Case: Purnendu Shekharmal Jain Vs. M/S. Acg Associated Capsules P Limited

by the defendant do not indicate substantial defence or that defence intended to be put up is frivolous or vexatious. Where a part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, no leave to defend the suit can be granted unless the admitted amount is deposited by him in court. Inasmuch as Order 37 does not speak of the procedure when leave to defend the suit is granted, the procedure applicable to suits instituted in the ordinary manner, will apply.11. It is important to note here that the power under Rule 4 of Order 37 is not confined to setting aside the ex parte decree, it extends to staying or setting aside the execution and giving leave to appear to the summons and to defend the suit. We may point out that as the very purpose of Order 37 is to ensure an expeditious hearing and disposal of the suit filed thereunder, Rule 4 empowers the court to grant leave to the defendant to appear to summons and defend the suit if the court considers it reasonable so to do, on such terms as the court thinks fit in addition to setting aside the decree. Where on an application, more than one among the specified reliefs may be granted by the court, all such reliefs must be claimed in one application. It is not permissible to claim such reliefs in successive petitions as it would be contrary to the letter and spirit of the provision. That is why where an application under Rule 4 of Order 37 is filed to set aside a decree either because the defendant did not appear in response to summons and limitation expired, or having appeared, did not apply for leave to defend the suit in the prescribed period, the court is empowered to grant leave to the defendant to appear to the summons and to defend the suit in the same application. It is, therefore, not enough for the defendant to show special circumstances which prevented him from appearing or applying for leave to defend, he has also to show by affidavit or otherwise, facts which would entitle him leave to defend the suit. In this respect, Rule 4 of Order 37 is different from Rule 13 of Order 9.12. Now adverting to the facts of this case, though the appellant has shown sufficient cause for his absence on the date of passing ex parte decree, he failed to disclose facts which would entitle him to defend the case. The respondent was right in his submission that in the application under Rule 4 of Order 37, the appellant did not say a word about any amount being in deposit with the respondent or that the suit was not maintainable under Order 37. From a perusal of the order under challenge, it appears to us that the High Court was right in accepting existence of special circumstances justifying his not seeking leave of the court to defend, but in declining to grant relief since he had mentioned no circumstances justifying any defence.13. As clearly held by the Supreme Court, it is not enough to show the special circumstances which prevented him from appearing or applying for leave to defend, he has also to show by affidavit or otherwise, the facts which would entitle him to leave to defend the suit. In that respect, Rule 4 of Order XXXVII is different from Order IX Rule 13. In other words, not only must the Defendant show that there was good cause in not appearing in answer to the writ of summons, but that he has at-least prima facie material which would entitle him to leave to defend the suit filed under the provisions of Order XXXVII.14. In the facts of the present case we have found that service was properly effected. However, even if we were to assume that there was some irregularity in effecting service, it would not carry the case of the Defendant any further. On a careful perusal of the affidavit in support of the Notice of Motion filed by the Defendant, there is not a word that is mentioned that refers to the merits of the matter. The only point raised in the affidavit in support is that M/s Ankur Drugs and Pharma Limited (the said Company) was before the BIFR and therefore a stay would operate by virtue of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985. To our mind, firstly, this can never be a defence touching the merits of the matter. On the basis of this, the Defendant cannot say that he is entitled for leave to defend the suit. At the highest what he can contend is that only once the company comes out of BIFR, or until the Plaintiff obtains permission from the BIFR to proceed with the suit, the same has to be stayed. It does not mean that he would be entitled to leave to defend the suit. Even otherwise, in the facts of the present case, we find that admittedly when the ex-parte decree was passed, the said company (M/s Ankur Drugs and Pharma Limited) was not before the BIFR. It approached the BIFR only thereafter. Therefore, there was no impediment in this Court passing the decree on the date that it did. Apart from this, there is absolutely no defence raised on merits in the affidavit in support. This being the case and going by the ratio as laid down by the Supreme Court in the case of Rajni Kumar v/s Suresh Kumar Malhotra (2003) 5 SCC 315 ), we have no hesitation in holding that the learned Single Judge was fully justified in dismissing the Notice of Motion filed by the Defendant for setting aside the ex-parte decree. There were no special circumstances (as required under Order XXXVII Rule 4) even pleaded in the affidavit in support for the learned Judge to exercise his discretion and set aside the ex-parte decree.