M/S. GMG ENGINEERING INDUSTRIES & ORS.versusM/S ISSA GREEN POWER SOLUTION & ORS.

                       [2015] 6 S.C.R. 1108


A       MIS. GMG ENGINEERING INDUSTRIES & ORS.
                                 v.
         MIS ISSA GREEN POWER SOLUTION & ORS.
                  (Civil Appeal No. 4472 of 2015)
B
                           MAY 15, 2015
            [T. S. THAKUR AND R. BANUMATHI, JJ.)
          Delay - Condonation of - Applications filed u/Or. 9 r
c 13 to set aside the ex-parte decrees alongwith the
  applications to condone the delay of 355 days and 382 days
  respectively - Applications allowed imposing condition on
  the appellants to deposit the entire decreetal amount- High
  Court upholding the order - On appeal, held: Trial court
D should not have imposed unreasonable and onerous
  condition of depositing the entire suit claim in the suits when
  the issues are yet to be decided on merits - In revision, High
  Court should have kept in view that the parties were yet to
  go for trial and appellants ought to have been afforded the
E opportunity to contest the suits on merits - Since the reasons
  for the delay was satisfactorily explained, impugned order
  set aside - Delay in filing applications to set aside ex-parte
  decrees condoned and ex-parte decrees set aside - Code
  of Civil Procedure, 1908 - Or. 9 r 13.
F
          Allowing the appeals, the Court

         HELD: 1.1 The expression 'sufficient cause' is to
  receive liberal construction so as to advance substantial
G justice. When there is no negligence, inaction or want
  of bona fide is imputable to the appellants, the delay has
  to be condoned. The discretion is to be exercised like
  any other judicial discretion with vigilance and
  circumspection. The discretion is not to be exercised in
H any arbitrary, vague or fanciful manner. The true test is
                             1108
    MIS. GMG ENGINEERING INDUSTRIES v. MIS ISSA                1109
              GREEN POWER SOLUTION

to see whether the applicant has acted with due A
diligence. [Para 8] [1113-F-G]

         1.2 In the instant case, while the trial court
exercised the discretion to condone the delay in filing
the applications to set aside the ex-parte decrees, the         B
trial court should not have imposed such an
unreasonable and onerous condition of depositing the
entire suit claim of Rs.1,50,00,0001- and Rs.10,00,0001-
respectively in the suits when the issues are yet to be
decided on merits. While considering the revision, the          C
High Court should have kept in view that the parties are
yet to go for trial and the appellants ought to have been
afforded the opportunity to contest the suits on merits.
When the S.L.Ps came up for admission, this Court
passed the conditional order that subject to deposit a          D
sum of Rs.50,00,0001-before the trial court, notice would
be issued to the respondents. In compliance with the
said order, the appellants deposited Rs.50,00,0001-
before the trial court. Since the appellants have
satisfactorily explained the reasons for the delay and          E
with a view to provide an opportunity to the appellants
to contest the suit, the impugned order is set aside. Delay
in filing the applications to set aside the ex-parte decrees
is condoned and the ex-pa rte decrees are set aside and         F
the suits are restored to file. [Paras 11 and 12] [1115-E-
H; 1116-A, CJ

    V.K. Industries and Ors. vs. M.P Electricity Board,
    Rampur, Jabalpur (2002) 3 SCC 159; Tea Auction
    Limited vs. Grace Hill Tea Industry And Anr. 2006 (6)       G
    Suppl. SCR 163: (2006) 12 sec 104: (2006) 9 SCALE
    223; Vijay Kumar Madan and Ors. vs. R.N. Gupta
    Technical Education Society and Ors., 2002 (3) SCR
•
    217 : (2002) 5 sec 30 - referred to.
                                                                H
1110        SUPREME COURT REPORTS                 [2015] 6 S.C.R.


 A                          Case Law Reference

       (2002) 3   sec 1sg          Referred to.         Para 6

       2006 (6) Suppl. SCR 163 Referred to.             Para 9
 B 2002 (3) SCR 217                Referred to.         Para 10

            CIVILAPPELLATE JURISDICTION: Civil Appeal No.
       4472of2015.

 c            From the Judgment and Order dated 16.04.2013 in
       the High Court of Judicature at Madrs, Madurai Bench in C.
       R. P. (NPD) (MD) No. 4 of 2013.

                                  Vli!TH
 D C. A. No. 4473 of 2015

             Brijender Chahar, D. Kumaran, Satya Mitra Garg for
       the Appellants.

 E           Nalini Chidambaram, V. Balaji, C. Kannan, Sripatha,
       D. Veda, Rakesh K. Sharma for the Respondents.

             The Judgment of the Court was delivered by

             R. BANUMATHI, J. 1. Leave granted.
 F
         2. These appeals arise out of common order dated
  16.04.2013, passed by the High Court of Madras, Madurai
  Bench in C.R.P. (NPD) (MD) No.4/2013 and C.R.P. (NPD)
  (MD) No.5/2013 respectively, confirming the order dated
G 4.12.2012 passed by the Principal District Judge, Thanjavur,
  imposing conditions to deposit Rs.1, 50,00,000/- and
  Rs.10,00,000/-, as a condition to condone the delay in filing
  the applications to set aside the ex-parte decrees passed in
  O.S.No.3 of 2011 and O.S. No.6 of 2011.
H
   M/S. GMG ENGINEERING INDUSTRIES v. MiS ISSA                    1111
    GREEN POWER SOLUTION [R. BANUMATHI, J.]

