N Mohan Vs R Madhu (2019): Right To Appeal U/S 96(2) Of CPC Is A Statutory Right Which Cannot Be Taken Away Merely Because An Application Filed Under Order Ix Rule 13 Was Dismissed

Date of Judgement:
21st November 2019

Coram:
Justices R. Banumati, A.S. Bopanna, Hrishikesh Roy

Parties:
Appellant: N. Mohan
Respondent: R. Madhu

Subject

The main subject of the judgement was the applicability of and relationship between Order IX Rule 13 and Section 96 (2) of the Code of Civil Procedure, 1908.

Overview

• The Appellant, a businessman, received Rs. 45,00,000/- from the Respondent to finance his business needs. It was agreed that the said amount would be returned to the Respondent within two months, with an interest of 18% per annum. However, there was no written acknowledgement of the transaction and the promise.
• The Appellant did not return the amount within the said time. But, it was said that he had issued two post-dated cheques, of Rs. 25,00,000/- and Rs. 20,00,000/- respectively. But when the cheques were presented for collection, they were returned back stating that payments have been stopped by the drawer.
• Consequently, the Respondent filed a suit before the Additional District Judge, Tiruchirapalli, and an ex-parte decree was passed on 9th October 2015.
• The Appellant filed a suit for setting aside the ex-parte decree under Order IX Rule 13 of the Civil Procedure Code, 1908. He also filed an application under Section 5 of the Limitation Act, 1963, condoning his delay in filing the suit under CPC.
• He pleaded that the summons was served in his old house at Trichy which did not come to his notice as he shifted to Chennai in 2014.
• However, his plea was rejected by the Trial Court, the High Court as well as the Supreme Court. Later, the Appellant filed the first appeal before the High Court.
• The same was dismissed along with the application of condonation of delay on the ground that since the matter has been dismissed in the earlier proceedings, the Appellant cannot file a first appeal.
• The Appellant approached the Supreme Court.

Issues Involved:

• Whether a first appeal under Section 96(2) of the CPC filed against the ex-parte decree is maintainable even after the dismissal of the application filed under Order IX Rule 13 CPC for condonation of delay in filing the appeal?
• Whether the time spent in the proceedings to set aside the ex-parte decree can be taken as a sufficient cause to condone the delay in preferring the first appeal?

Important Provisions

1. Order IX Rule 13, Civil Procedure Code: This provision deals with the setting aside of ex parte decree against the defendant on the following two grounds: 1) if summons was not served duly, or 2) if the defendant was prevented by any sufficient cause from appearing when the suit was called on for hearing.
2. Section 96(2), Civil Procedure Code: Section 96 deals with appeals from original decree. Section 96(2) states that an appeal lies from an original decree passed ex parte. The Court held that this right is statutory.
3. Section 5 of the Limitation Act:It states that an appeal/application, other than that filed under Order XXI of CPC, may be allowed even after the prescribed period, if the appellant/applicant satisfies the court that he had sufficient cause for not preferring/making the appeal/application within the prescribed period.

Judgement Analysis

• The three-judge bench analysed the scope of Order IX Rule 13 and Section 96(2) of the Code of Criminal Procedure. Under Order IX Rule 13 CPC, the Court has to see two things, one, whether the summons was served or not, and two, whether the defendant was prevented from appearing before the Court at the time of hearing by any sufficient cause. On the other hand, as per Section 96(2) CPC, the appeal may lie from an original decree that has been passed ex parte.
• The Court also looked at the connection between the two provisions of CPC. It observed that if an appeal filed under Section 96(2) is dismissed by the Court, then a person cannot file the same petition under Order IX Rule 13. This is because after the appeal filed under Section 96(2) of the Code has been dismissed, the original decree passed in the suit merges with the decree of the appellate court.
• However, if a suit filed under Order IX Rule 13 gets dismissed, the petitioner would still have the right to file an appeal under Section 96(2). (Paragraph No. 15)
• The Court also did not find any defect or mala fide motive on the Appellant's part and therefore opined that an opportunity to be heard must be provided to him. The amount of Rs. 25,00,000 out of the borrowed money was allowed to be withdrawn by the Respondent. (Paragraph No. 19)

With these observations, the Supreme Court set aside the order of the High Court and directed the allowance of the appeal on the condition that the Appellant must deposit the balance amount of Rs. 20,00,000/-.

Conclusion

The judgement in this case makes a detailed interpretation of Order IX Rule 13 and Section 96 (2) of the Code of Civil Procedure. As stated by the Supreme Court, the right granted under Section 96(2) is a statutory right, and the same cannot be simply taken away just because a suit on similar cause under Order IX Rule 13 was dismissed by the Courts. This case, undoubtedly, serves as a precedent for ascertaining the application of Order IX Rule 13 and Section 96 (2) of CPC.

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