Final Order 1

Order Details: Notice of Motion
Pdf Text: NM In SC 3485/12 Oral Order 1
IN THE BOMBAY CITY CIVIL COURT AT BOMBAY
NOTICE OF MOTION NO. 1517 OF 2018
(CNR NO.MHCC010047332018 )
IN
SUMMARY SUIT NO.3485 OF 2012
(HIGH COURT SUMMARY SUIT NO.1421 OF 2012)
Neha Gopi Marmat
of Mumbai, Indian Inhabitant, residing at
Jeet Nagar, Room No.117, 4 Bungalows,
Andheri (West), Mumbai400053. ...Plaintiff
V/s
Naresh D.Oberoi
of Mumbai, Indian Inhabitant residing at
101/102, Manu Building, 1st Floor, Opp.
BMC Garden, 7 Bungalows,
Andheri (West), Mumbai400061. ...Defendant
AND
1. Smt.Renu, widow of Naresh Oberai
2. Karishma daughter of Naresh Oberai
3. Arjun, son of Naresh Oberai
Applicant nos. 1 to 3 are of Mumbai,
adults and the only heirs and legal representatives
of the deceased Defendant abovenamed, all residing
at 102, Manu Building, B Wing, 1st Floor,
Opposite BMC Garden, Seven Bungalows,
Andheri (West), Mumbai 400061. ...Applicants
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Coram : His Honour Judge Shri M.M.Umar
(C.R. No.28)
Dated : 01/10/2018
Adv. Mr.Ajinkya Lokare for plaintiff.
Adv. Mr.Shah for heirs of deceased defendant.
ORDER BELOW NOTICE OF MOTION NO.1517/18
1. This Notice of Motion is taken out by the legal
heirs/representatives of deceased defendant for setting aside the
exparte decree passed on 30/4/2014 in the aforesaid Summary Suit
filed under Order XXXVII of the Code of Civil Procedure.
2. The plaintiff has resisted to the said Notice of Motion by
filing detailed reply. The applicants have also filed rejoinder to the
affidavit to the reply .
3. From the facts of the case, evidence and circumstances on
record, following points arise for my consideration and my finding
thereon for the reasons recorded are as under:
Sr.no
.
POINTS FINDINGS
1. Whether the applicants prove that there are
special circumstances to set aside the decree
passed exparte on 30/4/2014 ? In the arrifmative
2. What order ? As per final order
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REASONS
AS TO POINT NO.1
4. Uncontroverted and undisputed facts as seen from the
pleadings of the parties, evidence and circumstances of the case, needs
to be stated first to outset for the better appreciation of the points in
contraversy. It is not in dispute that Neha Gopi Marmat plaintiff filed
the abovesaid Summary Suit against Naresh B.Oberoi on 18/6/2012.
Thereafter, writ of summons was issued by RPAD to the defendant .
The abovesaid suit came to be transferred from the Hon'ble High Court
to this Court on 3/10/2015. Thereafter, the plaintiff filed application to
serve the defendant by publication and also in the alternative by RPAD.
There is no dispute that as per order dated 3/5/2013 below Exhibit 2
Writ of Summons was issued through substituted service by making
paper publication and also to serve Writ of Summons through RPAD on
the defendants. There is no dispute that the paper publication was
made and the affidavit of service alongwith paper publication was filed.
Thereafter, on 15/1/2014 the plaintiff filed affidavit of examination in
chief at Exhibit 3 and List of Documents at Exhibit 4. The Court heard
the arguments of the advocate for plaintiff and on 30/4/2014 the suit
came to be decreed with costs.
5. Heard learned advocate appearing for the applicantslegal
heirs of original defendant has submitted that the original defendant
Naresh Oberai expired on 10/1/2017 and the applicant received the
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letter dated 24/2/2018 from the insolvency register of High Court and
came to know that exparte decree came to be passed against Naresh
Oberai. It is submitted that deceased Naresh had bad habit, he was not
gainfully employed and he was a burden on his joint family and heirs. It
is submitted that due the bad habit Naresh spoiled his health he was
alcoholic and smoker and he needed money to continue his bad habit.
