Supreme Court of India
ARTI DIXIT & ANRversusSUSHIL KUMAR MISHRA & ORS
- Citation
- 2023 INSC 556
- Decided
- 18 May 2023
- Disposal
- Dismissed
- Bench
- K M JOSEPH
Holding
An applicant must deposit the decretal amount or give security on a prior application; the appellants failed to comply and the security offered was legally unacceptable, so the appeal is dismissed.
Summary
The respondents obtained an ex‑parte decree for ejectment and recovery of rent from the appellants. The appellants filed, on the same day, an application under Order IX Rule 13 of the CPC and an application under Section 17 of the Provincial Small Cause Courts Act, 1887, seeking permission to deposit or furnish security. No cash deposit or security was furnished at the time of filing; a shop owned by the Municipal Corporation was later offered as surety, which the trial court rejected as unenforceable under CPC Sec. 145. The High Court and the Additional District Judge affirmed the rejection, holding that the mandatory requirement of Section 17 was not complied with. The Supreme Court held that Section 17 obliges the applicant to deposit the decretal amount or give security on a prior application, and that the security offered was not acceptable. Consequently, the appeal was dismissed.
Issues considered
- Whether an application under Section 17 of the Provincial Small Cause Courts Act, filed without a cash deposit or security, satisfies the mandatory requirement of the proviso.
- Whether a prayer for permission to furnish security, without an explicit request for dispensing with deposit, suffices under Section 17.
- Whether security offered by a tenant of a municipal property can be accepted under Section 17(2) and enforced under CPC Sec. 145.
- Whether delay by the court in passing an order on the Section 17 application can prejudice the applicant.
- Whether the 30‑day limitation under the Limitation Act applies to furnishing security.
Legislation cited
- Code of Civil Procedure, 1908s. 145, s. Order IX Rule 13, s. Section 151
- Limitation Acts. Article 123
- Provincial Small Cause Courts Act, 1887s. 17
Subjects
ex‑parte decreeSection 17Provincial Small Cause Courts ActsecuritysuretyCPC Order IX Rule 13limitation perioddepositevictionrent arrears
Judgment
728 [2023]
SUPREME COURT 5 S.C.R. 728
REPORTS [2023] 5 S.C.R.
A ARTI DIXIT & ANR
v.
SUSHIL KUMAR MISHRA & ORS
(Civil Appeal No.3858 of 2023)
MAY 18, 2023
B
[K. M. JOSEPH AND HRISHIKESH ROY, JJ.]
Provincial Small Cause Courts Act, 1887: s. 17 – Decree
passed by a court of Small Causes ex-parte, under the proviso to
s.17 – Application to set aside the ex-parte decree – Mandatory
requirements – Held: Applicant must deposit in the court, the amount
C due under the decree or should give security for the performance
of the decree ‘on a previous application’ made by him in this behalf
– Such application can be filed up to the date of the application u/
Ord. IX r. 13 and the security must be made available along with
such application – On facts, court of Small Causes passed an ex-
D parte decree against the appellants for ejectment and recovery of
arrears of rent and taxes – Appellants filed an application u/Ord.
IX r. 13 rw s. 151 CPC seeking setting aside of the ex parte decree,
and on the same day filed application u/s. 17 and sought permission
for depositing/furnishing surety – Subsequently an application was
filed that the security in the form of rental shop owned by the
E Municipal Corporation be taken on record and the same was allowed
– Pursuant to remand, the trial court rejected the application filed
u/s.17 as also the application filed to take the security on record –
Surety provided by the appellants was also rejected – Said order
was confirmed in the revision petition, as also in the writ petition by
F the High Court – On a literal interpretation of s. 17, the appellant
did not seek for dispensing with deposit as such, thus, the appellant
had not in the said sense complied with the mandatory requirement
of s. 17 – Furthermore, the security furnished by the appellant
through the surety, who is a tenant, is not acceptable in law having
regard to s. 17(2) as the shop belonged to the Municipal Corporation
G and it could not be sold for enforcing the surety – Code of Civil
Procedure, 1908 – Ord. IX r. 13
Dismissing the appeal, the Court
HELD : 1.1 When a Decree is passed by a Court of Small
Causes ex-parte, inter alia, under the proviso to Section 17 of
H
728
ARTI DIXIT & ANR v. SUSHIL KUMAR MISHRA & ORS 729
the Provincial Small Cause Courts Act, 1887, the applicant, who A
files an Application to set aside the ex-parte Decree is bound to
do the following: he must deposit in the Court, the amount due
under the Decree; in the alternative, he should give security for
the performance of the Decree ‘on a previous Application’ made
by him in this behalf. [Para 18][747-H; 748-A-B]
B
1.2 As regards the question whether the Application is in
conformity with the proviso to Section 17 and did the applicant
furnish any security on 06.05.2014, the answer can only be in the
negative. The appellant did not seek for dispensing with deposit
as such. Therefore, the appellant had not in the said sense
complied with the mandatory requirement of Section 17. [Para C
21][749-F]
1.3 The High Court in the impugned order finds that no
application for dispensing with surety was filed and that this will
be read against the appellants. The High Court perseveres in
this observation on three occasions. It is observed that what D
Section 17 of the Act contemplates in the proviso is that the
applicant seeking to set aside an ex-parte decree inter alia must
either make a deposit of the amount in question or give security.
In Kedarnath’s case it has been laid down that the provision as to
deposit can be dispensed with by the Court. The applicant can, in E
other words, seek a dispensing with of the deposit and seek leave
for furnishing such security as the Court may direct. Therefore,
the High Court was not correct in proceeding on the basis that
appellants did not make any application for dispensing with surety.
No doubt, at one place, the High Court states that there is no
prayer for dispensing with the surety or the amount sought to be F
deposited by way of security. The prayer of the appellants was to
permit deposit/furnishing surety of Rs.50000/- which was part of
the decretal amount. This could be treated impliedly as seeking
a direction within the meaning of Section 17. An applicant could
no doubt also propose the security which he wishes to give. In G
fact, ordinarily, an application for dispensing with the cash deposit
and for direction to furnish security should be made prior to
application under Order IX Rule 13 of CPC. On the order passed
on the same, the applicant is to comply with the same and furnish
the security at the time when he files the application under Order
H
730 SUPREME COURT REPORTS [2023] 5 S.C.R.
A IX Rule 13. Since an application under Section 17 which is really
required only in the absence of the cash deposit can be filed up
to the date of the application under Order IX Rule 13 ordinarily,
the security must be made available along with such application.
