*THE HON’BLE SRI JUSTICE L. NARASIMHA REDDY +CIVIL MISCELLANEOUS APPEALNo.1348 of 2008 % 22-09-2009 Between: # Karumanchi Janakamma ..... APPELLANT AND $ Bodapati Punnaiah ....RESPONDENT ! Counsel for the Appellant : Sri M.V.S.Suresh Kumar ^ Counsel for the Respondent: Sri P.S.P.Suresh Kumar < Gist: > Head Note: ? CITATIONS: THE HON’BLE SRI JUSTICE L. NARASIMHA REDDY CIVIL MISCELLANEOUS APPEALNo.1348 of 2008 Date: 22.09.2009 Between : Karumanchi Janakamma ….. Appellant and Bodapati Punnaiah. ….. Respondent THE HON’BLE SRI JUSTICE L. NARASIMHA REDDY CIVIL MISCELLANEOUS APPEALNo.1348 of 2008 ORDER: The appellant filed O.S.No.317 of 2002 in the Court of the Junior Civil Judge, Macherla, for recovery of a sum of Rs.8,600/- on the strength of a promissory note against the respondent. The suit was decreed on 21.09.2005. Aggrieved thereby, the respondent filed A.S.No.27 of 2005 in the Court of the Senior Civil Judge, Gurazala. The lower appellate Court allowed the appeal on 19.08.2009 and remanded the matter to the trial Court for fresh consideration and disposal. The same is challenged in this Civil Miscellaneous Appeal. Sri M.R.S. Srinivas, learned counsel for the appellant, submits that the trial Court was left with no alternative except to dismiss the suit on account of the fact that it was reported on behalf of the respondent that he has no evidence to adduce. He contends that the trial Court did examine the various facets of Order XVII C.P.C. and it decided the matter on merits. The learned counsel submits that the lower appellate Court was not justified in remanding the matter to the trial Court when everything was done in accordance with law. Sri P.S.P. Suresh Kumar, learned counsel for the respondent, on the other hand, submits that the suit was liable to be rejected on several grounds such as one relating to limitation and non-joinder of necessary parties etc. He contends that even assuming that no evidence was reported on behalf of the respondent and that the respondent was not present, the only alternative for the trial Curt was to decree the sit ex parte. The learned counsel submits that the lower appellate Court has examined the various aspects and remanded the matter to the trial Court for fresh consideration and disposal. In the suit filed by the appellant herein, the trial Court framed two issues, namely, (i) Whether the suit pronote is true and valid? and (ii) Whether the transfer endorsement dated 10.08.2002 is true? By herself, the appellant did not lend any amount to the respondent. One Smt. Talluri Ravamma is said to have lent a sum of Rs.8,600/- to the respondent on 25.04.1997 on the strength of a promissory note. It was alleged that the respondent paid a sum of Rs.200/- on 25.04.2000 and thereby acknowledged the debt. The appellant, in turn, purchased that promissory note on 10.08.2002 for consideration. The respondent filed a written statement denying the very execution of the promissory note in favour of Talluri Ravamma or borrowing of any amount. According to him, a sum of Rs.8,000/- was borrowed from one Bellamkonda Narasimha Rao, father of the appellant, and that was discharged on 28.04.2002. The trial of the suit has progressed and on behalf of the appellant, P.Ws.1 to 6 were examined and Exs.A1 to A5 were marked. The trial Court imposed costs of Rs.150/- against the respondent for his failure to adduce evidence. The amount was not paid within the stipulated time. The record is not clear as to the consequences, that ensued, due to such default. On the ground that the counsel for the respondent reported that he has no evidence to adduce, the trial Court proceeded to hear the matter and pronounced the judgment on 21.09.2005. In the appeal preferred by the respondent, detailed discussion was undertaken as to the nature of the decree that was passed, with reference to Order XVII Rules 2 and 3 C.P.C. They read 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. 3.Court may proceed notwithstanding either party fails to produce evidence, etc.- 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.” They are so interconnected that it is difficult to delineate their respective areas of operation, with precision. Uncertainty exists as to what consequences must ensue, where the said Rules are attracted. The situation presents almost a vicious circle and it would be difficult to extricate the same. The operation of one Rule would lead to the other, and vice-versa. The principal distinction between the two seems to be that while Rule 2 gets attracted if the parties or their counsel fail to appear at all, Rule 3 applies where the parties are no doubt present but fail to discharge the functions or to take steps that were necessary at the concerned stage. Rule 2 provides for two contingencies, viz., (i) disposal of the suit in terms of Order IX C.P.C. if there is no representation or failure on the part of the parties or any of them to appear; and (ii) disposal of the suit, on merits, in case the evidence on behalf of the defaulting party was already recorded. Second contingency does not apply to the case on hand. The reason is that the defaulting party i.e. respondent herein did not adduce any evidence. Therefore, the only alternative for the trial Court was to dispose of the suit in terms of Order IX C.P.C. Rule 3 operates, almost as an exception to Rule 2, even while the operation of a facet of it leads to that very Rule. Of the two contingencies provided under Rule 3, one paves the way to give disposal to the suit under Rule 2. In that sense, it is nothing but an extension of Rule 2. The other contingency is to proceed to decide the suit, in case the parties are present but fail to perform an act, expected from them. Admittedly, the respondent was not present. Hence, application of Rule 3 to the facts of the case does not alter the situation. Learned counsel for the appellant submits that the presence of an Advocate engaged by a party deserves to be treated as the presence of the party itself and viewed from that angle, it was open to the trial Court, to decide the case on merits, as it did. If the Rules as contained in C.P.C. enacted by the Parliament are applied, this contention deserves to be accepted. However, if the A.P. amendment to Rule 2 of Order XVII is taken into account, a different scenario emerges. The following explanation is added to Rule 2 by A.P. Explanation:- The mere presence in Court of a party or his Counsel not duly instructed shall not be considered to be an appearance of the party within the meaning of this rule. From this, it is evident that apart from the physical presence of the party or its Advocate, existence of necessary instructions to proceed with the matter, becomes necessary. The record discloses that the advocate of the respondent reported no instructions to the trial Court. Hence, his physical presence does not prevent the consequences that flow from Rule 2. In this view of the matter, the opinion expressed by the lower appellate Court cannot be said to be incorrect. Secondly, the trial Court committed certain lapses. The first is about limitation. Even if the respondent did not raise any plea, in this regard the obligation imposed upon the Court under Section 3 of the Limitation Act, 1963 ought to have been discharged. No effort was made by the trial Court in this regard. The absence of the respondent became handy for unilateral adjudication of the matter. Further, there did not exist any privity of contract between the appellant on one hand and the respondent on the other hand. Assuming that promissory note is a negotiable instrument, it was necessary for the trial Court to satisfy itself as to whether a suit of this nature is maintainable, unless the original lender under the promissory note is made a party. The learned counsel for the appellant submits that the decree has been executed to a substantial extent and it was stopped at the stage of delivery of possession. In the judgment of the lower appellate Court, no such developments are noticed. At any rate, as long as the respondent is not evicted from any land owned by him, it hardly makes any difference as to what developments have taken place behind his back. In the circumstances, the Civil Miscellaneous Appeal is dismissed. On remand, the trial Court shall frame two more issues, viz., (1) Whether the suit is filed within the limitation?, and (2) Whether the suit is bad for non-joinder of parties? It shall be open to the parties to adduce evidence. No order as to costs. ______________________ L. NARASIMHA REDDY, J 22nd September, 2009 Note: L.R.Copy be marked. GHN