Madras High Court
Hiroo Hotchand Advani vs Integrated Finance Company Limited on 14 August, 2024
Author: S.S.Sundar
Bench: S.S.Sundar
O.S.A.No.112 of 2023
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 14.08.2024
CORAM :
THE HON'BLE MR.JUSTICE S.S.SUNDAR
AND
THE HON'BLE MR.JUSTICE K.RAJASEKAR
O.S.A.No.112 of 2023
Hiroo Hotchand Advani
S/o Late Hotchand Gopaldas Advani .. Appellant
v.
1. Integrated Finance Company Limited
rep.by its Authorised Signatory
Having its registered office at “R 10”
II Floor, Prem Nagar Colony
South Boag Road, T.Nagar
Chennai 600 017
2. Business India
rep.by its Partner Mr.Ashok Hotchand Advani
14th Floor, Nirmal Building
Nariman Point, Church Gate
Mumbai 400 021
3. Mr.Ashok Hotchand Advani
Partner, Business India
21, Frameroze Course
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O.S.A.No.112 of 2023
Marine Drive, Mumbai 400 020
Mr.Rajkumar Hotchand Advani (deceased)
Partner, Business India
14th Floor, Nirmal Building
Nariman Point, Church Gate
Mumbai 400 021
(3rd defendant is given up and memo recorded
as per order dated 24.02.2021
in C.S.No.530 of 2011) .. Respondents
Memorandum of Grounds of Original Side Appeal under Order
XXXVI, Rule 9 of the Original Side Rules read with Clause 15 of the
Letters Patent, against the order dated 17.03.2023 passed by the learned
single Judge in Application No.1255 of 2023 in C.S.No.530 of 2011.
For Appellant :: Mr.P.S.Raman
Senior Counsel for
Mr.B.Arvind Srevatsa
For Respondents :: Mr.V.P.Raman for R1/Caveator
JUDGMENT
(Judgment of the Court was made by S.S.SUNDAR,J.)
This original side appeal is directed against the order of the learned
single Judge dated 17.03.2023 passed in Application No.1255 of 2023 in
C.S.No.530 of 2011.
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2. The brief facts that are necessary for the disposal of this appeal are
as follows:-
The first respondent herein, as plaintiff, filed the suit in C.S.No.530
of 2011 to direct the defendants jointly and severally to pay a sum of
Rs.21,88,11,459.96p along with future interest at 36% per annum from the
date of plaint till the date of realisation. The first defendant is the
partnership firm and the other defendants including the appellant are
partners. It is the case of the appellant/fourth defendant that he was
admitted into the partnership on 01.01.1980 and the partnership was at will.
It is now contended by the appellant that he resigned from the partnership
on 18.11.2003 and the suit was filed in the year 2010 when the appellant
was no longer a partner of the first defendant firm.
3. It is not in dispute that an ex parte decree was passed on
15.11.2021. Therefore, the appellant filed an application to set aside the ex
parte decree along with an application to condone the delay of 423 days in
filing the petition to set aside the ex parte decree. In the affidavit filed in
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support of the petition to condone the delay, the appellant has raised several
grounds on the merits of the claim. Even though the receipt of summons
was not seriously disputed, the contention of the appellant is that he was not
residing in the address where the suit notice was sent and summons were
subsequently served. Since the appellant has engaged a counsel as found
from the records, this Court need not go into the issue whether there was
proper service of notice or summons. Even though it is not stated in the
original affidavit filed in support of the petition to condone the delay, in the
affidavit filed before this Court, a specific contention is raised that the
appellant had entrusted the case to be handled by his brother, who is also a
partner of the first defendant firm. It was in that context, the learned Senior
Counsel appearing for the appellant submitted that the appellant may also be
shown some indulgence for not putting forth all these facts in the affidavit
filed in support of the petition to condone the delay.
4. The delay in this case is inordinate and the explanation offered by
the appellant has been considered by the learned single Judge while
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dismissing the application to condone the delay of 423 days. The first
respondent has filed the suit against four defendants including the appellant.
