.FO 1 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD CIVIL REVISION APPLICATION No 513 of 1997 For Approval and Signature: Hon'ble MR.JUSTICE J.M.PANCHAL ============================================================ 1. Whether Reporters of Local Papers may be allowed to see the judgements? Yes JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ 2. To be referred to the Reporter or not? Yes J 3. Whether Their Lordships wish to see the fair copy of the judgement? No 4. Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? No 5. Whether it is to be circulated to the Civil Judge? No -------------------------------------------------------------- SUBHSAGAR ENTERPRISES Versus J.K.SYNTHETICS CO.LTD. -------------------------------------------------------------- Appearance: MR PV NANAVATI for Petitioners MR MB FAROOQUI for Respondent No. 1 -------------------------------------------------------------- CORAM : MR.JUSTICE J.M.PANCHAL Date of decision: 07/05/97 ORAL JUDGEMENT 1. This is a revisional application under Section 115 C.P.C. by the defendants against the order passed by the learned judge of City Civil Court setting aside an ex parte decree passed against them on their depositing in court a sum of Rs.3,00,000/= within the time prescribed by the order. The petitioners who are original defendants have been sued by the respondent for price of goods supplied to the petitioners. The suit was filed as a Summary Suit under Order 37 C.P.C. read with Rule 142 of Ahmedabad City Civil Courts Rules,1961 to recover a sum of Rs.50,20,770=86 with interest and cost.On service of the summons of the suit, the petitioners entered an appearance through learned pleader Shri B.A.Surti. The respondent thereafter, served on the petitioners a summons for judgment in prescribed form on April 11, 1991. Thereupon the matter was posted for hearing on May 2, 1991. It is the case of the petitioners that they had determined the appointment of learned pleader Shri Surti and appointed learned Advocate Mr.S.J.Desai to act on their behalf. However, on May 2, 1991, learned pleader Shri B.A.Surti as well as learned counsel Shri S.J.Desai submitted seperate applications before the court seeking adjournment in the matter to enable the petitioners to submit application seeking leave to defend the suit. In view of the request made by the learned advocates, the suit was adjourned to May 5, 1991. On that day, learned advocate Shri S.J.Desai submitted an application and prayed the court to adjourn the matter to enable the petitioners to file application seeking leave to defend the suit. The court therefore, adjourned the matter on September 26, 1991. On September 26, 1991, the suit was listed for hearing on the board and the name of learned advocate Mr. B.A.Surti was notified as advocate appearing on behalf of the petitioners. Neither Shri Surti nor Shri S.J.Desai nor the petitioners remained present in the court on September 26, 1991. Under the circumstances, hearing of summons for judgment took place and the court passed the decree against the petitioners. 2. On June 4, 1992, the petitioners submitted an application under Order 37 Rule 4 C.P.C. and prayed the court to set aside ex parte decree. The respondent resisted the application by filing reply at Exh.18. It was inter alia claimed that no special circumstances were made out for setting aside the ex parte decree, and, therefore, the application was liable to be dismissed. 3. The learned Judge of the City Civil Court found that the appointment of learned pleader Mr. B.A.Surti had not been determined with the leave of the court by a writing signed by the petitioners or the pleader nor learned counsel Mr. S.J.Desai had filed his appearance, and, therefore, no error was committed by Registry in mentioning name of learned advocate Mr. B.A.Surti as advocate appearing for the petitioners. However, the learned Judge noticed that the learned advocate appearing for the respondent knew well that authority conferred upon learned pleader Mr. Surti, to act, plead and appear was withdrawn and Mr.S.J.Desai learned Advocate was appointed by the petitioners to act on their behalf, but that fact was not brought to the notice of the court when summons for judgment was taken up for hearing. Under the circumstances, the learned Judge concluded that special circumstances were made out by the petitioners for setting aside the ex parte decree. In view of this conclusion, the learned Judge set aside ex parte decree by order dated March 6, 1997, passed below Exh.1 in Civil Misc. Application No.393/92. While setting aside the ex parte decree dated September 26, 1991, rendered in Summary Suit No.693/91, the learned Judge has directed the petitioners to deposit a sum of Rs.3,00,000/= and file application for leave to defend the suit within the time prescribed in the order. The direction to the petitioners to deposit a sum of Rs.3,00,000/= in court has given rise to the present revision. 