Court May Impose Deposit of Entire Decretal Amount as Condition for Condoning Delay in Recalling Ex-Parte Decree.

The petitioners challenged an order dated 02.03.2026 passed by the Commercial Court in an application for condonation of delay (123 days) in filing an Order IX Rule 13 CPC application to set aside an ex-parte decree dated 24.10.2024.

The original suit claim was for Rs. 22,72,236/-.

The Commercial Court found that despite summons being served in July/August 2024, the petitioners failed to appear.

The Court noted that the petitioners suppressed information regarding the date of knowledge of the decree, as bailiff reports proved service of execution process on 05.02.2025, contradicting the petitioners' claim of 17.02.2025.

The Commercial Court condoned the delay but imposed a condition precedent: the deposit of the full suit amount.

1. Whether the Commercial Court exercised its discretion legally by imposing the condition of depositing the entire decretal amount as a prerequisite for condoning the delay in filing an application to set aside an ex-parte decree.

The Court applied Order IX Rule 13 of the Code of Civil Procedure, 1908, regarding the setting aside of ex-parte decrees.

It relied on the Supreme Court precedent GMG Engineering Industries and others v. Issa Green Power Solution and others (2015) 15 SCC 659, which establishes that courts have the discretionary power to put defendants to terms (such as paying a portion of the decretal amount) when setting aside an ex-parte decree, provided such terms are not unreasonable or highly excessive.

Reference was also made to Periyammal (Dead Thr. Lrs.) v. V. Rajamani And Anr. (2025) regarding the time-bound disposal of execution cases.

The High Court examined whether the condition to deposit the full suit amount was "onerous or highly excessive".

The Court observed that the petitioners failed to prove bona fides or show "sufficient cause" for the 123-day delay, particularly noting that they approached the court with "unclean hands" by misrepresenting the date of knowledge of the decree.

Given the petitioners' use of "delay tactics" to prolong execution proceedings and the fact that summons were duly served during the original suit, the High Court reasoned that the Commercial Court's imposition of a full deposit was a justified exercise of discretionary jurisdiction to balance the interests of the decree-holder.

The Court clarified that if the petitioner complies with the deposit condition, the Commercial Court must decide the Order IX Rule 13 application independently on its own merits without being influenced by observations made regarding the petitioners' bona fides in this judgment. No order as to costs.