THE HON’BLE SRI JUSTICE VILAS V. AFZULPURKAR C.R.P. NOs. 2546 and 2556 of 2008 Date of order: 17.6.2010 Between: Konda Sugunamma and others …Petitioners and Smt. Nalam Ramaratnamma and another ..Respondents THE HON’BLE SRI JUSTICE VILAS V. AFZULPURKAR C.R.P. NOs. 2546 and 2556 of 2008 COMMON ORDER: CRP No. 2546 of 2008 The petitioners herein are respondents 2 to 5 in IP No. 69 of 2001 on the file of the II-Addl. Senior Civil Judge, Vijayawada. They had filed IA No. 771 of 2006 seeking condonation of delay of 1178 days in filing a petition to set aside the exparte decree passed in the said IP. The court below, under the impugned order, has dismissed the application seeking condonation of delay on the ground that the petitioners have failed to adduce any evidence in support of the affidavit filed along with the said application. Aggrieved thereby, the present revision petition is filed. Heard Sri P. Sridhar Reddy, learned counsel for the petitioners. Though first respondent herein who is the petitioner in IP was served, nobody appears for her to contest this revision. The learned counsel for the petitioners has submitted and pointed out that the IP was filed against a company which is arrayed as first respondent in IP and according to him, under Section 8 of the Provincial Insolvency Act no such petition is maintainable against a company incorporated under the Companies Act. The learned counsel has also taken me through the averments in the affidavits filed in support of the delay condonation petition as well as another application filed by the petitioners simultaneously in IA No. 279 of 2006. A reading of the averments together in both the affidavits would show that according to the petitioners, the second respondent herein got the said IP filed through the first respondent herein to defeat the sale agreement executed by the second respondent, relating to its property, in favour of the petitioners. The learned counsel states that part of the said property was conveyed by the registered sale deed and in order to avoid to convey the rest of the property, these proceedings were taken. It is specifically stated that notices in the IP were sent on some other address which does not belong to the petitioners and thereby the court below was made to believe that the notices were served on the petitioners, but they did not contest. Since the second respondent-company herein also did not contest the IP, which is surprising, the court below allowed the IP by a brief order dated 28.3.2003 which reads as under, “Proof affidavit of the petitioner is filed. Perused the petition and affidavit. Exs.A1 to A3 are marked. Heard the counsel for the petitioner. Hence R.1 is adjudicated as an insolvent. Property is vested with Official Receiver……….” All the respondents in IP were set exparte and there was virtually no contest. The learned counsel for the petitioners, therefore, states that fraud was placed on the petitioners in not sending the notices in IP to them and in managing the postal endorsement with a view to take exparte decree against the petitioners. The petitioners have also stated that they came to know of all these proceedings in IP only through Debt Recovery proceedings initiated by Union Bank of India in RP No. 91 of 2003 on the file of the Debt Recovery Tribunal, Visakhapatnam. The petitioners stated that when they have made appropriate application before the said Debt Recovery Tribunal, they came to know of these proceedings in the IP, and therefore, they have made the present application on 17.6.2006. It is note worthy to mention that the counter filed by the first respondent is one of general denial and is a very brief counter practically containing hardly one para except stating that the delay is huge delay. The material averments of the petitioners were not denied. The Court below, while considering the present application, was of the view that the petitioners ought to have established and adduced evidence in support of contents of their affidavit and rejected the application in IA No. 771 of 2006. On the facts and circumstances of the case and significantly in the absence of any contest by the second respondent-company, which was sought to be declared as insolvent before the court below, it leaves this Court with a strong suspicion that the proceedings in the IP were stage managed and only with a view to get an order declaring the company insolvent, so as to affect the interests of the petitioners, the above proceedings in the court below were taken up. The learned counsel for the petitioners states that the second respondent-company itself had earlier filed an IP so as to avoid transactions by the petitioners and the said IP was dismissed as withdrawn. However, none of those details are mentioned in the affidavit filed along with the present application or in the counter. Be that as it may, the fact remains that the petitioners would be seriously affected on account of the said exparte decree. Even otherwise, the exparte decree passed by the Court below is without any reasons. It is now well settled by the decisions of the Supreme Court that even exparte judgments and decrees must also reflect the application of mind by the court and the reasons for passing of such an exparte decree in faovur of plaintiff and non-speaking judgments and decrees merely on account of non appearance of the defendants was held to be not valid (See decision of Supreme Court in Balraj Taneja Vs. Sunil Madan [1]). In either view of the matter therefore, the approach of the lower court in rejecting the application for condonation of delay is totally erroneous, inasmuch as it has failed to notice that none of the material facts alleged by the petitioners were controverted by the respondents. The general denial of the contents of the affidavit was not sufficient to rebut the said allegations and as such it was not necessary for the petitioners to lead any further evidence in support of the said allegations, as understood by the court below. The impugned order, is therefore, liable to be set aside and is accordingly set aside. CRP No. 2546 of 2008 is allowed, IA No. 771 of 2006 is allowed and the delay as prayed for shall stand condoned. Similarly since the petition to set aside the exparte decree was based on the self same grounds, the same shall also stand allowed. The court below shall grant opportunities to the petitioners to file detailed counter and objections to the IP No. 69 of 2001 and thereafter, hear the parties and determine the IP afresh, in accordance with law. No costs. CRP No. 2556 of 2008: This revision is connected to CRP No. 2546 of 2008 and the same petitioners have filed the present revision petition questioning the exparte decree passed by the court below in IP No. 69 of 2001. Since the said exparte decree has been set aside by my order in CRP No. 2546 of 2008, the cause in this revision does not survive. The revision petition is accordingly dismissed. No costs. _________________________ VILAS V. AFZULPURKAR, J Dt. 17.6.2010 KR [1] AIR 1999 SC 3381