There then arises the aspect that the application under Order IX
Rule 13 can be filed within 30 days as provided in Article 123 of
B
the Limitation Act. Undoubtedly, the deposit or security must be
furnished within 30 days. This is on the basis that the application
can be made under Order IX Rule 13 upto the 30th day but at the
same time, the conditions in the proviso, namely, the deposit or
the security must be furnished at the time of presenting the
C application under Order IX Rule 13. But if the application under
Section 17 can be moved along with the application under Order
IX Rule 13, then if a direction is required for furnishing security
and the Court grants permission and time, then it may be possible
to furnish the security only after the date of the application under
Order IX Rule 13. The Court is expected to pass an order
D
promptly on the application which may be filed under Section 17
which may be of the same date as the application under Order IX
Rule 13. Any delay on the part of the Court cannot prejudice the
applicant. [Para 22][750-A-H; 751-A]
1.4 The appellants filed the application both under Section
E 17 of the Act and under Order IX Rule 13 on the same day,
namely, 06.05.2014. The application under Order IX Rule 13 is
premised on knowledge of the ex parte decree being obtained on
05.05.2014 in the Execution Proceedings. There was no security
offered on 06.05.2014. Though a direction as such was not
F expressly sought for but permission was sought for to furnish
security, it could be said that in substance the appellants
essentially sought for direction within the meaning of the proviso
to Section 17. The High Court was in error in finding that the
appellants did not seek for dispensing with the security, and
therefore, apparently holding the same against the appellants.
G When the appellants sought for permission to furnish security, if
the permission was granted and a direction to furnish security
was given on the same date and it had been complied with within
the time, then the appellants would have been compliant with
Section 17. No orders were passed on the application under
H Section 17 dated 06.05.2014. Within 6 days, on 12.05.2014, the
ARTI DIXIT & ANR v. SUSHIL KUMAR MISHRA & ORS 731
appellants on their own purported to furnish security. The surety A
was the 7th proforma respondent in the appeal. The security was
however, a shop. The shop was not owned by the surety. The
Municipal Corporation, Lucknow was the owner. The surety was
a tenant. A security to be provided under Section 17 by a surety
is to be enforced under the provisions of Section 145 of the Code
B
of Civil Procedure as contemplated in Section 17 (2) of the Act.
Section 145 of the CPC inter alia provides that the security
provided by a surety can be enforced by effecting sale of the
property. It has been held that the security provided by the
appellants through the surety is not acceptable in law having
regard to Section 17 (2) as the shop belonged to the Municipal C
Corporation, Lucknow and it could not be sold for enforcing the
surety. [Para 23][751-B-G]
1.5 While it is true that no order was passed on the
application under Section 17 on 06.05.2014, the fact remains that
the appellants on their own furnished a surety as stated. The D
High Court reasons that the security so provided was
unacceptable on two grounds. Firstly, it was not furnished along
with the application under Order IX Rule 13 on 06.05.2014.
Secondly, it is found that it was not acceptable in law. [Para
24][751-G-H]
E
1.6 It is true that the High Court in the order dated
03.12.2015 proceeded to find that the “security was accepted by
the court below”. This is by way of accepting the submission of
the counsel for the plaintiffs. It was on this basis that the matter
was remanded. Following the remand, the trial court allowed the
application filed by the appellants and also the application under F
Order IX Rule 13. This has been set aside by the ADJ and the
matters stood remanded back by Order dated 01.08.2017. This
order was not challenged by the appellants. It is thereafter that
the courts have concurrently found that there was non-compliance
of Section 17. The earlier order of the High court dated G
03.12.2015 has been overcome by finding that there was a
sweeping statement before the High Court in the earlier round
that the surety furnished had been accepted. The High Court
further finds that actually the prayer made in application dated
12.05.2014 was only to take the surety on record. The order dated
H
732 SUPREME COURT REPORTS [2023] 5 S.C.R.
A 25.04.2014 only shows that only the surety was taken on record.
It is further found that the application dated 12.05.2014 was filed
after 06.05.2014 and could not be the basis for a valid order under
Section 17. [Para 25][752-A-D]
1.7 It is accepted that the security furnished by the
B appellants in the form of the rented shop belonging to a third
party cannot be accepted as security in law. It is patent. It is not
clear from the order dated 24.05.2014 that the Court had applied
its mind to the sufficiency of the security or as to whether it was
acceptable security. If security is given, which is later found to
be unacceptable even if it is within 30 days within the meaning of
C Article 123 of the Limitation Act, then it would not be complying
with Section 17. [Para 26][752-E-F]
Ram Bharose v. Ganga Singh AIR 1931 Allahabad 727
– approved.
D 1.8.While it is true that there may have been a failure on
the part of the court to pass orders on the application dated
06.05.2014 apparently, the appellants proceeded to furnish the
security in this case on 12.05.2014. Therefore, it is proceeded
on the basis that within 30 days of the date of knowledge of the
decree, as alleged by the appellants, but after the date of the
E application under Order IX Rule 13, the appellants have furnished
security. No order was passed by the Court on 06.05.2014. Even
proceeding to consider the security however it is found clearly
unacceptable in law. The effect of the order of the High Court
dated 03.12.2015 must be understood with reference to the
F concession made by the counsel and may not withstand the
requirement of law under Section 17 of the Act being fulfilled.
The Court cannot be unmindful of the fact that the appellants did
not challenge the order of the Additional District Judge dated
01.08.2017. The trial Judge was bound by the same as the
appellants did not challenge the order dated 01.08.2017. The fact
G that the appellants, after participating in the remanded
proceedings mounted a challenge in a writ to the order dated
01.08.2017 appears as not advancing the case of the appellants.
This is both for the reason of the belated challenge as also the
nature of the earlier order involved. In the facts, having regard
H
ARTI DIXIT & ANR v. SUSHIL KUMAR MISHRA & ORS 733
to the Order dated 01.08.2017 and the security being found A
unacceptable, there is no merit in the appeal. [Para 27, 28][752-
F-H; 753-A-C]
Kedarnath v. Mohan Lal Kesarwari and others AIR
2002 SC 582 : [2002] 1 SCR 144; Bhagwan Dass Arora
v. First Additional District Judge, Rampur and others B
(1983) 4 SCC 1 : [1983] 3 SCR 493 – referred to.
Case Law Reference
[2002] 1 SCR 144 referred to Para 7
[1983] 3 SCR 493 referred to Para 13 C
AIR 1931 Allahabad 727 approved Para 26
CIVIL APPELLATE JURISDICTION : Civil Appeal No.3858
of 2023.
From the Judgment and Order dated 19.08.2021 of the High Court
D
of Judicature at Allahabad in MUA227 No.2175 of 2021.
Haraprasad Sahu, Pranaya Kumar Mohapatra, Advs. for the
Appellants.
S. R. Singh, Sr. Adv., Pradeep Kumar Yadav, Sushant Kumar
Yadav, Gaurav Lomes, Prithivi Yadav, Rahul Ranjan Singh, Venkatesh E
Rajput, Shivam Tyagi, Sanjeev Malhotra, Advs. for the Respondents.
The Judgment of the Court was delivered by
K. M. JOSEPH, J.
1. Leave granted. F
2. The Respondents No.1 to 4 obtained an ex-parte decree against
the appellants. The decree was one for ejectment and recovery of arrears
of rent, taxes, damages etc. This decree was passed on 18.10.2012.