        3. Appellants and respondents entered into an              A
agreement of sale on 1.08.2008, under which the
respondents agreed to purchase the property of the
appellants being the factory premise for a sum of
Rs.5,00,00,000/- and the respondents paid Rs.1,50,00,000/
- towards part of sale consideration. The sale transaction         B
could not be completed. The respondents issued legal notice
dated 24.11.2010 calling upon the appellants either to
execute the sale deed or refund the advance amount of
Rs.1,50,00,000/- with interest at the rate of 12% p.a. The
appellants received the said notice and sent the reply offering    C
to return the said amount but without interest. The
respondents filed the suit being O.S.No.3/2011 for recovery
of the sum of Rs. 1,50,00,000/-with interest. The case was
adjourned from time to time on various dates. On 16.06.2011,       D
the appellants-defendants were set ex-parte in the suit. After
recording evidence adduced by the respondents-plaintiffs
on 5.07.2011, the said suit was decreed ex-parte by the
Principal District Judge, Thanjavur.

         4. Respondents have also filed another suit O.S. No.6 E
 of 2011 for recovery of a sum of Rs.10,00,000/- said to have
 been paid by them to the appellants by way of an advance
 towards the purchase of another property. The said suit
 was decreed ex-parte on 16.06.2011. The appellants have F
 filed I.A. No.78 of 2012 to set aside the ex-parte decree
 alongwith application to condone the delay of 382 days under
 Section 5 of the Limitation Act. The said application was
"allowed by the Principal District Judge, Thanjavur by order
 dated 4.12.2012 imposing condition to deposit a sum of G
 Rs.10,00,000/-.

      5. The appellants filed l.A.No.77 of 2012 and I.A.
No.78 of 2012 in both the suits praying for condonation of
delay of 355 days and 382 days respectively in filing the H
1112      SUPREME COURT REPORTS                  (2015] 6 S.C.R.


 A   applications under Order IX Rule 13 CPC, for setting aside
     the ex-pa rte decrees. The appellants averred that they came
     to know about the ex-partedecrees only on 13.07.2012, when
     they saw a public notice in the daily newspaper regarding
     the attachment of the suit property. The Principal District
 B Judge, Thanjavur vide separate order dated 4.12.12
     condoned the delay of 355 days and 382 days in filing the
     applications under Order IX Rule 13 CPC for setting aside
   . the ex-pa rte decree and allowed the applications in IA No.77
     of2012 and I.A. No.78 of2012 but subject to condition that
 C the appellants should deposit Rs.1,50,00,000/- and
     Rs.10,00,000/- respectively in the court on or before
     3.01.2013, failing which the applications will automatically
     stand dismissed. Being aggrieved by the stringent condition,
    the appellants filed revision petitions before the High Court.
 0
     The High Court vide impugned order dated 16.04.13 upheld
    the order imposing condition to deposit Rs.1,50,00,000/- and
     Rs.10,00,000/-as a condition precedent to condone the delay
     in filing application to set aside the ex-parte decrees and
 E ·thereby dismissed the revisions which are under challenge
     in these appeals.

           6. Learned counsel for the appellants contended that
   the direction to deposit the entire decreetal amount of
   Rs.1,50,00,000/- in O.S. No.3 of 2011 and the decreetal
 F amount of Rs.10,00,000/- in O.S. No.6 of 2011 as a condition
   precedent to set aside the ex-parte decrees is onerous and
   unreasonable and prayed to set aside the impugned order.
   In support of his contention, learned Senior Counsel
 G Mr. Brijender Chahar for the appellants placed reliance upon
   the judgment of this Court in V.K. Industries and Ors. vs.
   M.P. Electricity Board, Rampur, Jabalpur, (2002) 3 SCC
   159.

           7. Learned Senior Counsel for the respondents Ms.
 H
  MIS. GMG ENGINEERING INDUSTRIES v. M/S ISSA                        1113
   GREEN POWER SOLUTION [R. BANUMATHI, J.]

Nalini Chidambaram submitted that the trial court was                    A
constrained to impose the said condition in view of the dilatory
tactics adopted by the appellants deliberately not being
present for hearing in the trial court on several occasions
when the suits were posted for trial. Learned Senior Counsel
further submitted that even after ex-parte decrees dated                 B
5.07.2011 were brought to the.notice of the appellants by a
series of telegrams (Annexures-R5/R1), the appellants did
not file the applications to set aside the ex-pa rte decree within
the period of limitation and waited for more than a year. It
was submitted that the respondents are more than seventy              C
years old and had borrowed sum of Rs.1,50,00,000/- and
Rs.10,00,000/- from the bank and paid the said amount to
the appellants under the agreements for sale and the
appellants are paying interest on that amount to the bank. It
                                                                      D
was contended that even though the appellants sold away
their property, they did not choose to refund the sum paid
towards part of sale consideration and if the suits are
decreed, the appellants have no assets to execute the
decrees and the rights of both the parties should be balanced         E
and therefore the impugned order does not warrant
interference by this Court under Article 136 of the
Constitution.

