2019 INSC 0094
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL Nos.2582­2583 OF 2011
G. Ratna Raj (D) by LRs.     ….Appellant(s)
VERSUS
Sri Muthukumarasamy Permanent
Fund Ltd. & Anr.       ….Respondent(s)
                 
J U D G M E N T
Abhay Manohar Sapre, J.
1. Application for substitution is allowed.
2. These   appeals   are   directed   against   the   final
judgment   and   order   dated   11.01.2008   passed   by
the   High   Court   of   Judicature   at   Madras   in   O.S.A.
Nos.299 & 300 of 2006 whereby the Division Bench
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of   the   High   Court   allowed   the   appeals   filed   by
respondent No.1 herein.
3. The   controversy   involved   in   these   appeals   lies
in   a   narrow   compass.   However,   in   order   to
appreciate   the   same,   few   relevant   facts   need
mention hereinbelow.
4. The original appellant­G Ratna Raj (since dead
and   now   represented   by   his   legal   representatives)
was   the   plaintiff   whereas     respondent   No.1   was
defendant   No.1   in   the   civil   suit   out   of   which   these
appeals   arise.     Respondent   No.2   is   impleaded   as
party   respondent   in   this   Court   by   order   dated
06.02.2014. 
5. The   original   plaintiff   (appellant   herein)­G
Ratna   Raj   filed   a   Civil   Suit   No.131/1999     against
the defendants (Sri Muthukumaraswamy Fund Ltd.­
Respondent   No.1   herein   and   Balajee   &  Ors.)   in   the
High   Court   of   Madras   on   its   original   side
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jurisdiction   for   redemption   of   mortgage   and   for
permanent   injunction   in   relation   to   the   mortgaged
property. 
6. The  defendants    on  being   served  entered  their
appearance   and   filed   their   written   statement.   The
Trial Court,   on the basis of pleadings,   framed the
issues. The plaintiff examined himself as PW­1. The
defendants cross­examined the plaintiff.  Thereafter,
the   plaintiff   closed   his   case.   The   case   was
accordingly   posted   for   recording   defendants’
evidence.
7. At   that   stage   of   the   proceedings,   the
defendants   did   not   appear   in   the   suit   and,
therefore,   the   Court   proceeded   ex   parte   against
them. The proceedings in the suit then continued as
ex   parte   against   the   defendants.   The   plaintiff   then
got   himself   re­examined   in   the   proceedings.   He,
however,   could   not   be   re­cross­examined   by   the
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defendants because they were already proceeded   ex
parte  in the proceedings. 
8. The   Trial   Court   (Single   Judge)   by
judgment/decree   dated   25.02.2003   passed   a
preliminary   decree   against   the   defendants   in
relation to the suit property. This led to filing of the
two   applications   (IA   No.340/2006   and   IA   No.
341/2006)   by     defendant   No.1   before   the   Trial
Court. 
9. So far as IA No. 341/2006 is concerned, it was
filed   under   Order   9   Rule   13   of   Code   of   Civil
Procedure,   1908   (hereinafter   referred   to   as   “the
Code”)     for   setting   aside   of   the   preliminary   decree
dated   25.02.2003   and   so   far   as   IA   No.340/2006   is
concerned,   it   was   filed   for   condonation   of   delay   in
filing   the   application   under   Order   9   Rule   13   of   the
Code.
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10. By   order   dated     14.03.2006,   the   Single   Judge
dismissed   both   the   applications   and   held   that   the
application   filed   by     defendant   No.1   under   Order   9
Rule 13   of the Code was not maintainable because
the   preliminary   decree   dated     25.02.2003   was   not
an   " ex   parte   decree".   In   other   words,   he   was   of   the
view   that   since   the   preliminary   decree   dated
25.02.2003   was   not   an   ex   parte   decree,   an
application   under   Order   9   Rule   13     of   the   Code
could not be filed for its setting aside. 
