SHANTILAL GULABCHAND MUTHAversusTATA ENGINEERING & LOCOMOTIVE CO. LTD. & ANR.

                         [2013] 2 S.C.R. 432


A           SHANTILAL GULABCHAND MUTHA
                             v.
    TATA ENGINEERING & LOCOMOTIVE CO. LTD. & ANR.
              (Civil Appeal No. 6162 of 2005)
B                         MARCH 18, 2013.
          [DR. B.S. CHAUHAN AND FAKKIR MOHAMED
                    IBRAHIM KALIFULLA, JJ.]

          CODE OF CIVIL PROCEDURE, 1908:.
c
         0. 8, r.10 - Judgment on failure of defendant to file written
    statement- Held: Relief under 0. 8, r. 10 is discretionary, and
  court has to be more cautious while exercising such power
  where defendant fails to file written statement -Court must be '
D satisfied that there is no fact which need to be proved in spite
  of deemed admission by defendant, and court must give
  reasons for passing such judgment - In the instant case, trial
  court has not examined as to whether the suit was filed within
  limitation and whether on the basis of pleadings, the relief
E granted by it could have been granted - Court did not even
  consider it proper to examine the case prima facie before
  passing the decree - As trial court failed to meet the
  parameters laid down by Supreme Court to proceed under 0.
  8 r. 10, judgment and decree passed by it is set aside and
F the case is remanded to it to decide afresh - Appellant is at
  liberty to file written statement within the period provided.
      Ba/raj Taneja & Anr. v. Sunil Madan & Anr. 1999 (2)
  Suppl. SCR 258 = AIR 1999 SC 3381; Bogidhola Tea &
  Trading Co. Ltd. & Anr. v. Hira Lal Somani, 2007 (12) SCR
G 1153 = AIR 2008 SC 911; Ramesh Chand Ardawatlya v. Anil
  Panjwani 2003 (3) SCR 1149 = AIR 2003 SC 2508 • relied
    on.


H                                  432
      SHANTILAL GULABCHAND MUTHA v. TATA                   433
       ENGINEERING & LOCOMOTIVE CO. LTD.
                      Case Law Reference:                         A

      1999 (2) Suppl. SCR 258      relied on          para 3
      2007 (12) SCR 1153           relied on          para 5
      2003 (3) SCR 1149            relied on          para 5      B
     CIVIL APPELLATE JURISDICTION : Civil Appeal No.
 6162 of 2005.
      From the Judgment & Order dated 22.06.2005 of the High
 Court of Judicature at Bombay in Appeal No. 478 of 2005 in
 Notice of Motion No. 503 of 2004 in Suit No. 1924 of 1998.       C
       Prasenjeet Keswani, Pawan Kr. Bansal {for V.D. Khanna)
 for the Appellant.
       Debmalya Banerjee (for Manik Karanjawala) for the
.. Respondents.                                                   D
     The following order of the Court was delivered
                             ORDER
     1. This appeal has been preferred against the judgment       E
 and order dated 22.6.2005 of the High Court of Judicature at
 Bombay, passed in Appeal No.478 of 2005 in Notice of Motion
 No.503 of 2004 in Suit No.1924 of 1988.
     2. Facts and circumstances giving rise to this appeal are:
       A. That the appellant had purchased five Tata Diesel       F
 Vehicles from the respondent No.1 for a sum of Rs.9,58,913/-
 which was to be paid in 8 installments through respondent No.2
 as per repayment schedule. The appellant alleges that eight
 Bills of Exchange were drawn by the respondent no.1 upon the
 respondent no.2 - banker of the appellant and by way of which    G
 the entire amount was paid. Respondent no.1 filed Suit
 No.1924 of 1988 on 2.6.1988 against the appellant as well as
 the banker for recovery of sum of Rs.5,66,000/- alongwith
 interest. Summons were served upon the appellant and he
 entered appearance through advocate to contest the suit.         H
    434      SUPREME COURT REPORTS                  [2013] 2 S.C.R.


