LexTEA AUCTION LTD. versus GRACE HILL TEA INDUSTRY & ANR.
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TEA AUCTION LTD. A V. GRACE HILL TEA INDUSTRY & ANR. ~ SEPTEMBER 13, 2006 [S.B. SINHA AND D.K. JAIN, JJ.] B Code a/Civil Procedure, 1908; 0. IX R.13: Filing of a Suit by a company claiming a decree for certain amount with c interest against another company-Decreed by High Court ex-parte-Petition for recalling the ex,parte decree-Allowed by Single Judge of the High Court subject to furnishing a security for the amount of decree-Appeal allowed by Division Bench of the High Court holding imposition of such condition as harsh- On appeal, Held: The Court while exercising discretionary jurisdiction under the provisions of Order IX Rule I 3 though empowered to put defendants D to terms but such terms should not be unreasonable-Jn the facts and circumstances of the case, it would be appropriate if respondent No. I /Company is directed to furnish security to the extent of Rs. 5 lakhs-Directions issued-- Interpretation of the Statutes. The question which arose for consideration by this Court in this E appeal was as to interpretation and application of the provisions of Order IX Rule 13 of the Code of Civil Procedure, 1908 in the context of exercise of discretionary power of the Courts in setting aside ex-parte decree against the defendant. Appellant contended that the Division Bench of the High Court F com milted a manifest error of law in so far as it failed to take into -!'- consideration that the Court had the power to direct furnishing of security as a pre-condition for recalling a money decree passed ex-parte. Partly allowing the appeal, the Court G HELD: I.I. A discretionary jurisdiction has been conferred upon the court passing an order for setting aside an ex parte decree not only on the basis that the defendant had been able to prove sufficient cause for his non-appearance even on the date when the decree was passed, but also 163 H 164 SUPREME COURLREPORTS (2006] SUPP. 6 S.C.R. A other attending facts and circumstances. It may also consider the question as to whether the defendant should be put on terms. The Court, however, is not denuded of its power to put the defendants to terms. It is, however, trite that such terms should not be unreasonable or harshly excessive. Once unreasonable or harsh conditions are imposed, the appellate court would B have power to interfere therewith. [169-C-D-EI c G.P. Srivastava v. R.K. Raizada & Ors., 1200013 SCC 54; Ramesh & Ors. v. Ratnakar Bank Ltd., JT (2000) 10 SC 325 and Vijay Kumar Madan & Ors. v. R.N Gupta Technical Education Society & Ors., (200215 SCC 30, referred to. 1.2. The Single Judge of the High Court exercised its discretionary jurisdiction keeping in view that the matter has been disposed of in fact finally at the interim stage at the back of defendant and it was in that view of the matter a chance was given to it to defend the suit, but, then the Single .Judge was not correct to direct securing of the entire amount D in the form of bank guarantee or deposit the sum in cash. The condition imposed should have been reasonable. What would be reasonable terms would depend upon facts and circumstances of each case. While setting aside a decree, conditions can be imposed but such conditions should not be unreasonable or harshly excessive. 1169-E-F; 172-DI E Karumuri Surayya v. Thadepalli Pushpavalli Thayaramma & Ors., AIR 37 (1950) Madras 618; Soma/al Nathalal Mistri v. The Vasant Investment Corporation Ltd. & Anr., ILR (1954) Born. 371; B. Padmavathi Rai v. Par;athiamma, AIR (1976) Karnataka 97; Packwood v. Union-Castle Mail Steamship Company Limited. (1903) 20 Times Law Reports 59; Kavalappara F Kottarathil Kochuni @ Moopil Nayar etc. v. State of Madras & Kera/a & Ors., AIR (1960) SC 1080 and The Union of India v. Shri Om Prakash. (19761 4 sec 32, referred to. 2. Keeping in view the peculiar facts and circumstances, interest of justice would be sub-served if respondent No.I is directed to furnish G securit)' to the extent of Rs.5 lakhs. Such security should be furnished to the satisfaction of the Single Judge. The Court shall consider the matter on merits, if the said defendant-respondent complies with this order, failing which the decree passed by the trial Court shall stand. (172-E-F; G) CIVIL APPEL LA TE JURISDICTION : Civil Appeal No. 4100 of 2006. H TEA AUCTION LTD. v. GRACE HILL TEA INDUSTRY. [S.B. SINHA, J.] 165 From the Judgment and Order dated 2.5.2005 of the High Court of A Calcutta in
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