4. Mr.P.V.Nanavati, learned counsel for the petitioners submitted that while setting aside ex parte decree and directing the petitioners to deposit a sum of Rs.3,00,000/= in the court, the learned Judge should have granted leave to the petitioners to defend the suit and as leave to defend the suit is not granted, the revision should be accepted and leave to defend the suit should be granted to the petitioners. It was pleaded that the direction to the petitioners to deposit a sum of Rs.3,00,000/= in the court is onerous as well as uncalled for, and, therefore, the said direction deserves to be set aside. In support of his submissions, learned counsel placed reliance on the decisions rendered in the cases of (1) The New Ashapuri Co-operative Housing Society Pvt.Ltd. and another v. Arvindkumar Manilal Patel, 16 G.L.R.53 and (2) Bank of India v. M/s. Mehta Brothers and others V1991 (2) Current Civil Cases, 68 . 5. Mr. A.H. Mehta, learned counsel for the respondent submitted that decree is not passed against the petitioners after refusing leave to defend the suit, and, therefore, the learned Judge was justified in not giving leave to defend the suit to the petitioners. It was highlighted that conduct of the petitioners indicated that they were only bidding for time and as direction given to the petitioners is justified by the facts of the case, the impugned order should not be interfered with in the present revision. It was pleaded that the learned Judge has not exercised discretion under Order 37 Rule 4 of CPC arbitrarily and therefore revision application should be dismissed. 6. In view of rival submissions advanced at the bar, it would be necessary to interpret the term " may give leave to the defendant to appear to the summons and to defend the suit, if it seems reasonable to the court so to do" appearing in Rule 4 of Order XXXVII C.P.C. Since impugned order is passed by the learned Judge, City Civil Court,Ahmedabad, it would be necessary to refer to scheme envisaged by Rules 142 to 148-A of the Ahmedabad City Civil Courts Rules, 1961. Rule 4 of Order XXXVII is a part of an integral scheme provided by Rules 142 to 148-A of the Ahmedabad City Civil Courts Rules, 1961. Therefore, it cannot be considered or construed in isolation. In order to determine the true meaning of the relevant term appearing in Rule 4 of Order XXXVII C.P.C. the context of setting, scheme, purpose and principles of Chapter XI of Ahmedabad City Civil Courts Rules, 1961, will have to be taken into consideration. An isolated consideration of Order XXXVII Rule 4 would lead to the risk of some other interrelated provisions becoming otiose or devoid of meaning. Interpretation must depend on the text and context as they are bases of interpretation. While the words of enactment are important, the context is no less important. The fact that general words are used in a statute is not in itself a conclusive reason why every case falling literally within them should be governed by that statute and the context of an Act may well indicate that wide or general words should be given a restrictive meaning. All general words are open to inspection. Many general words demand inspection, to see whether they really bear their widest possible meaning. Having regard to these settled principles of interpretation of statute, it would be advantageous to notice in brief the scheme relating to summary suits as provided in Chapter XI of the Ahmedabad City Civil Courts Rules, 1961. So far as city of Ahmedabad is concerned, the State Government has established Ahmedabad City Civil Court under Ahmedabad City Courts Act, 1961. The High Court of Gujarat, in exercise of powers under Article 227 of the Constitution and Section 122 of C.P.C., 1908, has with approval of the Governor and the Government of Gujarat, made rules known as Ahmedabad City Civil Courts Rules 1961. Chapter XI of the said Rules containing Rules 142 to 148-A, deals with summary suits. Rule 142 of the Rules provides that all suits upon bills of exchange, hundis or promissory notes and other suits enumerated therein can be instituted as a " summary suit " by presenting a plaint. The plaint has to contain an averment that the plaintiff is suing under the Summary Procedure under Order XXXVII of the Code of Civil