A However, subsequently under the impression that the entire
  amount had already been paid, he did not file the written
  statement. The High Court decreed the suit vide judgment and
  decree dated 12.11.2003 under the provisions of Order VIII Rule
  10 of the Code of Civil Procedure 1908, (hereinafter referred
B to as 'CPC') without considering any issue involved therein or
  taking note of the pleadings in the plaint itself.
       B. Aggrieved, the appellant took out a Notice of Motion
  bearing no.503 of 2004 in the said suit for setting aside ex
  parte decree dated 12.11.2003, however, it stood rejected vide
C order dated 10.12.2004 holding it to be not maintainable in view
  of division bench judgment of the Bombay High Court wherein
  it had been held that any decree passed under Order VIII Rule
  10 CPC could not be subjected to the application under Order
  IX Rule 13 CPC.
D        C. Aggrieved, the appellant filed the appeal which has
    been dismissed vide order dated 22.6.2005 concurring with the
    learned Single Judge.
          Hence, this appeal.
E        3. We have heard Shri Prasenjit Keswani, learned counsel
    for the appellant and Shri Debmalaya Banerjee, learned
    counsel for respondent no.1- and perused the record.
       4. This Court in Ba/raj Taneja & Anr. v. Sunil Madan &
  Anr., AIR 1999 SC 3381 dealt with the issue and held that even
F in such fact-situation, the court should not act blindly on the
  averments made in the plaint merely because the written
  statement has not been filed by the defendant traversing the
  facts set out by the plaintiff therein. Where a written statement
  has not been filed by the defendant, the court should be little
G cautious in proceeding under Order VIII, Rule 10, CPC.
  Before passing the judgment against the defendant it must
  ensure that even if the facts set out in the plaint are treated to
  have been admitted, a judgment could possibly by passed in
  favour of the plaintiff without requiring him to prove any fact
H mentioned in the plaint. It is a matter of Court's satisfaction and,
     SHANTILAL GULABCHAND MUTHA v. TATA                       435
      ENGINEERING & LOCOMOTIVE CO. LTD.
therefore, only on being satisfied that there is no fact which need   A
be proved on account of deemed admission, the court can
conveniently pass a judgment against the defendant who failed
to file the written statement. However, if the plaint itself
indicates that there are disputed questions of fact involved in
the case regarding which two different versions are set out in        B
the plaint itself, it would not be safe for the Court to pass a
judgment without requiring the plaintiff to prove the facts so as
to settle the factual controversy. The power of the court to
proceed under Order VIII, Rule 10 CPC is discretionary. The
court further held that judgment as defined in Section 2(9) CPC       C
means the statement given by the Judge of the grounds for a
decree or order. Therefore, the judgment should be self-
contained document from which it should appear as to what
were the facts of the case and what was the controversy which
was tried to be settled by the court and in what manner. The
process of reasoning by which the court came to the ultimate          D
conclusion and decreed the suit should be reflected clearly in
the judgment. The court further held as under:-
     "Whether it is a case which is contested by the defendants
     by filing a written statement, or a case which proceeds ex       E
     parte and is ultimately decided as an ex parte case, or is
     a case in which the written statement is not filed and
     the case is decided under Order 8 Rule 10, the court
     has to write a judgment which must be in conformity with
     the provisions of the Code or at least set out the reasoning
                                                                      F
     by which the controversy is resolved." (Emphasis added)
     5. In Bogidhola Tea & Trading Co. Ltd. & Anr. v. Hira Lal
Somani, AIR 2008 SC 911, this Court while reiterating a similar
view observed that a decree under Order VIII, Rule 10 CPC
should not be passed unless the averments made in plaint are          G
established. In the facts and circumstances of a case, the court
must decide the issue of limitation also, if so, involved.
    (See also: Ramesh Chand Ardawatlya v. Anil Panjwani,
AIR 2003 SC 2508)
                                                                      H
     436      SUPREME COURT REPORTS                 [2013] 2 S.C.R.

