M/S. GMG ENGINEERING INDUSTRIES & ORS. versus M/S ISSA GREEN POWER SOLUTION & ORS.
[2015] 6 S.C.R. 1108, Supreme Court of India, 2015
Outcome: Appeal(s) allowed (Granted)
Segment: Issues
[2015] 6 S.C.R. 1108 
A 
MIS. GMG ENGINEERING INDUSTRIES & ORS. 
v. 
MIS ISSA GREEN POWER SOLUTION & ORS. 
B 
(Civil Appeal No. 4472 of 2015) 
MAY 15, 2015 
[T. S. THAKUR AND R. BANUMATHI, JJ.) 
Delay - Condonation of - Applications filed u/Or. 9 r 
c 13 to set aside the ex-parte decrees alongwith the 
applications to condone the delay of 355 days and 382 days 
respectively - Applications allowed imposing condition on 
the appellants to deposit the entire decreetal amount- High 
Court upholding the order - On appeal, held: Trial court 
D should not have imposed unreasonable and onerous 
condition of depositing the entire suit claim in the suits when 
the issues are yet to be decided on merits - In revision, High 
Court should have kept in view that the parties were yet to 
go for trial and appellants ought to have been afforded the 
E opportunity to contest the suits on merits - Since the reasons 
for the delay was satisfactorily explained, impugned order 
set aside - Delay in filing applications to set aside ex-parte 
decrees condoned and ex-parte decrees set aside - Code 
of Civil Procedure, 1908 - Or. 9 r 13. 
F 
Allowing the appeals, the Court 
HELD: 1.1 The expression 'sufficient cause' is to 
receive liberal construction so as to advance substantial 
G justice. When there is no negligence, inaction or want 
of bona fide is imputable to the appellants, the delay has 
to be condoned. The discretion is to be exercised like 
any other judicial discretion with vigilance and
circumspection. The discretion is not to be exercised in 
H any arbitrary, vague or fanciful manner. The true test is 
1108
MIS. GMG ENGINEERING INDUSTRIES v. MIS ISSA 
1109 
GREEN POWER SOLUTION 
to see whether the applicant has acted with due A 
diligence. [Para 8] [1113-F-G] 
1.2 In the instant case, while the trial court 
exercised the discretion to condone the delay in filing 
the applications to set aside the ex-parte decrees, the B 
trial court should not have imposed such an 
unreasonable and onerous condition of depositing the 
entire suit claim of Rs.1,50,00,0001- and Rs.10,00,0001-
respectively in the suits when the issues are yet to be 
decided on merits. While considering the revision, the C 
High Court should have kept in view that the parties are 
yet to go for trial and the appellants ought to have been 
afforded the opportunity to contest the suits on merits. 
When the S.L.Ps came up for admission, this Court 
passed the conditional order that subject to deposit a D 
sum of Rs.50,00,0001-before the trial court, notice would 
be issued to the respondents. In compliance with the 
said order, the appellants deposited Rs.50,00,0001-
before the trial court. Since the appellants have 
satisfactorily explained the reasons for the delay and E 
with a view to provide an opportunity to the appellants 
to contest the suit, the impugned order is set aside. Delay 
in filing the applications to set aside the ex-parte decrees 
is condoned and the ex-pa rte decrees are set aside and F 
the suits are restored to file. [Paras 11 and 12] [1115-E-
• 
H; 1116-A, CJ 
V.K. Industries and Ors. vs. M.P
Electricity Board, 
Rampur, Jabalpur (2002) 3 SCC 159; Tea Auction 
Limited vs. Grace Hill Tea Industry And Anr. 2006 (6) 
Suppl. SCR 163: (2006) 12 sec 104: (2006) 9 SCALE 
223; Vijay Kumar Madan and Ors. vs. R.N. Gupta 
Technical Education Society and Ors., 2002 (3) SCR 
217 : (2002) 5 sec 30 - referred to. 
G 
H
1110 
SUPREME COURT REPORTS 
[2015] 6 S.C.R. 
