Full Order Text
Order 1 · 01 Oct 2018 · CNR MHCC010047332018
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 -- 1 of 20 -- NM In SC 3485/12 Oral Order 2 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 -- 2 of 20 -- NM In SC 3485/12 Oral Order 3 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 -- 3 of 20 -- NM In SC 3485/12 Oral Order 4 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 -- 4 of 20 -- NM In SC 3485/12 Oral Order 5 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 -- 5 of 20 -- NM In SC 3485/12 Oral Order 6 181 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 -- 6 of 20 -- NM In SC 3485/12 Oral Order 7 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 -- 7 of 20 -- NM In SC 3485/12 Oral Order 8 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 -- 8 of 20 -- NM In SC 3485/12 Oral Order 9 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 -- 9 of 20 -- NM In SC 3485/12 Oral Order 10 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 -- 10 of 20 -- NM In SC 3485/12 Oral Order 11 123 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 -- 11 of 20 -- NM In SC 3485/12 Oral Order 12 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 -- 12 of 20 -- NM In SC 3485/12 Oral Order 13 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 -- 13 of 20 -- NM In SC 3485/12 Oral Order 14 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 -- 14 of 20 -- NM In SC 3485/12 Oral Order 15 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: -- 15 of 20 -- NM In SC 3485/12 Oral Order 16 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 -- 16 of 20 -- NM In SC 3485/12 Oral Order 17 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 -- 17 of 20 -- NM In SC 3485/12 Oral Order 18 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 -- 18 of 20 -- NM In SC 3485/12 Oral Order 19 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 -- 19 of 20 -- NM In SC 3485/12 Oral Order 20 “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 -- 20 of 20 --