A         6. In view of the above, it appears to be a settled legal
     proposition that the relief under Order VIII Rule 10 CPC is
     discretionary, and court has to be more cautious while
     exercising such power where defendant fails to file the written
     statement. Even in such circumstances, the court must be
s    satisfied that there is no fact which need to be proved in spite
     of deemed admission by the defendant, and the court must
     give reasons for passing such judgment, however, short it be,
     but by reading the judgment, a party must understood what were
     the facts and circumstances on the basis of which the court must
c    proceed, and under what reasoning the suit has been decreed.
        7. The instant case is required to be examined in the light
   of the aforesaid settled legal propositions. It is evident from
   the plaint that eight Bills of Exchange, all dated 4.6.1982 for
   the respective amounts had been inclusive of interest and each
 q one of the said bills were accepted by the appellant payable
, at the Mercantile Bank Ltd. Bombay and the said bills were
   discounted by the respondent/plaintiff with its bankers. It is
   further admitted in the plaint that the bank of the appellant paid
   the said amount to the respondent/plaintiff on the respective
 E dates, as the five amounts have been mentioned in para 5 of
   the plaint. However, as the same did not satisfy the entire
   demand, the suit was filed with the following prayer:-
           "That the Defendant No.1 and Defendant No.2 may be
           ordered and decreed to pay to the plaintiff the sum of
F          Rs.999388.30p. as mentioned in paragraph 7 above
           together with interest on the sum of Rs.5,66,000/- at the 1
           rate of 18.5% per annum from the date of suit till
           payments."
G        8. The Trial Court while deciding Suit No.1924 of 1988
     decreed the suit vide judgment and decree dated 12.11.2003,
     which reads as under:-
           "Advocate for the plaintiffs is present. Nobody is present
           for the defendants. The matter is on board for proceeding
.H         against the defendants for want of written statement. Suit
        SHANTILAL GULABCHAND MUTHA v. TATA                       437
         ENGINEERING & LOCOMOTIVE CO. LTD.
       is of 1988. So far no written statement is filed .. Therefore,   A
       there shall be decree in favour of the plaintiffs and against
       the defendants under Order VIII Rule10 of the Code of Civil
       Procedure for a sum of Rs.9,99,388.30 with interest on the
       amount of Rs.5,66,000/- at 12% p.a. from the date of the
       suit till realization and costs. Prayer (a) only of the plaint   B
       is granted in the above terms. Decree be drawn up
       accordingly."
      9. The appellant take Notice of Motion to set aside the
 aforesaid judgment and decree which was dismissed and the
said order of dismissal has been approved by the division C
bench. We are not examining the issue as to whether such a
judgment and decree ex parte could be subjected to the
provisions of Order IX Rule 13 CPC but the court has not
examined as to whether the suit was filed within limitation and
whether on the basis of pleadings, the relief granted by the court D
could have been granted. The court did not even consider it
proper to examine the case prima facie before passing the
decree, as is evident from the above quotation. The same is
complete impugned judgment.
      10. As the Trial Court failed to meet the parameters laid         E
down by this court to proceed under Order VIII Rule 10 CPC,
the judgment and decree of the Trial Court dated 12.11.2003
is set aside and the case is remanded to the Trial Court to
decide afresh. The appellant is at liberty to file the written
statement within a period of 3 weeks from today and the Trial           F
Court is at liberty to proceed in accordance with law thereafter.
As the matter is very old, we request the Trial Court to conclude
the trial expeditiously. The Original Record, if any, may be sent
back forthwith.
    Before parting with the case, we would like to clarify that         G
we have not decided the issue as to whether application under
Order IX Rule 13 CPC in such a case is maintainable.
       11. The appeal is disposed of accordingly.
R.P.                                         Appeal disposed of.        H