Ex-parte Commercial Decree Set Aside to Permit Cross-Examination Despite Non-Filing of Written Statement

The Respondent (Plaintiff) filed a commercial suit for recovery of Rs. 4,21,800/- alleging non-payment for goods supplied via delivery challans.

The Appellant (Defendant) was served on March 14, 2024, but failed to appear through counsel. Consequently, the Trial Court proceeded ex-parte on April 25, 2024.

Based on the unrebutted evidence of PW-1 and PW-2, the District Judge (Commercial Court) decreed the suit on August 30, 2024, awarding the principal amount with 9% interest.

The Appellant moved the High Court claiming he was unaware of the ex-parte order due to counsel’s negligence despite participating in other simultaneous litigations with the Respondent.

1. Whether the delay of 209 days in filing the appeal should be condoned.

2. Whether the Appellant should be granted an opportunity to contest the suit on merits and cross-examine the Respondent’s witness despite the ex-parte decree.

Section 96 of the Code of Civil Procedure, 1908, and Section 13(1) of the Commercial Courts Act, 2015, regarding the right to appeal commercial decrees.

Principles of equity and natural justice, emphasizing that a litigant should not suffer irreparably for the fault of their counsel, especially when the claim involves allegations of fraud and forgery.

Section 34 of the CPC regarding the award of interest in commercial transactions.

The Court observed that while the Appellant failed to file a written statement within the statutory period, there was "genuine confusion" because the Appellant was appearing in a neighboring courtroom for another matter between the same parties on the same day.

The Court noted that the Appellant had already secured the Respondent’s interest by depositing the entire decretal amount (Rs. 4,21,800/-) with the Executing Court.

Given the Appellant’s defense that the delivery challans were "forged and fabricated" and that the suit involved blank cheques, the Court reasoned that a single opportunity to cross-examine PW-1 was necessary to test the "genuinity and credibility" of the evidence.

The Court held that since the principal amount was secured in a Fixed Deposit, the Respondent faced no financial prejudice.

The matter was remanded to the Commercial Court for the limited purpose of allowing the Appellant to cross-examine PW-1 and advance final arguments, with directions to dispose of the suit within three months.