A 
Case Law Reference 
(2002) 3 sec 1 sg 
Referred to. 
Para 6 
2006 (6) Suppl. SCR 163 Referred to. 
Para 9 
B 2002 (3) SCR 217 
Referred to. 
Para 10 
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 
4472of2015. 
c 
From the Judgment and Order dated 16.04.2013 in 
the High Court of Judicature at Madrs, Madurai Bench in C. 
R. P. (NPD) (MD) No. 4 of 2013. 
Vli!TH 
D C. A. No. 4473 of 2015 
Brijender Chahar, D. Kumaran, Satya Mitra Garg for 
the Appellants. 
E 
Nalini Chidambaram, V. Balaji, C. Kannan, Sripatha, 
F 
D. Veda, Rakesh K. Sharma for the Respondents. 
The Judgment of the Court was delivered by 
R. BANUMATHI, J. 1. Leave granted. 
2. These appeals arise out of common order dated 
16.04.2013, passed by the High Court of Madras, Madurai 
Bench in C.R.P. (NPD) (MD) No.4/2013 and C.R.P. (NPD) 
(MD) No.5/2013 respectively, confirming the order dated 
G 4.12.2012 passed by the Principal District Judge, Thanjavur, 
imposing conditions to deposit Rs.1, 50,00,000/- and 
Rs.10,00,000/-, as a condition to condone the delay in filing 
the applications to set aside the ex-parte decrees passed in 
O.S.No.3 of 2011 and O.S. No.6 of 2011. 
H
M/S. GMG ENGINEERING INDUSTRIES v. MiS ISSA 
1111 
GREEN POWER SOLUTION [R. BANUMATHI, J.] 
3. Appellants and respondents entered into an A 
agreement of sale on 1.08.2008, under which the 
respondents agreed to purchase the property of the 
appellants being the factory premise for a sum of 
Rs.5,00,00,000/- and the respondents paid Rs.1,50,00,000/ 
- towards part of sale consideration. The sale transaction 
B 
could not be completed. The respondents issued legal notice 
dated 24.11.2010 calling upon the appellants either to 
execute the sale deed or refund the advance amount of 
Rs.1,50,00,000/- with interest at the rate of 12% p.a. The 
appellants received the said notice and sent the reply offering C 
to return the said amount but without interest. The 
respondents filed the suit being O.S.No.3/2011 for recovery 
of the sum of Rs. 1,50,00,000/-with interest. The case was 
adjourned from time to time on various dates. On 16.06.2011, D 
the appellants-defendants were set ex-parte in the suit. After 
recording evidence adduced by the respondents-plaintiffs 
on 5.07.2011, the said suit was decreed ex-parte by the 
Principal District Judge, Thanjavur. 
4. Respondents have also filed another suit O.S. No.6 E 
of 2011 for recovery of a sum of Rs.10,00,000/- said to have 
been paid by them to the appellants by way of an advance 
towards the purchase of another property. The said suit 
was decreed ex-parte on 16.06.2011. The appellants have F 
filed I.A. No.78 of 2012 to set aside
the ex-parte decree 
alongwith application to condone the delay of 382 days under 
Section 5 of the Limitation Act. The said application was 
"allowed by the Principal District Judge, Thanjavur by order 
dated 4.12.2012 imposing condition to deposit a sum of G 
Rs.10,00,000/-. 
5. The appellants filed l.A.No.77 of 2012 and I.A. 
No.78 of 2012 in both the suits praying for condonation of 
delay of 355 days and 382 days respectively in filing the H
1112 
SUPREME COURT REPORTS 
(2015] 6 S.C.R. 