The fact that the appellant was a partner of the firm originally is not in
dispute. However, the appellant, according to him, was not a partner when
the suit was filed. The liability of the firm against any third party can be
fastened on the partners of the firm, if the transaction relates to the period
covered at the relevant point of time.
5. This Court will not go into the contentious issues raised by the
appellant on merits. However, going by the facts and circumstances of this
case, the appellant has made out a prima facie case that there are arguable
points and contentious issues. The suit claim appears to be based on the
hire purchase agreement, which was executed on 31.03.1998 for a sum of
Rs.95 lakhs and odd. The suit was filed in 2010 on the basis of some
amount paid by the first defendant firm acknowledging the debt just one
year prior to the institution of the suit.
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6. In an application filed to set aside the ex parte decree or in the
application to condone the delay in filing the petition to set aside ex parte
decree, this Court may not decide the applications on the merits of the suit
claim. However, in this case, only to examine the bonafides of the appellant,
this Court finds that the appellant's bonafides in filing the application at a
belated date, cannot be doubted. However, the fact remains that the
appellant has not stated all the reasons in the affidavit filed in support of the
application before the learned single Judge. However, from the counter
affidavit filed by the first respondent/plaintiff, we are unable to find any
material to discard the statements of the appellant in the affidavit. This
Court and the Hon'ble Supreme Court have always been liberal while
considering the petition to condone the delay. The aggrieved party, in an
application to condone the delay, is expected to give bonafide reasons to the
satisfaction of the Court. When the litigant owes a duty to the Court to
explain the delay, the reason cannot be expected with mathematical
precision, as has been reiterated by this Court and the Hon'ble Supreme
Court. There cannot be a strict or rigid formula that can be adopted in all
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cases. The application is dismissed by the learned single Judge, merely
because the appellant has participated in the proceedings at an earlier stage
and has engaged an Advocate, who has filed Vakalat on behalf of the
appellant. The statement of the appellant in the affidavit that the case was
entrusted to his brother and that he did not inform the ex parte decree at the
relevant point of time, cannot be discarded. Since the delay could have been
avoided by the appellant by acting with due diligence, this Court finds that
the delay can be condoned by putting the appellant on terms.
7. As we have recorded already, the bonafides of the appellant cannot
be doubted, as we find that the appellant will be put to irretrievable loss, if
he is deprived of an opportunity to contest the suit on merits, particularly
when there are triable contentious issues. The appellant may be able to
satisfy the Court that he was not a partner when the suit was filed and that
the liability fastened on him on facts, could have been avoided if an
opportunity is given to the appellant. It is also to be noted that the ex parte
decree is with interest at 36% per annum for the entire suit claim till
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realisation. The decree as it is may not be sustained ordinarily. Therefore,
this Court is unable to sustain the order of the learned single Judge refusing
to condone the delay of 423 days in filing the petition to set aside the ex
parte decree for the reasons stated in the order. Accordingly, the appeal is
allowed and the order of the learned single Judge in Application No.1255 of
2023 in C.S.No.530 of 2011 is set aside, on condition that the appellant
pays a sum of Rs.75,00,000/- through cheque/demand draft in favour of the
first respondent firm within a period of four weeks from the date of receipt
of a copy of this order. The submission of the learned Senior Counsel
appearing for the appellant that the said sum can be disbursed to the
depositors is recorded. This order will now enable the appellant to get a
favourable order from the learned single Judge in the other application filed
to set aside the ex parte decree. The appellant is also directed to file the
written statement within a period of four weeks from the date of receipt of a
copy of this order and on filing such written statement, it is for the learned
Judge hearing the matter on the original side to frame issues within a
reasonable time and to proceed with the trial of the suit, taking into
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consideration that the suit is of the year 2010. Consequently,
C.M.P.No.13126 of 2023 is closed. No costs.
Index : yes/no (S.S.S.R.,J.) (K.R.S.,J.)
Neutral citation : yes/no 14.08.2024
ss
To
The Sub Assistant Registrar (O.S.)
High Court, Madras
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S.S.SUNDAR, J.
AND
K.RAJASEKAR,J.
ss
14.08.2024
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