Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 5
CASE NO.:
Appeal (civil) 10280 of 2003
PETITIONER:
Srei International Finance Ltd.
RESPONDENT:
Fairgrowth Financial Services Ltd. & Anr.
DATE OF JUDGMENT: 12/08/2005
BENCH:
CJI R.C.LAHOTI & P.K.BALASUBRAMANYAN
JUDGMENT:
JUDGMENT
With
C.A.No.10281/2003
Srei International Finance Ltd. ...Appellant
VERSUS
Fairgrowth Financial Services Ltd.& Anr. ... Respondents
The Special Court(Trial of Offences Relating to
Transactions in Securities)
at Bombay has passed two decrees (both exparte) against the
appellant-One decree is
for recovery of Rs. 14,53,327.23 ps. and interest thereon and is
dated 3.7.2003 passed in
Misc . Petition No. 50 of 2000 and the other decree is for
recovery of Rs. 17,70,015.58 ps.
and interest and is dated 9.7.2003 passed in Misc.
Petition No. 81 of 2000. Both the
decrees were passed ex-parte as none appeared for the appellant
on the date of hearing
before the
Special Court. In Misc. Petition No. 81 of 2000
(M.A. No. 243/2003) application was
moved for setting aside ex-parte decree and seeking
re-hearing on merits. The
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 5
application has
been rejected vide order dated 17.9.2003 by the
Special Court, as in its opinion,
sufficient cause for default in appearance by the appellant or its
counsel was not made
out. Feeling aggrieved,C.A.No.10280/2003 has been filed. The ex-parte
decree passed in
Misc.Petition No.50 of 2000 dated 3.7.2003 is directly
challenged in Civil Appeal No.
10281/2003.
Having heard the learned counsel for the
parties, we are satisfied that the
approach adopted by the Special Court in rejecting the application for
setting aside the
ex-parte decree moved by the appellant has been too
rigid. It is well settled that,
ordinarily, a litigant should not be denied a hearing on merits unless
something akin to
gross negligence or misconduct on his part in contesting the
proceedings is made out.
Admittedly, in the present case, the appellant is a company having
its corporate office
at Kolkata. According to it, it had instructed its solicitors at
Kolkata who, in their turn,
had instructed solicitors in Bombay to appear and plead for the
appellant. It is pointed out that, initially, there was an
appearance by the Bombay solicitors but, later on,
there was a default in the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 5
appearance and sometime before the matters were taken up for hearing
by the Special
Court, one of the members of the firm of solicitors for the appellant
at Kolkata, who was
looking after the appellant’s cases, had suffered a
serious accident and remained
immobilized for a period of about nine months. In such
circumstances, we agree with
the learned senior counsel for the appellant that a liberal view ought
to have been taken
by the Special Court and the ex-parte decree should have been set
aside. We place on
record the plea vehemently raised by the learned senior counsel for
the appellant that
it is the same claim which forms part of two proceedings and there
has been in effect a
double decree for the same amount passed against the
appellant and if only the
appellant would have been given an opportunity of
defending itself, it would have
demonstrated that the payments made by the appellant
have more than satisfied the
respondents’ claim. We note the pleas, but we are not expressing any
opinion thereon.
In the totality of the facts and
circumstances of the two cases, we are
satisfied that the appellant deserves to be allowed an
opportunity of hearing and
contesting the two cases on merits.
The appeals are allowed as per the
condition expressed hereunder. The
impugned order dated 17.9.2003 rejecting the application
for setting aside ex-parte
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 5
decree dated 9.7.2003 is set aside and the ex-parte decree dated
9.7.2003 is set aside. The
ex-parte decree dated 3.7.2003 is also set aside.
Both the cases shall stand restored to
the file of the Special Court.
The appellant is allowed the liberty of filing
written statements in both the
cases and contesting on merits but subject to the
condition that the appellant shall
within a period of four weeks from today deposit an amount of
Rs.14,53,327.23 ps with the Special Court which amount shall be
retained in deposit by
the Special Court. The Court may invest the amount in
an interest bearing account
with any Scheduled Bank. The amount shall be available
to be disbursed subject to
final decision in the cases by the Special Court. Failing compliance
with the above-said
direction, the decrees passed by
the Special Court shall stand and these appeals shall be deemed to have
been dismissed.
The parties through their respective counsel
are directed to appear before
the Special Court on 12.9.2005. The written statements shall be
filed by the appellant
within four weeks from today in both the matters.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 5