Holding

Order 9 Rule 7 permits the court to impose costs and reasonable terms, but it cannot impose conditions that are overly onerous, vague, or that effectively pre‑judge the controversy, thus the condition was invalid.

Summary

The plaintiffs, owners of a leasehold premises in Gurgaon, sued the defendants for recovery of rent arrears and ejectment. The defendants failed to appear on the scheduled date, leading the trial court to proceed ex-parte and later set aside the ex-parte order under Order 9 Rule 7, imposing a condition that the defendants deposit the monthly lease amount in court when filing their written statement. The defendants appealed, arguing that the condition was overly onerous and effectively pre‑judged the suit. The High Court set aside the condition as too onerous, vague and uncertain, and directed an expeditious trial. The Supreme Court held that while Order 9 Rule 7 allows the court to impose costs and reasonable terms, it cannot impose conditions that are oppressive or that amount to a de facto decree of the suit. Consequently, the ex‑parte order and subsequent decree were set aside, the suit was restored as a money claim for arrears up to the date possession was taken, and the defendants were ordered to pay costs to the plaintiffs.

Issues considered

Whether, under Order 9 Rule 7 of the CPC, the trial court could impose a condition requiring the defendants to deposit monthly lease rent in court, amounting to an onerous or pre‑judicial term.
Whether the High Court was justified in setting aside the trial court's condition as too onerous, vague, and uncertain.

Legislation cited

Code of Civil Procedure, 1908s. Order 9 Rule 7

Subjects

ex‑parte proceedingsOrder 9 Rule 7civil procedurelease rent arrearspossessioncostsonerous conditionsetting aside order

Judgment

.,_
VIJA Y KUMAR MADAN AND ORS. A
v.
R.N. GUPTA TECHINCAL EDUCATION SOCIETY AND ORS.

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APRIL 18, 2002

[R.C. LAHOTI AND B.N. AGRAWAL, JJ.] B

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Code of Civil Procedure, 1908:

Order 9, Rule 7-Suitfor recovery ofa"ears ofrent and/or possession--
Defendant not appeared on date fu:ed-Suit ordered to proceed ex-parte- c
Application by defendants/or setting aside ex-parte order-Trial court setting
aside ex-parte order, but putting defendants to terms in that they should
deposit monthly lease rent-Defendants filing appeal before High Court as
regards putting them to terms-High Court holding the condition imposed by
trial court to be too onerous, set it aside-Appeal by plaint!ife-Meanwhile on D
the basis of interim order by Supreme Court trial court decreed th« suit-On
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execution proceedings, possession recovered by plaint!ife-Held, under order
9, Rule 7, the court does have jurisdiction, while setting aside the ex-parte
order, to impose costs and also to put the defendants on terms-But the court
cannot exercise its power to put the defendant/applicant on such terms as may
have the effect ofpre-judging the controversy involved in the suit and virtually E

- decreeing the suit though ex-parte order has been set aside or to put the
parties on such terms as may be too onerous-High Court was justified in
setting aside the condition imposed by the trial court in its order which was
too onerous, also vague, uncertain and suffering from want of clarity-The
•,, ex-parte order and the judgment and decree of the trial court based on the
F
said ex-parte order are set aside-The suit shall stand restored on the file of
the trial court-As the plaint!ife have secured possession of suit premises and
the defendants-respondents have given up their right of restitution so far as
the possession of premises is concerned, the suit shall now be treated as a
money claim for recovery of arrears as claimed in the plaint as also for
recovery of arrears pending suit for the period expiring on/. I 1.2000, the date G
on which the plaintiff-appellants have secured possession over the premises-
........ Defendants shall pay cost of Rs. 50, 000 to the plaintiff-appellants.

Arjun Singh v. Mohinder Kumar and Ors., AIR (1964) SC 993, relied
on.
217
H
218 SUPREME COURT REPORTS [2002] 3 S.C.R ..

A CIVIL APPELLATE JURISDICTION : Civil Appeal No. l 890 of
2000.

From the Judgment and Order dated 14. l 0.99 of the Punjab and Haryana
High Court in C.R. No. 2421 of 1999.

B Manoj Swarup for the Appellants.

