IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOTTATHIL B.RADHAKRISHNAN & THE HONOURABLE MR. JUSTICE C.T.RAVIKUMAR FRIDAY, THE 23RD DECEMBER 2011 / 2ND POUSHA 1933 FAO.No. 301 of 2011() ------------------------------ AGAINST THE ORDER DATED 31/05/2011 IN IA 702/2010 IN OS.215/2007 of SUB COURT,KOCHI .................... APPELLANT (S): PETITIONER/ 2ND DEFENDANT --------------------------------------------------------------------- M/S.STCO MARKETING (P) LTD., 156A, LENIN SARANI (4TH FLOOR), KOLKATTA-700013, REP. BY ITS MG.DIRECTOR MR.BALAI MONDAL. BY ADV. SRI.S.ANANTHAKRISHNAN RESPONDENT(S): RESPONDENTS/PLAINTIFF & IST DEFENDANT ------------------------------------------------------------------------------------------- 1. M/S.HINDUSTAN UNILIVER LIMITED, P.B.NO.514, MILNE ROAD, WILLINGDON ISLAND, COCHIN-682 003. 2. CENTRAL BANK OF INDIA, 10TH CAMAC STREET, KOLKOTTA-700017. R1 BY ADV. SRI.MADHU RADHAKRISHNAN R2 BY ADV. SRI.K.P.SUDHIR THIS FIRST APPEAL FROM ORDERS HAVING BEEN FINALLY HEARD ON 15/12/2011, ALONG WITH FAO NO. 326 OF 2011 THE COURT ON 23/12/2011 DELIVERED THE FOLLOWING: tss Thottathil B.Radhakrishnan & C.T.Ravikumar, JJ. ------------------------------------------------- F.A.O.Nos.301 & 326 of 2011 ------------------------------------------------- Dated this the 23rd day of December, 2011 Judgment Thottathil B.Radhakrishnan, J. 1.Heard this matter on 15.12.2011 but it was listed today to be spoken to. We had minuted an order this morning on the basis of the submissions made today. Read that order. 2.These appeals are against orders dismissing separate applications filed by the two defendants to set aside ex parte decree and to condone delay in filing such applications. 3.The respondent sued for realisation of an amount of Rs.81,74,871/- with future interest at 18% per annum from the date of suit with costs from the defendants jointly and severally. The subject matter of the litigation is a transaction under which the first defendant, a nationalised bank, issued a letter of credit to the plaintiff in FAO301 & 326/2011 2 connection with a transaction between the plaintiff and the second defendant relating to purchase and export of tea. 4.The first defendant, the bank, entered appearance and filed a written statement. After framing issues, the plaintiff filed I.A.No.936 of 2009 seeking a direction to the first defendant bank to produce statement of the accounts relating to payments it had received from the purchaser towards the letter of credit. The court below issued direction as sought for by the plaintiff. That order was not complied with by the bank, in spite of the matter having stood posted on 25.7.2009, 10.8.2009, 23.9.2009 and 23.10.2009. 5.In so far as the second defendant is concerned, it neither entered appearance nor filed any written statement. 6.Ultimately, an ex parte decree was passed on 7.12.2009. FAO301 & 326/2011 3 7.The first defendant bank applied to have that ex parte decree set aside. It also sought condonation of delay of 80 days in filing that application. The second defendant also applied to have the ex parte decree set aside. An application for condonation of delay of 92 days in applying to set aside the ex parte decree was also filed by it. The court below dismissed the applications by both the defendants. Hence, these appeals. 8.The plea of the bank was that though the counsel appearing for it before the trial court had communicated the direction of the court to the advocate's office, the officer then in charge happened to be transferred and when the present Chief Manager took charge, he was not aware of such communication. Thereafter, the Chief Manager came to know about the pendency of the matter when he obtained letter from advocate's office. The bank pleaded that it was only then that it FAO301 & 326/2011 4 knew about the situation and by the time, the ex parte decree was passed. On these fact situations, particularly when the first defendant, a nationalised bank, deals in public funds, the court below ought to have taken a lenient view, more particularly, when the first defendant had filed written statement and contested the matter. On the totality of the facts and circumstances of the case, the court below ought to have held that the first defendant had shown sufficient cause for condonation of delay in filing application and also to have set aside the ex parte decree. The applications filed by the first defendant ought to have been allowed at least on terms. 