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]9. Looking to the report of the Bailiff as well as thefiled by the Plaintiff in the Notice of Motion, what becomes quite apparent is that the refusal of the service of the writ of summons was actually by the husband who instructed his wife not to accept service. Once this is the factual position emanating from the record before us, then, we are not required to decide any larger or wider controversy, whether the provisions of Order V Rule 15 would apply or whether service would have to be effected as per the Bombay amendment. What is important to note is that Mr. Godbole fairly did not dispute the contents of the report of the Bailiff. What we must also note is that the Bombay High Court (Original Side) Rules, 1980 also provide for procedure for service of writ of summons.Mode of service ofWrit of Summons shall be served within the local limits of the Ordinary Original Civil Jurisdiction of the High Court by personal service or, if the plaintiff so desires, by registered postfor acknowledgment. Where the Writ of Summons is to be served at a place situate beyond the said limits, it may be served by registered postfor acknowledgment. An acknowledgment purporting to be signed by the defendant or an endorsement by a postal servant that the defendant refused service shall be deemed to be prima facie proof of service. In all other cases, the Court shall hold such inquiry as it thinks fit and either declare the summons to have been duly served or order such further service as may in its opinion be necessary.As the said provision clearly indicates, after the decree is passed by the Court, it 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. The words special circumstances have some importance. Unlike Order IX Rule 13 which talks about sufficient cause being shown to set aside andecree, the words used under Order XXXVII Rule 4 are special circumstances. These words (special circumstances) were considered by the Supreme Court in the case of Rajni Kumar v/s Suresh Kumar Malhotra (2003) 5 SCC 315  )wherein the Supreme Court heldA careful reading of Rule 4 shows that it empowers, under special circumstances, the court which passed an ex parte decree under Order 37 to set aside the decree and grant one or both of the following reliefs, if it seems reasonable to the court so to do and on such terms as the court thinks fit:(i) to stay or set aside execution, and(ii) to give leave to the defendant (a) to appear to the summons, and (b) to defend the suit.9. The expression special circumstances is not defined in the Civil Procedure Code nor is it capable of any precise definition by the court because problems of human beings are so varied and complex. In its ordinary dictionary meaning it connotes something exceptional in character, extraordinary, significant, uncommon. It is an antonym of common, ordinary and general. It is neither practicable nor advisable to enumerate such circumstances.of summons will undoubtedly be a special circumstance. In an application under Order 37 Rule 4, the court has to determine the question, on the facts of each case, as to whether circumstances pleaded are so unusual or extraordinary as to justify putting the clock back by setting aside the decree; to grant further relief in regard tomatters, namely, staying or setting aside the execution and also in regard tomatters viz. to give leave to the defendant to appear to the summons and to defend the suit.10. In considering an application to set aside ex parte decree, it is necessary to bear in mind the distinction between suits instituted in the ordinary manner and suits filed under Order 37 CPC. Rule 7 of Order 37 says that except as provided thereunder the procedure in suits under Order 37 shall be the same as the procedure in suits instituted in the ordinary manner. Rule 4 of Order 37 specifically provides for setting aside decree, therefore, provisions of Rule 13 of Order 9 will not apply to a suit filed under Order 37. In a suit filed in the ordinary manner a defendant has the right to contest the suit as a matter of course. Nonetheless, he may be declared ex parte if he does not appear in response to summons, or after entering appearance before framing issues; or during or after trial. Though addressing arguments is part of trial, one can loosely say that a defendant who remains absent at the stage of argument, is declared ex parte after the trial. In an application under Order 9 Rule 11, if a defendant is set ex parte and that order is set aside, he would be entitled to participate in the proceedings from the stage he was set ex parte. But an application under Order 9 Rule 13 could be filed on any of the grounds mentioned thereunder only after a decree is passed ex parte against the defendant. If the court is satisfied that (1) summons was not duly served, or (2) he was prevented by sufficient cause from appearing when the suit was called for hearing, it has to make an order setting aside the decree against him on such terms as to cost or payment into court or otherwise as it thinks fit and thereafter on the day fixed for hearing by court, the suit would proceed as if no ex parte decree had been passed. But in a suit under Order 37, the procedure for appearance of the defendant is governed by provisions of Rule 3 thereof. A defendant is not entitled to defend the suit unless he enters appearance within ten days of service of summons either in person or by a pleader and files in court an address for service of notices on him. In default of his entering an appearance, the plaintiff becomes entitled to a decree for any sum not exceeding the sum mentioned in the summons together with interest at the rate specified, if any, up to the date of the decree together with costs. The plaintiff will also be entitled to judgment in terms of(6) of Rule 3. If the defendant enters an appearance, the plaintiff is required to serve on the defendant a summons for judgment in the prescribed form. Within ten days from the service of such