It is submitted that none of his family members used to give money to
him because it would amount to encourage him to continue his bad
habit. So, fraudulently he executed writings, cheques and other
documents in favour and in collusion with parties like Neha and he had
borrowed large amount in cash from them. It is submitted that the
documents came to be executed from deceased Naresh with an
intention to file the Summary suit against him and received money
advantage illegally so also, extract money from the family members of
Naresh. It is submitted that the suit amount as claimed was never paid
to the deceased and he never executed the documents in favour of
plaintiff. Consequently, the suit claim not legal and proper.
6. In support of his abovesaid contention advocate for
applicants has heavily relied on the following Judgments:
1) P.N.Films Ltd. Vs.Overseas Films Corp.Ltd. AIR 1958 Bom 10,
wherein the Hon'ble Division Bench of Bombay High Court has held
that looking to the provisions of Order IX Rule 6, it seems to us clear
that those provisions do not apply to a decree passed in a Summary
Suit and an application to set aside a decree in summary suit is not
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regulated by Order IX Rule 13 but by order XXXVII Rule 4. In other
words Order XXXVII Rule 4 is a self contained order which deals not
only with the right of the defendant to appear in summary suit in which
a decree has to be passed, in which the leave to defend is not given to
him, but also with the procedure to be followed if the defendant wishes
to have a decree passed in a summary suit set aside.
7. The Hon'ble Division Bench has also held in their opinion,
such an application falls under order 37 Rule 4 and the limitation Act
has not dealt with any such application. Therefore, the article that
would apply could be the Residuary Article 181(Now it is article 137)
of Limitation Act.
2) Subhash Raina Vs. Suraj Parkash AIR 1977 J. & K 30, wherein
the Hon'ble J & K High Court has held that Order XXXVII is otherwise a
self contained order which deal not only with right of the defendant to
appear in the suit in which a decree has to be passed, if leave to defend
is not given to him, but also with the procedure to be followed if the
defendant wishes to have a decree passed in Summary Suit set aside.
8. It is further held that keeping in view to the procedure as set
out in Rule 4, it becomes clear that Order IX Rule 13 can have no
application to a decree passed in absence of defendant under Order
XXXVII Rule 3. Therefore, the time within which an application under
Rule 4 can be made is three years from the date of decree under Order
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181 of the Limitation Act.
9. The learned advocate for the applicant has also relied upon
the Judgments regarding the knowledge of decree as under:
a) Panna Lal Vs. Murari Lal AIR 1967 SC 1384 wherein it is held by
the Hon'ble Apex Court that,
“The expression “knowledge of the decree” in Art. 164 means knowledge of
the particular decree which is sough to be set aside. When the summons
was not duly served, limitation under Art.164 does not start running
against the defendant because he has received some vague information
that some decree has been passed against him. It is a question of fact in
each case whether the information conveyed to the defendant is sufficient
to impute to him knowledge of the decree within the meaning of Art. 164.
The test of the sufficiency is not what the information would mean to a
stranger, but what it meant to the defendant in the light of his previous
dealing with the plaintiff and the facts and circumstances known to him.
If from the information conveyed to him the defendant has knowledge of
the decree sought to be set aside, time begins to run against him under the
decree should be served on the defendant. It is sufficient that the defendant
has knowledge of the material facts concerning the decree, so that he has
a clear perception of the injury suffered by him and can take effective steps
to set aside the decree.”
b) Bharat Petroleum Vs. Khatanand AIR 2006 Chhat 22, wherein
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the Hon'ble Chhattisgarh High Court has held in para no.19 which
reads as under:
“Before coming into force the Act of 1963, the Act of 1908 was in force,
and present Article 123 of the Limitation Act corresponds to Article 164 of
the old Limitation Act. Hon'ble the Apex Court, while dealing with the
matter under Article 164 of the Limitation Act in Panna Lal V.Murari Lal
(dead) by his legal representatives reported in AIR 1967 SC 1384,
observed as below(para 4):
“(A) Limitation Act (1908), Art. 164 “Knowledge of the decree”
Meaning of,
The expression “knowledge of the decree” in Art 164 means
knowledge of the particular decree which is sought to be set aside.
