/ remained outstanding, which has

not been paid by the defendant to the plaintiff constraining him to file

the suit against the defendant.

3. It appears that after service of summons upon the defendant in

the prescribed proforma, he caused his appearance and filed the memo

of appearance indicating therein his address. Thereafter the summons for

judgment was served upon the defendant and in response, he filed an

application for leave to defend the suit before the trial court. However,

when the defendant failed to cause appearance before the trial court, his

application for leave to defend was dismissed in default on 06.12.2022.

4. It appears that the defendant filed an application seeking recall

of order dated 06.12.2022 on the same very date but the said application

was dismissed by the learned trial court on 27.02.2023. Since application

of the defendant seeking leave to defend was dismissed by the learned

trial court for non-prosecution, as such, the trial court proceeded to pass

impugned judgment and decree by presuming that the defendant has not

applied for leave to defend the suit.

5. It also appears that the defendant moved an application under

Order 37 Rule 4 CPC before the learned trial court seeking setting aside

of the exparte decree passed by the said court. However, the said

application came to be dismissed by the trial court on 04.07.2024 on the

ground that the same has been filed beyond the prescribed period of

limitation.

6. The appellant has challenged the impugned judgment and

decree passed by the learned trial court on the ground that the court has

dismissed his application for leave to defend in default of his appearance

and not on merits, which is impermissible in law. It has been further

contended that it was incumbent upon the trial court to adjudicate the

defence raised by defendant in his application for leave to defend before

passing the decree against him. It is also contended that the

appellant/defendant had raised a plausible defence in his application for

leave to defend and, as such, the same could not have been dismissed by

the trial court for non-prosecution.

7. I have heard learned counsel for the parties and perused record

of the case including the grounds of appeal.

8. Before proceeding to deal with the contentions raised in the

appeal, it is apt to notice that in the instant case, the appellant had moved

an application for setting aside exparte decree before the trial court by

invoking the provisions contained in Order 37 Rule 4 of the CPC but the

said application was dismissed by the trial court.

9. A defendant, against whom an exparte decree is passed, has

two options; (1) to file an appeal under Section 96 of the CPC, and (2) to

file an application under Order 37 Rule 4 CPC. Recourse can be taken to

both the said proceedings. If appeal under Section 96 of CPC is

dismissed, as a result of which exparte decree merges with the order of

the Appellate Court, an application under Order 37 Rule 4 of CPC would

not be maintainable but when an application under Order 37 Rule 4 of

CPC is dismissed, it is open to the defendant to file an appeal under

Section 96 of the CPC against the decree passed by the trial court as the

said provision provides for remedy of appeal against an original decree,

whether passed after the contest or in exparte. Therefore, the instant

appeal filed against the impugned judgment and decree passed by the

trial court is maintainable despite application of the appellant/defendant

under Order 37 Rule 4 of CPC having been dismissed by the trial court.

10. The main and only issue which is required to be determined in

this appeal is as to whether an application filed by a defendant for leave

to defend the suit in terms of sub-rule (5) of Rule 3 of Order 37 of CPC

can be dismissed in default for non-prosecution. In this context it would

be apt to notice the provisions contained in sub-rule (5) of Rule 3 of

Order 37 of CPC, which read as under:

3. Procedure for the appearance of defendant.

(1) xxx xxx xxx xxx (2) xxx xxx xxx xxx (3) xxx xxx xxx xxx (4) xxx xxx xxx xxx (5) The defendant may, at any time within ten days from the service of such summons for judgment, by affidavit or otherwise disclosing such facts as may be deemed

sufficient to entitle him to defend, apply on such summons for leave to defend such suit, and leave to defend may be granted to him unconditionally or upon such terms as may appear to the Court or Judge to be just:

Provided that leave to defend shall not be refused unless the Court is satisfied that the facts disclosed by the defendant do not indicate that he has a substantial defence to raise or that the defence intended to be put up by the defendant is frivolous or vexatious:

Provided further that, where a part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit shall not be granted unless the amount so admitted to be due is deposited by the defendant in Court.

11. The first proviso to afore-quoted sub-rule casts an obligation

upon the Court not to refuse leave to defend unless it is satisfied that the

facts disclosed by the defendant do not indicate that he has a substantial

defence to raise or that the defence intended to be put up by the defendant

is frivolous or vexatious. Once an application for leave to defend is filed

by a defendant before the Court, it is duty of the said Court to consider

the facts disclosed by the defendant in the said application and thereafter

determine as to whether the defendant has raised any substantial defence.

