G. RATNA RAJ (D) BY LRS.versusSRI MUTHUKUMARASAMY PERMANENT FUND LTD. & ANR.

                         [2019] 1 S.C.R. 845                              845


                    G. RATNA RAJ (D) BY LRS.                              A
                                  v.
          SRI MUTHUKUMARASAMY PERMANENT
                        FUND LTD. & ANR.
               (Civil Appeal Nos. 2582-2583 of 2011)                      B
                         FEBRUARY 01, 2019
                [ABHAY MANOHAR SAPRE AND
                   DINESH MAHESHWARI, JJ.]
       Code of Civil Procedure, 1908 – Or.XVII, r.2, Explanation –
                                                                          C
Applicability of – In order to attract Explanation to Or.XVII, r.2, the
party which has led evidence and has led substantial part of the
evidence if fails to appear on any day to which the hearing of the
case is adjourned, the Court may treat “such party” as “present”
on that day and is accordingly empowered to proceed in the suit –
In the instant case, the defendants were proceeded ex parte – It was      D
defendant who did not lead the evidence and therefore, Explanation
to Or.XVII, r.2 would not apply – Therefore, since the defendants
were proceeded ex parte and were found not to have led any evidence
in the suit, the Court could only proceed under Or.XVII, r.3 (b) r/w
Or.XVII, r.2 for disposal of the suit by taking recourse to one of the
                                                                          E
modes directed in that behalf by Or.IX of the Code – Trial court
(Single Judge) had proceeded to hear the suit ex parte by taking
recourse to Or.IX, r.6 (a) in terms of Or.XVII, r.2 because on that
day, the plaintiff was present when the suit was called on for hearing
whereas the defendants were absent despite service of summons
and, accordingly, trial court passed the preliminary decree – Such        F
decree was an “ex parte decree” within the meaning of Or.IX, r.6 (a)
r/w Or.IX, r.13 of the Code and, therefore, could only be set aside
under Or.IX, r.13 on making out a sufficient ground by the
defendants – Division Bench of High Court was justified in allowing
the applications filed by defendant no.1 under Or.IX, r.13 and in
                                                                          G
consequence was justified in setting aside the preliminary decree
treating the said decree as ‘ex parte decree’ – Interference with the
said order is not called for – Trial court is directed to decide the
suit on merits in accordance with law – Ex parte decree – Party,
appearance of.
                                                                          H
                                 845
846           SUPREME COURT REPORTS                      [2019] 1 S.C.R.


A           Dismissing the appeals, the Court
            HELD: In the instant case, the plaintiff’s evidence was
      recorded and his case was also closed. The defendants were placed
      ex parte on the date when the case was fixed for recording
      defendants’ evidence but the same was not recorded due to the
B     defendants’ absence on the said date. In such a situation arising
      in the case, the case at hand would not fall under Explanation to
      Order XVII Rule 2 because in order to attract the Explanation,
      “such party” which has led evidence or has led substantial part
      of the evidence, if fails to appear on any day to which the hearing
      of the case is adjourned, the Court may treat “such party” as
C     “present” on that day and is accordingly empowered to proceed
      in the suit. If the plaintiff had remained absent and was found to
      have led evidence, the Court could have invoked its powers under
      Explanation to Order XVII Rule 2 treating the plaintiff as
      “present” for passing appropriate orders. Such is, however, not
D     the case here. Similarly, in converse situation, if the defendants
      had remained absent (as has happened in this case) on that date
      and if it would have noticed that they had adduced the evidence
      either fully or substantially prior to the date on which they were
      proceeded ex parte, the Court could have invoked its powers
      under Explanation to Order XVII Rule 2 of the Code treating the
E     defendants as “present” on that day for passing appropriate orders
      in the suit. Such is, however, again not the case here. Since the
      defendants were proceeded ex parte and were found not to have
      led any evidence in the suit, the Court could only proceed under
      Order XVII Rule 3 (b) read with Order XVII Rule 2 for disposal
F     of the suit by taking recourse to one of the modes directed in
      that behalf by Order IX or could have made any other order as it
      thinks fit. The Trial Court (Single Judge) is directed to decide
      the Original Suit on merits in accordance with law. [Paras 23-24,
      26-28, 33][853-A-C, D-F; 854-F]
G           B. Janakiramaiah Chetty v. A.K. Parthasarthi & Ors.
            (2003) 5 SCC 641 : [2003] 3 SCR 369 – relied on.
                             Case Law Reference
            [2003] 3 SCR 369        relied on               Para 22

H
  G. RATNA RAJ (D) BY LRS. v. SRI MUTHUKUMARASAMY                               847
                PERMANENT FUND LTD.

      CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.                           A
2582-2583 of 2011.
      From the Judgment and Order dated 11.01.2008 of the High Court
of Judicature at Madras in OSA Nos. 299 & 300 of 2006.
      Ambhoj Kumar Sinha, Ashwariya Sinha, Advs. for the Appellants.
                                                                                B
     R.Anand Padmanabhan, Prawal Chaturvedi, Ms. Nishaka Tyagi,
Pramod Dayal, S. Gowthaman, Advs. for the Respondents.
      The Judgment of the Court was delivered by
       ABHAY MANOHAR SAPRE, J. 1. Application for substitution
is allowed.                                                                     C
      2. These appeals are directed against the final judgment and order
dated 11.01.2008 passed by the High Court of Judicature at Madras in
O.S.A. Nos.299 & 300 of 2006 whereby the Division Bench of the High
Court allowed the appeals filed by respondent No.1 herein.
                                                                                D
      3. The controversy involved in these appeals lies in a narrow
compass. However, in order to appreciate the same, few relevant facts
need mention hereinbelow.
      4. The original appellant-G Ratna Raj (since dead and now
represented by his legal representatives) was the plaintiff whereas
respondent No.1 was defendant No.1 in the civil suit out of which these         E
appeals arise. Respondent No.2 is impleaded as party respondent in this
Court by order dated 06.02.2014.
       5. The original plaintiff (appellant herein)-G Ratna Raj filed a Civil
Suit No.131/1999 against the defendants (Sri Muthukumaraswamy Fund
Ltd.-Respondent No.1 herein and Balajee & Ors.) in the High Court of            F
Madras on its original side jurisdiction for redemption of mortgage and
for permanent injunction in relation to the mortgaged property.
       6. The defendants on being served entered their appearance and
filed their written statement. The Trial Court, on the basis of pleadings,
framed the issues. The plaintiff examined himself as PW-1. The                  G
defendants cross-examined the plaintiff. Thereafter, the plaintiff closed
his case. The case was accordingly posted for recording defendants’
evidence.
       7. At that stage of the proceedings, the defendants did not appear
in the suit and, therefore, the Court proceeded ex parte against them.          H
848             SUPREME COURT REPORTS                            [2019] 1 S.C.R.


A     The proceedings in the suit then continued as ex parte against the
      defendants. The plaintiff then got himself re-examined in the proceedings.
      He, however, could not be re-cross-examined by the defendants because
      they were already proceeded ex parte in the proceedings.
              8. The Trial Court (Single Judge) by judgment/decree dated
B     25.02.2003 passed a preliminary decree against the defendants in relation
      to the suit property. This led to filing of the two applications (IA No.340/
      2006 and IA No. 341/2006) by defendant No.1 before the Trial Court.
            9. So far as IA No. 341/2006 is concerned, it was filed under
      Order 9 Rule 13 of Code of Civil Procedure, 1908 (hereinafter referred
C     to as “the Code”) for setting aside of the preliminary decree dated
      25.02.2003 and so far as IA No.340/2006 is concerned, it was filed for
      condonation of delay in filing the application under Order 9 Rule 13 of
      the Code.
            10. By order dated 14.03.2006, the Single Judge dismissed both
D     the applications and held that the application filed by defendant No.1
      under Order 9 Rule 13 of the Code was not maintainable because the
      preliminary decree dated 25.02.2003 was not an “ex parte decree”. In
      other words, he was of the view that since the preliminary decree dated
      25.02.2003 was not an ex parte decree, an application under Order 9
      Rule 13 of the Code could not be filed for its setting aside.
E
            11. Defendant No.1 felt aggrieved and filed appeals before the
      Division Bench of the High Court. By impugned order, the Division Bench
      allowed the appeals and set aside the order of the Single Judge. The
      Division Bench held that the preliminary decree dated 25.02.2003 was
      an ex parte decree passed in the civil suit by the Trial Court (Single
F     Judge) and, therefore, the application filed by defendant No.1 under
      Order 9 Rule 13 of the Code was maintainable with a view to find out as
      to whether such decree could be set aside under Order 9 Rule 13 of the
      Code or not.
             12. The Division Bench, therefore, allowed the application filed
G     by defendant No.1 under Order 9 Rule 13 of the Code subject to their
      paying a cost of Rs.10,000/- to the plaintiff. The civil suit was accordingly
      restored to its original file for its disposal on merits in accordance with
      law. It is against this order, the plaintiff has felt aggrieved and filed the
      present appeals by way of special leave in this Court.
H
  G. RATNA RAJ (D) BY LRS. v. SRI MUTHUKUMARASAMY                               849
  PERMANENT FUND LTD. [ABHAY MANOHAR SAPRE, J.]

