IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL Second Appeal No. 441 of 2001 (Old No. 2063 of 1985) Pooran Chandra Lohani S/o Sri Jai Dutt Lohani Resident of Simalgair Bazar, Pithoragarh. ...…………. Defendant / Appellant Versus Kailash Chandra Chilkoti S/o Sri Ram Dutt Chilkoti Resident of Bank Road, Pithoragarh. ...…………. Plaintiff / Respondent Mr. Lalit Samant, Advocate for the defendant / appellant. Mr. Rajendra Dobhal, Advocate for the plaintiff / respondent. Hon’ble Prafulla C. Pant, J. This appeal, preferred under Section 100 of the of the Code of Civil Procedure, 1908, is directed against the judgment and decree dated 16.09.1985, whereby the first appellate court (District Judge, Pithoragarh), dismissed the civil appeal No. 4 of 1984, affirming the judgment and decree dated 19.10.1984, passed by the trial court (Civil Judge, Almora, Camp Pithoragarh), in Suit No. 03 of 1983. 2) Heard learned counsel for the parties and perused the record. 3) Brief facts giving rise to this appeal are that plaintiff / respondent Kailash Chandra Chilkoti instituted suit No. 03 of 1983, before the trial court with the pleading that the defendant (present appellant) took loan of Rs. 13,000/- from the plaintiff on 10.06.1980, and executed a pronote. It is further pleaded that 14% interest per annum was agreed to be paid by the defendant to the plaintiff. It is alleged in the plaint that the defendant failed to repay the loan. It is further alleged that neither the amount of loan nor any amount towards interest was paid. Therefore, the suit for recovery of money instituted. 4) Defendant was served with the summons. He filed his written statement. In the written statement execution of pronote is not denied by the defendant, but it is alleged that repayment of loan was to be adjusted towards the expenditure incurred by the defendant on the vehicle of the plaintiff which was plying with the defendant’s Firm M/s Jai Dutt Lohani and Sons, for transportation of grains on hire, for the government supply. 5) The trial court, on the basis of the pleadings of the parties, framed following issues: 1. Whether, the defendant borrowed an amount of Rs. 13,000/- from the plaintiff on 10.06.1980, and executed the pronote? 2. Whether, the pronote dated 10.06.1980 execution of which is admitted to the defendant, is without consideration? 3. Whether, the pronote in question was executed in the manner as and under the impression as set forth in Para 19, 20 and 21 of the written statement? 4. Whether, the pronote in question comes under the category of a bond? If so, its effect? 5. Whether, there was an understanding that an amount of Rs. 13,000/- shall be paid to the plaintiff M/s Jai Dutt Lohani and Sons for meeting the fuel consumption charges of the truck for running the said truck, as alleged by the defendant in para 15 to 19 of the written statement? 6. Whether, the suit is barred by the provisions of U.P. Money Lending Act? 7. To what relief, if any, is the plaintiff entitled? 6) From the record it appears that the plaintiff adduced his evidence as P.W. 1 Kailash Chandra Chilkoti, and the others as P.W. 2 Ram Dutt Chilkoti and P.W. 3 S.S. Mehta, Branch Manager of the Cooperative Bank, Pithoragarh. 7) On behalf of the defendant adjournments were sought for adducing the evidence. After adjournment, the case was fixed for evidence of defendant, for 18.10.1984. On said date counsel for the defendant appeared but no evidence was adduced, instead again adjournment application was moved. Said application for adjournment was rejected, and the trial court proceeded under Order XVII Rule 3 of the Code of Civil Procedure, 1908. On 19.10.1984, the judgment and decree was passed by the trial court, decreeing the suit against the defendant for recovery of Rs. 17,882/- with interest for pendency of suit till the payment is made at the rate of 14% per annum. Aggrieved by said judgment and decree, the defendant preferred civil appeal (Civil Appeal No. 04 of 1984) before the District Judge, Pithoragarh. The first appellate court after hearing the parties, dismissed the appeal vide its impugned judgment and order dated 16.09.1985. Hence, this appeal was filed by the defendant before the Allahabad High Court on 21.11.1985, where it was admitted on 19.05.1986, on following substantial question of law: Whether, Rule 2 of Order XVII of C.P.C. as inserted by Allahabad High Court amendment and the explanation attached thereto will have no application after the Code of Civil Procedure (Amendment) Act, 1976, came into force? This appeal is received by transfer to this Court under Section 35 of the U.P. Re-organization Act, 2000 (Central Act No. 29 of 2000), for its disposal. Answer to substantial question of law: 8) Before further discussion this Court thinks it just and proper to quote the relevant provisions of law. Rule 2 of Order XVII of the Code of Civil Procedure, 1908 (hereinafter referred as C.P.C.), reads as under: “2. Procedure if parties fail to appear on day fixed. –Where, on any day to which the hearing of the suit is adjourned, the parties or any of them fail to appear, 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 order as it thinks fit. Explanation. –Where the evidence or a substantial portion of the 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, the Court may, in its discretion proceed with the case as if such party were present.” [The above explanation to Rule 2 of Order XVII was inserted by the C.P.C. (Amendment) Act, 1976, w.e.f. 01.02.1977]. The Allahabad