A applications under Order IX Rule 13 CPC, for setting aside 
the ex-pa rte decrees. The appellants averred that they came 
to know about the ex-partedecrees only on 13.07.2012, when 
they saw a public notice in the daily newspaper regarding 
the attachment of the suit property. The Principal District 
B Judge, Thanjavur vide separate order dated 4.12.12 
condoned the delay of 355 days and 382 days in filing the 
applications under Order IX Rule 13 CPC for setting aside 
. the ex-pa rte decree and allowed the applications in IA No.77 
of2012 and I.A. No.78 of2012 but subject to condition that 
C the appellants should deposit Rs.1,50,00,000/- and 
Rs.10,00,000/- respectively in the court on or before 
3.01.2013, failing which the applications will automatically 
stand dismissed. Being aggrieved by the stringent condition, 
0 the appellants filed revision petitions before the High Court. 
The High Court vide impugned order dated 16.04.13 upheld 
the order imposing condition to deposit Rs.1,50,00,000/- and 
Rs.10,00,000/-as a condition precedent to condone the delay 
in filing application to set aside the ex-parte decrees and 
E ·thereby dismissed the revisions which are under challenge 
in these appeals. 
6. Learned counsel for the appellants contended that 
the direction to deposit the entire decreetal amount of 
Rs.1,50,00,000/- in O.S. No.3 of 2011 and the decreetal 
F amount of Rs.10,00,000/- in O.S. No.6 of 2011 as a condition
precedent to set aside the ex-parte decrees is onerous and 
unreasonable and prayed to set aside the impugned order. 
In support of his contention, learned Senior Counsel 
G Mr. Brijender Chahar for the appellants placed reliance upon 
the judgment of this Court in V.K. Industries and Ors. vs. 
M.P. Electricity Board, Rampur, Jabalpur, (2002) 3 SCC 
159. 
H 
7. Learned Senior Counsel for the respondents Ms.
MIS. GMG ENGINEERING INDUSTRIES v. M/S ISSA 
1113 
GREEN POWER SOLUTION [R. BANUMATHI, J.] 
Nalini Chidambaram submitted that the trial court was A 
constrained to impose the said condition in view of the dilatory 
tactics adopted by the appellants deliberately not being 
present for hearing in the trial court on several occasions 
when the suits were posted for trial. Learned Senior Counsel 
further submitted that even after ex-parte decrees dated B 
5.07.2011 were brought to the.notice of the appellants by a 
series of telegrams (Annexures-R5/R1), the appellants did 
not file the applications to set aside the ex-pa rte decree within 
the period of limitation and waited for more than a year. It 
was submitted that the respondents are more than seventy C 
years old and had borrowed sum of Rs.1,50,00,000/- and 
Rs.10,00,000/- from the bank and paid the said amount to 
the appellants under the agreements for sale and the 
appellants are paying interest on that amount to the bank. It D 
was contended that even though the appellants sold away 
their property, they did not choose to refund the sum paid 
towards part of sale consideration and if the suits are 
decreed, the appellants have no assets to execute the 
decrees and the rights of both the parties should be balanced E 
and therefore the impugned order does not warrant 
interference by this Court under Article 136 of the 
Constitution. 
8. It is well settled that the expression 'sufficient cause' 
is to receive liberal
construction so as to advance substantial F 
justice. When there is no negligence, inaction or want of 
bonafide is imputable to the appellants, the delay has to be 
condoned. The discretion is to be exercised like any other 
judicial discretion with vigilance and circumspection. The G 
discretion is not to be exercised in any arbitrary, vague or 
fanciful manner. The true test is to see whether the applicant . 
has acted with due diligence. 
0 
9. While exercising the discretion for setting aside H
1114 
SUPREME COURT REPORTS 
[2015) 6 S.C.R. 
A the ex-parte decrees or condoning the delay in filing the 
application to set aside the ex-parte decrees, the court is 
competent to direct the defendants to pay a portion of the 
decreetal amount or the cost. In Tea Auction Limited vs. 