      13. The short question, which arises for consideration in these           A
appeals, is whether the Division Bench was justified in setting aside the
preliminary decree dated 25.02.2003 by holding the same to be an “ex
parte decree” for the purpose of Order 9 Rule 13 of the Code.
      14. Heard learned counsel for the parties.
       15. Having heard the learned counsel for the parties and on perusal      B
of the record of the case, we find no merit in these appeals.
       16. In our opinion, the question involved in these appeals is required
to be decided keeping in view the provisions of Order 9 Rule 6 (a) and
Order 17 Rules 2 and 3 of the Code.
                                                                                C
                          “Order 9 Rule 6 (1)(a)
      6. Procedure when only plaintiff appears- (1) Where the
      plaintiff appears and the defendant does not appear when
      the suit is called on for hearing, then-
      (a) When summons duly served – If it is proved that the                   D
      summons was duly served, the Court may make an order
      that the suit be heard ex parte;”
      17. Rule 6(1)(a) provides that where the plaintiff appears and the
defendant does not appear when the suit is called on for hearing, then if
the summons is held duly served on the defendant, the Court may make            E
an order that the suit be heard ex parte.
      18. Order 17 Rules 2 and 3 read as under :
                          “Order 17 Rules 2 & 3
      2. Procedure if parties fail to appear on day fixed.—Where,               F
      on any day to which the hearing of the suit is adjourned, the
      parties or any of them fail to appear, the court may proceed
      to dispose of the suit in one of the modes directed in that
      behalf by Order IX or make such other order as it thinks
      fit.
                                                                                G
      Explanation.—Where the evidence or a substantial portion
      of the evidence of any party has already been recorded and
      such party fails to appear on any day to which the hearing of
      the suit is adjourned, the court may, in its discretion,
      proceed with the case as if such party were present.
                                                                                H
850             SUPREME COURT REPORTS                           [2019] 1 S.C.R.


A           3. Court may proceed notwithstanding either party fails to
            produce evidence, etc.—Where any party to a suit to whom
            time has been granted fails to produce his evidence, or to
            cause the attendance of his witnesses, or to perform any
            other act necessary to the further progress of the suit, for
            which time has been allowed, the court may, notwithstanding
B
            such default,—
            (a) if the parties are present, proceed to decide the suit
            forthwith; or
            (b) if the parties are, or any of them is, absent, proceed
C           under Rule 2.”
              19. Order 17 Rule 2 of the Code provides that where, on any day
      to which the hearing of the suit is adjourned, the parties or any of them
      fail to appear, the Court may proceed to dispose of the suit in one of the
      modes directed in that behalf by order IX or make such other order as it
D     thinks fit.
              20. The Explanation appended to Order 17 Rule 2 of the Code
      provides that where the evidence or a substantial portion of the evidence
      of any party has already been recorded and such party fails to appear on
      any day to which the hearing of the suit is adjourned, the court may, in its
      discretion, proceed with the case as if such party was present.
E
              21. Order 17 Rule 3 of the Code, however, provides that where
      any party to a suit to whom time has been granted fails to produce his
      evidence, or to cause the attendance of his witnesses, or to perform any
      other act necessary to the further progress of the suit, for which time
      has been allowed, the Court may, notwithstanding such default, (a) if the
F     parties are present, proceed to decide the suit forthwith, or (b) if the
      parties are, or any of them is, absent, proceed under Rule 2.
              22. The scope of Order 17 Rule 2 and Order 17 Rule 3 of the
      Code came up for consideration before this Court in the case of B.
      Janakiramaiah Chetty vs. A.K. Parthasarthi & Ors., (2003) 5 SCC
G     641 wherein Justice Arijit Pasayat speaking for the Bench held in paras
      7 to 10 as under:
              “7. In order to determine whether the remedy under Order
              9 is lost or not what is necessary to be seen is whether in
              the first instance the Court had resorted to the Explanation
              of Rule 2.
H
G. RATNA RAJ (D) BY LRS. v. SRI MUTHUKUMARASAMY                      851
PERMANENT FUND LTD. [ABHAY MANOHAR SAPRE, J.]