The appellants filed an application under Order IX Rule 13 read with
Section 151 of the Code of Civil Procedure (hereinafter referred to as
G
‘CPC’)on 06.05.2014 claiming knowledge of the Decree on execution
proceeding on 05.04.2014. It was numbered as 4C. On the very same
day, an application was filed under Section 17 of the Provincial Small
Cause Courts Act 1887 (hereinafter referred to as the ‘Act’).
3. Section 17 of the Act reads as follows:
H
734 SUPREME COURT REPORTS [2023] 5 S.C.R.
A “17. Application of the Code of Civil Procedure.—(1) The
procedure prescribed in the Code of Civil Procedure, 1908 (5 of
1908), shall save in so far as is otherwise provided by that Code
or by this Act,] be the procedure followed in a Court of Small
Causes, in all suits cognizable by it and in all proceedings arising
out of such suits:
B
Provided that an applicant for an order to set aside a decree passed
ex parte or for a review of judgment shall, at the time of presenting
his application, either deposit in the Court the amount due from
him under the decree or in pursuance of the judgment, or give such
security for the performance of the decree or compliance with
C the judgment as the Court may, on a previous application made by
him in this behalf, have directed.
(2) Where a person has become liable as surety under the proviso
to sub-section (1), the security may be realised in manner provided
by section 145 of the Code of Civil Procedure, 1908 (5 of 1908).”
D
(Emphasis Supplied)
4. The relevant contents of the Application under Section 17 and
the relief sought was as follows:
“3. That the applicants pray to the Hon’ble Court that it shall be
E necessary in the interest of justice to grant the permission for
depositing/ paying the total amount of Rs. 98,624/- (Rupees Ninety
Eight Thousand Six Hundred Twenty Four Only) including decrial
amount, compensation, incurred expenses etc., out from such
amount, a sum of Rs. 12,600/- (Rupees Twelve Thousand Six
F Hundred Only) have already been deposited under section 30 (1)
of Uttar Pradesh Act No. 13 of 1972 and balance amount is
calculated Rs. 86,024/- (Rupees EightySix Thousand Twenty Four
Only), out from the same, the applicants intend to furnish the surety
of a sum of Rs. 50,000/- (Rupees Fifty Thousand Only) and deposit
balance amount before Hon’ble Court.
G
4. That the applicants are annexing the Tendering Application for
depositing cash amount of Rs. 36,024/- (Rupees Thirty Six
Thousand Twenty Four Only), it shall be appropriate in the interest
of justice to pass tender for depositing the such amount.
PRAYER
H
ARTI DIXIT & ANR v. SUSHIL KUMAR MISHRA & ORS 735
[K. M. JOSEPH, J.]
Therefore, it is humbly prayed to this Hon’ble court that grant the A
permission for depositing/ furnishing the surety of a sum of Rs.
50,000/- (Rupees Fifty Thousand Only) by passing the annexed
tender along with application in compliance of section 17 of
Provincial Small Cause Act, 1800 presented by applicants.”
(Emphasis supplied) B
5. This Application came to be numbered as 8C. Subsequently, on
12.05.2014, an Application was filed with a prayer that the security in
the form of a rental shop owned by the Nagar Nigam may be taken on
record. This Application was ‘allowed’ or ‘admitted’ on24.05.2014, a
point of controversy to be noticed and dealt with. The surety was one C
Abhishek Dixit (the 7th proforma respondent in this appeal). This was
the Application numbered as 14C. On 23.09.2015, the Trial Court
dismissed Application 8C filed under Section 17 of the Act. The Order,
inter alia, states as follows:
“In the light of above contentions/ arguments, I carefully inspected D
record file and found that the Restoration Application i.e. 08C
was presented itself on 06.05.2014, but this application was not
corroborated before the then Presiding Officer, but after submitting
the application i.e. 8C, it has been submitted the application i.e.
14C before Court, which was admitted by Court on 24.05.2015,
but it was not deposited necessary compensation with the same. E
Therefore, it was not remained any relevance to again pass the
order on application i.e., 08C after submitting the application i.e.,
14C. In the above circumstances, the application i.e. 08C has
been fruitless as the application i.e. 14C has already been admitted
on 24.05.2014 by the then Presiding Officer. Therefore, at this F
stage, it is not any relevance of application i.e., 08C and the same
is liable to be dismissed.”
(Emphasis supplied)
6. This Order was challenged by the appellants by filing a Revision
before the High Court.It is relevant to notice the following part of the G
Order passed by the High Court:
“Heard Sri Umesh Narain Sharma, learned Senior Advocate,
assisted by Sri Shailendra Kumar learned counsel for the
revisionists and Sri W.H.Khan, learned Senior Advocate
assisted by Sri Anand Srivastava learned counsel for the H
736 SUPREME COURT REPORTS [2023] 5 S.C.R.
A opposite parties. The present revision has been filed against
the order dated 23.09.2015 passed by learned Additional
District Judge/Special Judge (E.C. Act) Kanpur Nagar, in
Misc. Case No. 11/74/2014 whereby application paper no.
8-C under Section 17 of the Small Causes Court Act filed by
the revisionists has been rejected arising out of ex-parte
B
Judgement and decree dated 18.10.2013 passed in Small
Causes Case No. 27 of 2012. Learned counsel for the
revisionists contends that no notice in the SCC suit was served
upon the revisionists and ex-parte order passed against the
defendants-revisionists and even in execution proceedings no
C notice was served and ex-parte order passed against which
application under Order IX Rule 13 C.P.C.. Learned counsel
further contends that application under Section 17 of Small
Causes Court Act was filed which remain pending which
application was also filed within the statutory period. Learned
has next contended that again another application under the
D
statutory period was filed accepting the sureties which was
accepted by the learned court below after one year. Thereafter
earlier application paper no.8Ga has been rejected vide order
impugned which is impugned in the present revision. Sri
W.H.Khan, learned Senior Counsel assisted by Sri Anand
E Srivastava, learned counsel for the opposite parties states
that once the surety has been accepted, the earlier application
has become redundant which is the order impugned in the
present revision, therefore no adversity has been attended to
by the revisionists. In view of the submissions made by learned
counsel for the parties this Court is of the opinion that once
F
the surety has been accepted by the Court below as has also
been stated by Sri W.H.Khan, learned counsel for the opposite
parties, the matter may be directed to be decided expeditiously,
according it is directed as such. With the aforesaid directions,
this revision stands disposed off”.
