Case: M/S Tvc Skyshop Ltd Vs. M/S Reliance Communciation &amp; Infra.Ltd

or that the defence is frivolous or vexatious. Second proviso to sub-rule (5) lays down that if the defendant admits part of the amount claimed by the plaintiff then he shall not be granted leave to defend unless the admitted amount is deposited in the Court. Sub-rule (6) provides for the consequences of the defendant?s failure to apply for leave to defend or refusal of prayer for leave to defend. In such an eventuality, the plaintiff is entitled to judgment forthwith. Sub- rule (7) lays down that if the defendant is able to show sufficient cause, the Court can excuse the delay in entering of appearance or in making an application for leave to defend. Rule 4 gives power to the Court to set aside the decree provided special circumstances exist for doing so. The Court can also stay or set aside execution and grant leave to the defendant to defend the suit. 9. The expression ?special circumstances? appearing in Order XXXVII Rule 4 was considered by this Court in Rajni Kumar v. Suresh Kumar Malhotra (2003) 5 SCC 315 and it was observed: ?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. Non-service 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 to post-decree matters, namely, staying or setting aside the execution and also in regard to pre-decree matters viz. to give leave to the defendant to appear to the summons and to defend the suit.? In the same judgment, the Court considered the scope of order XXXVII Rule 4 and observed: ?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.? 10. In the present case, we find that the application filed by the appellant for setting aside decree dated 7.11.2006 did not disclose any special circumstance which could justify an order under Order XXXVII Rule 4. In his affidavit, Shri Mahesh Katudia had merely stated that sum of Rs.11,00,000/- had been paid in terms of order dated 13.4.2006 passed by the learned Company Judge and proper instructions could not be given to the Advocate engaged for defending the suit. Therefore, it is not possible to find any fault with the view taken by the Division Bench of the High Court on the tenability of the appellant?s prayer for setting aside decree dated 7.11.2006.11. The argument of Shri Rohan Thawani, learned counsel for the appellant that even though the appellant had not applied for leave to defend, the learned Single Judge was duty bound to scrutinise the claim of the respondent and the suit could have been decreed only if the Court felt satisfied that the claim was bonafide and not vexatious which finds some support from the judgment in Neebha Kapoor v. Jayantilal Khandwala (2008) 3 SCC 770 sounds attractive in the first flash but we do not find any valid ground to overturn the impugned judgment because, as mentioned above, the affidavit filed by Shri Mahesh Katudia did not disclose any special circumstances which could warrant exercise of power under Order XXXVII Rule 4. He did not even contest the liability of the appellant to pay the amount claimed in the plaint. The mere fact that one of the officials of the appellant had resigned would not constitute a valid ground for negating the policy underlying Order XXXVII in general and Rule 3(5) in particular.12. Equally meritless is the argument of Shri Thawani that the rate at which the respondent claimed interest is highly excessive. According to Shri Jaideep Gupta with whom we agree, the interest was charged as per the terms of the agreement and the appellant had always paid the bills in which interest was claimed at the rate of 30% per annum.

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

Explanation:
0[ds]10. In the present case, we find that the application filed by the appellant for setting aside decree dated 7.11.2006 did not disclose any special circumstance which could justify an order under Order XXXVII Rule 4. In his affidavit, Shri Mahesh Katudia had merely stated that sum of Rs.11,00,000/had been paid in terms of order dated 13.4.2006 passed by the learned Company Judge and proper instructions could not be given to the Advocate engaged for defending the suit. Therefore, it is not possible to find any fault with the view taken by the Division Bench of the High Court on the tenability of the appellant?s prayer for setting aside decree dated 7.11.2006.11. The argument of Shri Rohan Thawani, learned counsel for the appellant that even though the appellant had not applied for leave to defend, the learned Single Judge was duty bound to scrutinise the claim of the respondent and the suit could have been decreed only if the Court felt satisfied that the claim was bonafide and not vexatious which finds some support from the judgment in Neebha Kapoor v. Jayantilal Khandwala (2008) 3 SCC 770 sounds attractive in the first flash but we do not find any valid ground to overturn the impugned judgment because, as mentioned above, the affidavit filed by Shri Mahesh Katudia did not disclose any special circumstances which could warrant exercise of power under Order XXXVII Rule 4. He did not even contest the liability of the appellant to pay the amount claimed in the plaint. The mere fact that one of the officials of the appellant had resigned would not constitute a valid ground for negating the policy underlying Order XXXVII in general and Rule 3(5) in particular.12. Equally meritless is the argument of Shri Thawani that the rate at which the respondent claimed interest is highly excessive. According to Shri Jaideep Gupta with whom we agree, the interest was charged as per the terms of the agreement and the appellant had always paid the bills in which interest was claimed at the rate of 30% per annum.