Ex-Parte Decree On Being Set Aside Becomes Non-Est And Cannot Be Regarded As Decree Passed By Court Of First Instance [Read Judgment]

Answering the issue as to whether, in a suit for pre-emption, an ex parte decree which is later set aside, can be termed to be the decree of the court of first instance, the Supreme Court has said that ex-parte decree, once set aside, will cease to exist and cannot be regarded as decree of the court of first instance.

The suit in question was filed by a co-sharer of property seeking to set aside the sale made by another co-sharer on the ground that he had the right of pre-emption under the Punjab Pre-emption Act 1913. The suit was initially decreed ex-parte on 10.04.1990, setting aside the sale.  The defendant filed application for setting aside ex-parte decree on ground of non-receipt of summons. The said application was dismissed by the trial court. However, the appellate court allowed the application, and set-aside the ex-parte decree, as per order dated 28.08.1998. In the meantime, the Pre-emption Act was amended in 1995, taking away the right of pre-emption available to co-sharer. The amendment confined the right of pre-emption only to tenants.

In the trial conducted pursuant to the setting aside of the ex-parte decree, the trial court held that no right of pre-emption was available to the plaintiff in view of the amendment of 1995. The suit was therefore dismissed. The appeals filed against the dismissal of the suit were also dismissed.

The impact of the 1995 amendment to Pre-emption Act was considered by a constitutional bench of the Supreme Court in Shyam Sunder and others v. Ram Kumar and another (2001) 8 SCC 24. Therein, the Court had held that if the pre-emptor had the right of pre-emption as on the date of passing of decree by the court of first instance, then the amendment of 1995 will not affect such right.

Therefore, the issue before the Supreme Court was whether the ex-parte decree passed on 10.04.1990 could be treated as a decree passed by court of first instance. If yes, then the 1995 amendment will not affect the right of pre-emption of the plaintiff, as per the principle laid down in Shyam Sunder. The Court answered the issue in negative, and held that once an ex-parte decree is set-aside, it becomes non-est. The consequence of setting aside the ex-parte decree is that the parties would be relegated to the situation prior to the passing of ex-parte order, and the suit will resume from that stage. It was observed as hereunder.

In the present case, the appellate court while setting aside the ex parte decree, has come to the conclusion that the defendant Shanti Devi (respondent no. 1 herein) was not served and, therefore, the court had wronglyproceeded against her ex parte. That finding has been upheld till this Court. In our view, the effect of this would be that the ex parte decree, on its being set-aside, would cease to exist and become non-est. After the ex parte decree is set aside, it is no decree in the eyes of law. The decree passed by the trial court on merits should be treated as the decree of the first court.

Although the plaintiff’s appeal was dismissed, the Court refused to order restitution of property to the defendant(The plaintiff had taken possession after the ex-parte decree and his possession was continuing on basis of status-quo orders passed at various appellate stages). The Court held that it was for the execution court to decide the issue of restitution, including the issue as to whether plea for restitution was time-barred.