Order 1

Order Details: Notice of Motion
Pdf Text: NM In SC 3051/12 Oral Order 1
IN THE BOMBAY CITY CIVIL COURT AT BOMBAY
NOTICE OF MOTION NO. 1518 OF 2018
(CNR NO.MHCC010047342018 )
IN
SUMMARY SUIT NO.3051 OF 2012
(HIGH COURT SUMMARY SUIT NO.811 OF 2012)
Padma Creado
of Mumbai, Indian Christian, residing at
New Bharat Nagar, Room No.354, four
Bungalows, Andheri Versova Link Road,
Andheri (West), Mumbai 400053. ...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 Obera i
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.1518/18
1. This Notice of Motion is taken out by the legal
heirs/representatives of deceased defendant for setting aside the
exparte decree passed on 20/7/2015 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 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 20/7/2015 ? In the affirmative
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 Padma Creado plaintiff filed the
abovesaid Summary Suit against Naresh B.Oberoi on 12/3/2012.
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 and it was received on 5/12/2012. But no notice was issued
to the parties after receipt of R and P.
5. Heard learned advocate appearing for the applicantslegal
heirs of original defendant has submitted that the original defendant
Naresh Oberoi expired on 10/1/2017 and the applicant received the
letter dated 27/2/2018 from the insolvency register of High Court and
came to know that exparte decree came to be passed against Naresh
Oberoi. 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
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documents in favour and in collusion with parties like Padma Creado
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 recover money
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
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
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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.
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 Article
181 of the Limitation Act.
8. 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
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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
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”
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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
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
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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
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
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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.
9. Per contra, the learned advocate for the plaintiff has
submitted that original defendant deceased Naresh Oberoi was duly
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
20/7/2015. 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
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decree. It is submitted that now the applicants/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
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
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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.”
10. 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 clear 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 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 non
appearance 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.
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11. Turning to the case in hand, on going through the case
record it appears that on 5/12/2012, the court recorded the Roznama
“ R and P received. No minutes in R and P.
None present for plaintiff.
Adv. Mr.Melvyn Parreira h/f.Mansukhlal Hiralal and Co. for defendant
present. Matter adjourned to 29/1/2013 for direction.”
On 29/1/2013 the Court recorded the Roznama
“ None present for plaintiff.
None present for defendant.
Matter adjourned to 3/5/2013 for direction.”
Thereafter, on 3/12/2013 Court recorded the roznama as
under:
“Adv. N.M.Shah for plaintiff present and filed affidavit of service of
Summons.TOR. Case adj. For further steps by plaintiff to 5/2/2014.”
12. It appears that on 10/6/2014 plaintiff filed examination in
chief, original documents on record, case was adjourned for argument
with reference to the documents
“ Both parties and advocate are absent.
F.R.S.R. Following order is passed:
It is hereby ordered and decreed that.
1. Defendant do pay to the plaintiff a sum of Rs.31,25,000/ with
interest at the rate of 15% per annum, from the date of filing of the suit
till realization of the amount.
2. Defendant shall bear the cost of the plaintiff and his own.
3. Plaintiff is entitled for the refund of court fees as per rules.
4. Decree be drawn accordingly.”
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13. In the present suit after receipt of R and P from the Hon'ble
High Court, no notice was issued to the defendant nor the plaintiff
applied for issuance of Writ of Summons afresh upon the defendant. No
order was passed to show that defendant remained absent inspite of
service of writ of summons . Therefore, the legal representatives have
right to say that Writ of summons was not duly served upon deceased
defendant.
14. There is no dispute that after passing the exparte decree on
20/7/2015 in the abovesaid Suit in favour of Padma Creado, the
Hon'ble insolvency Court issued the insolvency notice to or against
original defendant Naresh Oberoi at the behest of plaintiff Padma
Creado as said deceased Naresh committed the act of insolvency by
noncompliance of insolvency notice as alleged. There is no dispute that
Padma Creado filed Insolvency Petition No.1/2017 against original
defendant Naresh Oberoi, who expired on 10/1/2017. There is no
dispute that as per the order of Hon'ble Insolvency Court notices were
issued to heirs of deceased and they received the said notice on
27/2/2018.
15. 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
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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 .
16. 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.
17. 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.
18. 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
19. 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
37 Rule 3. Therefore, the time within which an application under Order
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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.
20. 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 20/7/2015 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.
21. In the present Notice of Motion they have contended that
deceased Naresh Oberoi 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
writing and cheques, other documents in favour of the other parties,
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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 alleged in 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.
22. It is alleged that plaintiff Padma Creado 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 Oberoi 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 Oberoi 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 Oberoi. 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
exparte decree for the reason and special circumstances as stated above
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in the Motion appears sufficient to entitle them to defend the suit and
the exparte decree passed in the matter on 20/7/2015 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.1518/18 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.3051/12 on
20/7/2015, 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.3051/12
on 25/10/2018 before this Court.
7. Notice of Motion No.1518/18 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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