9.As already noted, the first defendant neither appeared nor filed written statement. Admittedly, it was served with summons on 25.2.2008. Even going by the affidavit filed by the second defendant before the court below in support of the application seeking order setting aside the FAO301 & 326/2011 5 ex parte decree and for condonation of delay of 92 days, the second defendant, admittedly, was served with summons to appear in the suit on 25.2.2008. There is nothing on record to show that the second defendant had engaged any counsel or marked appearance before the court below. The ex parte decree was passed on 7.12.2009. The second defendant would plead that it came to know of that decree only on 3.2.2010 when it received a communication from the plaintiff's counsel forwarding a copy of the ex parte decree. Going through the materials, we find that the second defendant had come out with a very strange explanation for having the ex parte decree set aside. According to the second defendant which is a private limited company, it entrusted the summons to Sri.Pavankumar Jhun Jhunwala, an advocate in Kolkata and had executed vakalath in his favour to conduct the case. While the second defendant says that the said counsel had assured that he will entrust the matter to his counterpart in Kochi and conduct the case for and FAO301 & 326/2011 6 on behalf of the second defendant, there is no shred of material to show that any such engagement was made or any further action taken. The second defendant placed an affidavit essentially pleading ignorance of further prosecution of the matter before the Kochi Court and ultimately says that Adv.Pavankumar Jhun Jhunwala passed away on 12.3.2010. The demise of that learned advocate was thus after the ex parte decree which is sought to be set aside. We see that while the second defendant is using the name of the said advocate, who is now no more, there is total lack of material in support of the second defendant's case as to the reason for absence in the court below. The version offered by the second defendant cannot be swallowed except with the pinch of salt. We say this because, the second defendant is a private limited company. It is engaged in commercial dealings. It deals in export. The transaction with the plaintiff is not denied. The factum of a letter of credit having been issued by the bank FAO301 & 326/2011 7 is also not denied. Going by the common course of human conduct, the second defendant can never be expected to have left matters so, to enable it ultimately to put the entire blame on Adv.Pavankumar Jhun Jhunwala, who is now no more. Therefore, we do not really find any ground to upset the orders of the court below in so far as the second defendant is concerned. 10.Yet, we are inclined to think that, to have a comprehensive adjudication of the main matter by the court below in the light of the fact that the first defendant deserves to be heard, we would set aside the impugned orders in so far as the second defendant is also concerned and grant it an opportunity to contest the matter further on stringent conditions. For the aforesaid reasons, i.FAO.No.326 of 2011 filed by the first defendant is allowed on payment of costs FAO301 & 326/2011 8 of Rs.5,000/- to the plaintiff within a period of three weeks from now. On payment of such costs, the orders impugned in that appeal will stand set aside and the ex parte decree passed against the first defendant will also stand set aside. ii.FAO.No.301 of 2011 filed by the second defendant is allowed on condition that the second defendant pays the plaintiff an amount of Rs.75,000/-(Rupees seventy five thousand only) as costs within three weeks from now. On payment of such costs, the orders impugned in that appeal will stand set aside and the ex parte decree passed against the second defendant will also stand set aside. iii.If any of the defendants does not satisfy the court below of having paid the costs within the time fixed above, this judgment in so far as it relates to that FAO301 & 326/2011 9 defendant, will stand recalled automatically. iv.The parties are directed to mark appearance before the court below on 27.1.2012. Thottathil B.Radhakrishnan, Judge C.T.Ravikumar,Judge Sha/2312