Full Judgment Text
Neutral Citation Number: 2022/DHC/005813
$~16
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 22.12.2022
+ CS(COMM) 267/2021
TRANSASIA PRIVATE CAPITAL LIMITED & ANR.
..... Plaintiffs
Through: Mr.Atul Shankar Mathur,
Ms.Priya Singh,
Mr.Shubhankar & Mr.Umang
Katariya, Advs.
versus
PARMANAND AGARWAL & ORS.
..... Defendants
Through: Mr.Ayush Negi & Mr.Vivek
Aggarwal, Advs.
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
NAVIN CHAWLA, J. (Oral)
I.A. 22013/2022
1. This application has been filed by the defendant no.2 under
Order XXXVII Rule 4 of the Code of Civil Procedure, 1908
(hereinafter referred to as the ‘CPC’), praying for the setting aside of
the Decree dated 26.11.2021 (wrongly mentioned as 27.04.2022 in the
prayer of the said application) passed by this Court.
2. The present suit was filed by the plaintiff under Order XXXVII
Rule 1 of the CPC, seeking recovery of Rs. 28,51,72,991/- alongwith
interest from the defendants.
Signature Not Verified
Digitally Signed By:RENUKA
NEGI
Signing Date:23.12.2022
19:41:51
CS(COMM) 267/2021 Page 1 of 10
Neutral Citation Number: 2022/DHC/005813
3. Summons in the suit were issued to the defendants vide order
dated 02.06.2021. The defendant no.2 was duly served with the
summons on 20.07.2021, however, did not enter appearance as
required in Order XXXVII Rule 3 of the CPC.
4. Thereafter, the plaintiff filed the application, being I.A.
15447/2021, under Order XXXVII Rule 2(3) of the CPC on
14.11.2021, praying for passing of a Decree against the defendant
nos.2, for his default in appearance. An advance copy of the
application was duly served on the defendant no.2.
5. As the defendant nos. 2 and 3, despite receipt of summons, did
not enter appearance, a Decree was passed against them on
26.11.2021.
6. The defendant no.2 has now filed the present application
seeking recall of the said Decree. The only ground urged by the
learned counsel for the defendant no.2 before this Court is that the
plaintiff had not filed the original documents in support of its plaint.
7. Placing reliance on the judgments in Goyal MG Gases Ltd. v.
Premium International Finance Ltd. & Ors. , 2006 SCC OnLine Del
839 and Neebha Kapoor v. Jayantilal Khandwala & Ors. , 2008 SCC
OnLine Del 154, the learned counsel for the defendant submits that in
absence of the documents in original, the Decree against the defendant
no.2 could not have been passed.
8. On the other hand, the learned counsel for the plaintiff submits
that the present suit was filed electronically. The ‘Practice Directions
for Electronic Filing (E-Filing) in the High Court of Delhi’
(hereinafter referred to as the ‘Practice Directions’) provide that
Signature Not Verified
Digitally Signed By:RENUKA
NEGI
Signing Date:23.12.2022
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Neutral Citation Number: 2022/DHC/005813
scanned copy of the documents can be filed at the time of e-filing. The
only obligation on the plaintiff is to keep the original documents
preserved for production upon a direction in that regard being passed
by the Court. He submits that therefore, no fault can be found in the
decree having been passed without insisting upon the documents in
original being produced, especially as the defendant no. 2 did not even
care to enter appearance in the Suit.
9. He submits that in the present case, even otherwise, this Court
would refuse to exercise its discretion to recall of the Decree dated
26.11.2021 against the defendant no.2, inasmuch as the defendant no.2
has failed to show any ‘ special circumstances’ warranting the recall of
the Decree under Order XXXVII Rule 4 of the CPC. He submits that
the case history on the website of this Court would show that on
receipt of summons, the defendant no.2, instead of filing his
appearance, filed a written statement on 11.09.2021. The said written
statement never came on record. The plaintiff on 28.09.2021 then e-
filed the original personal guarantees of defendant nos.1 and 2, which
were duly served on the defendant no.2. The application under Order
XXXVII Rule 2(3) of the CPC was also served on the defendant no.2.