11.   Defendant   No.1   felt   aggrieved   and   filed
appeals   before   the   Division   Bench   of   the   High
Court.   By   impugned   order,   the   Division   Bench
allowed   the   appeals   and   set   aside   the   order   of   the
Single   Judge.   The   Division   Bench   held   that   the
preliminary   decree   dated   25.02.2003   was   an   ex
parte   decree   passed   in   the   civil   suit   by   the   Trial
Court (Single Judge) and,  therefore, the application
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filed   by     defendant   No.1   under   Order   9   Rule   13   of
the   Code   was   maintainable   with   a   view   to   find   out
as to whether such decree could be set aside under
Order 9 Rule 13 of the Code or not.
12.   The   Division   Bench,     therefore,   allowed   the
application   filed   by     defendant   No.1   under   Order   9
Rule 13 of the Code subject to their  paying a cost of
Rs.10,000/­     to   the   plaintiff.   The   civil   suit   was
accordingly   restored   to   its   original   file   for   its
disposal   on   merits   in   accordance   with   law.   It   is
against   this   order,   the   plaintiff   has   felt   aggrieved
and filed the present appeals by way of special leave
in this Court.
13. The   short   question,   which   arises   for
consideration   in   these   appeals,   is   whether   the
Division   Bench   was   justified   in   setting   aside   the
preliminary decree dated  25.02.2003 by holding the
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same   to   be   an   " ex   parte   decree"   for   the   purpose   of
Order 9 Rule 13 of the Code.
14. Heard learned counsel for the parties.
15. Having   heard   the   learned   counsel   for   the
parties and on perusal of the record of the case, we
find no merit in these appeals.
16. In   our   opinion,   the   question   involved   in   these
appeals   is   required   to   be   decided   keeping   in   view
the   provisions   of   Order   9   Rule   6   (a)   and   Order   17
Rules 2 and 3 of the Code.  
“   Order 9 Rule 6 (1)(a)
6.   Procedure   when   only   plaintiff   appears­   (1)
Where   the   plaintiff   appears   and   the
defendant   does   not   appear   when   the   suit   is
called on for hearing, then­
(a)     When   summons   duly   served   –   If   it   is
proved   that   the   summons   was   duly   served,
the Court may make an order that the suit be
heard  ex parte;”
17. Rule   6(1)(a)   provides   that   where   the   plaintiff
appears   and   the   defendant   does   not   appear   when
the   suit   is   called   on   for   hearing,   then   if   the
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summons is held duly served on the defendant, the
Court may make an order that the suit be heard   ex
parte .
18. Order 17 Rules 2 and 3  read as under :
“   Order 17 Rules 2 & 3
2.   Procedure if parties fail to appear on day
fixed .—Where,   on   any   day   to   which   the
hearing   of   the   suit   is   adjourned,   the   parties
or   any   of   them   fail   to   appear,   the   court   may
proceed   to   dispose   of   the   suit   in   one   of   the
modes  directed   in   that  behalf   by  Order  IX   or
make such other order as it thinks fit.
Explanation .—Where   the   evidence   or   a
substantial   portion   of   the   evidence   of   any
party   has   already   been   recorded   and   such
party fails to appear on any day to which the
hearing   of   the   suit   is   adjourned,   the   court
may,   in   its  discretion,   proceed   with  the   case
as if such party were present.
3.   Court   may   proceed   notwithstanding
either party fails to produce evidence, etc .—
Where   any  party   to   a   suit   to   whom   time   has
been granted fails to produce his evidence, or
to   cause   the   attendance   of   his   witnesses,   or
to   perform   any   other   act   necessary   to   the
further   progress   of   the   suit,   for   which   time
has   been   allowed,   the   court   may,
notwithstanding such default,—
( a )   if   the   parties   are   present,   proceed   to
decide the suit forthwith; or
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( b )   if   the   parties   are,   or   any   of   them   is,
absent, proceed under Rule 2.”
