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Rahini Roy Vs. Jethmull Bhojraj and anr. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKolkata High Court
Decided On
Case NumberSuit No. 96 of 1967
Judge
Reported inAIR1969Cal218
ActsCode of Civil Procedure (CPC) , 1908 - Order 37, Rules 2 and 4
AppellantRahini Roy
RespondentJethmull Bhojraj and anr.
Advocates:Tibrewalla, Adv.
DispositionApplication dismissed
Cases ReferredMurahari Rao v. K. Bapayya
Excerpt:
- .....masud, j.1. this is an application on behalf of the petitioner, a partnership firm, under order xxxvii rule 4 of the code of civil procedure for setting aside a decree passed by me as an undefended suit on 8th september, 1967. admittedly, this suit was instituted as a summary suit under order xxxvii on three hundis for rs. 10,000/- each payable to the plaintiff or order 180 days after the said date without grace. the said hundis were drawn by the petitioner firm, m/s. jethmull bhojraj on k.k. sukhani and were purported to have been accepted by one k.c. sukla, the defendant no. 2. the said hundis on maturity were duly presented to the defendant no, 2 for payment but were dishonoured by non-payment due notice of which was given to the defendant no. 1 also. the defendants having failed.....
Judgment:
ORDER

S.A. Masud, J.

1. This is an application on behalf of the petitioner, a partnership firm, under Order XXXVII Rule 4 of the Code of Civil Procedure for setting aside a decree passed by me as an undefended suit on 8th September, 1967. Admittedly, this suit was instituted as a summary suit under Order XXXVII on three hundis for Rs. 10,000/- each payable to the plaintiff or order 180 days after the said date without grace. The said hundis were drawn by the petitioner firm, M/s. Jethmull Bhojraj on K.K. Sukhani and were purported to have been accepted by one K.C. Sukla, the defendant No. 2. The said hundis on maturity were duly presented to the defendant No, 2 for payment but were dishonoured by non-payment due notice of which was given to the defendant No. 1 also. The defendants having failed and neglected to pay the amounts of the said hundis, the present suit was instituted against the defendants for a decree for Rs. 35,365/- on 12th January, 1967. On 9th February, 1967, the defendant No. 1 was informed by one of its assistants that Writ of Summons in the said summary suit along with a notice dated 8th February, 1967, was purported to have been served upon the defendants. On 21st February, 1967, the firm by a Master's Summons taken out by its attorneys, Khaitan & Co. made an application in the said suit, inter alia, for setting aside the purported service of the writ of summons and alternatively, for leave to enter appearance and to defend the suit. On 28th June, 1967, the said application came up for hearing before R.M. Dutta, J., who was pleased to grant him leave to defend on condition that the petitioner would furnish security to the extent of Rs. 30,000/- to the satisfaction of the Registrar within one month. His Lordship was further pleased to direct that in case no security is furnished, there would be no order on the said application. Thereafter, an application for leave to file the Memorandum of Appeal without a certified copy was presented before the Court of Appeal consisting of Ray and S.K. Mukherjee, JJ., against the said order of R.M. Dutta, J. The said application however was withdrawn with the leave of the Appeal Court. The defendants having failed to deposit the sum of Rs. 30,000/- in pursuance of the order of Dutta, J., the matter appeared in my undefended list on 8th September, 1967, and a decree was passed. It is alleged that the petitioner for the first time came to know of the ex parte decree on 21st December, 1967. On 2nd February, 1968, the Memorandum of Appeal was filed on behalf of the petitioner against the said decree. But the said Memorandum of Appeal was returned to the defendant No. 1's solicitor as the same was filed out of time. On 19th February, 1968, the petitioner made an application before the Appellate Court for condonation of delay in preferring the said appeal and for extension of time to file the Memorandum of Appeal. On 5th March, 1968, the said application came up for hearing before the Appellate Court and their Lordships were pleased to deliver a judgment by which the said application was dismissed. Thereafter, on 11th March, 1968, the present application is filed.

2. The short point to be decided in this application is whether there are 'special circumstances' within the meaning of Order XXXVII Rule 4 of the Code which would enable me to exercise my discretion to set aside the decree passed by me, Order XXXVII, Rule 4 reads as follows:

'4.-- After the decree the Court may, under special circumstances, set aside the decree, and if necessary stay or set aside the execution, and may give leave to the defendant to appear to the summons and to defend the suit, if it seems reasonable to the Court so to do, and on such terms as the Court thinks fit.' The words 'the decree' and 'the summons' in Rule 4 must refer to Order XXXVII, Rule 2 which provides:

2 (1).-- All suits upon Bills of Exchange, Hundis or Promissory Notes may, In case the plaintiff desires to proceed hereunder, be instituted by presenting a plaint in the form prescribed; but the summons shall be in Form No. 4 in Appendix B or in such other form as may be from time to time prescribed.