When the summons was not duly served, limitation under Art.164 does
not start running against the defendant because he has received some
vague information that some decree has been passed against him. It is a
question of fact in each case whether the information conveyed to the
defendant is sufficient to impute to him knowledge of the decree within
the meaning of Art.164. The test of the sufficiency is not what the
information would mean to a stranger, but what it meant to the
defendant in the light of his previous dealing with the plaintiff and the
facts and circumstances known to him. If the information conveyed to
him the defendant has knowledge of the decree sought to be set aside,
time begins to run against him under Art.164. It is not necessary that a
copy of the decree should be served on the defendant. It is sufficient
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that the defendant has knowledge of the material facts concerning the
decree, so that he has a clear perception of the injury suffered by him
and can take effective steps to set aside the decree.”
c) Rajnikumar Vs. Suresh K Malhotra AIR 2003 SC 1322, wherein
the Hon'ble Chhattisgarh High Court has held as under:
“As the very purpose of Order 37 is to ensure an expeditious hearing and
disposal of the suit filed thereunder, Rule 4 empowers the Court to grant
leave to the defendant to appear to summons and defend the suit if the
Court considers it reasonable so to do, on such terms as Court thinks fit in
addition to setting aside the decree. Where on an application, more than
one among the specified reliefs may be granted by the Court all such reliefs
must be claimed in one application. It is not permissible to claim such
reliefs in successive petitions as it would be contrary to the letter and spirit
of the provision. That is why where an application under R.4 of O 37 is
filed to set aside a decree either because the defendant did not appear in
response to summons and limitation expired, or having appeared, did not
apply for leave to defend the suit in the prescribed period, the Court is
empowered to grant leave to defendant to appear to the summons and to
defend the suit in the same application. It is therefore, not enough for the
defendant seeking setting aside ex parte decree to show special
circumstances which prevented him from appearing or applying for leave
to defend, he has also to show by affidavit or otherwise, facts which would
entitle him leave to defend the suit. In this respect, Rule 4 of Order 37 is
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different from R.13 of O.9. In the instant case though the defendant has
shown sufficient cause for his absence on the date of passing ex parte
decree, he failed to disclose facts which would entitle him to defend the
case. In the application under R.4 O.37 the defendant did not say a word
about any amount being in diposit with the plaintiff or that the suit was
not maintainable under O.37. Therefore, dismissal of application of
defendant for setting aside ex parte decree as no special circumstances
were stated in the petition, both in regard to there being illegality in
deeming service of summons for judgment on defendant as well facts
sufficient to entitle him to defend the suit cannot be interfered with.”
e) Kone International Pvt.Ltd. Vs. Syndicate Bank AIR 1995 P & H
16, the plaintiff filed the suit against the LR's of the Guarantor, they
were not party to the loan transaction and not aware of the guarantee.
The Hon'ble Punjab & Haryana High Court held that on the basis of
application and reply are raised, it cannot be said that the defence
sought to be raised by the defendants was not frivolous. Permission to
contest the suit should be granted unconditionally and the condition of
furnishing the Bank Gaurantee is held illegal.
So also, the learned advocate for the applicants has relied
upon other Judgments and the bunch of citations is placed on record.
