Case: RAJASTHAN FINANCIAL CORPORATION Vs. SHASHI BALA

3. The respondent- Shashi Bala and her husband viz. P.C. Agrawal took loan and an amount of L 65,00,000/- (Rupees sixty five lakhs) disbursed to them. Since the repayment schedule was not adhered by them, they were declared defaulters and the machineries and assets of M/s. Pankaj Cement (P) Limited was sold. When the appellant(s)-Corporation was about to take steps for recovery of the balance amount from the respondent and her husband who were the guarantors, the respondent filed the Civil Suit No. 02/2004 seeking for permanent injunction and praying that the assets of the directors/guarantors are not to be attached.4. The Trial Court granted temporary injunction. The appellant(s) went in appeal and the said appeal came to be disposed of by the order dated 06.09.2011 directing both the parties to appear in the suit before the Trial Court with the direction to the trial Court to dispose of the matter within a period of eight months from the date of receipt of copy of the order in view of the long pendency of the matter.5. Even when the said appeal was pending, the civil suit filed by the respondent was decided ex-parte on 19.05.2008 and the ex-parte decree was passed on 06.09.2008. The appellant-corporation filed the application on 18.05.2012 under Order 9 rule 13 CPC along with Section 5 application to condone the delay. Pointing out that the delay was not properly explained, the trial court dismissed the application. The High Court declined to interfere with the said order observing that the delay has not been properly explained.

Court's reasoning:
11. We have carefully considered the rival submissions and perused the materials on record.12. The delay in filing application to set aside the ex-parte decree is from 06.09.2008 to 18.05.2012. Though from the records and proceedings after 19.05.2008 (the date on which the suit was decided ex-parte) it seen that one Ashok Saxena was present before the trial court, in our considered view the appellant-corporation probably did not follow up the matter, since the appeal against the grant of interim injunction was pending in the High Court. As rightly pointed out by the learned counsel for the appellant-corporation that when the High Court has disposed of the Miscellaneous Appeal, it was not brought to the notice of the High Court that the suit has been decreed ex-parte on 06.09.2008. If it was brought to the notice of the High Court, probably the High Court might have passed appropriate orders.13. The appellant-corporation is the public sector undertaking providing money for development of industries in the State of Rajasthan. In this case inasmuch as the huge public money is involved and since the respondent has filed the suit for permanent injunction, in our considered view, the appellant-corporation is to be given opportunity to put forth their defence and contest the matter in accordance with law. However, having regard to the delay in filing the application and in the interest of justice we deem it appropriate to put the appellant-corporation on heavy terms.