The case history would further reflect that some filing was done by the
defendant no.2 on 18.11.2021, details whereof are not available with
the plaintiff as they were not served on the plaintiff. Further filings
were done by the defendant no.2 on 22.11.2021 and 23.11.2021,
however, again without serving any advance copy thereof on the
plaintiff. The defendant no.2 was, therefore, fully aware of the
pendency of the suit and nature thereof, however, chose not to appear
Signature Not Verified
Digitally Signed By:RENUKA
NEGI
Signing Date:23.12.2022
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CS(COMM) 267/2021 Page 3 of 10
Neutral Citation Number: 2022/DHC/005813
before this Court or avail of the remedy as is available in law to him.
Even till date, the plaintiff is not aware of the nature of filings that
have been done by the defendant no.2 in the suit on 22.11.2021 or
23.11.2021. In fact, after passing of the Decree, the defendant no.2
appears to have filed a Review Petition on 04.02.2022; copy thereof
was again not served on the plaintiff. The fate of this review is also
not known. The plaintiff was then served with a copy of a purported
appeal by the defendant no.2. The learned counsel for the plaintiff
further submits that thereafter a Decree against the defendant no.1 was
passed on 27.04.2022. It is only thereafter and now that the defendant
no.2 has finally filed this present application. He submits that much
less than showing any special circumstance warranting an indulgence
of this Court, in fact, the conduct of the defendant no.2 would show
that the defendant no.2 is merely abusing the process of this Court. In
support, he places reliance on:-
(i) Rajni Kumar v. Suresh Kumar Malhotra & Anr., (2003)
5 SCC 315;
(ii) TVC Skyshop Ltd. v. Reliance Communication and
Infrastructure Ltd., (2013) 11 SCC 754; and
(iii) National Small Industries Corp. Ltd. v. Myson
Electronics P. Ltd. & Ors., 2016 SCC OnLine Del 4937
10. The learned counsel for the defendant no.2 admits the fact of
filing above pleadings as also that an appeal was filed, however, is
lying in defects.
Signature Not Verified
Digitally Signed By:RENUKA
NEGI
Signing Date:23.12.2022
19:41:51
CS(COMM) 267/2021 Page 4 of 10
Neutral Citation Number: 2022/DHC/005813
11. I have considered the submissions made by the learned counsels
for the parties. Order XXXVII Rule 4 of the CPC is reproduced
hereinunder: -
“ 4. Power to set aside decree. - After decree
the Court may, under special circumstances
set aside the decree, and if necessary stay or
set aside execution, and may give leave to the
defendant to appear to the summons and to
defend the suit, if it seems reasonable to the
Court so to do, and on such terms as the Court
thinks fit.”
12. It is only where ‘special circumstances’ are shown by the
defendant for setting aside the Decree that the Court may, if necessary,
stay or set aside execution of the Decree, and grant leave to the
defendant to appear to the summons and to defend the suit. In Rajni
Kumar (supra), the Supreme Court explained the limited expanse of
the power of a court to recall the decree under Order XXXVII Rule 4
CPC, as under:-
“ 9 . The expression “special circumstances”
is not defined in the Civil Procedure Code nor
is it capable of any precise definition by the
court because problems of human beings are
so varied and complex. In its ordinary
dictionary meaning it connotes something
exceptional in character, extraordinary,
significant, uncommon. It is an antonym of
common, ordinary and general. It is neither
practicable nor advisable to enumerate such
circumstances. Non-service of summons will
undoubtedly be a special circumstance. In an
application under Order 37 Rule 4, the court
has to determine the question, on the facts of
each case, as to whether circumstances
pleaded are so unusual or extraordinary as to
justify putting the clock back by setting aside
the decree; to grant further relief in regard to
Signature Not Verified
Digitally Signed By:RENUKA
NEGI
Signing Date:23.12.2022
19:41:51
CS(COMM) 267/2021 Page 5 of 10
Neutral Citation Number: 2022/DHC/005813
post-decree matters, namely, staying or setting
aside the execution and also in regard to pre-
decree matters viz. to give leave to the
defendant to appear to the summons and to
defend the suit.