M.N. Krishnamani and Aseem Mehrotra for R.K. Agnihotri for the
Respondents.

The following Judgment of the Court was delivered
c Certain premises situated in the township of Gurgaon, Haryana were
held by the respondents on tenancy from the appellants under the Deed of
Lease dated 1.4.1996. The rent of the tenancy premises, payable with effect
from 1.4.1996, was Rs. 63,087.50 per month, in addition to maintenance
charges of Rs. 40,000 per month. On 27.3.1998, the appellants filed a suit for
D recovery of rent and ejectment of the respondents alleging the respondents to
be in arrears with effect from 1.5.1996. On 2.5.1998 the defendants/respondents
and their counsel failed to appear in the trial court and, therefore, the trial
court directed the suit to proceed ex-parte against the defendants. on
29.5.1998
the defendants moved an application under Order 9 Rule 7 of the CPC
E praying for setting aside of the ex-parte order on the ground that their counsel ;.
was prevented from appearing in the court on account of having met with an
accident. On 9.9.1999 the trial court allowed the defendants application
recording the finding that the counsel for the defendant had good and sufficient
ca·;,ise for previous non-appearance in the court and that the non-appearance
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of defendants and their counsel on 2.5.1998 was not intentional but due to
F unavoidable circumstances. However, purporting to exercise the power
conferred by Order 9 Rule 7 of the CPC to put the defendants, on terms, the
trial court directed as under:-

"It is pertinent to mention here that since defendants are enjoying
the property, it will be reasonable to direct them to deposit monthly
G lease amount in the court at the time of filing written statement. If
ultimately it is found that case of the plaintiffs is false and that of the
defendants is true, defendants will be entitled to claim back that
amount from the plaintiffs. On this condition I set aside the exparte
order dated 2.5.98 on the condition that the defendants will deposit
monthly lease amount on 16.2.99 for filing the written statement and
H
VIJAY KUMAR MADAN v. R.N. GUPTA TECHJNCAL EDUCATION SOCIETY 219
... for payment., A

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The defendants feeling aggrieved by the order of the trial court to the
extent to which it placed the defendants on terms in the manner reflected in
the order of the trial court extracted and reproduced heteinabove, preferred
an appeal in the High Court. In its order dated 14. I0.1999, which is impugne<!
herein, the High Court formed an opinion that the condition imposed by the B
trial court on the defendants while setting aside the ex-parte order was too
onerous and in view of such opinion formed by the High Court, the condition
"• imposed by the trial court was directed to be set aside. At the same time
taking care of the hardship that was likely to result to the plaintiffs (respondents
in the High Court), the High Court directed the triat court to proceed to c
dispose of the suit as early as possible and latest by 31.3 .2000.

The plaintiffs filed the present petition seeking special leave to appeal.
On 28.2.2000, while allowing the leave to the appellants, it was directed that
the impugned order of the High Court dated 14th October, 1999 should
remain stayed. However, the Court added that the stay will not in any way D
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affect the direction of the High Court regarding the disposal of the suit by
~ 31st March, 2000. The result of the interim order was that the order of the
trial court dated 9. I. 99 putting the defendants on terms came into operation
and as the defendants failed to comply with the condition imposed by the
trial court, the trial court in terms of the interim order passed by this Court
decided the suit on 31.3.2000 passing a decree for recovery of rent in arrears
E
as also for recovery of possession as prayed for by the plaintiffs. However,
it appears that prior to 28.2.2000 the date of the passing of the interim order
by this Court, and armed with the order of the High Court, the defendants
..., had filed their written statement. The trial had proceeded and on behalf of the
plaintiffs four witnesses (P.W. 5 to P.W. 8) were examined and were also F
cross examined on behalf of the defendants, by the time this court passed the
order dated 28.2.2000. Earlier, while the proceedings had remained ex-parte,
four witnesses, namely, PW I to PW 4 were examined on behalf of tlle
plaintiffs and they were not cross examined by the defendants. There is yet
another important event which has taken place during the pendency of this

- appeal. Subsequent to the passing of the .decree by the trial court the same G
was put to execution. On I st November, 2000, the plaintiff-appellants have
+- taken possession over the property with police aid, as directed by the executing
court.