(2).-- In any case in which the plaint and summons are in such forms respectively the defendant shall not appear or defend the suit unless he obtains leave from a Judge as hereinafter provided so to appear and defend; and, in default of his obtaining such leave or of his appearance and defence in pursuance thereof, the allegations in the plaint shall be deemed to be admitted, and the plaintiff shall be entitled to a decree. ......

Admittedly, the summons was served in accordance with Form No. 4 in Appendix B which provides that a copy of the Hundis is to be annexed to the summons and not the plaint. The petitioner, however, applied for leave to defend under Order XXXVII, Rule 3, as stated earlier. The petitioner having failed to comply with the conditional order passed by Dutta, J,, leave to defend is deemed to have been refused and the statements in the plaint admitted by the defendants.

3. Mr. Tebriwalla, Counsel for the petitioner, has contended that on the face of the three hundis, no decree could have been passed against the petitioner and, as such, I should exercise my discretion under Order XXXVII, Rule 4 in setting aside the decree. According to him, the drawer of the hundis, K.K. Sukhani had no authority to sign the documents on behalf of the petitioner either as a partner or otherwise. Secondly, K.K. Sukhani as partner or authorised agent is the drawer and the drawee is also K.K. Sukhani in his individual capacity; the acceptor is K.C. Sukla, a different man who is unknown to the petitioner. Thirdly, the plaintiff's cause of action rested on the presentment of the hundis to the defendant No. 2 for payment and on the fact that the same were dishonoured by non-payment by the defendant No. 2. Relying on Section 37 of the Negotiable Instruments Act 1881, he has argued that no case has been made out in the plaint that K.K. Sukhani in his individual capacity has accepted the hundis, or that the drawer has dishonoured it by non-payment. A specific case was made out that K.C. Sukla is the acceptor and the cause of action arose as a result of Mr. Sukla's failure to pay. He has drawn my attention to Sections 27, 33, 61, 91-93 and 148 and wanted me to hold that, on a proper construction of the said sections read with Section 37, I should hold that there was no cause of action against the petitioner.

4. In my view, in the facts and circumstances of the case, there is not much scope to argue the points raised by Mr. Tebriwalla in an application under Order 37, Rule 4 of the Code. The summary procedure has been enacted by the Legislature to expedite suits on negotiable instrument where the defendant, prima facie, fails to satisfy the Court that he has a good defence. The special procedure, though a rigorous one, is laid down in the interest of the public and, therefore, the Court cannot travel beyond the provisions of Order XXXVII. In the present case, applications for leave to defend have been decided and the learned Judge passed the conditional order under Order XXXVII, Rule 3. The appeal against such order was not pursued. The petitioner having failed to comply with the said conditional order, a decree has been passed. The petitioner has got the right to appeal against such decree and agitate the points in its favour on merits in the appeal before the Appellate Court. I agree with Mr. Tebriwalla's contention that the failure to file an appeal does not mean that the petitioner cannot make an application under Order XXXVII, Rule 4 although his application for condonation of delay has been dismissed by the Appeal Court.

5. In my view, the Court has got ample jurisdiction under Order XXXVII, Rule 4 to set aside a decree passed in a suit under Order XXXVII. This is a special jurisdiction vested in the Court. It is, therefore, necessary for the Court to follow in strict accordance with the procedure mentioned in the said order. Order XXXVII, Rule 4 refers to a decree and this decree is the decree passed under Order XXXVII, Rule 2. Order XXXVII, Rule 2 provides that the defendant has no right to appear or defend the plaintiff's suit unless he first obtains leave from a Judge to appear and defend. It is only when the defendant does not obtain the leave or where the defendant after obtaining such leave does not appear and make out a case for good defence, the plaintiff is entitled to a decree. The decree contemplated is a decree under certain conditions. One of the conditions is that the defendant must not obtain any leave or must not have entered appearance. Thus, where the defendant has obtained leave and has also entered appearance within 10 days from the service of summons, as set out in Form No, 4 Appendix B to the Code as in the present case, it may be logically argued, the decree passed is not a decree within the meaning of Order XXXVII, Rule 2 Sub-clause (2). But, in my opinion, the procedure as to the defendant obtaining leave is set out in Order XXXVII, Rule 3, where the Court has been given power to grant leave unconditionally or upon any terms as the Court thinks fit. Where the Court imposes conditions but the defendant doe_s not comply with such conditions, the leave granted to him stands forfeited and the result is that he must be deemed not to have obtained leave, as provided in Order XXXVII, Rule 2, In such case the leave not having been obtained, one of the conditions under which a decree may be passed under Order XXXVII, Rule 2 is satisfied. In the premises the decree passed becomes a decree within the meaning of Order XXXVII, Rule 2 Sub-clause (2) and on this point I agree with the decision of the Bombay High Court in Ram Chandra Dhundu v. Vithaldas Gokuldas : AIR1964Bom251 where the learned Judges have stated at page 252:

'Rule 4 must apply to a suit as has resulted into a decree under the summary procedure and it enables the Court to set aside the decree which must mean the decree made under Rule 2.'