Procedure. The writ of summons in suit instituted has to be in form No.5. The plaintiff has to, together with writ of summons, serve on the defendant a copy of the plaint and exhibits thereto. The defendant has to enter an appearance within 10 days of service of summons either in person or by an advocate. On the day of entering appearance, notice of the appearance has got to be given to the plaintiff's advocate or to the plaintiff himself if he sues in person. The defendant is not entitled to defend the suit unless he enters an appearance and obtains leave from a Judge to defend the suit. In default of his entering an appearance and of his obtaining such leave to defend, the allegations in the plaint not only should be deemed to be admitted, but the plaintiff is entitled to a decree for the sum mentioned in the summons, together with interest at the rate specified (if any) up to the date of decree and such sum for costs. If the defendant enters an appearance or files a Vakilatnama, the plaintiff is entitled to apply by a summons for judgment returnable not less than 10 clear days from the date of service, to the Sitting Judge in chamber for the amount claimed together with interest ( if any ) and costs. A summons for judgment should be in form No.6 of the Forms annexed to the Rules. The summons for judgment must be supported by an affidavit verifying the cause of action and the amount claimed and stating that in his belief there is no defence to the suit. The defendant, if he desires to defend the suit has to file an affidavit or declaration disclosing the grounds and facts on which he seeks leave to defend the suit. A copy of such affidavit or declaration must be supplied by the defendant to the plaintiff or his advocate who may file an affidavit or declaration in rejoinder. The leave to defend has to be granted or refused having regard to the factors indicated in Rule 143 (1) (c) of Ahmedabad City Civil Courts Rules, 1961. If the defendant fails to file an affidavit or declaration as contemplated by Rule 143 (1) (b) or if the defendant fails to make out sufficient grounds or disclose facts sufficient to entitle him to defend the suit, the Judge has to pass a decree in favour of the plaintiff. As noticed earlier, a defendant may be granted leave to defend the suit conditionally or unconditionally. If the defendant does not comply with the condition imposed by the court, the plaintiff is entitled to apply to put the suit down for hearing forthwith and the court may pass a decree against the defendant. This, in short, is the Scheme envisaged by Rules 142 to 148-A of Ahmedabad City Civil Courts Rules, 1961, relating to summary suits. To a limited extent, Rules 142 to 148-A of the Ahmedabad City Civil Courts Rules, 1961, are inconsistent with the amended Rules of Order XXXVII C.P.C. as found in case of Keshavlal v. Manubhai (1968) 9 G.L.R.,177. So far as courts other than the courts established under Ahmedabad City Courts Act, 1961, are concerned, provisions of Order XXXVII C.P.C. would apply to classes of suits enumerated in sub rule (2) of Rule 1 of the said Order. The plaintiff is entitled to institute a summary suit by presenting a plaint, if the provisions of Order XXXVII applies to his case. The plaint has to contain particulars which are specified in Rule 2 (1) of Order XXXVII C.P.C. The summons of the suit has to be in form No.4 as specified in Appendix B to C.P.C. The defendant is not entitled to defend the suit unless he enters an appearance and in default of his entering an appearance, not only the allegations in the plaint must be deemed to be admitted, but the plaintiff is entitled to a decree for the sum mentioned in the summons, together with interest at the rate specified, up to the date of decree and such sum for costs. In a suit to which Order XXXVII applies, the defendant has to enter an appearance either in person or by pleader within 10 days of service of summons. On the day of entering the appearance, notice of such appearance is required to be given by the defendant to the plaintiff or his pleader. If the defendant enters an appearance, the plaintiff is entitled to serve on the defendant a summons for judgment in the prescribed form returnable not less than 10 days from the date of service. The summons for judgment must be supported by an affidavit verifying the cause of action and the amount claimed and stating that in his belief there is no defence to the suit. The defendant, within 10 days from the service of such summons for judgment has to disclose on oath or otherwise, such facts as may be deemed sufficient to entitle