G (Emphasis supplied)
7. This Order was passed on 03.12.2015. On the basis of the said
order the Trial Court by Order dated 07.12.2016, after noticing the Order
of the High Court, found that the appellants have presented the Application
under Section 17 of the Act at the time of presenting the Application
H
ARTI DIXIT & ANR v. SUSHIL KUMAR MISHRA & ORS 737
[K. M. JOSEPH, J.]
under Order IX Rule 13 of the CPC, and that though the Application 8C A
was dismissed by Order dated 23.09.2015 on the basis of the Application
No. 14C,in view of the decision of this Court in Kedarnath v. Mohan
Lal Kesarwariand others1,the Trial Court found that the appellant had
complied with Section 17(1) of the Act in relation to depositing the decretal
amount and also in view of the High Court order about surety being
B
‘admitted’ it was found that the surety submitted by the appellants was
also sufficient. It further proceeded to find that service of summons
could not be inferred on the appellants.Therefore, the application under
Order IX Rule 13, (4C) was allowed with cost of Rs.1500. This Order
was, inturn, challenged before the Additional District Judge, Kanpur
(Urban).By Order dated 01.08.2017,the Orders dated 07.12.2016, C
23.09.2015 and 04.10.2016 were ‘dismissed’ and it was found, inter alia,
as follows:
“26. In the apparent view of this Court in judicial citation i.e.
Kedarnath (above), the Hon’ble Supreme Court established the
principle, such principle completely clarified in the judicial citation D
i.e. Rajkumar Makhija (above) by the Bench of Hon’ble High
Court. If it is any previously established legal principle contrary to
above both legal principles, in such circumstances, it cannot be
given preference to established principle in the same. It is
mandatory and prior to considering the revision application, the
Learned Trial Court must satisfy by this fact that whether the E
above section 17 has been complied or not? and Such kind of
satisfaction cannot be left for later stage. In the present case, it
was presented the application i.e. document no. 28C under section
17 of Provincial Small Cause Act, in fact till date, it is not passed
any order on the same and on 23.09.2015 the application dismissed F
on the ground that it has already been passed order on the
application i.e. document no. 34C. The application i.e. document
no. 34C had been presented only with the intention that the surety
is to be taken on record, which was admitted by Court, it means
the surety had been taken on record, but this order cannot be
considered that the surety was admitted by considering/ inferring G
sufficient. Thereafter again, when on the direction of Court, it
was presented the applications i.e. document nos. 90C and 102C
on behalf of defendant, in such circumstances; it was not passed
1
AIR2002 SC 582
H
738 SUPREME COURT REPORTS [2023] 5 S.C.R.
A any appropriate order on such applications. If it is observed in
these circumstances, it is not placed any order for admitting surety,
in absence of the same, it cannot be inferred/ considered to not
complyin any condition to the provisions of section 17 of Provincial
Small Cause Act, but as the principle established by Hon’ble
Supreme Court in the case of Kedarnath that in the condition of
B
causing delay in passing order on the part of Court, the defendant
cannot be declared guilty/ defaulter, in the present case also, this
Revision Court cannot declare guilty/ defaulter to the defendants.
27. Whether the defendant complied the provisions of section 17
of Provincial Small Cause Court Act or not? It is the question of
C one fact and it can only be decided/ adjudicated by Learned Trial
Court accordingly. In such circumstances, it was not in accordance
of stipulated provisions of law toadmitted revision petitioner without
concrete conclusion in relation of compliance of above section 17
and the impugned order is liable to be set aside.”
D (Emphasis supplied)
8. It was thereafter ordered as follows:
“The revision is admitted. The impugned order dated
07.12.2016 and orders dated 23.09.2015 and 04.10.2016
E respectively are dismissed and it is direction to Learned Trial
Court that firstly, in the light of objections of plaintiff, pass
the decree after compliance of section 17 of Provincial Small
Cause Act or non-compliance in relation its report on
deposited amount and presented surety i.e. document nos.
16C/36C and thereafter pass the appropriate order in
F accordance of stipulated provisions of law on hearing the
parties on revision petition. In the facts and circumstances of
present case, the parties shall afford their respective incurred
expenses. Return the record file. The parties are directed to
appear on 24.08.2017 before Ld. Trial Court”.
G (Emphasis supplied)
9. On the basis of the aforesaid order the Trial Court by order
dated 11.02.2019 rejected the application under Section 17 dated
06.05.2014 and also the application dated 12.05.2015. The surety provided
by the appellants was also rejected. This order was confirmed by the
H ADJ by Order dated 26.02.2021 in revision filed by the appellants. It
ARTI DIXIT & ANR v. SUSHIL KUMAR MISHRA & ORS 739
[K. M. JOSEPH, J.]
was found that the Order dated 01.08.2017 passed by the ADJ was A
binding on the Trial Court. We notice the following reasoning:
“ … It is apparent on the basis of above whole discussion that
applicant no. 3 namely Abhishek Dixit is not owner of the land of
shop, of which, it was presented the surety of shop by the applicant
no. 3 namely Abhishek Dixit on behalf of revisionists/ applicants B
and the ownership of above land of shop is vested in Municipal
Corporation Kanpur Metropolitan, Kanpur. Therefore, under the
provisions of section 145 of Civil Procedure Code, the surety cannot
be recovered by selling the said shop as it is vested ownership
right of Municipal Corporation, Kanpur Metropolitan, Kanpur on
the said land of shop. The applicant no. 3 namely Abhishek Dixit C
is not owner of said land of shop. …
… In accordance of principle established by the Bench of Hon’ble
High Court in judicial citation/ judgment i.e. Rajkumar Makheja&
Others Versus M/s. S.K.S. & Company & Others, 2012 (3) A.R.C.
117, now it cannot be granted/ extended the time limit to the D
revisionists for presenting surety at this stage as now, the limitation
period of presenting the surety has been ceased. In this way, it is
clear that applicants/ revisionists have completely not complied
the provisions of section 17 of Provincial Small Cause Act.”
10. The appellants thereupon filed a Writ Petition before the High E
Court of Allahabad by challenging the Order dated 01.08.2017 passed
by the ADJ, the Order dated 11.02.2019 passed by the Trial Court and
the order dated 26.02.2021 passed by the ADJ. Further order dated
09.03.2021 passed by the ADJ in Execution Case, ordering the eviction
of the appellants based on the ex-parte decree, was also challenged. F
11. By the impugned Order, the High Court has dismissed the said
Writ Petition.It was, inter alia, found by the High Court that no
Application for dispensing with surety was filed. Rather permission was
sought for the security being given. It was further found that the
requirement of Section 17 is mandatory and filing of application without G
furnishing surety and making no prayer for dispensing would be read
against the appellants. It was found that only an Application (14C) was
filed on 12.05.2014, wherein the only prayer was to keep the ‘Application
on record’. On 24.05.2014, Order was passed for keeping the Application
on record. There was neither any prayer for accepting the surety towards
H
740 SUPREME COURT REPORTS [2023] 5 S.C.R.
A the part of the decretal amount nor any such Order was passed. The
Application (14C), it was found, was made after the filing of the
Application under Order IX Rule 13 of the CPC. The security for the
amount of Rs.50,000/- was submitted on 24.05.2014. This Court in
Kedarnath (supra), it was found, has not held that where the incompetent
surety had been furnished, the Court may dispense with the same. It
B
was also found the Judgments relied upon by the appellants would not
apply as instead of making prayer before the Trial Court to furnish
appropriate security, prior to the Order dated 23.09.2015 was passed,
the appellants resorted to litigation and at no stage they offered any
surety as per law. The concession by a Counsel regarding a question of
C law, it was found, was not binding on the party. This is by way of dealing
with the submission of the appellants based on the statement of the
Senior Counsel for the plaintiffs, as seen reflected on the Order of the
High Court, which we have extracted.
