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CASE NO.: Appeal (civil)  5771 of 2007

PETITIONER: BOGIDHOLA TEA & TRADING CO. LTD. AND ANR.

RESPONDENT: HIRA LAL SOMANI

DATE OF JUDGMENT: 07/12/2007

BENCH: S.B. SINHA & G.S. SINGHVI

JUDGMENT: J U D G M E N T [Arising out of SLP(C) No.6404/2007] S.B. Sinha, J.         Leave granted.         This appeal is directed against the judgment and order dated 3.1.2007 passed by the  Gauhati High Court in MC No.3398/2004 whereby and whereunder the appeal  preferred by the appellants herein from a judgment and decree dated 19.4.1990  passed in Suit No.2/89, was dismissed on the premise that the appellants had not  shown sufficient cause for condonation of 10 months’ delay in filing the said appeal.  

       The parties herein were on business terms. Appellants were to supply 22,000 Kgs. of  ’made tea’ for 1984 season and 50,000 Kgs. of ’made tea’ for 1985 season to the  respondent. However, the appellants supplied only 5,547 Kgs. of ’made tea’  for 1984  season and 18.245 Kgs. of ’made tea’ for 1985 season.  Respondent filed a suit for a  decree for a sum of Rs.5,22,69.66 paise together with interest thereon at the rate of  18% per annum. A suit was filed towards the price of the remaining amount for  terminal tea supply.  In paragraph 5 of the plaint, the respondent inter alia averred:

\023The price for other remaining quantity of made tea of 1985 season  made available by the defendants to the plaintiff, could not be  finalized as the same were found to have no proper market and  hence were not saleable at Jorhat. At such as per  instruction/discussion of the defendants, remaining qualities of  14,796 of made tea of 1985 season were sent to the  tea action  market at Guwahati and in Calcutta. The sale proceeds of the said  tea on sale of auction markets were to be adjusted with the advances  already made by the plaintiff to the deponents.  After 18.04.85 the  plaintiff had paid a total sum of Rs. 6,22,116 inclusive of Rs.  1,30,000 as shown in schedule ’A’ below.\024  

       The first Bill referred to in this appeal reads thus:

\023Bill dated 5.6.85 for.....   Rs. 46,594.80 Bill dated 5.6.85 for......   Rs. 86,225.00 For sale proceeds on 16.8.85  Rs. 79,824.91 For sale proceeds on 26.8.85  Rs.  4,608.60 For sale proceeds on 9.9.85   Rs.  9,101.83 For sale proceeds on 19.9.85  Rs. 3766.70 For sale proceeds on 12.11.85 Rs. 2502.54 For sale proceeds on 9.12.85  Rs. 30,615.48 For sale proceeds on 23.12.85 Rs. 30,9119.62 For sale proceeds on 3.1.86   Rs.  5,945.78 For sale proceeds on 20.1.86  Rs.  9,784.28

                               Rs. 3,18,089.54

       Allegedly, despite service of summons the appellants did not appear. The plaintiff- respondent made a prayer before the Trial Court that a decree be passed under order  8 Rule 10 of the CPC. He declined to examine any witness.  The learned Trial Court

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by a judgment and order dated 19.4.1990 decreed the suit stating:

       \023Learned lawyer of the plaintiff side is present filing his hazira.  Defendants side is absent without any step.  Seen the previous  orders of this Court. The suit is taken up for ex-parte hearing.  Heard learned counsel for the plaintiff. He submits Court to take  action under Order VIII Rule 10 of the C.P.C. and declined to  examine any P.W. Hence, perused the plaint and the relevant  documents submitted by the plaintiff in support of his plaint. Prima  facie case is held proved in favour of the plaintiff as per plaint.         The suit is decreed on ex-parte for realization of Rs.5,22,669.66 p  with costs of the suit and future interest per plaint as prayed for.\024                  Appellants contended that they were not aware of passing of the said decree. In the  year 1997, an execution case was filed. Summons in the said execution case were   served upon the appellants. One Shri Tapan Gogoi was appointed as an Advocate in  the said execution case. However, no further steps were taken.  The execution  proceeding was stayed on 15.7.2000.   