   8. The Explanation permits the court in its discretion to         A
   proceed with a case where substantial portion of evidence
   of any party has already been recorded and such party fails
   to appear on any day to which the hearing of the suit is
   adjourned. As the provision itself shows, discretionary
   power given to the court is to be exercised in a given
                                                                     B
   circumstance. For application of the provision, the court
   has to satisfy itself that: (a) substantial portion of the
   evidence of any party has been already recorded; (b) such
   party has failed to appear on any day; and (c) the day is one
   to which the hearing of the suit is adjourned. Rule 2 permits
   the court to adopt any of the modes provided in Order 9 or        C
   to make such order as he thinks fit when on any day to
   which the hearing of the suit is adjourned, the parties or
   any of them fail to appear. The Explanation is in the nature
   of an exception to the general power given under the rule,
   conferring discretion on the court to act under the specified
                                                                     D
   circumstance i.e. where evidence or a substantial portion
   of evidence of any party has been already recorded and such
   party fails to appear on the date to which hearing of the suit
   has been adjourned. If such is the factual situation, the court
   may in its discretion deem as if such party was present.
   Under Order 9 Rule 3 the court may make an order directing        E
   that the suit be dismissed when neither party appears when
   the suit is called on for hearing. There are other provisions
   for dismissal of the suit contained in Rules 2, 6 and 8. We
   are primarily concerned with a situation covered by Rule
   6. The crucial words in the Explanation are “proceed with
                                                                     F
   the case”. Therefore, on the facts it has to be seen in each
   case as to whether the Explanation was applied by the court
   or not.
   9. In Rule 2, the expression used is “make such order as it
   thinks fit”, as an alternative to adopting one of the modes
   directed in that behalf by Order 9. Under Order 17 Rule           G
   3(b), the only course open to the court is to proceed under
   Rule 2, when a party is absent. Explanation thereto gives a
   discretion to the court to proceed under Rule 3 even if a
   party is absent. But such a course can be adopted only when
                                                                     H
852           SUPREME COURT REPORTS                        [2019] 1 S.C.R.


A           the absentee party has already led evidence or a substantial
            part thereof. If the position is not so, the court has no option
            but to proceed as provided in Rule 2. Rules 2 and 3 operate
            in different and distinct sets of circumstances. Rule 2 applies
            when an adjournment has been generally granted and not
            for any special purpose. On the other hand, Rule 3 operates
B
            where the adjournment has been given for one of the
            purposes mentioned in the rule. While Rule 2 speaks of
            disposal of the suit in one of the specified modes, Rule 3
            empowers the court to decide the suit forthwith. The basic
            distinction between the two rules, however, is that in the
C           former, any party has failed to appear at the hearing, while
            in the latter the party though present has committed any
            one or more of the enumerated defaults. Combined effect
            of the Explanation to Rule 2 and Rule 3 is that a discretion
            has been conferred on the court. The power conferred is
            permissive and not mandatory. The Explanation is in the
D
            nature of a deeming provision, when under given
            circumstances, the absentee party is deemed to be present.
            10. The crucial expression in the Explanation is “where
            the evidence or a substantial portion of the evidence of a
            party”. There is a positive purpose in this legislative
E           expression. It obviously means that the evidence on record
            is sufficient to substantiate the absentee party’s stand and
            for disposal of the suit. The absentee party is deemed to
            be present for this obvious purpose. The court while acting
            under the Explanation may proceed with the case if that
F           prima facie is the position. The court has to be satisfied on
            the facts of each case about this requisite aspect. It would
            be also imperative for the court to record its satisfaction in
            that perspective. It cannot be said that the requirement of
            substantial portion of the evidence or the evidence having
            been led for applying the Explanation is without any
G           purpose. If the evidence on record is sufficient for disposal
            of the suit, there is no need for adjourning the suit or
            deferring the decision.”
            23. Now when we examine the facts of the case at hand keeping
      in view the law laid down in the case of B Janakiramaiah Chetty
H
  G. RATNA RAJ (D) BY LRS. v. SRI MUTHUKUMARASAMY                              853
  PERMANENT FUND LTD. [ABHAY MANOHAR SAPRE, J.]