But this does not mean, in my opinion, that the Court can only set aside a decree under Order XXXVII, Rule 4, if the defendant fails to obtain leave to defend or having obtained such leave has not appeared and defended the suit, or, in other words, it will be too narrow a construction to say that if he appears after getting the leave to defend, he cannot make an application under Order XXXVII, Rule 4 in any case. Thus, I cannot accept the contention of the counsel for the plaintiff that the application is not maintainable.

6. The next point to be decided is whether there were 'special circumstances' for which I should exercise my judicial discretion in setting aside the decree. Mr. Sankar Ghose has argued that far from the fact that there are special circumstances which entitle the defendant No. 1 to have the decree set aside, the facts in this case would show just the contrary. In my view, this is a case where I cannot persuade myself to exercise my discretion in favour of the petitioner for the following reasons:

(a) Admittedly, the petitioner took out the chamber summons for leave to enter appearance and to defend the suit. On 28th June, 1967, Dutta, J., directed the petitioner to furnish security to the extent of Rs. 30,000/- to the satisfaction of the Registrar within one month from the date of the said order. The petitioner has not complied with the said order.

(b) The petitioner preferred an appeal against the said order of Dutta, J., but did not proceed with the said appeal.

(c) Further indulgence was given to the petitioner by extending the date to furnish security up to 11th August, 1967, as asked for by the petitioner. The petitioner failed again.

(d) Time to furnish security was again extended till 25th August, 1967, but no security was furnished.

(e) The petitioner allowed the reference before the Registrar-in-Insolvency for furnishing the security to be struck out.

(f) Under the Rules of this Court, the suit appeared on 6th September, 1967, before the Warning List of this Court. The petitioner or his solicitor did not choose to mention the matter or to offer the security money.

(g) On 8th September, 1967, the suit appeared in my Peremptory List and a decree was passed on the same date. There was not a whisper from the side of the petitioner between 8th September, 1967 and 19th February, 1968, when the petitioner made an application before the Court of Appeal for an order that the delay in preferring the appeal be condoned. The petitioner did not choose to file an appeal against the decree passed by me. The Appeal Court on 5th March, 1963, dismissed his application for condonation of delay and the learned Judges have delivered a short judgment where Ray, J., after holding that there is no sufficient cause which prevents the petitioner from taking steps earlier has also made the following observations:

'Further, Counsel for the respondent rightly contended that the provisions contained in Section 37 of the Negotiable Instruments Act were sufficient to clothe the drawer with liability. The acceptor in the present case might not have liability on the instrument, but that would not rob the drawer of liability.' Mr. Tebriwalla has argued the same point before me that the petitioner has no liability as a drawer under Section 37 of the Negotiable Instruments Act. He has fairly conceded that the same point was argued before Dutta, J., and also before the Appeal Court. Three Judges have decided against his client and I do not feel justified to disturb or review the exercise of discretion of the learned Judges.

(h) No new ground or fact which was overlooked by Dutta, J., or by the Appeal Court has been pointed out to me.

(i) Two letters were written by the plaintiff's solicitor dated 11th October, 1966 and 12th November, 1966, prior to the institution of the suit by registered post to the petitioner, but no reply was given. The petitioner could have stated there that K.K. Sukhani is not the partner of the petitioner firm or, at least could have denied the liability under Section 37 of the Negotiable Instruments Act.

(j) The suit has been instituted on 12th January, 1967, and I find an advertisement in the Amrita Bazar Patrika on 21st April 1967, (Annexure C to the petition) to the effect that K.K. Sukhani has retired from the petitioner firm.

7. The petitioner has relied upon Murahari Rao v. K. Bapayya, AIR 1949 Mad 742, and M.A. Ethiraiulu Naiduv. T. K.C. K. Pannikkar : AIR1957Mad752 . In both these cases the decree was set aside because the defendants could not enter appearance for some reason or other and thus the facts of those cases are distinguishable. Mr. Tebriwalla has drawn my attention to the fact in : AIR1964Bom251 (supra) that the learned Judges exercised their discretion in setting aside the decree in the said case although a conditional order was made by the trial Judge and the order was not complied with. I have already stated the circumstances why the petitioner's prayer cannot be granted. In the present case, the matter went to the Appeal Court; several times indulgence was granted to him; the suit appeared in the Warning List and also in the Peremptory List; the petitioner did not apply to this Court under Order XXXVII, Rule 4 before the expiry of the period of limitation to file the appeal, he did not choose to file an appeal in proper time; the Appeal Court has already exercised its discretion on the same argument as is urged before me and lastly, the learned Judges in Bombay decision exercised their discretion in their revisional jurisdiction.

8. For all these reasons the application is dismissed with costs.


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