A.N. Sanu & M/S A.N. Engineering Works v. The Kerala State Electricity Board & Ors.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN** ## **&** **THE HONOURABLE MR.JUSTICE P.G. AJITHKUMAR** **THURSDAY, THE 20[TH] DAY OF JULY 2023 / 29TH ASHADHA, 1945** **FAO NO. 96 OF 2019** **AGAINST THE ORDER DATED 20.06.2018 IN I.A.NO.675 OF 2017 IN OS 123** **OF 2012 OF SUB COURT, ALAPPUZHA** ## **APPELLANT/PETITIONER/PLAINTIFF:** **A.N.SANU, AGED 65 YEARS** **M/S. A.N.ENGINEERING WORKS, NO.134/6, INDUSTRIAL AREA, KAMAKSHY PALAYAM, MAGADI MAIN ROAD, BANGALORE-560 029 AND KOMANA, AMBALAPPUZHA, ALAPPUZHA, PIN-688 561.** **BY ADV C.S.MANU** ## **RESPONDENTS/COUNTER PETITIONERS /DEFENDANT:** - **1 THE KERALA STATE ELECTRICITY BOARD REPRESENTED BY ITS SPECIAL OFFICER, MANAGING COMMITTEE APPOINTED BY GOVERNMENT OF KERALA, VYDYUTHIBHAVANAM, PATTAM, THIRUVANANTHAPURAM-695 004.** - **2 THE ASSISTANT EXECUTIVE ENGINEER, KERALA STATE ELECTRICITY BOARD, LINE MAINTENANCE SUB DIVISION, ALAPPUZHA, PIN-688 007.** - **3 DARMARAJAN.V.K., VARIYAMMURIVELI, AVALOOKUNNU P.O., ALAPPUZHA688 006.** - **4 P.G.LAIJU, S/O.GOPALAN, SREERANGAM, STADIUM WARD, ALAPPUZHA-688 001. BY ADV A.ARUNKUMAR A (STANDING COUNSEL - R1 & R2)** **THIS FIRST APPEAL FROM ORDERS HAVING BEEN FINALLY COME** **UP FOR ADMISSION ON 20.07.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **FAO NO. 96 OF 2019** 2 ## **JUDGMENT** ## **Anil K. Narendran, J.** The appellant is the 1[st] defendant in O.S.No.123 of 2012 on the file of the Sub Court, Alappuzha, which was one filed by respondents 1 and 2 herein-plaintiffs against the appellant and two others, who are arrayed as respondents 3 and 4 herein, for realisation of Rs.92,48,453.50/- being the value of copper scrap allegedly misappropriated by the defendants and for other consequential reliefs. The defendants filed individual written statements raising various contentions. The suit was listed for trial on 03.10.2017. On the side of the plaintiffs, PWs.1 to 3 were examined and Exts.A1 to A14 were marked. Since the 1[st] defendant remained absent, he was set _ex parte_ . Defendants 2 and 3 did not adduce any oral or documentary evidence. The Sub Court, by the judgment and decree dated 31.10.2017, decreed the suit against defendants 1 and 2 and they were directed to pay Rs.92,48,453.50/- to the 1[st] plaintiff within three months. The suit against the 3[rd] defendant was dismissed. Defendants 1 and 2 were held jointly and severally liable to pay the amount to the 1[st] plaintiff with costs. Seeking an order to set aside the _ex parte_ decree dated 31.10.2017 in O.S.No.123 of 2012, the 1[st] **FAO NO. 96 OF 2019** 3 defendant filed I.A.No.675 of 2017, an application under Order IX Rule 13 of the Code of Civil Procedure, 1908. The relief sought for in that application was opposed by the plaintiffs, by filing counter. After considering the rival contentions, the court below dismissed the said interlocutory application by the order dated 20.06.2018, which is under challenge in this appeal filed invoking the provisions under Order XLIII Rule 1(d) of the Code. 2. This appeal is one filed along with C.M. Application 1 of 2019 for condonation of delay of 243 days, which was condoned by the order dated 01.12.2022, on payment of a cost of Rs.1,000/- to the High Court Legal Services Committee. By the order dated 19.06.2023, the appellant was granted extension of time till that date to deposit the cost. Accordingly, the appellant deposited the cost of Rs.1,000/- on 19.06.2023 and a memo to that effect has also been filed by the learned counsel for the appellant. 3. Heard the learned counsel for the appellant-1[st] defendant and also the learned Standing Counsel for KSEB for respondents 1 and 2-plaintiffs. Despite service of notice, none appears for respondents 3 and 4-defendants 2 and 3. 4. The issue that arises for consideration in this appeal is **FAO NO. 96 OF 2019** 4 as to whether any interference is warranted on the order dated 20.06.2018 of the Sub Court, Alappuzha in I.A.No.675 of 2017 in O.S.No.123 of 2012, whereby the application filed by the appellant-1[st] defendant under Order IX Rule 13 of the Code to set aside the _ex parte_ decree dated 31.10.2017 stands rejected. 