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Quality Poly Vinyls (P) Ltd. Vs. Delhi Financial Corporation - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtDelhi High Court
Decided On
Case NumberFirst Appeal No. 243 of 1982
Judge
Reported in24(1983)DLT207
ActsState Financial Corporation Act, 1951 - Sections 31; Code of Civil Procedure (CPC), 1908 - Order 9, Rule 13
AppellantQuality Poly Vinyls (P) Ltd.
RespondentDelhi Financial Corporation
Advocates: P.C. Khanna,; Anu Goswamy and; Asghar Ali Khan, Advs
Cases ReferredRajdhani Enterprises v. Haryana Financial Corporationand
Excerpt:
.....appeared for appellant - district judge granted ex parte decree in favor of respondent - appellant filed application under order 9 rule 13 for setting aside ex parte order - appellant contended that impugned order had been passed without hearing debtor - lower court could have dismissed applications and adjourned case for evidence and arguments of appellant - lower court passed order without giving proper hearing to appellant - breach of principle of natural justice - impugned order set aside - district judge directed to dispose of application. - - the supreme court held that the district judge was not a persona designata, and it is difficult to understand why the scope of the language should be cut down by not including appeals provided under civil procedure code within the ambit..........shall be entitled to realise the decretal amount by sale of the mortgaged property.(3) the company filed an application on 18-3-1981 under order 9 rule13, c.p.g. for setting aside the ex-parte order. that application was dismissed in default on 14-7-1981. application for restoration thereof was filed on20-7-1981. it was accepted on 7-7-1982. the application was restored and rejected by the learned additional district judge by his order of 4-8-1982.the company filed an appeal fao 244 of 1982 on 30-8-1982. simultaneously,the company also filed an appeal against the decretal order of 17-3-1981 on30-8-1982. along with this appeal an application under section 5 of the limitation act, 1963 was also filed. the company also filed on31-8-1982 a g.m(m) 235 of 1982 under article 227 of the.....
Judgment:

M.L. Jain, J.

(1) This order will dispose of F.A.O. 243 of 1982, F.A O.244 of 1982 and G.M. 235 of 1982.

(2) The Delhi Financial Corporation filed an application on 26-10-1978under Section 31 read with Section 32 of the State Financial Corporation Act,1951 (the Act) against M/s Quality Poly Vinyls (P) Ltd. for recovery of a sum of Rs. 4,56,811.59. The learned Additional District Judge issued an ad interim injunction restraining the firm from transferring the assets and an adinterim order of attachment of security. A show cause notice was issued under Sub-section (4) of Section 32 of the Act as to why the interim order of attachment should not be made absolute and injunction confirmed. The company showed cause and filed a written statement on 6-2-1980. Replication was filed in March, 1980 on behalf of the Corporation. Issues were framed.The evidence of the Corporation was closed on 8-9-1980. Case was adjourned for the evidence of the company. On 27-10-1980 the company moved twoapplications, one under Order 1 Rule 10 and the other under Order 6 Rule17, Code of Civil Procedure, 1908. Replies were filed on 28-11-80. The case was fixed for arguments on the aforesaid two applications and after some adjournments it ultimately stood adjourned to 17-3-1981 for the same purpose.On that date nobody appeared for the company. The learned Additional District Judge rejected the two applications, proceeded ex-parte, heard arguments and delivered judgment on the same date. The learned AdditionalDistrict Judge decreed the aforesaid amount in favor of the Corporation and directed that the Corporation shall be entitled to realise the decretal amount by sale of the mortgaged property.

(3) The company filed an application on 18-3-1981 under Order 9 Rule13, C.P.G. for setting aside the ex-parte order. That application was dismissed in default on 14-7-1981. Application for restoration thereof was filed on20-7-1981. It was accepted on 7-7-1982. The application was restored and rejected by the learned Additional District Judge by his order of 4-8-1982.The company filed an appeal Fao 244 of 1982 on 30-8-1982. Simultaneously,the company also filed an appeal against the decretal order of 17-3-1981 on30-8-1982. Along with this appeal an application under Section 5 of the Limitation Act, 1963 was also filed. The company also filed on31-8-1982 a G.M(M) 235 of 1982 under Article 227 of the Constitution against the order of the Additional District Judge dated 4-8-1982.