12. We have heard Shri Pranaya Kumar Mohapatra on behalf of
D the appellants.We have also heard Sh. S.R. Singh, learned Senior Counsel
on behalf of the respondents.
THE CONTENTIONS OF THE APPELLANTS
13. The appellants had moved the Application under Order IX
Rule 13 of the CPC as well as the Application under Section 17 of the
E Act on the same day, i.e., 06.05.2014. The Trial Court did not pass any
Order on the Application under Section 17 dated 06.05.2014. The
Application under Section 17 being filed on the same day as an Application
under Order IX Rule 13, was validly filed in terms of the Judgment of
this Court in Kedarnath (supra). There was a fault on the part of the
F Court in not passing Order on the Application under Section 17 filed on
06.05.2014. The appellants cannot be made to suffer on account of the
fault of the Court. On 24.05.2014, the Application filed for taking on
record the security, was accepted. The prayer in the application (14C)
was ‘TAKEN ON RECORDS’.The earlier Application dated 06.05.2014,
under Section 17, was pending consideration. The security, which was
G accepted, was Shop No. 25. The same was allotted by the Municipal
Council, Kanpur. For the allotment, a sum of Rs.85,000/- had been
received by the Local Body, which had been deposited. Once the security
was accepted, any insufficiency found after the prescribed period, cannot
be laid at the doorstep of the appellants. Reliance is placed on the
H Judgment of the Full Bench of the Allahabad High Court in the case of
ARTI DIXIT & ANR v. SUSHIL KUMAR MISHRA & ORS 741
[K. M. JOSEPH, J.]
Bhagwandas Arora v. First ADJ Rampur. Also, reliance is placed on A
the decision of this Court reported in Bhagwan Dass Arora v. First
Additional District Judge, Rampur and others2. The Trial Court passed
Order on security after two years, viz., on 29.03.2015 with the expression
‘inappropriate security’. The Trial Court had to give direction on
sufficiency of security within the prescribed period. If that had been
B
passed and the Trial Court raises questions about sufficiency of the
security, the appellants could not have submitted other security or cash
without the Order of the Court. Reliance is placed on the Order dated
03.12.2015 passed by the High Court. In view of the Order passed by
the High Court, in the hierarchical system, the ADJ erred in overlooking
the Order of the High Court. We are reminded that the Order of the C
ADJ dated 01.08.2017 was also challenged before the High Court in the
Writ Petition. The merits of the case must be considered.
THE SUBMISSIONS OF RESPONDENTS 1 TO 6
14. The requirements under Section 17 are mandatory. Security
was not filed on 06.05.2014 but on 24.05.2014. Therefore, the mandatory D
condition in proviso to Section 17(1) was not complied with.The Court
should have passed an Order on the Application under Section 17(8C)
dated 06.05.2014 indicating the nature of the security, that would be
sufficient for the performance of the Decree. However, it was contended
that it is not forthcoming as to why appellants did not press the Application E
under Section 17 dated 06.05.2014 and also filed other Application for
security. Therefore, the failure on the part of the Court to pass Orders
on the Application dated 06.05.2014 under Section 17 could not be a
factor entitling appellants to contend that in the absence of an Order,
they were prejudiced. This is for the reason that they are presumed to
know, having regard to Section 17(2) of the Act, that security must be F
such as may be enforceable in law. The security, which was furnished,
consisted of a shop room, which belonged to the Municipal Corporation
and not to Shri Abhishek Dixit (the surety) who was the third Writ
Petitioner and who is shown as Proforma Respondent No.7 in the Appeal.
The security was not enforceable. The period of limitation for providing G
security had expired. While an Application under Section 17 can be filed
with application under Order IX Rule 13, the security must be filed along
with the Application. Otherwise, it may not be possible for the Court to
find whether the security, which was filed, was in conformity of the
2
(1983) 4 SCC 1 H
742 SUPREME COURT REPORTS [2023] 5 S.C.R.
A Section 17(2) of the Act. Even assuming that the security could be
furnished subsequently, the subsequently furnished security was not
enforceable in law. The Application under Order IX Rule 13 has not
been rejected on the ground that security was not furnished but on the
ground that the security furnished on 12.05.2014 (Application 14C) was
not a valid security. Therefore, the plea that the appellants cannot suffer
B
on account of the fault of the Court, does not arise.
ANALYSIS; 3 DECISIONS;KEDARNATH (SUPRA)
15. We have already set out Section 17 of the Act. It is necessary
to notice that in Kedarnath (supra), this Court, inter alia, held as follows:
C “8. A bare reading of the provision shows that the legislature has
chosen to couch the language of the proviso in a mandatory form
and we see no reason to interpret, construe and hold the nature of
the proviso as directory. An application seeking to set aside an ex
parte decree passed by a Court of Small Causes or for a review
D of its judgment must be accompanied by a deposit in the court of
the amount due from the applicant under the decree or in pursuance
of the judgment. The provision as to deposit can be dispensed
with by the court in its discretion subject to a previous application
by the applicant seeking direction of the court for leave to furnish
security and the nature thereof. The proviso does not provide for
E the extent of time by which such application for dispensation may
be filed. We think that it may be filed at any time up to the time of
presentation of application for setting aside ex parte decree or for
review and the court may treat it as a previous application. The
obligation of the applicant is to move a previous application for
F dispensation. It is then for the court to make a prompt order. The
delay on the part of the court in passing an appropriate order
would not be held against the applicant because none can be made
to suffer for the fault of the court.
9. In the case at hand, the application for setting aside ex parte
G decree was not accompanied by deposit in the court of the amount
due and payable by the applicant under the decree. The applicant
also did not move any application for dispensing with deposit and
seeking leave of the court for furnishing such security for the
performance of the decree as the court may have directed. The
application for setting aside the decree was therefore incompetent.
H It could not have been entertained and allowed.
ARTI DIXIT & ANR v. SUSHIL KUMAR MISHRA & ORS 743
[K. M. JOSEPH, J.]
(Emphasis supplied) A
THE FULL BENCH IN RAM BHAROSE
16. Since the appellants have also relied upon the Judgment of the
Full Bench of the High Court of Allahabad, we deem it appropriate to
advert to the same, i.e., Ram Bharose v. Ganga Singh3. The Full Bench
of the High Court was dealing with the following facts: B
The Application under Order IX Rule 13 was
accompanied by a security bond to cover the decretal amount.