5. Order IX, Rule 13 of the Code provides for setting aside decree ex parte against the defendant. As per sub-rule (1) of Rule 13, in any case in which a decree is passed _ex parte_ against a defendant, he may apply to the court which the decree was passed for an order to set it aside; and if he satisfies the court that the summons was not duly served, or that he was prevented by any sufficient cause from appearing when the suit was called on for hearing, the court shall make an order setting aside the decree as against him upon such terms as to costs, payment into Court or otherwise as it thinks fit, and shall appoint a day for proceeding with the suit. As per the first proviso to subrule (1), where the decree is of such a nature that it cannot be set aside as against such defendant only it may be set aside as against all or any of the other defendants also. As per the second proviso to sub-rule (1), no court shall set aside a decree passed _ex parte_ merely on the ground that there has been an irregularity **FAO NO. 96 OF 2019** 5 in the service of summons, if it is satisfied that the defendant had notice of the date of hearing and had sufficient time to appear and answer the plaintiff's claim. As per the Explanation, where there has been an appeal against a decree passed _ex parte_ under this rule, and the appeal has been disposed of on any ground other than the ground that the appellant has withdrawn the appeal, no application shall lie under this rule for setting aside that _ex parte_ decree. 6. In **G.P. Srivastava v. R.K. Raizada [(2000) 3 SCC 54]** in the context of an application filed under Order IX, Rule 13 of the Code, for setting aside an _ex parte_ decree, the Apex Court held that, the word ‘was prevented by any sufficient cause from appearing’ occurring in Order IX, Rule 13 of the Code must be liberally construed to enable the court to do complete justice between the parties, particularly when no negligence or inaction is imputable to the erring party. Sufficient cause for the purpose of Order IX, Rule 13 of the Code has to be construed as an elastic expression for which no hard and fast guidelines can be prescribed. The courts have wide discretion in deciding the sufficient cause keeping in view the peculiar facts and circumstances of each case. **FAO NO. 96 OF 2019** 6 7. In **G.P. Srivastava** , the Apex Court held further that, ‘sufficient cause’ for non-appearance refers to the date on which the absence was made a ground for proceeding _ex parte_ and cannot be stretched to rely upon other circumstances anterior in time. If ‘sufficient cause’ is made out for non-appearance of the defendant on the date fixed for hearing when _ex parte_ proceedings initiated against him, he cannot be penalised for his previous negligence which had been overlooked and thereby condoned earlier. In a case where the defendant approaches the court immediately and within the statutory time specified, discretion is normally exercised in his favour, provided the absence was not malafide or intentional. For the absence of a party in the case the other side can be compensated by adequate costs and the _lis_ decided on merits. 8. In **Peeves Enterprises v. Muhammed Ashraf [2015 (3) KHC 981]** , relying on the law laid down by the Apex Court in **G.P. Srivastava** , a Division Bench of this Court in which one among us [Anil K. Narendran, J] was a party held that, on an application filed under Order IX, Rule 13 of the Code of Civil Procedure, the court has to find out whether the erring party has made out sufficient cause for setting aside the _ex parte_ decree. **FAO NO. 96 OF 2019** 7 When no negligence or inaction is imputable to the erring party and the absence was not malafide or intentional, the discretion has to be exercised in his favour, especially when the application is within the statutory time limit. In appropriate cases, the plaintiff can be compensated by adequate costs for the loss of time and the inconvenience caused to him. But any such condition shall not be too onerous. 9. The relative scope and applicability of the provisions under Order IX Rule 6 and Order XVII Rules 2 and 3 of the Code of Civil Procedure were considered by the Apex Court in the context of an application under Order IX Rule 13 of the Code in **G.Ratna Raj (dead) by LRs v. Sri Muthukumarasamy Permanent Fund Ltd. [(2019) 11 SCC 301]** , in which the Apex Court relied on its earlier decision in **B.Janakiramaiah Chetti v. A.K. Parthasarathi [(2003) 5 SCC 641]** . 