1. Rule be issued. Mr. Nirad D. Buch, learned Advocate, waives service of notice of Rule on behalf of the respondent. As this Court has issued notice for final disposal, the petition is being finally decided at this stage.
2. By preferring this petition under Arts. 226 and 227 of the Constitution of India, the petitioner has challenged the order dated 1-10-2012, passed by the learned Principal Senior Civil Judge, Porbandar, in Misc. Civil Application No. 47 of 2009, whereby the application of the respondent under Order 37, Rule 4 of the Code of Civil Procedure, 1908 ("the Code" for short), has been allowed and the judgment and decree passed in Summary Suit No. 2 of 2005, has been set aside.
3. Briefly stated, the relevant facts of the case are that the petitioner, M/s. Cham Ice & Cold Storage, which is the original plaintiff, filed Summary Suit No. 2 of 2005, against the respondent, before the learned Second Additional Civil Judge, Porbandar, for recovery of certain amounts due to it, under the provisions of Order 37 of the Code, claiming an amount of Rs. 83,57,200/-. The petitioner filed summons for judgment, to which the respondent (original defendant) filed an application for leave to defend. After hearing the parties, the trial Court granted leave to defend on condition that the respondent deposits an amount of Rs. 25 lakhs, within a period of thirty days from the date of the order. The respondent challenged the order granting conditional leave to defend, by filing a petition in this Court, being Special Civil Application No. 17336 of 2006, which was converted from Appeal from Order No. 210 of 2006. Vide order dated 11-8-2006, the said petition was dismissed. Being aggrieved by the above order, the respondent filed Letters Patent Appeal No. 53 of 2007, which came to be dismissed by the Division Bench, vide judgment dated 7-7-2008. The said judgment of the Division Bench has attained finality. According to the petitioner, the defendant was, thus, liable to deposit an amount of Rs. 25 lakhs as conditional leave to defend. However, the respondent failed to deposit the amount.
4. The suit of the petitioner was decreed vide judgment and decree dated 17-9-2009, directing the respondent to pay an amount of Rs. 83,57,200/- with 12% interest and costs. Thereafter, on 16-10-2009, the respondent filed Misc. Civil Application No. 47 of 2009, under the provisions of Order 37, Rule 4 of the Code, for setting aside the judgment and decree dated 17-9-2009, passed in Summary Suit No. 2 of 2005. The respondent also filed an application below Exh. 5 for grant of interim stay. After hearing the parties in the application at Exh. 5, the trial Court directed that the decree could be stayed only on condition that the respondent deposits an amount of Rs. 25 lakhs with interest thereupon at the rate of 9% p.a. within a period of thirty days from the date of the order, which was passed on 28-2-2011. Aggrieved by this order, the respondent filed another petition, being Special Civil Application No. 4664 of 2011, challenging the order passed below Exh. 5 in Misc. Civil Application No. 47 of 2009. This petition was dismissed by this Court vide judgment and order dated 29-4-2011. The respondent preferred Letters Patent Appeal No. 915 of 2011 against the order dated 29-4-2011, before the Division Bench. The appeal also came to be dismissed by the Division Bench, vide its order dated 24-12-2012, as not being maintainable. On an application being made by the petitioner, being Misc. Civil Application No. 1164 of 2012, for modification of the order dated 24-2-2012, the Division Bench clarified that the direction to the learned Senior Civil Judge to take up Misc. Civil Application No. 47 of 2009, for expeditious hearing would not mean that the respondent is granted any protection against the execution of the decree passed in Summary Suit No. 2 of 2005.
5. In the application preferred by the respondent under Order 37, Rule 4, the petitioner filed its objections. After hearing the parties, the trial Court passed the impugned order dated 1-10-2012, allowing the application and setting aside the decree passed in Summary Suit No. 2 of 2005. Aggrieved by this order, the petitioner is before this Court.
6. Learned Counsel for the respective parties have made submissions at length, in support of their respective stands. The gist of the submissions advanced at the Bar is as follows.
7. Mr. Ajay R. Mehta, learned Advocate for the petitioner has submitted that:
(1) The impugned order passed by the trial Court is ex-facie illegal and against the relevant provisions of law, as it is passed without considering the facts or assigning any reasons, whatsoever, as required by the provisions of Order 37, Rule 4 of the Code.
(2) The respondent has failed to comply with the condition of payment of Rs. 25 lakhs within a period of thirty days as per the order dated 5-4-2006, passed by the trial Court while granting conditional leave to defend. As such, as per the provisions of Order 37, Rule 3, sub-rule (6)(b) of the Code, the petitioner would be entitled to a decree. By the operation of law, a right has accrued in favour of the petitioner, who has been seriously prejudiced by the impugned order.