him to defend the suit and has to apply on such summons for leave to defend the suit. The leave to defend has to be granted or refused having regard to the factors indicated in sub rule (5) of Rule 3 of Order XXXVII. If the defendant has not applied for leave to defend or if such application has been made and is refused, then the plaintiff is entitled to judgment forthwith at the hearing of summons for judgment. In view of the provisions of Rule 148-A of the Ahmedabad City Civil Courts Act, 1961,it is evident that Rules in Chapter XI are in supersession of Rules 2 and 3 of Order XXXVII C.P.C. as amended by the High Court of Bombay under Section 122 of C.P.C., but Rules 4 to 7 of Order XXXVII of C.P.C. are applicable to summary suits which may be instituted under Chapter XI of the said Rules. The scheme envisaged under Chapter XI of Ahmedabad City Civil Court Rules, 1961, as well as scheme contemplated by Order XXXVII C.P.C. makes it abundantly clear that the Court can pass a decree against the defendant in the following circumstances. (1) When the defendant fails to enter the appearance within 10 days from the date of service of summons or within the time which may be extended by the court (2) When the defendant does not apply for leave to defend the suit (3) When the defendant fails to comply with the condition imposed by the court while granting leave to defend the suit and (4) When application submitted by the defendant seeking leave to defend the suit is rejected by the court. 7. Rule 4 of Order 37 confers power on the court to set aside decree passed in any of the eventualities mentioned above and reads as under : Order XXXVII Rule 4 Power to set aside decree After decree the Court may, under special circumstances set aside the decree, and if necessary stay or set aside execution, and may give leave to the defendant to appear to the summons and to defend the suit, if it seems reasonable to the Court so to do, and on such terms as the Court thinks fit. A bare reading of Order XXXVII Rule 4 makes it apparent that the provisions of said Rule are applicable to any decree which may be passed by the court under Rule 1 to Rule 3 of the said Order or Rules 142 to 147 of Ahmedabad City Civil Courts Rules, 1961. Therefore, it would not be correct to say that irrespective of nature of decree and the stage at which it might have been passed, the court must, in all cases, grant leave to the defendant to defend the suit, while setting aside the decree. The kind of leave to be granted to the defendant by the court while setting aside decree under Order XXXVII Rule 4 would differ from facts to facts and cannot be put in straight-jacket formula. When the decree is passed against the defendant on the ground that he failed to enter the appearance, the court may, at the time of setting aside decree, give him leave to appear to the summons. Similarly when decree is passed against the defendant on the ground that he failed to apply for leave to defend the suit, the court may while setting aside decree, grant leave to him to appear to the summons for judgment. However, when the decree is passed against the defendant on the ground that he failed to comply with condition imposed by court while granting leave to defend the suit, the question of granting leave to the defendant to appear to the summons would not arise, but the question of restoring leave to the defendant to defend the suit on certain conditions may arise for consideration of the court. Again when decree is passed against the defendant after rejection of application seeking leave to defend the suit, the court may grant leave to defend the suit, to the defendant, while setting aside decree. As noticed earlier, the defendant has to apply for leave to defend the suit on service of summons for judgment and if he makes necessary application, the court has to consider the question whether conditional or unconditional leave to defend the suit should be granted or not. Therefore, when the Court passes decree against the defendant on the ground that the defendant has not applied for leave to defend, the Court at the best can give leave to the defendant to appear to the summons for judgment while setting aside ex parte decree, but question of granting leave to defend the suit does not arise at that stage. Having regard to the scheme of Order XXXVII the word " and " appearing in the term " may give leave to the defendant to appear to the summons and to defend the suit " will have to be read as "or" to give effect to the legislative intent. The word "or" is normally disjunctive and " and " is normally conjunctive, but