19.   Order   17   Rule   2   of   the   Code   provides   that
where,  on  any  day  to  which  the  hearing  of  the  suit
is   adjourned,   the   parties   or   any   of   them   fail   to
appear, the Court may proceed to dispose of the suit
in one of the modes directed in that behalf by order
IX or make such other order as it thinks fit.
20. The Explanation appended to Order 17 Rule 2
of   the   Code   provides   that   where   the   evidence   or   a
substantial portion of the evidence of any party has
already   been   recorded   and   such   party   fails   to
appear on any  day  to which the hearing  of the suit
is   adjourned,   the   court   may,   in   its   discretion,
proceed with the case as if such party was present.
21. Order   17   Rule   3   of   the   Code,   however,
provides   that   where   any   party   to   a   suit   to   whom
time has been granted fails to produce his evidence,
or   to   cause   the   attendance   of   his   witnesses,   or   to
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perform   any   other   act   necessary   to   the   further
progress   of   the   suit,     for   which   time   has   been
allowed,   the   Court   may,   notwithstanding   such
default,   (a)   if   the   parties   are   present,   proceed   to
decide the suit forthwith,  or (b) if the parties are, or
any of them is, absent, proceed under Rule 2.
22. The   scope   of   Order   17   Rule   2   and   Order   17
Rule 3 of the Code came up for consideration before
this Court in the case of   B. Janakiramaiah Chetty
vs.   A.K.   Parthasarthi   &   Ors. ,   (2003)   5   SCC   641
wherein   Justice   Arijit   Pasayat   speaking   for   the
Bench held in paras 7 to 10 as under: 
“ 7.   In   order   to   determine   whether   the
remedy   under   Order   9   is   lost   or   not   what   is
necessary   to   be   seen   is   whether   in   the   first
instance   the   Court   had   resorted   to   the
Explanation of Rule 2.
8.   The   Explanation   permits   the   court   in   its
discretion   to   proceed   with   a   case   where
substantial   portion   of   evidence   of   any   party
has   already   been   recorded   and   such   party
fails   to   appear   on   any   day   to   which   the
hearing   of   the   suit   is   adjourned.   As   the
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provision   itself   shows,   discretionary   power
given   to   the   court   is   to   be   exercised   in   a
given   circumstance.   For   application   of   the
provision, the court has to satisfy itself that:
( a ) substantial portion of the evidence of any
party   has   been   already   recorded;   ( b )   such
party has failed to appear on any day; and ( c )
the   day   is   one   to   which   the   hearing   of   the
suit is adjourned. Rule 2 permits the court to
adopt   any   of   the   modes   provided   in   Order   9
or   to   make   such   order   as   he   thinks   fit   when
on any day to which the hearing of the suit is
adjourned,   the   parties   or   any   of   them   fail   to
appear.   The   Explanation   is   in   the   nature   of
an   exception   to   the   general   power   given
under   the   rule,   conferring   discretion   on   the
court to act under the specified circumstance
i.e. where evidence or a substantial portion of
evidence   of   any   party   has   been   already
recorded   and   such   party   fails   to   appear   on
the   date   to   which   hearing   of   the   suit   has
been   adjourned.   If   such   is   the   factual
situation,   the   court   may   in   its   discretion
deem   as   if   such   party   was   present.   Under
Order 9 Rule 3 the court may make an order
directing   that   the   suit   be   dismissed   when
neither party appears  when the  suit is  called
on for hearing. There are other provisions for
dismissal   of   the   suit   contained   in   Rules   2,   6
and   8.   We   are   primarily   concerned   with   a
situation   covered   by   Rule   6.   The   crucial
words   in   the   Explanation   are   “proceed   with
the case”. Therefore, on the facts it has to be
seen   in   each   case   as   to   whether   the
Explanation was applied by the court or not.