Here we may give an indication of the controversy between the parties H
220 SUPREME COURT REPORTS [2002] 3 S.C.R.

A to the suit though we are not concerned with the merits thereof. On the
question of recovery of arrears of rent the parties are laying blame on each · ·

B
other. According to the defendants the plaintiffs have failed in fulfilling their
obligation as to certain material terms and conditions of the lease and therefore,
the obligation of the defendants to pay rent remains suspended and they are
not liable to pay the rent; while according to the plaintiffs they have placed
..
the defendants in peaceful and full possession of the tenancy premises and
nothing had remained to b.e done by them,· and therefore, they are entitled to
the recovery of rent and mai~tenance charges as agreed.
..
During the courses of hearing, the learned counsel for the defendant-
C respondents submitted that if this Court is inclined to sustain the order of the
High Court, in that event in order to do complete justice in the case this Court
ought to set aside the judgment and decrees dated 31.3.2000 passed by the
trial court which is in consequence of the interim order made by this Court
and the parties should be put back to the position to which they would stand
relegated in terms of the order of the High Court. However the learned
D counsel very fairly stated under instructions that if the order of the High
Court be sustained the defendants shall not pray fur restitution of possession
over the tenancy premises in spite of the decree of evictions being set aside
and shall also not insist on such of the witnesses being recalled and made
available for further cross-examination, as have already been cross examined
E by the defendants. In view of the above said stand taken by the learned
counsel for the defendants, the limited issue which survives for decision is ·
whether the condition imposed by the trial court putting the defendants on
terms can be said to be too onerous as could not have been imposed under
Order 9 Rule 7 of the CPC and whether the High Court was justified in
setting aside that condition while sustaining the order of the Trial Court
F setting aside the ex-parte proceedings.

Having heard the learned counsel for the parties, we are of the opinion
that the impugned order of the High Court deserves to be maintained but
subject to certain modifications. Under Order 9 Rule 7 of the CPC the Court
does have jurisdiction, while setting aside the ex-parte order to impose costs
G and also to put the defendants-applicants on terms. Rule 7 of Order 9 of the
CPC reads as under:-

"R. 7. Procedure where defendant appear on day of adjourned
hearing and assigns good cause for previous non-appearance.
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H Where the Court has adjourned the hearing of the suit ex-parte
.
VIJAY KUMAR MADAN v. R.N. GUPTA TECHINCAL EDUCATION SOCIETY 221

.... and the defendant, at or before such hearing, appears and assigns A
good cause for his previous non-appearance, he may, upon such terms
as the Court directs as to costs or otherwise, be heard in answer to
the suit as if he had appeared on the day fixed for his appearance."

Power in the Court to impose costs and to put the defendant-applicant
on terms is spelled out from the expression "Upon such terms as the Court B
directs as to costs or otherwise". It is settled with the decision of this Court
in Arjun Singh v. Mohinder Kumar and Ors., AIR (1964) SC 993, that on an
'<; adjourned hearing, in spite of the Court having proceeded ex-parte earlier the
" defendant is entitled to appear and participate in the subsequent proceedings
as of right. An application under Rule 7 is required to be made only if the
defendant wishes the proceedings to be relegated back and re-open the
c
proceedings from the date wherefrom they became ex-parte so as to convert
the ex-parte hearings into bi-parte. While exercising power of putting the
defendant on terms under Rule 7 the Court cannot pass an order which would
have the effect of placing the defendant in a situation more worse off than
what he would have been if he had not applied under Rule 7. So also the D
conditions for taking benefit of the order should not be such as would have
.. the effect of decreeing the suit itself. Similarly, the Court may not in the garb
of exercising power of placing upon terms make an order which probably the
• Court may not have made in the suit itself. As pointed out in the case of
Arjun Singh (supra), the purpose of Rule 7 in its essence is to ensure the
orderly conduct of the proceedings by penalizing improper dilatoriness
E
calculated merely to prolong the litigation.