One of the questions, which arose was, as to whether the
Application was not maintainable in as much as the direction
of the Court had not been obtained in regard to the deposit of C
the decretal amount or the filing of the security in terms of the
proviso to Section 17 of the Act. Three separate opinions were
pronounced. In the opinion rendered by Mukherjee, J., we
consider it appropriate to refer to the following:
“17. Now I come to consider the second point. On a plain D
reading of Section 17,Provincial Small Cause Courts Act,
the applicant for the setting aside of a judgment hasto do
these things: To start with, he ought to apply to the Court to
which he proposes to make an application, to tell him what
kind of security, in the circumstances detailed in the E
applicant’s application, the Court would require of him to
furnish. Usually the Court would ask for a cash security,
but it may be satisfied on the applicant’s representation that
a cash security may be dispensed with. In rare cases, as in
theillustration given by me in my judgment in JhabbooMisir’s
case, cited below, the Courtmay refuse to take a cash F
security and may insist on other kind of security being
takenand may insist on the move-able property in dispute
being itself produced. When the Court gives its direction,
namely, whether the applicant is to furnish cash security or
is to give some other kind of security, the applicant should G
present his application for setting aside the decree, together
with the security demanded. Then his duties are over. The
security filed will then be scrutinized by the Court, and the
Court shall see whether the security is to its satisfaction.
3
AIR 1931 Allahabad 727 H
744 SUPREME COURT REPORTS [2023] 5 S.C.R.
A Then ‘presumably a notice would go to the plaintiff toshow
cause why the decree should not be set aside. This was
also the view which I tookin the case of JhabbooMisir v.
Howladar Tewari.
18. Although the rule (Section 17, Small Cause Court Act),
B requires that the security is to be furnished at the time of
presenting an application for setting an ex parte decree, it
has been held in this Court in Moti Lal Ram Chandar Das.
v. Durga Prasad MANU/UP/0193/1930 : AIR1930All830
that the security may be furnished even after the application
has been made provided the security is forthcoming within
C the period of 30 days of limitation. To this decision I was a
party. This view was taken by other HighCourts also : see
V. M. Assan Mohamad Sahib v. M.E. Rahim Sahib [1920]
43 Mad. 579,JenuMuchi v. BudhiramMuchi [1905] 32 Cal.
339 and Narain v. PudanMANU/OU/0001/1929. The
D reason of this decision is that the previously madeapplication
may be taken as made on the date on which the security
was furnished, asthe period of limitation has not yet expired,
and it would be a mere formality (whichmay be safely
dispensed with) to direct the applicant to file a fresh
application on theday when he furnishes the security.
E
xxx xxx xxx
20. Where an applicant, without formally applying for the
Court’s direction, makes anapplication for setting aside an
ex parte decree and furnishes security with it, and theCourt
F directs a notice to issue to the other side, it must be taken
that the Court iscognizant of the fact that the applicant has
furnished security as required by Section 17,Small Cause
Courts Act. The order that notice should issue may be taken
as an approvalby the Court of the security furnished, in the
circumstances disclosed by the applicant inhis application
G and affidavit (if any). We may also take it that, the Court,
by implication,gave the applicant a direction that he should
furnish security of the kind actuallyfurnished by him. This
is not a more attempt to get over what may be believed to
berather hard directions of the law. If the Court instead of
H issuing a notice in the case justmentioned, rejects this
ARTI DIXIT & ANR v. SUSHIL KUMAR MISHRA & ORS 745
[K. M. JOSEPH, J.]
application because its direction has not been obtained, and A
iflimitation has not already expired, it would be open to the
applicant to make a freshapplication and to furnish such
security as the Court may direct. A party cannot sufferby
the act of a Court, and therefore we must accept the position
that the Court hasgiven the direction, according to law to
B
the furnishing of the security actually furnished,where the
Court instead of rejecting the application of the defendant
directs that anotice should issue.
23. The conclusion that I arrive at; therefore is that the
proper course is for a party to make an application to the
Court to obtain its direction as to the nature of the security, C
and then to apply with the security of the nature directed
by the Court for setting aside the ex parte decree. The
security furnished must comply with the directions of the
Court, and the Court will see that the security is to its
satisfaction, i. e., sufficient. Butwhere the Court adopts a D
security without question and directs a notice to issue, it,
bynecessary implication, gives a direction that the security
should be of the naturedirected by it ‘and that the security
furnished is sufficient to its mind.”
(Emphasis supplied) E
The view taken by Boys J., insofar as it is relevant, is
contained in the following paragraph:
“37. The conclusion from this, then, is that no initial defects
in the making of theapplication must be allowed to stand in
the way of the applicant getting a notice issuedto the decree- F
holder, provided that an application has been filed, and
further that cashhas been deposited, or, if the Court has so
permitted, security has been given, allbefore the expiry of
30 days. A reasonable and practical interpretation of the
section is therefore as follows: (1) the applicant must within G
30 days file his application either with cash or with a
[statement that he is prepared to give security (and in the
latter case, he may, of course, tender the security he
proposes and ask for the direction of the Court (2) In the
case where he wants to give security, if the Court refuses
H
746 SUPREME COURT REPORTS [2023] 5 S.C.R.
A to direct (security, he must deposit cash within [the 30 days,
or his application will be [rejected. (3) If the Court agrees
to direct security, then (a) it will consider (the security
already offered, if it has been so offered; or (b) name
security to its satisfaction which must be filed within the 30
days. (4) If the applicant does not in fact ask for a direction
B
or if,though the applicant does ask for a direction, the Court
does not in fact give anydirection, but in fact the Court
does issue notice, the Court shall be taken to haveapproved
the deposit of cash or the security offered as the case may
be. (5) If filedwithin the 30 days and accepted by the Court
C expressly or impliedly by the issue ofnotice the application
is a good application, though it will be open to the decree-
holderto challenge the nature land sufficiency of the security
and to the Court under Order 9,Rule 9 to make such further
conditions as it thinks fit. In the course of the argument
ithas been suggested that difficulty might arise if the Court
D
delayed in giving itsdirection, or approving expressly or
impliedly the security already tendered, so longthat the period
of limitation had expired before the applicant had fair
opportunity ofcomplying with the direction. It is not a case
which we have now to consider, but in asuitable case it
E would bet open to the Court itself to consider and exercise
its inherentpowers reserved to it by Section 151, Civil P.C.”
(Emphasis supplied)
Chief Justice Suleman concurred with the other Judges that
the Revision must be dismissed and he, inter alia, held as follows:
F
“46. No doubt the language of the proviso-is very unhappy
and there is some apparentinconsistency between the
expression “ at the time of presenting his application “ andthe
expression “ as the Court may direct. “ If we take the two
expressions literally, thetwo things cannot happen exactly
G simultaneously. But the direction of the Court may
beobtained before the application is presented or just after
presenting the application.
47. It is quite clear to me that an application cannot be
presented after the prescribedperiod, nor can cash or
H security be deposited after the expiry of that period. The
ARTI DIXIT & ANR v. SUSHIL KUMAR MISHRA & ORS 747
[K. M. JOSEPH, J.]
Courtis not given any discretion at all to extend the time. If A
the security deposited within thetime is discovered
afterwards to be defective or unsatisfactory in any way,
the Court hasno power to direct a fresh security to be
substituted for it after the expiry of the period.
