2022 (4) TMI 768 - SC - Indian Laws

Mainatianbility of suit - summons and notices returned unclaimed - additional opportunity granted to the defendants to defend the suit or not - HELD THAT - The summons/notices issued by the learned Trial Court were returned unclaimed as the same were sent at the address at Chennai and the house was closed as the appellants herein original defendants were staying in USA and thereafter the said house was sold and so as to give one additional opportunity to the defendants to defend the suit and as by now entire decretal amount is deposited by the appellants to show their bonafides and therefore the amount alleged to have been due and payable to the Bank is secured, we are of the opinion that if the appellants are given one additional opportunity to defend the suit it will be in the fitness of things and meet the ends of justice. The amount already deposited by the appellants herein (50% of the amount pursuant to the order passed by the High Court and the balance 50% of the decretal amount pursuant to the order passed by this Court) is concerned, it will be open for the respondent Bank original plaintiff to withdraw the same and keep it in an interest bearing fixed deposit which shall be dealt with subject to the ultimate outcome of the suit. Appeal allowed.

Summary

Issues:
Challenge of order dismissing the petition to set aside exparte decree.

Analysis:
The appellants, original defendants, challenged the order passed by the Trial Court dismissing the petition to set aside the exparte decree. The High Court dismissed the revision application, leading to the present appeal before the Supreme Court. The appellant no.1, a company, had availed a loan from the respondent bank, with appellant nos. 2 and 3 being directors residing in the USA. The suit for recovery of the loan amount proceeded exparte as the appellants were not present to receive summons and notices, which were returned 'unclaimed'. The exparte decree was passed in 2004, and the appellants became aware of it in 2014. They filed an application to set aside the exparte judgment, which was dismissed by the Trial Court and later by the High Court.

At the time of hearing the appeal, it was noted that the appellants had deposited 50% of the decretal amount as per the High Court's order. The Supreme Court directed the deposit of the remaining 50%, which was subsequently done. Considering the circumstances, the Supreme Court observed that giving the appellants another chance to defend the suit would meet the ends of justice, especially since the entire decretal amount had been deposited to secure the alleged dues to the Bank.

The Supreme Court allowed the appeal, quashing the orders of the High Court and Trial Court. The exparte judgment and decree were set aside, and the original suit was ordered to be restored before the Trial Court for a fresh decision on its merits. The appellants were directed to appear before the Trial Court and file their written statements. The amount deposited by the appellants was to be kept in an interest-bearing fixed deposit by the Bank, to be appropriated based on the suit's outcome. The appeal was allowed without costs.