w w w . L a w y e r S e r v i c e s . i n

Original Side Adar Holdings Limited & Another v/s Anil Kumar Todi & Others

Company & Directors' Information:- A V S R HOLDINGS PRIVATE LIMITED [Active] CIN = U67120TG2005PTC045117

Company & Directors' Information:- S R HOLDINGS PRIVATE LIMITED [Active] CIN = U65993TN1988PTC083659

Company & Directors' Information:- S K A HOLDINGS LIMITED [Active] CIN = L65993DL1981PLC012592

Company & Directors' Information:- H M HOLDINGS PRIVATE LIMITED [Active] CIN = U65993ML2005PTC007956

Company & Directors' Information:- S M H HOLDINGS PRIVATE LIMITED [Active] CIN = U65993TG2006PTC049309

Company & Directors' Information:- M M HOLDINGS PVT LTD [Active] CIN = U70109WB1993PTC058147

Company & Directors' Information:- V R HOLDINGS PRIVATE LIMITED [Active] CIN = U70102KA2009PTC051724

Company & Directors' Information:- S M HOLDINGS PRIVATE LIMITED [Active] CIN = U65990MH2011PTC225004

Company & Directors' Information:- ADAR HOLDINGS LIMITED [Strike Off] CIN = U70200WB1998PLC086340

Company & Directors' Information:- D D B HOLDINGS PVT LTD [Strike Off] CIN = U67120WB1992PTC055592

Company & Directors' Information:- B AND B HOLDINGS PRIVATE LIMITED [Active] CIN = U70101AS1999PTC005674

Company & Directors' Information:- D G HOLDINGS PRIVATE LIMITED [Active] CIN = U65110DL1998PTC094466

Company & Directors' Information:- B J HOLDINGS PRIVATE LIMITED [Active] CIN = U67120MH1982PTC028820

Company & Directors' Information:- KUMAR HOLDINGS PVT. LTD. [Strike Off] CIN = U67120WB1986PTC040517

Company & Directors' Information:- B I HOLDINGS PVT LTD [Strike Off] CIN = U65922WB1988PTC043690

Company & Directors' Information:- V K HOLDINGS PRIVATE LTD [Strike Off] CIN = U27924DL1987PTC027924

Company & Directors' Information:- C S A HOLDINGS PRIVATE LIMITED [Strike Off] CIN = U65990MH1995PTC092555

Company & Directors' Information:- J D S HOLDINGS PRIVATE LIMITED [Active] CIN = U65993DL1993PTC053637

Company & Directors' Information:- J AND S HOLDINGS PVT LTD [Strike Off] CIN = U67120RJ1996PTC012114

    GA. No. 79 of 2018 With CS. No. 287 of 2000

    Decided On, 12 October 2018

    At, High Court of Judicature at Calcutta


    For the Appearing Parties: Malay Ghosh, Sr. Advocate, Rakhi Shroff, Saubhik Chowdhury, Oiswarjya Bose, Acvocates.

Judgment Text

The Court:

This is an application filed by the defendant no.1 for recalling and setting aside a judgment and decree dated 31st August, 2007 passed ex parte against the defendant no.1. A prayer has also been made for condonation of delay in making the instant application since eleven years have passed since the date of the ex parte decree.

The grounds taken by the defendant no.1/applicant are the following.

Ms. Shroff, the advocate conducting some matters on behalf of the defendant no.1 came to know some time in December 2017 that an execution case pertaining to the suit being EC no. 268 of 2007 has been listed in the cause list of this Hon’ble Court. Pursuant to such, the advocate appeared in the execution case and requested for a copy of the execution application which was served on her on 8th December, 2017 and was received by the defendant no.1 soon thereafter. The petitioner apparently came to know from the execution application that an ex parte decree had been passed by this Court on 31st August, 2007. The pleadings in the application thereafter are concerned with the order passed in the execution case and the steps taken by the advocate to obtain a certified copy of the decree dated 31st August 2007 which is presently sought to be recalled. The remaining pleadings are concerned with the defendant no.1 having gone into liquidation some time in 2004 and that the defendant no.1 resigned as a director from the defendant no.2 and the defendant no.3 in 2000 and 2002 respectively. The petitioner admits that a copy of the writ of summons in the suit was served on him and that the advocate-on-record representing the petitioner was served with the requisite papers for doing the needful. The petitioner / defendant no.1 states that on assigning the responsibilities of the matter to the advocate-on-record, the petitioner did not make any further inquiries and was away from the city from 2004 to 2015. The petitioner did not think it necessary to personally enquire into the status of the matter and proceeded on the basis that the Advocate engaged was looking after the interest of the petitioner. The petitioner also states that the Advocate-on-record had admittedly missed the suit in the list and came to know of the ex parte decree only upon being confronted by the petitioner. Further, the junior engaged to look after the matter in the office of the Advocate-on-record also left sometime in 2004. Noticeably, it appears from the pleadings that besides missing the suit from the cause list, the Advocate also came to know (at least after December, 2017) that the petitioner had filed an application being GA No. 3040 of 2001 for dismissing the suit and for rejecting the plaint. The pleadings in the application strangely do not mention how the aforesaid application was subsequently discovered, particularly when such application was filed by the Advocate representing the defendant No. 1. A certified copy of the said application was obtained in December, 2017 and the Advocate-onrecord of the petitioner came to know that the said application for rejection of the plaint was dismissed by an order dated 6th May, 2008.