(3) The impugned order is not sustainable in law as the condition of deposit of Rs. 25 lakhs by the respondent has been upheld upto the Division Bench of this Court. Further, the respondent has failed in its challenged to the order passed below Exh. 5, and the order of the Division Bench of this Court in this regard has also attained finality. The respondent was, therefore, under an obligation to deposit the amount of Rs. 25 lakhs, failing which the petitioner was entitled to a decree.
(4) The trial Court has gone completely wrong in setting aside the decree without taking into consideration the aspect that the order directing the respondent to deposit Rs. 25 lakhs has been upheld upto the Division Bench of this Court. This aspect does not find mention in the impugned order at all.
(5) The provisions of Order 37, Rule 4 of the Code warrant that a decree can only be set aside under special circumstances. The trial Court has failed to enumerate even a single special circumstance in the impugned order. The reasons assigned by the trial Court for setting aside the decree give rise to an impression that the respondent was not granted an opportunity of hearing, which is factually incorrect, as the respondent has pursued the litigation upto the Division Bench of the High Court on two occasions.
(6) The other reasons assigned by the trial Court regarding the form of the suit, which, in its opinion, is not proper and that the petitioner has not produced the original documents, cannot be said to be "special circumstances". The trial Court cannot act as though it is an appellate Court, insofar as the decree passed by it is concerned, in the absence of any special circumstances.
On the above grounds, it is prayed that the impugned order be quashed and set aside.
8. The petition is strongly opposed by Mr. Nirad D. Buch, learned Advocate for the respondent, by submitting that:
(i) It is true that the respondent could not comply with the order granting conditional leave to defend by depositing Rs. 25 lakhs. However, the life-span of the said order has now ended as the decree has been passed, therefore, this aspect is not relevant insofar as the present petition is concerned.
(ii) In the second round of litigation, which began by the filing of the application under Order 37, Rule 4 of the Code by the respondent, a conditional stay was granted by the trial Court below Exh. 5, by directing that the decree could be stayed upon deposit of Rs. 25 lakhs with interest and costs. However, the respondent could not deposit the said amount, therefore, there was no stay of the decree. Thereafter, the trial Court has heard the matter on merits and has thought it fit to set aside the decree for sufficient reasons, as indicated in its order.
(iii) It is stated by the trial Court in the impugned order that the summary suit was not filed in proper form by the petitioner and the original documents had not been produced. It is further stated that though the documents were not exhibited or proved by the petitioner, an ex-parte order and decree was passed in the Summary Suit. The above reasons assigned by the trial Court, for setting aside the decree, can be termed as "special circumstances", as required by the provisions of Order 37, Rule 4 of the Code.
(iv) There is no legal infirmity in the impugned order, therefore, this Court may not interfere with the same.
9. This Court has heard learned Counsel for the respective parties, perused the averments made in the petition, contents of the impugned order and other documents on record.
10. There is no dispute regarding the fact that an order granting conditional leave to defend upon deposit of Rs. 25 lakhs within a period of thirty days from the date of the order was made by the trial Court on 5-4-2006. Instead of depositing the amount, the respondent chose to challenge the order in this Court. As noted earlier, the challenge failed upto the Division Bench. Even thereafter, the amount of Rs. 25 lakhs has not been deposited by the respondent. The suit was decreed by judgment and decree dated 17-9-2009. The respondent did not choose to challenge the judgment and decree but filed an application under Order 37, Rule 4 of the Code for setting aside the decree, on 16-10-2009. In the above application, the respondent filed an application at Exh. 5 for grant of stay of the decree. A conditional order was passed upon this application by the trial Court on 28-2-2011, directing that the decree could be stayed only upon the deposit of Rs. 25 lakhs with interest, within a period of thirty days. Admittedly, this amount has not been deposited by the respondent, till date, leave alone within the period of time stipulated by the said order. There was, therefore, no stay against the decree.
11. The main issue involved for determination in the present petition is whether the impugned order setting aside the decree under the provisions of Rule 4 of Order 37 of the Code, is sustainable in law, or not. In order to form a cogent opinion in this regard, it would be fruitful to reproduce the provisions of Rule 4 of Order 37 of the Code, which read as below:
"4. Power to set aside decree:- After decree the Court may, under special circumstances set aside the decree, and if necessary stay or set aside 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."