(supra), we find that the plaintiff’s evidence was recorded and his case       A
was also closed. It is not in dispute that the defendants were placed ex
parte on the date when the case was fixed for recording defendants’
evidence but the same was not recorded due to the defendants’ absence
on the said date. In other words, it was a case where the defendants did
not lead any evidence.
                                                                               B
       24. In such a situation arising in the case, in our view, the case at
hand would not fall under Explanation to Order 17 Rule 2 of the Code
because in order to attract the Explanation, “such party” which has led
evidence or has led substantial part of the evidence, if fails to appear on
any day to which the hearing of the case is adjourned, the Court may
treat “such party” as “present” on that day and is accordingly empowered       C
to proceed in the suit.
       25. In this case, the party, who was absent and was proceeded
ex parte was the “defendants” and they had not led any evidence whereas
it was the plaintiff, who was present and had led his evidence.
                                                                               D
      26. In other words, if the plaintiff had remained absent and was
found to have led evidence, the Court could have invoked its powers
under Explanation to Order 17 Rule 2 of the Code treating the plaintiff
as “present” for passing appropriate orders. Such is, however, not the
case here.
                                                                               E
       27. Similarly, in converse situation, if the defendants had remained
absent (as has happened in this case) on that date and if it would have
noticed that they had adduced the evidence either fully or substantially
prior to the date on which they were proceeded ex parte, the Court
could have invoked its powers under Explanation to Order 17 Rule 2 of
the Code treating the defendants as “present” on that day for passing          F
appropriate orders in the suit. Such is, however, again not the case here.
       28. We are, therefore, of the view that since the defendants
were proceeded ex parte and were found not to have led any evidence
in the suit, the Court could only proceed under Order 17 Rule 3 (b) read
with Order 17 Rule 2 of the Code for disposal of the suit by taking            G
recourse to one of the modes directed in that behalf by Order 9 of the
Code or could have made any other order as it thinks fit.
       29. As mentioned above, the Trial Court did proceed to hear the
suit ex parte by taking recourse to the Order 9 Rule 6 (a) in terms of
                                                                               H
854              SUPREME COURT REPORTS                          [2019] 1 S.C.R.


A     Order 17 Rule 2 of the Code because on that day, the plaintiff was
      present when the suit was called on for hearing whereas the defendants
      were absent despite service of summons and accordingly the Trial Court
      passed the preliminary decree. Such decree, in our opinion, was an “ex
      parte decree” within the meaning of Order 9 Rule 6 (a) read with Order
      9 Rule 13 of the Code and, therefore, could be set aside under Order 9
B
      Rule 13 on making out a sufficient ground by the defendants.
            30. In view of the foregoing discussion, we are of the view that
      the Division Bench was justified in allowing the applications filed by
      defendant No.1 under Order 9 Rule 13 of the Code and, in consequence,
      was justified in setting aside the preliminary decree dated 25.02.2003
C     passed in O.S. No.131/1999 treating the said decree as “ex parte decree”.
             31. So far as the finding on the question of sufficient ground for
      setting aside of the ex parte decree is concerned, suffice it to say, it
      being a pure question of fact, the same does not call for any interference
      by this Court. A finding on such question is binding on this Court.
D     Moreover, we find that the Division Bench imposed a cost of Rs.10,000/-
      on defendant No.1 payable to the plaintiff as condition for setting aside
      the ex parte decree. Defendant No.1, therefore, must pay the cost to
      the plaintiff.
             32. As a result of the foregoing discussion, we find no merit in
E     these appeals, which are accordingly dismissed.
              33. The Trial Court (Single Judge) is now directed to decide the
      Original Suit No. 131/1999 on merits in accordance with law preferably
      within a period of one year as an outer limit. Since the original plaintiff
      has died and his legal representatives are already brought on record in
F     these appeals, the Trial Court will permit the plaintiff to amend the cause
      title in the plaint and bring on record the legal representatives(appellants
      herein) to enable them to prosecute the suit on merits in accordance
      with law.

G
      Devika Gujral                                               Appeals dismissed.




H