summons for judgment, the defendant may seek leave of the court to defend the suit, which will be granted on disclosing such facts as may be deemed sufficient to entitle him to defend and such leave may be granted to him either unconditionally or on such terms as the court may deem fit. Normally the court will not refuse leave unless the court is satisfied that facts disclosed by the defendant do not indicate substantial defence or that defence intended to be put up is frivolous or vexatious. Where a part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, no leave to defend the suit can be granted unless the admitted amount is deposited by him in court. Inasmuch as Order 37 does not speak of the procedure when leave to defend the suit is granted, the procedure applicable to suits instituted in the ordinary manner, will apply.11. It is important to note here that the power under Rule 4 of Order 37 is not confined to setting aside the ex parte decree, it extends to staying or setting aside the execution and giving leave to appear to the summons and to defend the suit. We may point out that as the very purpose of Order 37 is to ensure an expeditious hearing and disposal of the suit filed thereunder, Rule 4 empowers the court to grant leave to the defendant to appear to summons and defend the suit if the court considers it reasonable so to do, on such terms as the court thinks fit in addition to setting aside the decree. Where on an application, more than one among the specified reliefs may be granted by the court, all such reliefs must be claimed in one application. It is not permissible to claim such reliefs in successive petitions as it would be contrary to the letter and spirit of the provision. That is why where an application under Rule 4 of Order 37 is filed to set aside a decree either because the defendant did not appear in response to summons and limitation expired, or having appeared, did not apply for leave to defend the suit in the prescribed period, the court is empowered to grant leave to the defendant to appear to the summons and to defend the suit in the same application. It is, therefore, not enough for the defendant to show special circumstances which prevented him from appearing or applying for leave to defend, he has also to show by affidavit or otherwise, facts which would entitle him leave to defend the suit. In this respect, Rule 4 of Order 37 is different from Rule 13 of Order 9.12. Now adverting to the facts of this case, though the appellant has shown sufficient cause for his absence on the date of passing ex parte decree, he failed to disclose facts which would entitle him to defend the case. The respondent was right in his submission that in the application under Rule 4 of Order 37, the appellant did not say a word about any amount being in deposit with the respondent or that the suit was not maintainable under Order 37. From a perusal of the order under challenge, it appears to us that the High Court was right in accepting existence of special circumstances justifying his not seeking leave of the court to defend, but in declining to grant relief since he had mentioned no circumstances justifying any defence.13. As clearly held by the Supreme Court, it is not enough to show the special circumstances which prevented him from appearing or applying for leave to defend, he has also to show by affidavit or otherwise, the facts which would entitle him to leave to defend the suit. In that respect, Rule 4 of Order XXXVII is different from Order IX Rule 13. In other words, not only must the Defendant show that there was good cause in not appearing in answer to the writ of summons, but that he hasprima facie material which would entitle him to leave to defend the suit filed under the provisions of Order XXXVII.14. In the facts of the present case we have found that service was properly effected. However, even if we were to assume that there was some irregularity in effecting service, it would not carry the case of the Defendant any further. On a careful perusal of the affidavit in support of the Notice of Motion filed by the Defendant, there is not a word that is mentioned that refers to the merits of the matter. The only point raised in the affidavit in support is that M/s Ankur Drugs and Pharma Limited (the said Company) was before the BIFR and therefore a stay would operate by virtue of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985. To our mind, firstly, this can never be a defence touching the merits of the matter. On the basis of this, the Defendant cannot say that he is entitled for leave to defend the suit. At the highest what he can contend is that only once the company comes out of BIFR, or until the Plaintiff obtains permission from the BIFR to proceed with the suit, the same has to be stayed. It does not mean that he would be entitled to leave to defend the suit. Even otherwise, in the facts of the present case, we find that admittedly when thedecree was passed, the said company (M/s Ankur Drugs and Pharma Limited) was not before the BIFR. It approached the BIFR only thereafter. Therefore, there was no impediment in this Court passing the decree on the date that it did. Apart from this, there is absolutely no defence raised on merits in the affidavit in support. This being the case and going by the ratio as laid down by the Supreme Court in the case of Rajni Kumar v/s Suresh Kumar Malhotra (2003) 5 SCC 315  ), we have no hesitation in holding that the learned Single Judge was fully justified in dismissing the Notice of Motion filed by the Defendant for setting aside thedecree. There were no special circumstances (as required under Order XXXVII Rule 4) even pleaded in the affidavit in support for the learned Judge to exercise his discretion and set aside the