Grace Hill Tea Industry AndAnr., (2006) 12 SCC 104:-(2006) 
B 9 SCALE 223, this Court has held as under: 
c 
D 
E 
0 
"15 ..... A discretionary jurisdiction has been 
conferred upon the court passing an order for 
setting aside an ex parte decree not only on the 
basis that the defendant had been able to prove 
sufficient cause for his non-appearance even on 
the date when the decree was passed, but also on 
other attending facts and circumstances. It may 
also consider the question as to whether the 
defendant should be put on terms. The court, 
indisputably, however, is not denuded of its power 
to put the defendants to terms. It is, however, trite 
that such terms should not be unreasonable or 
harshly excessive. Once unreasonable or harsh 
conditions are imposed, the appellate court would 
have power to interfere therewith ..... " 
10. In Vijay Kumar Madan and Ors. vs. R.N. Gupta 
Technical Education Society and Ors., (2002) 5 SCC 30, 
F this Court has held as under: 
"8. Costs should be so assessed as would 
reasonably compensate the plaintiff for the loss of 
time and inconvenience caused by relegating back 
G 
the proceedings to an earlier stage. The terms 
which the court may direct may
take care of the 
time or mode of proceedings required to be taken 
pursuant to the order under Rule 7 ........ the court 
cannot exercise its power fo put the defendant-
H 
applicant on such terms as may have the effect of
M/S. GMG ENGINEERING INDUSTRIES v. M/S !SSA 
1115 
GREEN POWER SOLUTION [R. BANUMATHI, J.] 
prejudging the controversy involved in the suit and 
virtually decreeing the suit though ex parte order 
has been set aside or to put the parties on such 
terms as may be too onerous ......... That condition 
in the order of the trial court having been set aside 
by the High Court, we are inclined to sustain the 
order of the High Court but subject to certain 
modification. In our opinion the High Court was 
justified in setting aside the condition imposed by 
the trial court in its order which was too onerous, 
also vague, uncertain and suffering from want of 
clarity. The order of the High Court to the extent of 
setting aside the ex parte proceedings and directing 
the expeditious trial of the suit has to be sustained 
as it serves the ends of justice .... " 
The same view was reiterated in V. K. Industries case 
(supra). 
A 
B 
c 
D 
11. In the present case, while the trial court has 
exercised the discretion to condone the delay in filing the E 
applications to set aside the ex-parte decrees, in our view, 
the trial court should not have imposed such an unreasonable 
and onerous condition of depositing the entire suit claim of 
Rs.1,50,00,000/-and Rs.10,00,000/- respectively in the suits 
when the issues are yet to be decided on merits. While F 
considering the revision, the High Court should have kept in 
view that the parties are yet to go for trial and the appellants 
ought to
have been afforded the opportunity to contest the 
suits on merits. When the S.L.Ps came up for admission on 
1.08.2013, this Court passed the conditional order that G 
subject to deposit a sum of Rs.50,00,000/- before the trial 
court, notice shall be issued to the respondents. In 
compliance with the order dated 1.08.2013, the appellants 
have deposited Rs.50,00,000/- before the trial court. Since H
1116 
SUPREME COURT REPORTS 
[2015] 6 S.C.R. 
A the appellants have satisfactorily explained the reasons for 
the delay and with a view to provide an opportunity to the 
appellants to contest the suit, the impugned order is liable to 
be set aside. 
B 
12. The order dated 16.04.2013 of the High Court 
passed in C.R.P. (NPD) (MD) No.4/2013 and C.R.P. (NPD) 
(MD) No.5/2013, is set aside and these appeals are allowed. 
Delay in filing the applications to set aside the ex-parte 
decrees is condoned and the ex-parte decrees passed in 
C O.S. No.3 of 2011 and O.S. No.6 of 2011 are set aside and 
the suits are ordered to be restored to file. The appellants 
shall file their written statements within a period of six weeks 
if not already filed. Since the suits are of the year 2011 and 
the respondents are stated to be senior citizens, the trial 
D court is directed to take up the suits at an early date and 
dispose of the suits expeditiously. It is made clear that we 
have not expressed any opinion on the merits of the matter. 
The amount of Rs.50,00,000/- deposited by the appellants 
before the trial court shall be invested in a Nationalized Bank 
E so that the accrued interest may enure to the benefit of either 
party. In the facts and circumstances of the case, we make 
no order as to costs. 
Nidhi Jain 
Appeals allowed. 
F