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Synopsis

The Supreme Court has said that the circumstances, justification, consideration and legal remedies for ‘condoning the delay’ on the one hand and ‘setting aside the ex-parte decree’ on the other are different and must be dealt with independently, holding that this much of clarity is sufficiently borne by practice and procedure of law.

A bench of Justices P S Narasimha and Manoj Misra said facts and events relating to passing of an ex-parte decree are distinct from the facts and events relating to the delayed filing of the application for setting aside of the ex-parte decree. Secondly, the procedure for setting aside the ex-parte decree will again be distinct from the procedure for condoning the delayed filing of the application to set aside the ex-parte decree. 

Thirdly, the court pointed out, the adjudication and determination of a court with respect to setting aside the ex-parte decree are independent of the adjudication with respect to condoning the delay. Finally, the remedies against these orders are independent and one remedy would not subsume the other. They must be adopted and pursued independently.

Appellants C Prabhakar Rao and others as plaintiffs obtained an ex-parte decree in a suit for specific performance of an agreement for sale. That was challenged by the respondents/defendants by filing an application to set it aside and also filed another application for condoning the delay in its filing. 

The trial court refused to condone the delay and as a natural consequence it dismissed the application for setting aside the ex-parte decree. The respondents/defendants filed a revision only against the order refusing to condone the delay. No revision was filed against the other consequential order. By the order impugned, the high court not only condoned the delay but proceeded to set aside the ex-parte decree and restored the suit for further hearing.

The appellants, plaintiffs in the suit alleged that the first respondent, the father of the second respondent, purchased certain property in 1992 through a sale deed and in the year 2012 gifted a part of it to his daughter. In the year 2015, both the father and the daughter executed an agreement of sale in favour of the appellants for a total consideration of Rs 1,89,75,000. 

The appellants allegedly made an advance payment of rupees five lakhs on the date of the agreement, and an additional amount of rupees Rs 40 lakhs to the respondents in 2015.

The respondents as per clause of the agreement were to conduct a land survey, demarcate boundaries and proceed to execute the sale deed, however, instead of surveying the land, when the respondents issued a legal notice in 2016 cancelling the agreement of sale, the appellants had to approach the civil court to institute a suit for specific performance.

The respondents also did not conduct the suit diligently, the trial court in 2018 passed an ex-parte decree and further directed the respondents to execute the registered sale deed in favour of the appellants within six months after the appellants deposit balance sale consideration.

The respondents then approached the trial court for condoning the delay in filing the application for setting aside the ex-parte decree and the second application was for setting aside the ex-parte decree of 2018.

The trial court took up the application only for condoning the delay and dismissed it. It felt that the delay of 939 days was not sufficiently explained.

In view of the dismissal of the application for condonation of delay, the trial court, without any further consideration and as if it was a natural consequence, proceeded to dismiss the application for setting aside the ex-parte decree.

Questioning the order, the respondents approached the High Court of Telangana by filing a civil revision petition only against the application for condonation of delay, there was no revision against the other dismissing the petition for setting aside the ex-parte decree.

The high court proceeded to allow the revision petition by which the delay was condoned, the ex parte decree was set aside and the suit was restored.

Partly allowing the appeal, while not interfering with the decision of the high court in condoning the delay, the apex court revived and restored the application of 2021 for setting aside the ex-parte decree to its original number and directed the trial court to hear and dispose of the application on its own merit.

The bench explained this decision is for the reason that the circumstances, justification, consideration and legal remedies for ‘condoning the delay’ on the one hand and ‘setting aside the ex-parte decree’ on the other are different and must be dealt with independently.

The appellants' counsel submitted that apart from the merits of the matter, the high court committed a jurisdictional error of setting aside the ex-parte decree when there was in fact no challenge to the decision.

"We straightaway agree with the submission. It is evident that the revisional jurisdiction of the High Court was invoked only against the order passed by the Trial Court in condoning the delay in filing the application for setting aside the ex-parte decree," the bench said.

The court noted the substantive part of the judgment of the high court related to reasons justifying the condonation of delay in filing the application for setting aside the ex-parte decree. For this purpose, the high court had examined the contents of the application filed by the respondents and came to the conclusion that there was a justifiable reason to condone the delay.

The high court proceeded to condone the delay after noting that the property was valuable and that the respondent's father and daughter must have at least one opportunity to contest the suit, it noted.

The high court exercised its revisional jurisdiction and came to the conclusion that the delay in filing the application in setting aside the ex-parte decree should be condoned.

"We are not inclined to interfere with this order in exercise of our power under Article 136 of the Constitution. However, the later portion of the order is unsustainable as the High Court proceeded to automatically restore the suit and directed the Trial Court to dispose of the suit expeditiously," the bench said.

The court also noted it was evident in the high court’s order that there was no consideration whatsoever with respect to setting aside the ex-parte decree. 

"The High Court, while disposing of the application has not applied its mind about the justification for setting aside the ex-parte decree. In this view of the matter, we set aside the directions of the High Court to the extent of restoration of the suit and the consequent direction that the suit should be disposed of within six months from the date of the order. The Trial Court has to hear the application and decide the same on merits," the bench said.

The apex court affirmed the finding of the high court that there was a justifiable reason for condoning the delay in filing the application for setting aside the ex parte decree.

The bench, however, set aside the conclusion of the high court that the suit was restored. It revived the application and directed the trial court to take up said application and dispose it of as expeditiously as possible, preferably within two months from the date of the receipt of the present order. It also imposed Rs 50,000 as cost on the respondents payable to the appellants.

Case Title: C Prabhakar Rao & Anr Vs Sama Mahipal Reddy And Anr