The main ground as urged appears to be that the petitioner was totally dependent upon his Advocate-on-record and was also advised that the petitioner need not file his written statement since an application for rejection of the plaint had been filed. The petitioner attributes the laches and negligence on his Advocate –on- record for failing to keep track of the present suit or the ex parte decree passed on 31st August, 2007.

On the first two occasions when the matter was taken up in June and July, 2018, the plaintiffs were represented. No one appeared for the parties in August, 2018 when the matter was called. The plaintiffs have remained unrepresented since August, 2018. Mr. Malay Ghosh, Senior counsel appears for the petitioner / defendant No. 1 submits that the first plaintiff has been struck off from the Register of Companies.

The suit appears to be for a decree for a sum of Rs.1,02,19,000/- against the defendants jointly and severally for money lent and advanced by the plaintiffs to the defendants and on account of damages suffered by the plaintiffs in relation to expenses incurred in setting up of the first plaintiff and for closure of business and loss of profits. The plaintiffs have also claimed damages for loss of credibility with the proforma defendant bank.

I now come to the ex parte decree dated 31st August, 2007. By the said judgement the learned Judge was pleased to record that despite writ of summons along with copies of the plaint being duly served upon the defendants, no one appeared for the defendants on the date when the decree was passed. On that day, the plaintiff no.2 was examined as a witness and documents were marked pursuant to such evidence being taken. Upon perusing the evidence of the first plaintiff and the documents on record, the learned Judge was pleased to come to the following findings; the relevant portion of the ex parte decree is set out below:

'On perusal of the evidence of plaintiff no. 2 it is seen that he has been able to prove his case against the defendants. However, the Court cannot accept that being a prudent man having vast experience, he acted solely on the advice of defendant no. 1 in opening the new business for which he had to suffer the loss.

However, it is clear from the evidence and materials on record that the plaintiffs had to suffer loss as they took loan from defendant no. 4 to the tune of Rs. 24.5 lakhs. It is also clear from the documents that the bank obtained a decree of Rs.51,80,529.90/- including the interest with the principal amount.

It is clear from the evidence of the plaintiff that due to the said decree, he has been particularly black listed and is not getting financial assistance from any other financial institute.

In view of the said position, the Court is of clear opinion that the plaintiff is entitled to get the said amount as damages. At the same time, the Court is of clear opinion that the plaintiff cannot get the amount as mentioned in paragraph 39 of the plaint.

Accordingly, the suit be decreed ex parte against defendants no. 1, 2 and 3 jointly and severally. The plaintiff do get a decree for Rs. 9.85 lakhs all together as mentioned in paragraph 38 of the plaint and also a sum of Rs. 17, 24, 000/- as mentioned in paragraph 41. Besides that amount the plaintiff will also do get decree for Rs.51,80,529.90/- as damages.

The defendants i.e. defendants no. 1, 2 and 3 are hereby directed to liquidate the said dues within six months hence, failing which the plaintiff will be at liberty to put the decree in execution.'

Mr. Ghosh fairly submits that there has been an inordinate delay on the part of the advocate-on-record handling the matter on behalf of the first defendant. Even the application for recalling of the ex parte decree was made in January 2018 although the application for dismissal of the suit / rejection of the plaint was filed by the same advocate-on-record in 2001. Therefore, no steps were taken for pursuing such application even though the advocate was aware that the suit has been filed against his client in the year 2000.