52. Of course, the question whether the security is sufficient B
and satisfactory need notbe finally determined during the
period of 30 days. Indeed, the plaintiff decree-holdermay
come in afterwards and challenge its sufficiency. The mere
fact that it is foundafterwards that the security was
sufficient, would not make the deposit of the securitywithin
the time in any way defective.” C
BHAGWANDAS (SUPRA)
17. As far as the Judgment of this Court in Bhagwandas (supra)
is concerned, the relevant facts were as follows:
A suit was decreed ex-parte on 06.08.1977. The appellant D
moved an Application on the said day within the meaning of the
proviso to Section 17 of the Act to permit him to furnish such
security for the performance of the decree in lieu of cash due
under the decree. On the same day, Court granted him permission
subject to making a cash deposit for part and for the balance he E
had to furnish the security. Thereafter, on the 31.08.1977, he moved
the Application under Order IX Rule 13 to set aside the ex-parte
decree. He also deposited the cash on 31.08.1977. On the basis
of a defect pointed in the security bond on 21.09.1977, the Court
directed the appellant to supply the defect, which consisted of
deficient stamp in the security bond. The appellant complied with F
the said Order. It was in these facts, the Court took the view that
the Application of the appellant was wrongly rejected on the basis
that there was a legal infirmity in the bond as instead of it being
stamped under the Stamp Act it was stamped with court fee of
Rs.2/. G
OUR FINDINGS
18. When a Decree is passed by a Court of Small Causes ex-
parte, inter alia, under the proviso to Section 17 of the Act, the applicant,
who files an Application to set aside the ex-parte Decree is bound to do
the following: H
748 SUPREME COURT REPORTS [2023] 5 S.C.R.
A a. He must deposit in the Court, the amount due under the
Decree;
b. In the alternative, he should give security for the
performance of the Decree ‘on a previous Application’ made
by him in this behalf;
B 19. In view of the Judgment of this Court in Kedarnath (supra),
the words ‘on a previous application’ in proviso to Section 17, have been
understood to be an application, which may be made along with the
application under Order IX Rule 13 of the CPC. On 06.05.2014, on the
same daythe Court ordered notice to be issued fixing 19.07.2014 as the
C date.The execution proceeding was stayed till 19.07.2014. It could indeed
be said, that even notice being issued was permissible only after
compliance with the proviso to Section 17 of the Act.The appellants had
filed an Application under Order IX Rule 13 of the CPC and Section 17
of the Act, on the same day. If the Application under Section 17 was
accompanied with a cash deposit, then, the Application under Order IX
D Rule 13 would have been, indeed, maintainable.The controversy arises
as in the Application dated 06.05.2014, filed under Section 17, the
appellants sought for permission to deposit/furnish surety for a sum of
Rs.50,000/- out of a total sum of Rs.98,624/-. No order was passed on
the said Application. On 12.05.2014, appellant moved an Application
E (14C). Therein, the appellant sought to furnish security in the form of a
shop room of which the Proforma Respondent in this Appeal, Shri
Abhishek Dixit was the tenant, but the owner was the Municipal
Corporation, Lucknow. On the said Application, the Court passed an
Order on 24.05.2014. It reads:
F “Order
24.05.2014
Today application has been filed on behalf of the judgment debtor
Dr. Aarti Dikshit for taking on record surety. Order passed.
Allowed”.
G
20. The contention of the appellants appears to be that the
Application dated 06.05.2014, was in order as it was filed along with the
Application under Order IX Rule 13 and it accords with the law laid
down in Kedarnath (supra). Once such an Application is filed, it was the
duty of the Court to pass an Order. The Court according to the appellants
H
ARTI DIXIT & ANR v. SUSHIL KUMAR MISHRA & ORS 749
[K. M. JOSEPH, J.]
had a duty to indicate as to whether the Application for permission to A
give security was allowed and in what form the security should be
furnished. It was as no orders were passed, that the appellants on their
own filed Application and purported to furnish the security in the form of
the rented shop. The High Court in its Order dated 03.12.2015, accepted
the submission of the Counsel for the parties that the surety was accepted
B
by the Court on 25.04.2015 and the matter was directed to be decided
expeditiously and on the said basis, the Trial Court had allowed the
Application under Order IX Rule 13.This order was set aside by the
ADJ by order dated 01.08.2017 on the basis that the order dated
24.05.2014 did not mean that the security was accepted. The trial court
was to consider the application dated 06.05.2014 on its own merits. This C
was so ordered after finding that no order had been passed on the
application dated 12.05.2014 accepting the security. It must be noticed
that the appellants did not challenge the Order dated 01.08.2017. Pursuant
to the Order dated 01.08.2017, the Trial Court, by Order dated 11.02.2019,
did not find merit in the case of the appellants and dismissed the
D
Application filed under Section 17 dated 06.05.2014 as also the Application
dated 12.05.2014 and rejected the surety. It is this Order, which has
been upheld again by the ADJ by Order dated 26.02.2021 and then by
the High Court, by the impugned Order.
21. On a literal interpretation of Section 17 of the Act, which
contemplates the Application under Section 17 being filed before the E
Application under Order IX Rule 13, whether appellants have made out
a case. The first question, which we would have to consider is, whether
the Application is in conformity with the proviso to Section 17. Did the
applicant furnish any security on 06.05.2014? The answer can only be in
the negative.The appellant did not seek for dispensing with deposit as F
such. [See paragraph-9 of Kedarnath (supra)].Therefore, the appellant
had not in the said sense complied with the mandatory requirement of
Section 17. Next, was the prayer, viz., the request to permit the appellant
to deposit/furnish security for a sum of Rs.50,000/- due under the Decree
in consonance with Section 17? What was the duty of the Court in the
face of such prayer under Section 17? Was the furnishing of the security G
consisting of the rented shop belonging to the Local Body, sufficient
compliance of Section 17? What is the effect of the application dated
12.05.2014 and the order dated 25.05.2014 on the same which is obviously
after 06.05.2014 (the date of the application under Order IX Rule 13).