         8. It is well settled that the expression 'sufficient cause'
 is to receive liberal construction so as to advance substantial F
justice. When there is no negligence, inaction or want of
bonafide is imputable to the appellants, the delay has to be
condoned. The discretion is to be exercised like any other
judicial discretion with vigilance and circumspection. The G
discretion is not to be exercised in any arbitrary, vague or
fanciful manner. The true test is to see whether the applicant .
has acted with due diligence.
                                                                     0
       9. While exercising the discretion for setting aside           H
1114      SUPREME COURT REPORTS                  [2015) 6 S.C.R.


 A the ex-parte decrees or condoning the delay in filing the
   application to set aside the ex-parte decrees, the court is
   competent to direct the defendants to pay a portion of the
   decreetal amount or the cost. In Tea Auction Limited vs.
   Grace Hill Tea Industry AndAnr., (2006) 12 SCC 104:-(2006)
 B 9 SCALE 223, this Court has held as under:
                                             0
       "15 ..... A discretionary jurisdiction has been
       conferred upon the court passing an order for
       setting aside an ex parte decree not only on the
 c     basis that the defendant had been able to prove
       sufficient cause for his non-appearance even on
       the date when the decree was passed, but also on
       other attending facts and circumstances. It may
       also consider the question as to whether the
 D     defendant should be put on terms. The court,
       indisputably, however, is not denuded of its power
       to put the defendants to terms. It is, however, trite
       that such terms should not be unreasonable or
       harshly excessive. Once unreasonable or harsh
 E     conditions are imposed, the appellate court would
       have power to interfere therewith ..... "

          10. In Vijay Kumar Madan and Ors. vs. R.N. Gupta
   Technical Education Society and Ors., (2002) 5 SCC 30,
 F this Court has held as under:

       "8. Costs should be so assessed as would
       reasonably compensate the plaintiff for the loss of
       time and inconvenience caused by relegating back
 G     the proceedings to an earlier stage. The terms
       which the court may direct may take care of the
       time or mode of proceedings required to be taken
       pursuant to the order under Rule 7........the court
       cannot exercise its power fo put the defendant-
 H     applicant on such terms as may have the effect of
  M/S. GMG ENGINEERING INDUSTRIES v. M/S !SSA                  1115
   GREEN POWER SOLUTION [R. BANUMATHI, J.]

  prejudging the controversy involved in the suit and           A
  virtually decreeing the suit though ex parte order
  has been set aside or to put the parties on such
  terms as may be too onerous ......... That condition
  in the order of the trial court having been set aside
  by the High Court, we are inclined to sustain the             B
  order of the High Court but 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              c
  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 .... "
                                                                D
       The same view was reiterated in V. K. Industries case
(supra).

         11. In the present case, while the trial court has
exercised the discretion to condone the delay in filing the E
applications to set aside the ex-parte decrees, in our view,
the trial court should not have imposed such an unreasonable
and onerous condition of depositing the entire suit claim of
Rs.1,50,00,000/-and Rs.10,00,000/- respectively in the suits
when the issues are yet to be decided on merits. While F
considering the revision, the High Court should have kept in
view that the parties are yet to go for trial and the appellants
ought to have been afforded the opportunity to contest the
suits on merits. When the S.L.Ps came up for admission on
1.08.2013, this Court passed the conditional order that G
subject to deposit a sum of Rs.50,00,000/- before the trial
court, notice shall be issued to the respondents. In
compliance with the order dated 1.08.2013, the appellants
have deposited Rs.50,00,000/- before the trial court. Since H
1116          SUPREME COURT REPORTS                 [2015] 6 S.C.R.


 A     the appellants have satisfactorily explained the reasons for
       the delay and with a view to provide an opportunity to the
       appellants to contest the suit, the impugned order is liable to
       be set aside.

 B          12. The order dated 16.04.2013 of the High Court
   passed in C.R.P. (NPD) (MD) No.4/2013 and C.R.P. (NPD)
   (MD) No.5/2013, is set aside and these appeals are allowed.
   Delay in filing the applications to set aside the ex-parte
   decrees is condoned and the ex-parte decrees passed in
 C O.S. No.3 of 2011 and O.S. No.6 of 2011 are set aside and
   the suits are ordered to be restored to file. The appellants
   shall file their written statements within a period of six weeks
   if not already filed. Since the suits are of the year 2011 and
   the respondents are stated to be senior citizens, the trial
 D court is directed to take up the suits at an early date and
   dispose of the suits expeditiously. It is made clear that we
   have not expressed any opinion on the merits of the matter.
   The amount of Rs.50,00,000/- deposited by the appellants
   before the trial court shall be invested in a Nationalized Bank
 E so that the accrued interest may enure to the benefit of either
   party. In the facts and circumstances of the case, we make
   no order as to costs.

       Nidhi Jain                                      Appeals allowed.
 F