9.   In   Rule   2,   the   expression   used   is   “make
such order as it thinks fit”, as an alternative
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to adopting one of the modes directed in that
behalf   by   Order   9.   Under   Order   17   Rule   3( b ),
the   only   course   open   to   the   court   is   to
proceed under Rule 2, when a party is absent.
Explanation   thereto  gives  a  discretion  to  the
court to proceed under Rule 3 even if a party
is   absent.   But   such   a   course   can   be   adopted
only when the absentee party has already led
evidence   or   a   substantial   part   thereof.   If   the
position   is   not   so,   the   court   has   no   option
but to proceed as provided in Rule 2. Rules 2
and 3 operate in different and distinct sets of
circumstances.   Rule   2   applies   when   an
adjournment   has   been   generally   granted   and
not   for   any   special   purpose.   On   the   other
hand, Rule 3 operates where the adjournment
has   been   given   for   one   of   the   purposes
mentioned in the rule. While Rule 2 speaks of
disposal   of   the   suit   in   one   of   the   specified
modes,   Rule   3  empowers   the   court  to  decide
the   suit   forthwith.   The   basic   distinction
between the two rules, however, is that in the
former,   any  party  has  failed   to   appear  at  the
hearing,   while   in   the   latter   the   party   though
present   has   committed   any   one   or   more   of
the   enumerated   defaults.   Combined   effect   of
the  Explanation  to Rule  2 and   Rule  3  is  that
a discretion has been conferred on the court.
The   power   conferred   is   permissive   and   not
mandatory.   The   Explanation   is   in   the   nature
of   a   deeming   provision,   when   under   given
circumstances, the absentee party is deemed
to be present.
10.  The crucial expression in the Explanation
is   “where   the   evidence   or   a   substantial
portion of the evidence of a party”. There is a
positive   purpose   in   this   legislative
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expression.   It   obviously   means   that   the
evidence   on   record   is   sufficient   to
substantiate   the   absentee   party’s   stand   and
for disposal of the suit. The absentee party is
deemed   to   be   present   for   this   obvious
purpose.   The   court   while   acting   under   the
Explanation   may   proceed   with   the   case   if
that   prima   facie   is   the   position.   The   court
has   to   be   satisfied   on   the   facts   of   each   case
about   this   requisite   aspect.   It   would   be   also
imperative   for   the   court   to   record   its
satisfaction   in   that   perspective.   It   cannot   be
said   that   the   requirement   of   substantial
portion   of   the   evidence   or   the   evidence
having   been   led   for  applying   the   Explanation
is   without   any   purpose.   If   the   evidence   on
record   is   sufficient   for   disposal   of   the   suit,
there   is   no   need   for   adjourning   the   suit   or
deferring the decision.”
 
23. Now when we examine the facts of the case at
hand keeping in view the law laid down in the case
of   B   Janakiramaiah   Chetty   (supra),   we   find   that
the   plaintiff’s     evidence   was   recorded   and   his   case
was   also   closed.   It   is   not   in   dispute   that   the
defendants   were   placed   ex   parte   on   the   date   when
the   case   was   fixed   for   recording   defendants’
evidence but the same was not recorded due to the
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defendants’   absence   on   the   said   date.   In   other
words,   it   was   a   case   where   the   defendants   did   not
lead any evidence. 
24. In  such  a  situation  arising   in  the  case,  in  our
view,   the   case   at   hand   would   not   fall   under
Explanation to Order 17 Rule 2 of the Code because
in   order   to   attract   the   Explanation,   "such   party"
which   has   led   evidence   or   has   led   substantial   part
of   the   evidence,   if   fails   to   appear   on   any   day   to
which   the   hearing   of   the   case   is   adjourned,   the
Court   may   treat   “such   party”   as   "present"   on   that
day and is accordingly empowered to proceed in the
suit. 
25. In   this   case,   the   party,     who   was   absent   and
was   proceeded   ex   parte   was   the   "defendants"   and
they   had   not   led   any   evidence   whereas   it   was   the
plaintiff, who was present and had led his evidence.