(4) The cause shown for nonappearance on 17-3-1981 was that thecounsel for the company got busy in the High Court and while coming to attend the court his car went out of order on way and he got delayed. The Director of the company could not attend the court due to the sudden death of a close relative of his. Counsel for the respondent appeared at 12-30 p.m.By then the order of 17-3-1981 had been passed. Counsel made the application on 18-3-1981 for setting aside the ex-parte order. The learned Judge did not go into the merits of the application. The ground for rejecting the laid application under Order 9 Rule 13 Civil Procedure Code was that it was not maintainable because the special law, namely, the Act provides for an appeal against the order made under Sub-section (7) of Section 32 of the Act. For this view,he relied upon M/s Rajdhani Enterprises v. Haryana Financial Corporationand others, 1970 Plr 491. In this case, it was held that Order 9 Rule 13applies to a decree and an order under Sub-section (7) of Section 32 of the Act was not a decree. The only remedy available to the aggrieved party was to file an appeal under Section 32(9) of the Act against the ex-parte order within 30 days of the order. The learned counsel for the Corporation submitted before me that the view adopted by the Punjab & Haryana HighCourt was supported by the Gujarat State Financial Corporation v. M/s Natson . and others, : [1979]1SCR372 and M/s Parkash Playing Cards . and others v. Maharashtra State Financial Corporation and others, : [1972]1SCR351 , the District Judge directed sale of the property and passed an order for issue of sale proclamation under Order 21 Rule 66, G.P.G. According to Section 32(8) of theAct, an order of attachment and sale shall be carried into effect as far as practicable in the manner provided in Civil Procedure Code for the attachment and sale as of the Corporation was a decree holder. The sale took place but the borrower company challenged the sale. The District Judge dismissed the Company'sapplication. The company appealed under Order 43 Rule 1(5). The HighCourt dismissed the appeal on the ground that no appeal lay. The Supreme Court held that the District Judge was not a persona designata, and it is difficult to understand why the scope of the language should be cut down by not including appeals provided under Civil Procedure Code within the ambit of the words 'in the manner provided in the Code of Civil Procedure'. Thus, it was clear that the order of attachment or sale is like a decree and the Code of Civil Procedure applies to it. The order of 17-3-1981 was an order for sale if moneys were not paid. Indeed, it was correctly described as a decree and the application was correctly registered as a suit. It has all the elements of adecree. thereforee, Order 9 Rule 13 is attracted and the order of 4-8-1982deserves to be set aside. As to merits it proved that counsel could not reach in time and the application was moved next day. There is sufficient cause for default and the application deserves to be accepted.

(5) With great respect, for the reasons aforesaid I am not inclined to accept fully the view taken in Rajdhani Enterprises (supra). In case of an exparte decree, two remedies are available to the defendant. He can file anappeal, or can file an application under Order 9 Rule 13. Same is the case in respect of an order made under Sub-section (7) of Section 32 of the Act. The party could do one or both. He has done both but his appeal was timebarred. The learned counsel for the appellant submitted that (1) the period pent in Order 9 Rule 13 proceedings be excluded and in that case the appeal will be in time and (2) the appellant has moved an application C.M. No.2982 of 1982 under Section 5 of the Limitation Act to condone the delay.

(6) The learned counsel for the respondent opposed these requests on the ground that they are not bona-fide. He pointed out that the company had obtained a copy of the decree but the appeal was filed on 30-8-1982.Even otherwise the appellant has been delaying the proceedings. In the circumstances of the case, it seems to me that there was no need to file the appeal against the order of 17-3-1981. It was done by way of caution andthe time consumed in Order 9 Rule 13 proceedings deserve to be excluded.If the time is not excluded, it is otherwise a fit case for condensation of delay as well.

(7) The learned counsel for the appellants submitted that the impugned order of 17-3-1981 has been passed without hearing the debtor. On 17-3-1981,the case was fixed for arguments on the two applications. The court at the most could have dismissed those applications and adjourned the case for the evidence and arguments of the appellant. The learned Judge has passed the order without giving proper and effective hearing to the appellant and has thus committed breach of the principles of natural justice. If it is held thatthe appeal is not maintainable, it Wjs a fit case in which supervisory jurisdiction should be exercised. I agree.

(8) Consequently, I set aside the impugned order of 17-3-1981 and4-8-1982, accept the application under Order 9 Rule 13 and direct the learned Additional District Judge to hear the said two applications and dispose of them and then proceed to deal with the main claim. There shall be no order as to costs,The two appeals and the miscellaneous petition hall stand disposed ofaccordingly.


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