12. A perusal of the above provision of law makes it clear that after the passing of the decree, the Court is empowered to set it aside, only "under special circumstances". What constitutes special circumstances, has not been defined in the said provision of law. However, the "special circumstances" can be ascertained with relation to the facts and circumstances of the case. However, the very expression connotes that special circumstances are those circumstances which are exceptional, extraordinary, significant or uncommon. In short, there ought to be a grave cause or reason which constitutes special circumstances, before a decree can be set aside. Normal or ordinary circumstances or defects would not fall under the term "special circumstances" so as to enable the Court to exercise the power of setting aside the decree. In short, it may be said that the power to set aside a decree under Rule 4 of Order 37 of the Code may not be used in an ordinary or routine manner.
13. In Santoshi T.V. Centre Vs. Arvind Mills Ltd. (Electronics Division), , this Court has dealt with the words "special circumstances", as used in Rule 4 of Order 37 in comparison with the term "sufficient cause", as used in Rule 13 of Order 9 of the Code. After comparing the two provisions of law, this Court has held as below:
"3. In case of Rule 13 of Order 9 of the Civil Procedure Code, the aggrieved party has only to satisfy the Court about sufficient cause which prevented him from appearing when the suit was called for hearing. Therefore, whenever a party approaches the Court under Rule 4, Order 37 of the Code, he has to show not only sufficient cause but special circumstances which prevented from entering appearance to defend the suit. The words "special circumstances" used in Rule 4 has some different connotation than "sufficient cause". By "sufficient cause" we mean, a cause sufficient and reasonable to come in way rendering the defendant helpless to approach the Court within the stipulated period but "special circumstances" suggest that even by all reasonable efforts and due diligence it was beyond control to enter appearance. In other words, despite best efforts suit could not be defendant. Thus, while invoking this Rule, the defendant will have to satisfy two conditions, viz., (i) that there was no due service of summons or that he was prevented by sufficient reason from getting leave to defend, (ii) that he has a substantial defence to raise in suit and depriving him of defence would result into great prejudice and injustice."
14. A perusal of Para 6 of the impugned order dated 1-10-2012, gives rise to an impression that a proper opportunity was not afforded to the respondent before the decree was passed and that it was an ex-parte decree. This aspect is believed by the record of the case, as it is not the case of the respondent, itself, that no proper opportunity was afforded before the decree was passed, or that the decree was passed ex-parte. The other grounds on which the decree has been set aside by the trial Court, apart from the above, are that the summary suit was not filed in proper form and no original documents were produced or proved by the petitioner. Can these reasons, as recorded in the impugned order, be said to constitute "special circumstances"? The answer, in the view of this Court, is in the negative.
15. It is clear from the record of the litigation that sufficient opportunity was granted to the defendant to prove its case. The defendant has challenged the orders of the trial Court upto the Division Bench of this Court on two occasions, though unsuccessfully. It is nobody's case that the judgment and decree dated 17-9-2009, passed Summary Suit No. 2 of 2005, is an ex-parte one. In the application filed by the respondent under Order 37, Rule 4, of the Code, there is no ground to suggest that the judgment and decree has been passed ex-parte. If these reasons are excluded, that leaves only two other reasons recorded by the trial Court for setting aside the decree; which are, that the suit is not filed in proper form and the original documents have not been produced or proved in the Summary Suit. By no stretch of imagination can these reasons be termed as "special circumstances". As elaborated earlier, circumstances that can be said to be special, are those that are extraordinary, exceptional or highly uncommon. Common, ordinary or general circumstances in a case cannot be termed as "special circumstances". The reasons assigned by the trial Court give rise to an impression that it is exerc
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ising appellate powers while scrutinising the judgment and decree, although it is not an appellate Court but the same Court that passed the judgment and decree. 16. It may be kept in mind that while deciding an application under Order 37, Rule 4 of the Code, the trial Court does not sit as a Court of appeal over the judgment and decree. The power envisaged by the said provision of law is for setting aside the decree "under special circumstances" only. It cannot be stretched to mean that the trial Court can exercise appellate powers over its own judgment and decree, as has been done by it in the present case. The trial Court has failed to enumerate even a single special circumstance which is of so grave, exceptional or extraordinary in nature that it warrants the setting aside of the decree. 17. A disturbing aspect of the matter emerging from a perusal of the record is that, though it is not the case of the respondent that no opportunity of hearing was afforded to it and though it is clear that the decree was not made ex-parte, the trial Court has proceeded on the footing that this is so. Courts are expected to be true to the record. It does not behave a Court to deviate from the veracity of the record in order to support its own conclusions. Though more could have been said in this regard, the Court leaves it at that. The cumulative effect of the above discussion is that the impugned order deserves to be quashed and set aside, as being unsustainable in law. Accordingly, the petition is allowed. The impugned order dated 1-10-2012, passed by the trial Court in Misc. Civil Application No. 47 of 2009, is quashed and set aside. Rule is made absolute. There shall be no orders as to costs.