If upon undertaking such an exercise, the Court comes to a conclusion

that the defendant has raised a substantial defence, leave to defend the

suit has to be granted in his favour and if the Court is of the view that the

defence put up by the defendant in his application is frivolous or

vexatious, the application has to be declined. In short, once an

application for leave to defend the suit is filed by a defendant within the

period specified in sub-rule (5) (supra), the same has to be considered by

the Court on its merits and it cannot be dismissed for non-prosecution

nor can defendant be set exparte.

12. In the above context, it would be apt to refer to the

observations made by the High Court of Delhi in the case of Sukhbir

Singh vs. Jatinder Sharma and others, 169 (2010) DLT 78:

"5. Thus, even if the petitioner was absent and had not appeared on the date fixed for arguments, the application for leave to defend could have been disposed of by the trial court in absence of the petitioner considering the defence of defendant. In terms of Order XXXVII Rule 3(5), the trial court was obliged to consider the facts raised by defendant and pass an order on the application for leave to defend even in absence of the petitioner. The petitioner was respondent in application for leave to defend. If the petitioner had not appeared, still the facts set out by defendant were before the trial court and the trial court in absence of the petitioner could have considered the application for leave to defend and passed a speaking order."

13. The aforesaid position of law has been reiterated and

reaffirmed by this Court in the case of Balwant Rai vs. Mohan Lal,

AIR 2009 J&K 71. In the said case the Court had not proceeded to decide

the application of the defendant for leave to defend the suit and without

deciding such application, the suit was decreed after proceeding exparte

against the defendant. This Court, while setting aside the order of the

trial court, termed the approach of the trial court as incorrect and held

that the said approach has resulted in causing prejudice to the defendant

resulting in failure of justice.

14. Again, in the case of Gh. Ahmad Wani vs. Gulzar Ahmad

Guroo, 2014 (4) JKJ 76, this Court, while observing that in a suit under

Order 37 of CPC, the procedure and mechanism prescribed therein has

to be followed in its true spirit, held that if the defendant had failed to

appear, he was not required to be proceeded in exparte and the court had

to consider the application seeking leave to defend and to proceed further

15. From the foregoing analysis of law on the subject, there is no

doubt to the legal position that once a defendant files an application for

leave to defend the suit, the Court is legally bound to consider the

defence put up by the defendant in such application on its merits

notwithstanding the absence of the defendant on the date on which the

said application is taken up for consideration. Thus, the approach of the

learned trial court in dismissing the application of the appellant for leave

to defend the suit for non-prosecution, is not countenanced by law.

16. Learned counsel for the respondent has contended that the

appellant has not carved out any special circumstances for setting aside

of the impugned judgment and decree and in view of the provisions

contained in Order 37 Rule 4 of CPC, which provide for setting aside of

a decree only in case special circumstances are carved out by a defence,

the impugned judgment decree cannot be set aside. In this regard, the

learned counsel has relied upon the judgment of the Supreme Court in

the case of Rajni Kumar vs. Suresh Kumar Malhotra & anr, AIR

2003 SC 1322, judgment of Andhra Pradesh High Court in the case of

Karumili Bharathi vs. Prichikala Venkatachalam, AIR 1999 AP 427,

and the judgment of this Court in the case Noor Mohammad Rah vs.

Bashir Ahmad Wandroo, 2018(2) JKJ 245.

17. The contention raised by learned counsel for the respondents

is misconceived for the reason that this Court is considering the regular

first appeal that has been filed by the appellant/defendant against the

impugned judgment and decree not an application under Order 37 Rule

4 CPC. The requirement of carving out special circumstances for

succeeding to get an exparte decree set aside is mandated under Order

37 Rule 4 of CPC and not in a regular first appeal. The ratio laid down

in the cases referred to and relied upon by learned counsel for the

respondent is, therefore, not applicable to the facts of the present case.

Even otherwise non-consideration of application of the

appellant/defendant for leave to defend the suit on its merits by the trial

court definitely constitutes a special circumstance for inviting the

intervention of this Court.

18. As already stated, the learned trial court has not considered the

application for leave to defend the suit filed by the appellant/defendant

on merits which is a legal imperative, as such, the impugned judgment

and decree becomes unsustainable in law.

19. For the foregoing reasons, the appeal is allowed and the

impugned judgment and decree passed by the trial court is set aside and

the case is remanded to the trial court with the direction to consider the

application of the appellant/defendant for leave to defend the suit on its

merits and pass appropriate orders thereon in accordance with law.

20. A copy of this judgment be sent to the learned trial court for

information and compliance.

(Sanjay Dhar) Judge Srinagar, 21.02.2025 "Bhat Altaf-Secy"

                                                Whether the order is speaking:         Yes/No
                                                Whether the order is reportable:       Yes/No