10. Per contra, the learned advocate for the plaintiff has
submitted that original defendant deceased Naresh Oberoi was duly
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served by the Writ of summons on 5/7/2012 as there was no proof of
service on record, thereby substituted service of Paper publication on
5/8/2013 was allowed. So also, lateron insolvency notice was
personally served on 23/8/2016 after the exparte decree was passed on
30/4/2014. It is submitted that the original defendant did not move
any application to set aside the decree despite the knowledge of it to
him. It is submitted that it was his personal right to apply which he
failed to do so and it is not a right in rem. It is submitted that due to
nonaction of the original defendant the act of insolvency has resulted,
which is a right vested in favour of the plaintiff as per the exparte
decree. It is submitted that now the applicant/representatives of the
deceased Mr.Naresh Oberoi has no legal right to make the application
for setting aside the exparte decree. It is submitted that as the decree
was passed during the lifetime of original defendant, the applicants
have no right to ask for setting aside the exparte decree. It is submitted
that the Legal Representatives of deceased defendant were having
knowledge about the exparte decree and their contention that they
came to know about the exparte decree on 27/2/2018 when they
received notice from insolvency Registrar is totally false. It is also
submitted that the application for setting aside the exparte decree is
filed on 10/4/2018 by the LR's of deceased. Hence, it is beyond
limitation even for them. It is submitted that the applicants are not
entitled to take out the Notice of Motion as no explanation for delay is
given. It is submitted that the limitation period under Order 37 Rule 4
ought to be 30 days from the date of decree as it is covered by Article
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123 of Limitation Act and not by Article 137, the Residuary Clause. It is
submitted that the application is barred by law of limitation, therefore,
it is requested to dismiss the Notice of Motion filed by the applicants. In
support of his contention the learned advocate for the plaintiff has
heavily relied upon the following Judgments:
1. Tirlok Singh Thakur vs. Madan Singh Nirala AIR 2000 Himachal
Pradesh 95, wherein the Hon'ble Himachal Pradesh High Court has
held as under:
“ Under the provisions contained in Order 37 Rule 4 , the defendant is
obliged to satisfy the twin conditions, namely he was prevented by
sufficient cause from putting in appearance and obtain leave to defend the
suit and, he has a good, substantial and/or meritorious defence in the
suit, before a decree passed under Order 37 Rule 3, can be set aside and
leave granted to him to defend the suit. Absence of any one of the two
conditions would be sufficient to decline the prayer of the defendant under
Order 37, Rule 4.”
11. I have duly considered the above submissions of both the
sides so also, I have gone carefully through the case record. From the
provisions of Order 37 Rule 4 so also, from the catena of Judgments, it
is crystal and well settled that Order 9 Rule 13 CPC has no application
in setting aside the exparte decree passed in Summary Suit since the
specific provision is made under Rule 4 of Order 37 of the Code of Civil
Procedure, which provides that for setting aside exparte decree in
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Summary suit the defendant has to show special circumstances . For
special circumstance to be shown, the defendant has to show that he
was prevented by sufficient cause in seeking leave to defend after
service of summons or Judgment or cause for nonappearance and if he
is able to show cause for not seeking leave to defend after service of
Summons for Judgment or for nonappearance such defendant is further
required to show that he has good meritorious and substantial defence.
12. Turning to the case in hand, on going through the case
record it appears that on 6/12/2012, the court recorded the Roznama
“ None present. Nothing on record to show that plaintiff has taken steps
to serve the defendants since June 2012. Adjourned to 3/5/2013 for
dismissal order.”
On 3/5/2013 the Court recorded the Roznama
“Resumed today. Advocate Smt.Chandra More for defendant/BMC
present.
Learned advocate Shri.M.N.Shah for plaintiff. Application for reissue of
Writ of Summons and the Court passed the following order below Exhibit
2:
“Heard ld.adv. Shri.N.M.Shah
Perused of contempt of appln.
Appln. is allowed through writ of summons through substitute service by
making publication at the cost of plaintiff and also in alternative to serve
writ of summons by R.A.D on the defts.
Case adjd. for awaiting writ of publication and writ of summons by
R.A.D.”
Thereafter, on 21/8/2013 Court recorded the roznama as
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under:
“Adv. for plaintiff present.
Adv.for plaintiff files affidavit of service alongwith paper publication. Adv.
for plaintiff files original writ of summons. Adjourned for filing evidence
and documents on 3/12/2013.”
13. It appears that on 3/12/2013 adv. N.M.Shah for plaintiff was
present and case was adjourned on 15/1/2014, on that day advocate
for plaintiff filed the affidavit of examination in chief and list of
documents and case was adjourned for judgment on 17/2/2014, and
ultimately on 30/4/2014 the Court passed the following order:
“None present.
F.R.S.R. Following order passed:
(I) Suit is decreed with costs.
(ii) Defendant do pay Rs.34,80,000/ to the plaintiff with interest at the
rate of 10% per annum, from the date of suit till realization of entire
amount due.
