Source: Supreme Court

Why in News?

A bench of Justices Vikram Nath and Ahsanuddin Amanullah observed that the court can record the presence of a party who has led a substantial portion of evidence and failed to appear.

• The Supreme Court gave the observation in the matter of Y. P. Lele v. Maharashtra State Electricity Distribution Company Ltd. & Ors.

Background

• A suit for recovery of money and interest was filed by Maharashtra State Electricity Board against Miraj Electric Supply Co. Ltd. and its five directors.
• The defendant's counsel withdrew his name from the case and had also not cross-examined the witnesses.
• Subsequently, the Trial Court directed the suit to proceed under Order XVII Rule 2 of Code of Civil Procedure, 1908 (CPC) against the defendants and decreed the suit ex-parte with costs.
• The defendants filed an application under Order IX Rule 13 of CPC for setting aside the ex-parte decree.
  • Trial Court allowed the application and restored the suit.
• The plaintiffs then filed a writ petition in the Bombay High Court (HC), where HC invoked explanation under Order XVII Rule 2 CPC and held ex-parte decree to be valid.
• The appellants aggrieved from the order of High Court, filed an appeal before the Supreme Court.

Court’s Observation

• The Court observed Trial Court ought to have issued notice to the defendants to engage another counsel, which it did not do and proceeded ex-parte.
• The Apex Court further stated that where the evidence or a substantial portion of the evidence of any party has already been recorded and such party fails to appear the court has liberty to proceed as if such party was present.

Ex-Parte Decree

• Order IX of CPC deals with the appearance and non-appearance of the party.
  • Ex-parte decree against defendant is passed under Order IX Rule 6 of CPC.
• If any party does not appear on the date prescribed by the court, the court will issue summons and notices to appear.
• In the case of proceedings of a civil suit, if a plaintiff was present and the defendant was not present, and the summons was duly issued, then the court could proceed against the defendant and pass an ex-parte decree.

If Parties Fail to Appear on Day Fixed

• The procedure if parties fail to appear on the day fixed is mentioned under Order XVII Rule 2 CPC.
• It mentions the situation where, on any day to which the hearing of the suit is adjourned, the parties or any of them fail to appear.
• The Court in such situation 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.
  • One of the modes under Order IX Rule 6 is passing an ex-parte decree.
• The explanation under Order XVII Rule 2 states that the court has discretion to proceed against the party whose evidence or substantial portion of evidence has already been recorded.

Remedy for Defendant Against Ex-Parte Decree

• Any case in which a decree is passed ex-parte against a defendant, he can opt the remedy of filing application under Order IX Rule 13 CPC for setting it aside.
• Defendant may apply to the Court by which the decree was passed for an order to set it aside.
• The court shall make an order of setting aside that decree if it is satisfied on the following grounds:
  • If the defendant satisfies the Court that the summons was not duly served.
  • He was prevented by any sufficient cause from appearing when the suit was called on for a hearing.