H
750 SUPREME COURT REPORTS [2023] 5 S.C.R.
A 22. The High Court in the impugned order finds that no application
for dispensing with surety was filed and that this will be read against the
appellants. The High Court perseveres in this observation on three
occasions. We must observe that what Section 17 of the Act contemplates
in the proviso is that the applicant seeking to set aside an ex-parte decree
inter alia must either make a deposit of the amount in question or give
B
security. What this Court in Kedarnath (Supra) laid down was that the
provision as to deposit can be dispensed with by the Court. The applicant
can, in other words, seek a dispensing with of the deposit and seek leave
for furnishing such security as the Court may direct. Therefore, the
High Court was not correct in proceeding on the basis that appellants
C did not make any application for dispensing with surety. No doubt, at one
place, the High Court states that there is no prayer for dispensing with
the surety or the amount sought to be deposited by way of security. The
prayer of the appellants was to permit deposit/furnishing surety of
Rs.50000/- which was part of the decretal amount. This could be treated
impliedly as seeking a direction within the meaning of Section 17. An
D
applicant could no doubt also propose the security which he wishes to
give. In fact, ordinarily, an application for dispensing with the cash deposit
and for direction to furnish security should be made prior to application
under Order IX Rule 13 of CPC. On the order passed on the same, the
applicant is to comply with the same and furnish the security at the time
E when he files the application under Order IX Rule 13. Since an application
under Section17 which is really required only in the absence of the cash
deposit can be filed up to the date of the application under Order IX
Rule 13 as held in Kedarnath (supra) ordinarily, the security must be
made available along with such application. There then arises the aspect
that the application under Order IX Rule 13 can be filed within 30 days
F
as provided in Article 123 of the Limitation Act. Undoubtedly, the deposit
or security must be furnished within 30 days as held by the full Bench of
the Allahabad High Court in Ram Bharose (supra). This is on the basis
that the application can be made under Order IX Rule 13 upto the 30th
day but at the same time, the conditions in the proviso, namely, the deposit
G or the security must be furnished at the time of presenting the application
under Order IX Rule 13. But if the application under Section 17 can be
moved along with the application under Order IX Rule 13, then if a
direction is required for furnishing security and the Court grants permission
and time, then it may be possible to furnish the security only after the
date of the application under Order IX Rule 13. As held by this Court in
H
ARTI DIXIT & ANR v. SUSHIL KUMAR MISHRA & ORS 751
[K. M. JOSEPH, J.]
Kedarnath (supra), the Court is expected to pass an order promptly on A
the application which may be filed under Section 17 which may be of the
same date as the application under Order IX Rule 13. Any delay on the
part of the Court cannot prejudice the applicant.
23. In this case, the appellants filed the application both under
Section 17 of the Act and under Order IX Rule 13 on the same day, B
namely, 06.05.2014. The application under Order IX Rule 13 is premised
on knowledge of the ex parte decree being obtained on 05.05.2014 in
the Execution Proceedings. There was no security offered on 06.05.2014.
Though a direction as such was not expressly sought for but permission
was sought for to furnish security, it could be said that in substance the
appellants essentially sought for direction within the meaning of the proviso C
to Section 17. We have already found that the High Court was in error in
finding that the appellants did not seek for dispensing with the security,
and therefore, apparently holding the same against the appellants. When
the appellants sought for permission to furnish security, if the permission
was granted and a direction to furnish security was given on the same D
date and it had been complied with within the time, then the appellants
would have been compliant with Section 17. No orders were passed on
the application under Section 17 dated 06.05.2014. Within 6 days, on
12.05.2014, the appellants on their own purported to furnish security.
The surety was one Abhishek Dixit (the 3rd writ petitioner who is the 7th
proforma respondent in the appeal). The security was however, a shop. E
The shop was not owned by the surety. The Municipal Corporation,
Lucknow was the owner. The surety was a tenant. A security to be
provided under Section 17 by a surety is to be enforced under the
provisions of Section 145 of the Code of Civil Procedure as contemplated
in Section 17 (2) of the Act. Section 145 of the CPC inter alia provides F
that the security provided by a surety can be enforced by effecting sale
of the property. The courts in this case have held that the security provided
by the appellants through the surety is not acceptable in law having
regard to Section 17 (2) as the shop belonged to the Municipal
Corporation, Lucknow and it could not be sold for enforcing the surety.
G
24. While it is true that no order was passed on the application
under Section 17 on 06.05.2014, the fact remains that the appellants on
their own furnished a surety as stated. The High Court reasons that the
security so provided was unacceptable on two grounds. Firstly, it was
not furnished along with the application under Order IX Rule 13 on
06.05.2014. Secondly, it is found that it was not acceptable in law. H
752 SUPREME COURT REPORTS [2023] 5 S.C.R.
A 25. It is true that the High Court in the order dated 03.12.2015
proceeded to find that the “security was accepted by the court below”.
This is by way of accepting the submission of the counsel for the
plaintiffs. It was on this basis that the matter was remanded. Following
the remand, the trial court allowed the application filed by the appellants
and also the application under Order IX Rule 13. This has been set aside
B
as noticed by us by the ADJ and the matters stood remanded back by
Order dated 01.08.2017. This order was not challenged by the appellants.
It is thereafter that the courts have concurrently found that there was
non-compliance of Section 17. The earlier order of the High court dated
03.12.2015 has been overcome by finding that there was a sweeping
C statement before the High Court in the earlier round that the surety
furnished had been accepted. The High Court further finds that actually
the prayer made in application dated 12.05.2014 was only to take the
surety on record. The order dated 25.04.2014 only shows that only the
surety was taken on record. It is further found that the application dated
12.05.2014 was filed after 06.05.2014 and could not be the basis for a
D
valid order under Section 17.
26. We are in agreement with the courts that the security furnished
by the appellants in the form of the rented shop belonging to a third party
cannot be accepted as security in law. It is patent. It is not clear from
the order dated 24.05.2014 that the Court had applied its mind to the
E sufficiency of the security or as to whether it was acceptable security.
If security is given, which is later found to be unacceptable even if it is
within 30 days within the meaning of Article 123 of the Limitation Act,
then it would not be complying with Section 17 [see the observations of
the full Bench of the Allahabad High court in Ram Bharose (supra)].
F 27. While it is true that there may have been a failure on the part
of the court to pass orders on the application dated 06.05.2014 apparently,
the appellants proceeded to furnish the security in this case on 12.05.2014.
Therefore, we proceed on the basis that within 30 days of the date of
knowledge of the decree, as alleged by the appellants, but after the date
G of the application under Order IX Rule 13, the appellants have furnished
security. We are mindful of the fact that no order was passed by the
Court on 06.05.2014. Even proceeding to consider the security however
we would find that it is clearly unacceptable in law. The effect of the
order of the High Court dated 03.12.2015 must be understood with
reference to the concession made by the counsel and may not withstand
H
ARTI DIXIT & ANR v. SUSHIL KUMAR MISHRA & ORS 753
[K. M. JOSEPH, J.]
the requirement of law under Section 17 of the Act being fulfilled. We A
cannot be unmindful of the fact that the appellants did not challenge the
order of the Additional District Judge dated 01.08.2017. The trial Judge
was bound by the same as the appellants did not challenge the order
dated 01.08.2017. The fact that the appellants, after participating in the
remanded proceedings mounted a challenge in a writ to the order dated
B
01.08.2017 appears to us as not advancing the case of the appellants.
This is both for the reason of the belated challenge as also the nature of
the earlier order involved.
28. In the facts, having regard to the Order dated 01.08.2017 and
the security being found unacceptable, we find no merit in the appeal
generated by special leave. The appeal will stand dismissed. There shall C
be no order as to costs.
Nidhi Jain Appeal dismissed.
(Assisted by : Rakhi, LCRA)
D
E
F
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