- Costs should be so assessed as would reasonably compensate the plaintiff
for the loss of time and inconvenience caused by relegating back the
T"
proceedings to an earlier stage. The terms which the Court may direct may F
, take care of the time or mode of proceedings required to be taken pursuant
to the order under Rule 7. For example, keeping in view the conduct of the
defendant-applicant, the Court may direct that though the ex-parte proceedings
are being set aside, the defendant must file the written statement within an
appointed time or recall for cross examination at his own cost and expenses
the witnesses examined in his absence or that the defendant shall be allowed G

- ...- not more than one opportunity of adducing his evidence and so on. How the
terms are to be devised and made a part of the order would depend on the
facts and circumstances of a given case. In short, the court cannot exercise
its power to put the defendant/applicant on such terms as may have the effect
of pre-judging the controversy involved in the suit and virtually decreeing H
I
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222 SUPREME COURT REPORTS [2002] 3 S.C.R.

A the suit though ex-parte order has been set aside or to put the parties on such )r•

terms as may be too onerous. That apart, the order of the trial court dated
9. l.l 980 suffers from another infirmity of vagueness and want of clarity. In
fact, during the course of hearing, the learned counsel for the parties tried to
place their own respective interpretation certainly divergent to each other, on
the order of the High Court as to what it means, that is, whether the trial court
B directed to pay all the arrears of monthly lease and the amount being deposited
along with filing of the written statement or for that month only and whether
for furture too, but we do not propose to deal further with this aspect as it
is unnecessary. That condition in the order of trial court having been set aside
by the High Court, we are inclined to sustain the order of the High Court but
.
-f

c subject to certain modification. In our opinion the High Court was justified
in setting aside the condition imposed by the trial court in its order which was
too onerous, also vague, uncertain and suffering from want of clarity. The
order of the High Court to the extent of setting aside the ex-parte proceedings
and directing the expeditious· trial of the suit has to be sustained as it serves
the ends of justice. But in .view of the subsequent events brought to our
D notice and the statement made by the learned c~:mnsel for the defendants-
respondents during the course of hearing, the following . directions are made:-
.
I. The ex-parte order dated 2.5.98, and the judgment and decree of the . ).

trial court based on the ex-parte order dated 2.5.-98 are set aside. The interim _,
order of this Court dated 28.2.2000 shall also stand vacated. The suit shall
E
stand restored on the file of the trial court.

2. As the plaintiffs have secured the possession of suit premises and the . .,.
defendants-respondents have given up their right of restitution so far as the
possession of the premises are concerned, the suit filed by the plaintiff-
F appellants shall now be treated as a money claim for recovery of arrears as .,.
claimed in the plaint as also recovery of arrears pending suit for the period "
expiring on l.11.2000, the date on which the plaintiff-appellants have secured
possession over the tenancy premises.

3;· Such of the witnesses as have already been cross examined by the
G defendant-respondents shall not be recalled for further cross examination, in
view of that right having been given by the learned counsel for the defendant-
respondents before this Court. Such of the plaintiffs' witnesses as were not ~

cross examined, shall be recalled for cross examination at the cost and expenses
of the defendant-respondents.
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H 4. The parties shall have the liberty to lead such other evidence as they
,....
VIJA Y KUMAR MADAN v. RN.GUPTA TECHINCAL EDUCATION SOCIETY 223

- -,C.
propose to do. A
5. The trial court may refuse to grant any avoidable adjournment at the

- trial which may have the effect of delaying the hearing of the suit. The suit
shall be expeditiously heard and decided. The learned counsel for the
defendant-respondents has assured that the defendants shall co-operate therein.

6. To avail the benefit of the orders passed by the High Court and this
order the defendants shall pay cost of Rs. 50,000 to the plaintiff-appellants
B

~ within four weeks as a condition precedent .
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During the execution of decree an amount of Rs. 20,00,000 (Rupees
twenty lakhs only) is said to have been attached by the executing court. As C
the ex-parte decree has been set aside and the suit stand re-opened, the
plaintiff-appellants shall be at liberty to move an application for attachment
before judgment of such amount and/or such other interim relief as may be
available to them before the trial court. However, we express no opinion on
this.
D
The appeal stands disposed of in the terms abovesaid.

• R.P. Appeal disposed of.