(iii) Court fee refund allowed as per rules.
(iv) Accordingly Decree be drawn.”
14. It is pertinent to mention here that the advocate for plaintiff
has filed the copy of the application for substitute service. Wherein
there is no whisper that the defendant was keeping out of way for the
purpose of avoiding service or that for any other reason the Writ of
summons could not be served in the ordinary way, then only under
Order 5 Rule 20(1A), Summons can be ordered to be served by an
advertisement in a daily newspaper in the locality. It appears to be that
in the instant case there was nothing for the Court to get itself satisfied
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that the original defendant was keeping out of the way for avoiding
service or that the writ of summons could not be served in the ordinary
way. Therefore, the legal representatives of the deceased defendant
have a right in submitting that there was no service legally effected
upon the deceased. Apart from that, by order dated 3/5/2013 below
Exhibit 2 as stated above, the application was allowed for substituted
service by making the Paper publication at the cost of plaintiff and also
in alternative to serve the writ of Summons by the Registered Post AD
and the case was adjourned for awaiting writ of summons and service
by Register post AD.
15. It appears that the plaintiff did not produce any documentary
evidence before the Court to show that the said order is fully complied
and that writ of summons was issued through the paper publication as
well as by Registered Post A.D. Therefore, the legal heirs of original
defendant have right to say that the order date 3/5/2013 was not duly
complied by the plaintiff in its true spirit. There is no dispute that after
passing the exparte decree on 30/4/2014 in the abovesaid Suit in
favour of Neha Gopi Marmat, the Hon'ble insolvency Court issued the
Insolvency Notice No.N/30 of 2015 to or against original defendant
Naresh Oberai at the behest of plaintiff Neha Marmat as said deceased
Naresh committed the act of insolvency by noncompliance of insolvency
notice as alleged. There is no dispute that Neha Marmat filed
Insolvency Petition No.1/2017 against original defendant Naresh
Oberai, who expired on 10/1/2017. There is no dispute that as per the
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order of Hon'ble insolvency Court notice were issued to heirs of
deceased and they received the said notice on 27/2/2018.
16. In the matter advocate for plaintiff has vehemently argued
that the notice of motion is not within limitation and he has contended
that though the applicants wrongly claimed about the knowledge of
exparte decree only on 27/2/2018 when they received the notice from
insolvency Registrar but they have taken out present Notice of Motion
on 10/4/2018, hence, it is beyond limitation as not brought within 30
days from the date of knowledge. It is contended that under Order 37
Rule 4 limitation period is 30 days from the date of decree as per
Article 123 of Limitation Act and not as per Article 137, the residuary
clause .
17. Per contra, the advocate for defendant/applicants has
submitted that as per Article 137 there is a limitation of three years for
setting aside the exparte decree under Order 37 Rule 4 CPC and not
under Article 123 of the Limitation Act. He has relied upon the case of
PN Films Ltd. Vs.Overseas Films Corporation Supra.
18. I have duly considered the above submissions of both the
sides on the point of limitation. In my opinion, it will be just, proper
and convenient to mention the provision of Article 123 of Limitation
Act, which reads as under:
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Description of application Period of
limitation
Time from
which period
begins to run
123 To set aside a decree
passed ex parte or to re
hear an appeal decreed or
heard exparte
Explanation – For the
purpose of this article,
substituted service under
Rule 20 of Order V of the
Code of Civil Procedure,
1908 shall not be deemed
to be due service
Thirty days The date of the
decree or where
the summons or
notice was not
duly served,
when the
applicant had
knowledge of
the decree.
19. Whereas, the provisions of article 137 of Limitation Act 1963
reads thus as under:
PART II OTHER APPLICATIONS
Description of application Period of
limitation
Time from
which period
begins to run
137 Any other application for
which no period of
limitation is provided
elsewhere in this division
Three years When the right
to apply accrues
20. Thus, keeping in view of the procedure as set out in Rule 4 of
Order 37, it becomes clear that Order 9 Rule 13 can have no
application to a decree passed in absentia of the defendant under order
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37 Rule 3. Therefore, the time within which an application under Order
4 can be made is 3 years from the date of decree under Article 137 of
the Limitation Act. In my opinion, Article 123 will not be applicable to
an application for setting aside the decree under Order 37 Rule 4. In
view of above discussion in my considered view the law laid down by
the Hon'ble Division Bench of our parent High Court, in the case of
P.N.Films Ltd. Vs. Overseas Films Corporation, will be squarely
applicable to the facts of the case in hand. With due respect, I,
therefore, overruled the objection of the learned advocate for the
plaintiff that the present Notice of Motion is beyond time.
