Appeal u/s 96(2) CPC is statutory right, can’t be denied if application under Order IX Rule 13 CPC dismissed

Appeal u/s 96(2) CPC is statutory right which defendant cannot be deprived merely on ground that application filed under Order IX Rule 13 CPC was dismissed

ABCAUS Case Law Citation:
ABCAUS 3189 (2019) (11) SC

Important case law relied upon by the parties:
Bhivchandra Shankar More v. Balu Gangaram More and others (2019) 6 SCC 387
Neerja Realtors (P) Ltd. v. Janglu (Dead) Through Legal Representative (2018) 2 SCC 649

In the instant case, the respondent-plaintiff had given hand loan in cash to the appellant-defendant for business purpose.

The appellant had agreed to return the amount within two months. The appellant had issued post-dated cheques to the respondent, but when the cheques were presented for collection, the same were returned with the endorsement that “payments stopped by the drawer”.

The respondent-plaintiff filed a civil suit before the Additional District Judge. The said suit was decreed ex-parte.

The appellant filed an application under Order IX Rule 13 CPC under Section 5 of the Limitation Act to condone the delay in seeking setting aside the exparte decree. In the said application, the appellant stated that summons was sent to the appellant’s old address and the same was returned unserved and the ex-parte decree was passed.

The said petition was dismissed by the Additional District Judge. Subsequent revision and Special Leave Petitions in this regard were also dismissed by the Hon’ble High Court and Hon’ble Supreme Court respectively.

After the dismissal of the SLP by the Supreme Court, the appellant-defendant filed the first statutory appeal challenging the decree passed along with application praying to condone the delay in filing the appeal. In the said application, the appellant raised the very same grounds that the summons was not served on him where he was residing and thereafter, ex-parte decree was passed against him.

The High Court dismissed the application for condonation of delay on the ground that in the earlier proceedings under Order IX Rule 13 CPC, the appellant had stated the same reasons to set aside the ex-parte decree and that the reasons so stated by the appellant was not accepted by the trial court, High Court and the Supreme Court.

Pointing out that the appellant has chosen belatedly to file the first appeal in time, the High Court dismissed the application for condonation of delay in filing the first appeal.

Being aggrieved, the appellant had filed an appeal before the Hon’ble Supreme Court.

The Hon’ble Supreme Court formulated the following questions of law for consideration:-

(i) Whether after dismissal of the application filed under Order IX Rule 13 CPC for condonation of delay in filing the appeal, whether the appeal filed under Section 96(2) CPC against the ex-parte decree was maintainable?

(ii) Whether the time spent in the proceedings to set aside the ex-parte decree be taken as “sufficient cause” within the meaning of Section 5 of the Limitation Act, 1908 so as to condone the delay in preferring the first appeal?

The Hon’ble Supreme Court pointed out that when an ex-parte decree is passed, the defendant has two remedies –

(a) Either to file an application under Order IX Rule 13 CPC to set aside the ex-parte decree by satisfying the court that the summons was not served or if served, the defendant was prevented by “sufficient cause” from appearing in the court when the suit was called for hearing;

(b) to file a regular appeal from the original decree to the first appellate court in terms of Section 96(2) CPC and challenge the ex-parte decree on merits

The Hon’ble Supreme Court stated that right to file an appeal under Section 96(2) CPC is a statutory remedy. The right to appeal is not a mere matter of procedure; but is a substantive right. Right to appeal under Section 96(2) CPC.

It was noted that the Hon’ble Supreme Court had the occasion to consider the question whether the first appeal filed under Section 96(2) of the Code was maintainable despite the fact that an application under Order IX Rule 13 CPC was dismissed. The Court had observed that the right to appeal is a statutory right and that the litigant cannot be deprived of such a right.

The Hon’ble Supreme Court observed that it was held that the defendant can take recourse to both proceedings – Order IX Rule 13 CPC as well as the appeal under Section 96(2) CPC. The right of appeal is not taken away by filing an application under Order 9 Rule 13. But if the appeal is dismissed as a result of which the ex parte decree merges with the order of the appellate court, a petition under Order 9 Rule 13 would not be maintainable.

The Hon’ble Supreme Court stated that an unscrupulous litigant may, of course, firstly file an application under Order IX Rule 13 CPC and carry the matter up to the highest forum; thereafter may opt to file appeal under Section 96(2) CPC challenging the ex-parte decree. However, in that event, considerable time would be lost for the plaintiff. Thus the question was whether the remedies provided as simultaneous can be converted into consecutive remedies?

The Hon’ble Supreme Court opined that an appeal under Section 96(2) CPC is a statutory right, the defendant cannot be deprived of the statutory right merely on the ground that earlier, the application filed under Order IX Rule 13 CPC was dismissed.

The Hon’ble Supreme Court said that where the defendant has been pursuing the remedy bona fide under Order IX Rule 13 CPC, if the court refuses to condone the delay in the time spent in pursuing the remedy under Order IX Rule 13 CPC, the defendant would be deprived of the statutory right of appeal. Whether the defendant has adopted dilatory tactics or where there is lack of bona fide in pursuing the remedy of appeal under Section 96(2) of the code after the dismissal of the application under Order IX Rule 13 CPC, is a question of fact and the same has to be considered depending upon the facts and circumstances of each case.

The Hon’ble Supreme Court held that the appellant deserved an opportunity to put forth his defence in the suit for recovery of money from him. Accordingly, the delay in filing the appeal was condoned.

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