Two SBI Borrowers Get Until Nov 26 To Deposit 15% To Set Aside Ex-Parte Decree, Madras HC Upholds Condition

The State Bank of India sued the petitioners to recover ₹3,12,404, with future interest, and sought a preliminary decree creating a charge over the suit properties

After entering appearance, the defendants were set ex parte when they did not file a written statement; an ex parte preliminary decree followed

They applied under Order IX Rule 7 CPC to set aside the ex parte order and decree. The trial court allowed the application subject to depositing 25% of the decretal amount, but dismissed it when the defendants failed to deposit that sum.

On appeal, the deposit condition was reduced to 15%, payable by 10 March 2023. The defendants challenged that condition under Article 227 of the Constitution

Under Order IX Rule 7 CPC, a court may impose a condition requiring deposit of part of the decretal amount when granting relief against an ex parte decree; however, the condition must be reasonable and must not be harsh.

The High Court’s supervisory jurisdiction under Article 227 does not warrant interference with a discretionary order absent a sufficient reason to do so.

The trial court’s 25% deposit condition was based on the nature of the suit, the hypothecation of the properties, and the defendants’ non-denial that they had obtained the loan

The appellate court considered that condition excessive, reduced it to 15%, and allowed time for payment in light of the explanation for the defendants’ absence

The High Court found the reduced condition reasonable, not harsh, and saw no basis to interfere with the appellate court’s exercise of discretion

It granted them time to deposit that sum on or before 26 November 2026, directing that, if they failed to do so, I.A. No. 107 of 2019 would stand automatically dismissed. No costs were awarded, and the connected miscellaneous petition was closed