10 . In considering an application to set
aside ex parte decree, it is necessary to bear in
mind the distinction between suits instituted in
the ordinary manner and suits filed under
Order 37 CPC. Rule 7 of Order 37 says that
except as provided thereunder the procedure
in suits under Order 37 shall be the same as
the procedure in suits instituted in the ordinary
manner. Rule 4 of Order 37 specifically
provides for setting aside decree, therefore,
provisions of Rule 13 of Order 9 will not apply
to a suit filed under Order 37. In a suit filed in
the ordinary manner a defendant has the right
to contest the suit as a matter of course.
Nonetheless, he may be declared ex parte if he
does not appear in response to summons, or
after entering appearance before framing
issues; or during or after trial. Though
addressing arguments is part of trial, one can
loosely say that a defendant who remains
absent at the stage of argument, is declared ex
parte after the trial. In an application under
Order 9 Rule 11, if a defendant is set ex parte
and that order is set aside, he would be
entitled to participate in the proceedings from
the stage he was set ex parte. But an
application under Order 9 Rule 13 could be
filed on any of the grounds mentioned
thereunder only after a decree is passed ex
parte against the defendant. If the court is
satisfied that (1) summons was not duly served,
or (2) he was prevented by sufficient cause
from appearing when the suit was called for
hearing, it has to make an order setting aside
the decree against him on such terms as to cost
or payment into court or otherwise as it thinks
fit and thereafter on the day fixed for hearing
by court, the suit would proceed as if no ex
parte decree had been passed. But in a suit
under Order 37, the procedure for appearance
Signature Not Verified
Digitally Signed By:RENUKA
NEGI
Signing Date:23.12.2022
19:41:51
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Neutral Citation Number: 2022/DHC/005813
of the defendant is governed by provisions of
Rule 3 thereof. A defendant is not entitled to
defend the suit unless he enters appearance
within ten days of service of summons either in
person or by a pleader and files in court an
address for service of notices on him. In
default of his entering an appearance, the
plaintiff becomes entitled to a decree for any
sum not exceeding the sum mentioned in the
summons together with interest at the rate
specified, if any, up to the date of the decree
together with costs. The plaintiff will also be
entitled to judgment in terms of sub-rule (6) of
Rule 3. If the defendant enters an appearance,
the plaintiff is required to serve on the
defendant a summons for judgment in the
prescribed form. Within ten days from the
service of such summons for judgment, the
defendant may seek leave of the court to
defend the suit, which will be granted on
disclosing such facts as may be deemed
sufficient to entitle him to defend and such
leave may be granted to him either
unconditionally or on such terms as the court
may deem fit. Normally the court will not
refuse leave unless the court is satisfied that
facts disclosed by the defendant do not
indicate substantial defence or that defence
intended to be put up is frivolous or vexatious.
Where a part of the amount claimed by the
plaintiff is admitted by the defendant to be due
from him, no leave to defend the suit can be
granted unless the admitted amount is
deposited by him in court. Inasmuch as Order
37 does not speak of the procedure when leave
to defend the suit is granted, the procedure
applicable to suits instituted in the ordinary
manner, will apply.
11. It is important to note here that the
power under Rule 4 of Order 37 is not
confined to setting aside the ex parte decree, it
extends to staying or setting aside the
execution and giving leave to appear to the
summons and to defend the suit. We may point
out that as the very purpose of Order 37 is to
Signature Not Verified
Digitally Signed By:RENUKA
NEGI
Signing Date:23.12.2022
19:41:51
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Neutral Citation Number: 2022/DHC/005813
ensure an expeditious hearing and disposal of
the suit filed thereunder, Rule 4 empowers the
court to grant leave to the defendant to appear
to summons and defend the suit if the court
considers it reasonable so to do, on such terms
as the court thinks fit in addition to setting
aside the decree. Where on an application,
more than one among the specified reliefs may
be granted by the court, all such reliefs must
be claimed in one application. It is not
permissible to claim such reliefs in successive
petitions as it would be contrary to the letter
and spirit of the provision. That is why where
an application under Rule 4 of Order 37 is
filed to set aside a decree either because the
defendant did not appear in response to
summons and limitation expired, or having
appeared, did not apply for leave to defend the
suit in the prescribed period, the court is
empowered to grant leave to the defendant to
appear to the summons and to defend the suit
in the same application. It is, therefore, not
enough for the defendant to show special
circumstances which prevented him from
appearing or applying for leave to defend, he
has also to show by affidavit or otherwise,
facts which would entitle him leave to defend
the suit. In this respect, Rule 4 of Order 37 is
different from Rule 13 of Order 9.”