at times they are read as vice versa to give effect to the manifest intention of the legislature as disclosed from the context. If the interpretation as suggested by learned counsel for the petitioners is accepted, it will stultify the scheme of Order XXXVII as well as Chapter XI of Ahmedabad City Civil Courts Rules,1961 and would make other interrelated provisions otiose or devoid of meaning. Literal construction canvassed by learned counsel for the petitioners is bound to defeat the manifest object and purpose of Order XXXVII C.P.C. The term " if it seems reasonable to the court so to do" immediately following the term " may give leave to the defendant to appear to the summons and to defend the suit" appearing in Rule 4 of Order XXXVII also makes it clear that the kind of leave which may be granted to the defendant by the Court while setting aside decree would vary from facts to facts, and, therefore, it would be reasonable to read the word " and " appearing in term " may give leave to the defendant to appear to the summons and to defend the suit" as "or" to give effect to the manifest intent purpose and object of Order XXXVII. If the relevant term appearing in Rule 4 of Order XXXVII is interpreted to mean that the Court should not only give leave to the defendant to appear to the summons, but also must give leave to the defendant to defend the suit while setting aside decree it is bound to defeat the scheme of Order XXXVII and Chapter XI of Ahmedabad City Civil Courts Rules,1961. Under the circumstances, I do not find any substance in the contention of Mr. P.V.Nanavati, learned counsel for the petitioners that the learned Judge has committed an error in not granting leave to the petitioners to defend the suit while setting aside ex parte decree. The said contention has no merits and is hereby rejected. 8. The next question which arises for consideration of the court is whether direction to the petitioners to deposit a sum of Rs.3,00,000/= in the court is onerous and unreasonable so as to call for interference of the court in the revision application which is instituted under Section 115 of CPC ? Mr. P.V.Nanavati, learned counsel for the petitioners submitted that the learned Judge in paragraph 10 of the impugned order has held that the petitioners were not at fault, but concerned advocates appearing for the petitioners were not vigilant enough in keeping watch over proceedings and in view of th saddled with liability to deposit a sum of Rs.3,00,000/= in the court. What was highlighted on behalf of the petitioners was that the condition requiring the petitioners to deposit a sum of Rs.3,00,000/= in the court is not only onerous but unreasonable, and, therefore, should be set aside. From the facts which are narrated above, there is no manner of doubt that the petitioners had engaged learned pleader Mr. B.A.Surti to defend the suit. It is their case that thereafter, authority of learned pleader Mr. Surti to act on their behalf was determined and learned counsel Mr. S.J.Desai was engaged to act on their behalf.However, the record of the case does not indicate at all that appointment of learned pleader Mr. Surti was determined with the leave of the Court by a writing signed by the petitioners or the pleader as contemplated by Order III Rule 4 (2) CPC or learned counsel Mr. S.J.Desai had filed his appearance on behalf of the petitioners. Therefore, for all practical purposes appointment of learned pleader Shri Surti to act, plead and appear on behalf of the petitioners must be deemed to be in force as provided by Order-111 Rule 4(2) C.P.C. and Registry of City Civil Court did not commit any error in showing appearance of Mr.Surti as representing the petitioners.It was the duty of the petitioners to see that appearance was filed by learned counsel Shri S.J.Desai on their behalf and that authority given to learned pleader Shri B.A.Surti to appear in the case was properly determined. The record of the case unerringly shows that on May 2, 1991, one application was submitted by learned pleader Mr. B.A.Surti and another application was submitted by learned counsel Shri S.J.Desai praying for time in the matter to enable the petitioners to file application seeking leave to defend the suit. The averments made in application for setting aside ex parte decree shows that on May 5, 1991, an application was submitted by learned counsel Shri S.J.Desai and prayer was made to adjourn the matter to enable the petitioners to file application for leave to defend the suit. The prayer for adjournment was granted by the court, and, thereafter, the matter was adjourned