       In the month of September, 2000, the appellants herein filed an application under  Order 9 Rule 13 of CPC for setting aside the said ex-parte decree. An application for  condonation of delay in filing the suit was also filed.  The said application was  dismissed by an order dated 22.9.2003 as the appellants could not allegedly  satisfactorily explain the cause for delay in filing the said application as also in view of   Article 123 of the Schedule appended to the Limitation Act, 1923.   

       A civil revision application was preferred thereagainst which was also  dismissed by   the High Court by its order dated 2.1.2004.  Liberty, however, was granted to the  appellants to prefer an appeal against the original decree.  An appeal thereafter was  filed by the appellants along with an application for condonation of delay.  The High  Court by reason of the impugned judgment refused to condone the delay and  consequently dismissed the appeal.  

       Mr. Hansaria, learned senior counsel appearing on behalf of the appellants, inter  alia, would submit that the High Court committed a serious error in passing the  impugned judgment in so far as it failed to take into consideration that assuming that  the defendant-appellants had not filed written statement, it was obligatory on the part  of the Trial Judge to satisfy itself about the bona fide of the claim of the plaintiff- respondent.  Learned counsel urged that having regard to the fact that the last  advance was purported to have been made on 19.6.1985, the suit which was filed on  2.1.1989 was barred by limitation.

       Learned counsel appearing on behalf of the respondent, on the other hand,  submitted that assuming that the learned Trial Judge should not have granted a  decree in terms of Order 8 Rule 10 of the CPC, the appellants were obligated to  explain the delay in preferring an appeal.  The appeal being continuation of the suit,  the learned counsel would submit that if the same could not have been entertained on  the ground of being barred by limitation, the question of setting aside the decree by  the High Court in exercise of its appellate jurisdiction did not and could arise.

       While issuing notice in terms of order dated 16.04.2007, this Court directed the  appellants to deposit a sum of Rs. 2 lakhs before the Executing Court within four  weeks from the said date.  It is stated before us by learned senior counsel Mr.  Hansaria, that the aforementioned sum has been deposited on or about 25.6.2007.     

       Ordinarily, we would not have interfered in such matter. However, it appears to be  a gross case. Appellants before us have been able to show that the ex-parte decree  dated 19.4.1990 passed by the learned Additional District & Sessions Judge, Jorhat,  ex-facie suffers from non-application of mind. Had the learned Judge applied its mind  even to the averments made in the plaint, he should have asked himself the question as  to whether in absence of any acknowledgment in writing, as a result whereof the  period of limitation would start running afresh, the suit could have been decreed.   Section 3 of the Limitation Act, 1963 mandates that a Court would not exercise its

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jurisdiction for any relief in favour of a party if the same is found to be barred by  limitation. Although such a defence has not been raised, the statute obligated upon the  Court of law to consider as to whether a suit is barred by limitation or not. In the  event it was found that the suit was barred by limitation, the Court had no  jurisdiction to pass a decree.  It was, therefore, essential for the learned Trial Judge to  pose unto itself the right question, particularly when without adduction of oral  evidence the pleading raised in the plaint could not be said to have been established. It  was, therefore, not a case where the Court could have invoked the provisions of Order  10 Rule 8 of the CPC. Even otherwise, the suit was set down for ex-parte hearing. The  learned Trial Judge stated that only a prima-facie case was found out from the plaint  and other documents which were not sufficient for passing a decree as therefor the  plaintiff was bound to prove his case.   

       For the reasons aforementioned, having regard to the peculiar facts and  circumstances of this case, we think that it is a fit case where the High Court should  have condoned  the delay.  We, therefore, set aside the judgment of the High Court.  Ordinarily, we would have remitted the matter back to the High Court for  consideration thereof on merit of the appeal, but as we have ourselves looked to the  records of the case, we are of the opinion that interest of justice would be subserved if  we set aside the ex-parte decree dated 19.4.1990. We direct accordingly.   

       This order shall, however, be subject to the condition that the appellants shall  deposit a further sum of Rs.1 lakh before the Executing Court which shall be subject  to the outcome of the suit. Appellants shall further pay a sum of Rs. 25,000/- to the  respondent towards costs. The respondent shall be entitled to withdraw the sum  deposited by the appellants, upon furnishing security.   

       Appellants may file written statements before the Trial Court within six weeks and  the learned Trial Judge may consider the desirability of disposing of the suit within  three months from the date of receipt of this order.               

       The appeal is disposed of with the aforementioned observations and direction.