21. Now, coming to the question of special circumstances as
envisaged by Rule 4 . It is therefore, necessary for the applicants to
show the special circumstances which prevented them from appearing
or applying for setting aside the said exparte decree. On the cost of
repetition the said exparte decree came to be passed on 30/4/2014 and
though the original defendant was not served during his lifetime
regarding the insolvency Petition and the notice was served upon his
legal heirs which they received on 27/2/2018.
22. In the present Notice of Motion they have contended that
deceased Naresh Oberai had bad habits. He was not gainfully employed
and he was burden on his heirs and joint family, so also, he was
addicted to alcohol and smoking. It is also alleged that he was always
needed money to continue his bad habits. Therefore, he executed the
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writing and cheques, other documents in original in favour of the other
parties, like plaintiff Neha, to show that he had borrowed large amount
in cash from them. It is alleged that Naresh Oberoi executed document
without any consideration, so also, it is alleged that the fraudulent and
collusive transactions alleging the documents were fictitious and had
never taken place. It is alleged that to fabricate the cause of action in
favour of plaintiff the said documents came to be prepared so that she
can file the Summary suit.
23. It is alleged that plaintiff Neha does not appear to be
gainfully employed or has enough Bank Balance or source of income
out of which she could have lent money to deceased Naresh. She is also
not income tax payer. It appears that the contention raised by the
applicants are sufficient and enough for showing that original
defendant Naresh Oberai prevented from appearing or applying for
leave to defend after publication of Notice of Writ of Summons in
Newspaper. Considering the above facts, evidence and circumstances
on record in my opinion in the instant case the applicants have shown
the special circumstances for not appearing of deceased defendant
Naresh Oberai in the suit, so also, they have disclosed the facts which
would entitle them to defend the case. The applicants stated in
application about the conduct and bad habits of the original defendant
deceased Naresh Oberai. So also, they have raised the contention that
the suit as framed and filed under Order 37 of CPC was not
maintainable therefore, the Notice of Motion for setting aside the
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exparte decree for the reason and special circumstances as stated above
in the Motion appears sufficient to entitle them to defend the suit and
the exparte decree passed in the matter on 30/4/2014 needs to be set
aside. In the result, I answer to the point no.1 in affirmative and pass
the following order:
: ORDER :
1. Notice of Motion no.1517/18 is allowed subject to costs of
Rs.25,000/ payable by the applicants to the plaintiff, on or before next
date without fail.
2. The exparte decree passed in Summary Suit no.3485/12 on
30/4/2014, is set aside.
3. Leave is granted to the heirs of the original defendant i.e.
applicants for appearance in the abovesaid suit.
4. The plaintiff is directed to bring the applicants on record in the
suit as the legal heirs of deceased defendant and serve Summons for
Judgment on the applicants on or before the next date.
5. The payment of cost is condition precedent.
6. The parties are directed to appear in the original Suit no.3485/12
on 25/10/2018 before this Court.
7. Notice of Motion no.1517/18 is disposed of accordingly.
(M.M.UMAR)
Judge,
01/10/2018 City Civil Court, Gr. Mumbai
Date of Dictation : 01/10/18.
Date of Transcription : 01/10/18.
Date of signature : 12/10/18
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“CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER”
UPLOAD DATE TIME NAME OF STENOGRAPHER
12/10/18 4.00p.m. Mrs.Jyoti R.Mane
Name of the Judge HHJ Shri M.M.Umar(CR No.28)
Date of Pronouncement of
Judgment/Order.
1/10/2018
Judgment/order signed by P.O on 12/10/2018
Judgment/order uploaded on 12/10/2018
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