10. In **G.Ratna Raj (dead) by LRs [(2019) 11 SCC 301]** the Apex Court held that if the defendants had remained absent on the day referred to in Order XVII Rule 2 and the defendant had adduced the evidence either fully or substantially prior to the date on which he was proceeded _ex parte_ , the court could have invoked its powers under Explanation to Order XVII **FAO NO. 96 OF 2019** 8 Rule 2 of the Code treating the defendants as ‘present’ on that day for passing appropriate orders in the suit. Paragraphs 20 to ## 28 of that decision read thus; ‘20. The scope of Order 17 Rule 2 and Order 17 Rule 3 of the Code came up for consideration before this Court in **B. Janakiramaiah Chetty v. A.K. Parthasarthi [(2003) 5** **SCC 641]** wherein Arijit Pasayat, J., speaking for the Bench held in paras 7 to 10 as under: (SCC pp. 645-46) “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 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 **FAO NO. 96 OF 2019** 9 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 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 adjourn- **FAO NO. 96 OF 2019** 10 ment 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 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 **FAO NO. 96 OF 2019** 11 for disposal of the suit, there is no need for adjourning the suit or deferring the decision.” 21. Now when we examine the facts of the case at hand keeping in view the law laid down in **B. Janakiramaiah Chetty v. A.K. Parthasarthi [(2003) 5 SCC 641]** , 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 the defendants' evidence but the same was not recorded due to the defendants' absence on the said date. In other words, it was a case where the defendants did not lead any evidence. 22. 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. 23. 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. 24. 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. **FAO NO. 96 OF 2019** 12 25. 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. 26. 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. 27. As mentioned above, the trial court did proceed to hear the suit ex parte by taking recourse to 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 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. 28. In view of the foregoing discussion, we are of the view that the Division Bench was justified in allowing the applications filed by Defendant 1 under Order 9 Rule 13 of **FAO NO. 96 OF 2019** 13 the Code and, in consequence, was justified in setting aside the preliminary decree dated 25.02.2003 passed in O.S.No.131 of 1999 treating the said decree as “ex parte decree”.’ 11. In the instant case, the 1[st] defendant was set _ex parte_ on 31.10.2017 and he did not lead any evidence prior to that date. Therefore, the decree passed by the Sub Court on 31.10.2017 is an _ex parte_ decree, which could be set aside in an application filed by the 1[st] defendant under Order IX Rule 13 of the Code, on making out a sufficient ground. 12. The application filed by the appellant-1[st] defendant under Order IX Rule 13 of the Code is one filed within the period of limitation. The reason stated in the affidavit filed in support of I.A.No.675 of 2017 in O.S.No.123 of 2012 was that at that time the 1[st] defendant was working at Bangalore. As he was suffering from knee pain, he returned to his native place for treatment and the doctor advised him to take rest for one month. Therefore, he could not appear in court to contest the case. The 1[st] defendant has not chosen to produce any medical records in order to substantiate the above contention. Considering the fact that the application under Order IX Rule 13 of the Code is one filed within the period of limitation, and the plaintiffs have no case that the **FAO NO. 96 OF 2019** 14 1[st] defendant was set _ex parte_ in O.S.No.123 of 2012 on previous occasions, we find that, in view of the law laid down in the decisions referred to supra, the _ex parte_ decree dated 31.10.2017 can be set aside on payment of cost of Rs.20,000/to the 1[st] respondent-1[st] plaintiff, within the time limit to be stipulated in this judgment, since it cannot be said that the absence of the 1[st] defendant on 03.10.2017 or 31.10.2017 were _malafide_ or intentional. 13. In such circumstances, this appeal is allowed by setting aside the order dated 20.06.2018 of the Sub Court, Alappuzha in I.A.No.675 of 2017, on payment of a cost of Rs.20,000/- to the 1[st] respondent-1[st] plaintiff, within a period of two weeks from the date of receipt of a certified copy of this judgment. On such payment being made, the _ex parte_ decree dated 31.10.2017 in O.S.No.123 of 2012 will stand set aside and the court below shall proceed with that suit. Since the suit is of the year 2012, the court below shall finally dispose of the same, as expeditiously as possible, at any rate, within a period of four months. The evidence already recorded shall be acted upon, after giving an opportunity to the 1[st] defendant to cross examine PWs.1 to 3 and to adduce oral and documentary evidence on his **FAO NO. 96 OF 2019** 15 side. Both parties shall appear before the court below on **22.08.2023** . Sd/- **ANIL K. NARENDRAN, JUDGE** Sd/- **P.G. AJITHKUMAR, JUDGE** Dxy