13. Applying the above yardstick to the facts of the present case, it
is to be noted that the defendant no.2 was well aware of the pendency
of the present suit, having been duly served with the summons of the
suit. In fact, as contended by the learned counsel for the plaintiff and
not denied by the learned counsel for the defendant no.2, various steps
were taken by the defendant no.2, though not in accordance with law,
by filing certain pleadings in the suit. The defendant no.2 merely filed
these pleadings without even bothering to have them listed before this
Signature Not Verified
Digitally Signed By:RENUKA
NEGI
Signing Date:23.12.2022
19:41:51
CS(COMM) 267/2021 Page 8 of 10
Neutral Citation Number: 2022/DHC/005813
Court. No explanation has been given by the defendant no. 2 for not
having these pleadings listed before court or entering appearance in
Court in response to the Summons or filing the application under
Order XXXVII Rule 4 of the CPC at an earlier stage. The defendant
no.2 also did not enter appearance in the suit before this Court, not
only till when the Decree was passed against him, but even thereafter
when the Decree was passed against the defendant no.1, and even
thereafter, till the date of the filing of the present application. By his
very conduct, the defendant no.2, therefore, is disentitled from any
relief from this Court. The defendant no. 2 has been unable to show
any ‘special circumstance’ for recalling the decree.
14. On the submission of the learned counsel for the defendant
no.2, that in absence of the original documents being filed by the
plaintiff, the Decree could not have been passed in favour of the
plaintiff, I again find no merit. While there can be no dispute that even
in absence of the defendants to enter appearance, the Decree in a
Summary Suit may not be automatic and the Court must consider the
claim of the plaintiff on merit, at the same time, keeping in view the
position of the Rules of this Court, insistence on filing of the original
documents by the plaintiff cannot be insisted upon.
15. In this regard, I may refer to Rule 1 of Chapter 4 of the Delhi
High Court (Original Side) Rules, 2018, which states that all plaints
are to be accompanied with documents, either in original or copies
thereof. The Practice Directions also state in Clause 6.1 thereof that
scanned copies of the same are to be filed, and that the party filing the
same must preserve the original of the documents for production
Signature Not Verified
Digitally Signed By:RENUKA
NEGI
Signing Date:23.12.2022
19:41:51
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Neutral Citation Number: 2022/DHC/005813
before the Court on being so directed at any time. Therefore, the Rules
do not any longer require the plaintiff to file documents in originals
along with the plaint.
16. In view thereof, the plea of the defendant no.2 that the suit
could not have been decreed in favour of the plaintiff in absence of the
original documents being filed cannot be accepted.
17. At this stage, the learned counsel for the defendant no.2 submits
that even in accordance with Clause 4 read with Clause 6.1 of the
Practice Directions, the documents had to be digitally signed by
counsel for the plaintiff or the plaintiff itself, and in absence thereof,
again the documents could not have been considered by this Court.
18. I am not impressed with the said argument inasmuch as there
was and still is no dispute raised by the defendants on the documents
that have been filed by the plaintiff along with the suit. The
requirement of digitally signing the documents is a matter of
procedure, and, therefore, could have been remedied had the defendant
no.2 entered appearance and contested the suit. It is now too late in the
day for the defendant no.2 to be allowed to take benefit of such
technical objections.
19. Accordingly, I find no merit in the present application. The
same is dismissed.
NAVIN CHAWLA, J
DECEMBER 22, 2022/ rv
Signature Not Verified
Digitally Signed By:RENUKA
NEGI
Signing Date:23.12.2022
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