High Court amendment which existed prior to above explanation (w.e.f. 28.05.1943) (framed under Section 122 of the Code), reads as under: “Where the evidence, or a substantial portion of the evidence, of any party has already been recorded and such party fails to appear on such day, the Court may in its discretion proceed with the case as if such party were present, and may dispose of it on the merits. Explanation . –No party shall be deemed to have failed to appear if he is either present or is represented in Court by agent or pleader, though engaged only for the purpose of making an application.” Rule 3 of Order XVII of C.P.C. makes a provision as to how the Court has to proceed when the party fails to adduce evidence and cooperate with the proceeding of the suit. Said Rule, reads as under: “3. Where any party to a suit to whom time has been granted fails to produce his evidence, or to cause the attendance of his witnesses, or to perform any other act necessary to the further progress of the suit, for which time has been allowed, [the Court may, notwithstanding such default, - (a) if the parties are present, proceed to decide the suit forthwith; or (b) if the parties are, or any of them is, absent, proceed under rule 2].” 9) From Rule 2 of Order XVII it is clear that it applies to a situation where a party fails to appear on an adjourned date. And, Rule 3 of Order XVII shows that it applies where the party fails to adduce evidence or perform other duty. In Rule 3, two situations are visualized – (a) when the parties are present, and (b) when the parties or any of the party is not present. It is evident from Clause (b) of Rule 3 that in case the party is absent, the Court has to revert back to Rule 2 of Order XVII to proceed with, which provides that the Court may proceed to dispose of the suit in one of the modes directed in that behalf by order IX or makes any such order as it thinks fit. On the other hand, Clause (a) of Rule 3 provides that where the parties are present and they or anyone of them fails to adduce the evidence the Court may proceed with the suit forthwith. In the present case, from the record it appears that though the defendant was absent personally on the adjourned date of final hearing, but his counsel was present in the Court, who moved an application for adjournment and when rejected argued that case (without adducing evidence on behalf of defendant). 10) On behalf of learned counsel for the appellant attention of this Court is drawn to the case of B. Janakiramaiah Chetty Vs. A.K. Parthasarthi and others; AIR 2003 SUPREME COURT 3527, and it is argued that when the defendant was absent the trial court should have proceeded under Rule 2 of Order XVII, and not under Rule 3 of said Order. I have gone through said case law. It nowhere provides that when the counsel was present in place of a party, the Court should have proceeded under Rule 2 of Order XVII. Rather, in para 10 it is observed as under: “……….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 adjournment 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.” Section 97 of C.P.C. (Amendment) Act, 1976 provides that any amendment made, or any provision inserted in the principal Act by a State Legislature or a High Court, before the commencement of this Act, shall, except in so far as such amendment or provision is consistent with the provision of principle Act as amended by this Act, stand repealed. The plain reading of Allahabad amendment framed and incorporated under Section 122 of the Code w.e.f. 28.05.1943, is not inconsistent to the explanation added to Rule 2 of Order XVII inserted vide C.P.C. (Amendment) Act, 1976. That being so, it cannot be said that the Allahabad High Court amendment which was added to Rule 2 of Order XVII stood repealed w.e.f. 01.02.1977 i.e. the date on which C.P.C. (Amendment) Act 1976, came into force. In other words, Allahabad High Court Amendment in the rule still holds good. 11) On behalf of learned counsel for the respondent attention of this Court is drawn to the case of Madan Mohan Bajpayee Vs. Harnam Das Gupta and others; 2005 (4) AWC 3704, and M.S. Khalsa Vs. Chiranji Lal and others; AIR 1976 ALLAHABAD 290 (full bench) and it is submitted that the trial court as well as the first appellate court has committed no error of law as mere personal absence of the party (when his counsel is present in the Court representing the party) cannot be said to be absence of the party. In view of the provisions contained in Rule 3 of Order XVII of the Code, when the counsel of both the parties were present on the adjourned date of hearing, this Court is of the view that trial court committed no error of law in proceeding under Rule 3 of Order XVII of C.P.C., and the first appellate court did not err in law in upholding said order. Accordingly, the substantial question of law stands answered. 12) For the reasons as discussed above, this appeal has no force, and the same is liable to be dismissed. However, considering the facts and circumstances of the case, while upholding the decree passed by the trial court and the first appellate court, in the interest of justice it is desirable to reduce the rate of interest, for the pendency of period of this appeal, to nine per cent per annum instead of fourteen per cent per annum. 13) With these observations and modification the impugned judgments and decree passed by the courts below are affirmed and the appeal is dismissed. Cost of the appeal easy. (Prafulla C. Pant, J.) [ Dt.: April 27, 2009 H.Negi