Ex-parte decree in summary suit not be lightly distrubed

Setting aside of ex-parte decree under Order XXXVII Rule 4 of the Code cannot be allowed in routine and special circumstances are required to be established. However, the expression “special circumstances” has to be construed having regard to the individual fact situations.

In the present appeal the question raised for consideration was whether the courts below rightly declined the prayer to set aside the ex-parte decree and to grant leave to appeal to defend the summary suit.

The Respondent in the present appeal had filed a suit under Order XXXVII of the Code of Civil Procedure, 1908 (CPC) alleging that the Appellant’s cheques given towards purchase price of Plot were dishonoured inspite of execution of requisite documents and possession of plot in question having been handed over. The summons were duly served on the wife of the Appellant but, the Appellant failed to enter appearance within ten days which lead to the passing of ex-parte decree.

Application thereafter was filed for setting aside of the decree stating that the power of attorney in favour by the alleged owner of the plot in question, did not specify the plot number and the Appellant found no such plot in existence in the records of the concerned Authority due to which Appellant could not get possession of the plot and the cheques in question could not be taken to be in discharge of any liability. The transaction was thus stated to be without any lawful consideration and hence void.

The Courts below held that the suit was for recovery on account of dishonour of cheques and was not in respect of the transaction of property. The Appellant had failed to enter appearance without any justification in spite of service and hence there was no ground to set aside the ex parte decree.

The Apex Court held that it would be fair and just to give the Appellant an opportunity to contest the suit subject to the Appellant depositing the entire amount claimed in the suit but without interest or costs and on depositing of the said amount, the decree will stand set aside and the Appellant would be entitled to leave to defend. 

It was observed by the Court that setting aside of ex-parte decree under Order XXXVII Rule 4 of the Code cannot be allowed in routine and special circumstances are required to be established. However, the expression “special circumstances” has to be construed having regard to the individual fact situations. The Court has to balance the equities and while safeguarding the interest of the plaintiff, appropriate conditions can be laid down if the defendant makes out a debatable case which may prime facie show injustice if the ex-parte decree was not set aside. 

[Mahesh Kumar Joshi vs. Madan Singh Negi]
(SC, 15.01.2015)
(Civil Appeal No. 450 of 2015)