Counsel however seeks to assail the ex parte decree on the quantum assessed under the various heads pleaded in the plaint under the provisions of Order IX Rule 13 of The Code of Civil Procedure, 1908. Under the said provision, the Court is empowered to set aside a decree passed ex parte against a defendant upon being satisfied of the contentions laid down in the said order upon such terms as to costs, which the Court may think fit to impose in the facts of the case. Counsel submits that the terms to which the defendant no.1 may be put should be considered in context of the ex parte decree. Counsel relies on the findings of the learned Single Judge that it is difficult to accept that the plaintiff no.2, being an experienced and prudent man could have relied solely on the advice of the first defendant in opening the new business for which he suffered loss. He also relies on the view of the Learned Single Judge that the plaintiff is not entitled to the amount as pleaded in paragraph 39 of the plaint which is in effect a claim for damages. Counsel, therefore, submits that having come to the aforesaid findings, the decree passed in respect of Rs.51,80,529.90 as damages cannot be taken into account for putting the defendant no.1 to terms. Counsel further submits that the finding of the learned Judge with regard to the plaintiffs’ suffering loss on account of taking loan from the defendant no.4 bank and being entitled to an amount of Rs.51,80,529.90 on account of the bank having obtained a decree is neither pleaded in the plaint nor corroborated by any documents annexed as exhibits to the plaint. He also submits that there is no separate prayer quantifying the damages in the prayer portion of the plaint. Counsel dwells at length on the various heads in the plaint under which the plaintiffs have claimed against the defendants and submits that apart from paragraph 38 (being a claim on account of money paid to the defendants amounting to a total of Rs.9.85 lakhs) and paragraph 41 (where the claim has been assessed at Rs.17,24,000/- on account of advance given by the plaintiffs to the defendant nos. 1 and 3), the other decree in favour of the plaintiffs cannot be sustained. He, accordingly, prays that the defendant no.1 may be put to terms for a total of Rs.9.85 lakhs and Rs.17.24 lakhs.

I have considered the submissions of Mr. Ghosh for the defendant no.1. As stated above, no one has appeared for the plaintiffs since July 2018. It does not appear that the advocate-on-record representing the plaintiffs is interested in contesting this application for recalling the ex parte decree, even though an execution case has been filed pursuant thereto. Be that as it may, it appears that there is indeed no pleading in respect of the plaintiffs taking loan from the defendant no.4 bank or any decree being obtained by such bank which persuaded the Court to award Rs.51,80,529.90. It is also true that this amount is inconsistent with the finding of the learned Judge that it is difficult for the Court to accept that the plaintiff no.2 could have suffered loss by reason of following the advice of the defendant no.1 and further that the Court is of the opinion that the plaintiff cannot get the amount as mentioned in paragraph 39 of the plaint, which was a claim for damages. Having come to the aforesaid findings, it is not clear how the sum of Rs.51,80,529.90 was decreed in favour of the plaintiffs.

The most important fact however is that on the date of the ex parte decree, the application filed by the defendant no.1 being GA 3040 of 2001 for dismissal of the suit and for rejection of the plaint was pending. This was obviously not brought to the notice of the Court by counsel appearing for the plaintiff. This fact should definitely have been brought to the notice of the learned Judge, which was not done. The petitioner has pleaded that the application was dismissed only much later on 6th May 2008. Therefore on the date of passing of the decree i.e

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. 31st August 2007, the said application was very much in the records of the Court. It is doubtful whether the ex parte decree would have been passed if the Learned Judge had been made aware that the defendant no.1’s application was pending adjudication. In view of the above, GA 79 of 2018 is allowed in terms of prayer (b). The defendant no.1 is however put on terms to the extent of Rs.9.85 lakhs + Rs.17.24 lakhs which amounts to Rs.27.09 lakhs. Such amount will have to be deposited with the Registrar, Original Side within a week after Court opens in November, 2018. Since there has been considerable delay in filing the instant application and the advocate-onrecord of the defendant has not shown any diligence in proceeding even with the application for revocation of the plaint, costs assessed at Rs.50,000/- is directed to be paid by the applicant to the State Legal Services Authority within a week after Court opens on November, 2018. The Registrar, Original Side will keep the amount in a separate fixed deposit account until the matter is finally heard out. The interest earned will also be kept with the Registrar. GA 79 of 2018 is disposed of with the above directions. List the suit in the monthly list of December 2018.