Shafeeq Razak vs P.M. Abdul Lahir & Anr.

Soumen Sen, CJ.

The dispute is with regard to a money transaction between the father-in-law and the son-in-law in respect of business.

Heard Advocates Sri. Aneesh James and Sri. P. Martin Jose for the appellants as well as Advocate Sri.Nayana Varghese for the 1^st respondent.

The father-in-law would submit that it was a business loan and the son-in-law had failed to repay the loan amount. There are two suits instituted for the recovery of an amount of almost ₹7 Crores.

We have read the impugned orders carefully. Admittedly, after the suit progressed substantially, the learned counsel for the defendants had declined to cross-examine the plaintiff/PW1. In fact a memo was filed subsequently to show that he has not received instruction to cross-examine the plaintiff/PW1. Although the learned counsel for the plaintiff has submitted that the matter was posted for evidence of the defendants, the same, however, is disputed by the plaintiff. However, from the impugned order, it appears that after the evidence of plaintiff/PW1 was closed, the case was posted for defendants’ evidence on 22^nd November, 2024. Admittedly, the defendants did not adduce any evidence on the date fixed, as a result thereof, the matter was posted for hearing on 4^th December, 2024 and thereafter, the judgment was pronounced.

The learned counsel for the plaintiff has referred to the decision of a Division Bench of this Court in Fathima M. K. v. Kunhipathu and Others^{11.2018 (3) KHC 402; 2018 (3) KLT 491} to demonstrate that in a situation where the defendants did not adduce any evidence on the date fixed and the court, after hearing the arguments of the counsel on both sides, pronounced the judgment, the disposal of the suit can only be under Order XVII Rule 3(a) and not under Order XVII Rule 3(b) of the Code of Civil Procedure, 1908 (in short, “CPC”), thereby not attracting Order IX Rule 13 for setting aside of such decree.

The defendants/appellants had thereafter filed an application for recalling and/or setting aside of the ex parte decree under Order IX Rule 13 of the CPC.

The maintainability of such an application is being resisted in view of the ratio in Fathima M. K. (supra).

The learned counsel for the appellants have referred to the decision of the Hon'ble Supreme Court in Prakash Chander Manchanda v. Janki Manchanda^{22.(1986) 4 SCC 699} to contend that in a situation where the defendant failed to appear before the court and consequently no evidence could be recorded on behalf of the defendant on the day to which suit was finally adjourned and the defendant's case was closed by the court, the court is required to proceed under Rule 2 and not under Rule 3 of Order XVII. Accordingly, the court must proceed to dispose of the matter in any of the modes provided under Order IX and, therefore, application made by the defendant under Order IX Rule 13 after passing of the ex parte decree would be maintainable. The case of Prakash Chander Manchanda (supra), was apparently not considered in Fathima M.K. (supra). The present case is akin to the fact situation in Prakash Chander Manchanda (supra).

Since the parties have argued as to the maintainability of an application under Order IX Rule 13 of the CPC, it is necessary to refer to Order XVII Rule 2 and Order XVII Rule 3 of the CPC. The said provisions are reproduced below:

Order XVII Rule 2 contains a situation where on any day to which the hearing of the suit is adjourned and the parties or any of them fail to appear on the adjourned date, 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 orders as it thinks fit, whereas, Order XVII Rule 3 provides that where any party to a suit who has been granted time earlier fails to produce evidence or ensure the production of his witnesses or to perform any other act necessary to the further progress of the suit, the court may, if the parties are present, proceed to decide the suit forthwith or if the parties or any of them are absent, proceed under Rule 2.

In Prakash Chander Manchanda (supra), while considering the Explanation to Rule 2, as inserted by the Amendment Act, 1976, the Hon’ble Supreme Court observed that the Explanation conferred discretion on the Court to proceed to dispose of the suit in any one of the modes prescribed by or under Order IX of the CPC. In a situation arising under Order XVII Rule 3(b), the disposal of the suit would essentially be under Rule 2, and it would be open to the aggrieved party to apply under Order IX Rule 13.

The record does not show that, the defendants did appear on the adjourned date when the hearing was concluded and the judgment pronounced. Hence, the decision of the Hon’ble Supreme Court in Prakash Chander Manchanda (supra) squarely applies to the present situation. However, the fact remains that the defendants, in spite of having opportunities to cross-examine the plaintiff’s witness and also to adduce the evidence independently, had chosen to stay away from the court and allowed the decree to be passed in favour of the plaintiff.

The merits of the decree is not under challenge. The question is whether at this stage the Court would permit the defendants to participate in the proceeding.

In view of the fact that the defendants have already filed the written statement, and have now expressed their desire to cross-examine PW1 and to participate in the proceeding diligently, we allow these appeals for the ends of justice to give a last opportunity to the defendants to contest the proceeding upon payment of a consolidated sum of ₹1,00,000/- (Rupees One Lakh only) as costs to the plaintiff within a period of a fortnight from date. In default, the decree passed by the learned trial court shall become enforceable. In the event the aforesaid cost is paid, the defendants shall be entitled to cross-examine PW1 and shall also be entitled to adduce evidence on the dates to be fixed by the learned trial Judge. In the event, the defendants fail to cross-examine PW1 on the date fixed or fail to adduce any evidence on the date fixed for recording the evidence of the defendants, the court shall close the proceeding and may rewrite the judgment on the basis of any fresh evidence if it had come in the meantime. Otherwise it would be open for the court simply to reiterate its earlier order and decree. The learned trial Judge is directed to conclude the proceeding preferably within a period of 6 months from the date of compliance of this order by the appellants and shall not grant any adjournment to the parties unless it is unavoidable.

Accordingly, these First Appeals from Orders stand disposed of.