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26. In   other   words,   if   the   plaintiff   had   remained
absent   and   was   found   to   have   led   evidence,   the
Court   could   have   invoked   its   powers   under
Explanation to Order 17 Rule 2 of the Code treating
the   plaintiff   as     "present"   for   passing   appropriate
orders. Such is, however,  not the case here.
27. Similarly,   in   converse   situation,   if   the
defendants   had   remained   absent   (as   has   happened
in   this   case)   on   that   date   and   if   it   would   have
noticed   that   they   had   adduced   the   evidence   either
fully or substantially prior to the date on which they
were   proceeded   ex   parte ,   the   Court   could   have
invoked   its   powers   under   Explanation   to   Order   17
Rule   2   of   the   Code   treating   the   defendants   as
"present" on that day for passing appropriate orders
in   the   suit.   Such   is,   however,   again   not   the   case
here.
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28.   We are,   therefore,   of the view that since the
defendants were proceeded  ex parte  and were found
not   to   have   led   any   evidence   in   the   suit,   the   Court
could   only   proceed   under   Order   17   Rule   3   (b)   read
with Order 17 Rule 2 of the Code for disposal of the
suit by taking recourse to one of the modes directed
in that behalf by Order 9 of the Code or could have
made any other order as it thinks fit. 
29. As   mentioned   above,   the   Trial   Court   did
proceed to hear the suit  ex parte  by taking recourse
to the Order 9 Rule 6 (a) in terms of Order 17 Rule 2
of   the   Code   because   on   that   day,   the   plaintiff   was
present   when   the   suit   was   called   on   for   hearing
whereas the defendants were absent despite service
of summons and accordingly the Trial Court passed
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the preliminary decree. Such decree, in our opinion,
was   an   " ex   parte   decree"   within   the   meaning   of
Order 9 Rule 6 (a) read with Order 9 Rule 13 of the
Code and, therefore, could be set aside under Order
9 Rule 13 on making out a sufficient ground by the
defendants.
30. In   view   of     the  foregoing  discussion,   we  are  of
the   view   that   the   Division   Bench   was   justified   in
allowing   the   applications   filed   by     defendant   No.1
under   Order   9   Rule   13     of   the   Code   and,   in
consequence,   was   justified   in   setting   aside   the
preliminary   decree   dated     25.02.2003   passed   in
O.S.     No.131/1999   treating   the   said   decree   as   " ex
parte  decree".
31. So   far   as   the   finding   on   the   question   of
sufficient   ground   for   setting   aside   of   the   ex   parte
decree is concerned, suffice it to say, it being a pure
question   of   fact,   the   same   does   not   call   for   any
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interference   by   this   Court.   A   finding   on   such
question is binding on this Court. Moreover, we find
that   the   Division   Bench   imposed   a   cost   of
Rs.10,000/­     on   defendant   No.1   payable   to   the
plaintiff   as   condition   for   setting   aside   the   ex   parte
decree.   Defendant   No.1,     therefore,     must   pay   the
cost to the plaintiff.
32. As a result of the foregoing discussion,  we find
no   merit   in   these   appeals,   which   are   accordingly
dismissed.
33. The   Trial   Court   (Single  Judge)  is  now   directed
to decide the Original Suit No. 131/1999 on merits
in accordance with law preferably within a period of
one   year   as   an   outer   limit.       Since   the   original
plaintiff   has   died   and   his   legal   representatives   are
already     brought   on   record   in   these   appeals,   the
Trial   Court   will   permit   the   plaintiff   to   amend   the
cause   title   in   the   plaint   and   bring   on   record   the
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legal   representatives(appellants   herein)   to   enable
them to prosecute the suit on merits in accordance
with law.    
             ………...................................J.
[ ABHAY MANOHAR SAPRE ]
                   
         
....……..................................J.
        [DINESH MAHESHWARI]
New Delhi;
February 01, 2019.
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