Right To File Regular Appeal Cannot Be Curtailed Merely Because Application To Set Aside Ex-Parte Decree Was Dismissed: SC [Read Judgment]

The Supreme Court has observed that a defendant cannot be deprived of the statutory right to appeal under Section 96(2) of the Code of Civil Procedure merely on the ground that earlier, the application filed under Order IX Rule 13 CPC was dismissed.

The bench of Justice R.Banumathi, Justice AS Bopanna and Justice Hrishikesh Roy said that the application under Order IX Rule 13 CPC cannot be filed after dismissal of appeal under Section 96(2) CPC.

The bench, in N. Mohan vs. R. Madhu, was addressing the contention that despite the fact that an application under Order IX Rule 13 CPC was dismissed, the first appeal under Section 96(2) CPC being a statutory right is still available. It noted that a defendant, against whom an ex-parte decree is passed, has two options. First option to file an application under Order IX Rule 13 CPC and second option is to file an appeal under Section 96(2) CPC. It observed:

The question to be considered is whether the two options are to be exercised simultaneously or can also be exercised consecutively. An unscrupulous litigant may, of course, firstly file an application under Order IX Rule 13 CPC and carry the matter up to the highest forum; thereafter may opt to file appeal under Section 96(2) CPC challenging the ex-parte decree. In that event, considerable time would be lost for the plaintiff. The question falling for consideration is that whether the remedies provided as simultaneous can be converted into consecutive remedies.

Another issue in this case was whether the time spent in the proceedings to set aside the ex-parte decree be taken as "sufficient cause" within the meaning of Section 5 of the Limitation Act, 1908 so as to condone the delay in preferring the first appeal. The bench observed that the question whether the defendant has adopted dilatory tactics or where there is a lack of bonafide in pursuing the remedy of appeal under Section 96(2) of the Code, has to be considered depending upon the facts and circumstances of each case. It said:

In case the court is satisfied that the defendant has adopted dilatory tactics or where there is lack of bonafide, the court may decline to condone the delay in filing the first appeal under Section 96(2) CPC. But where the defendant has been pursuing the remedy bonafide under Order IX Rule 13 CPC, if the court refuses to condone the delay in the time spent in pursuing the remedy under Order IX Rule 13 CPC, the defendant would be deprived of the statutory right of appeal. Whether the defendant has adopted dilatory tactics or where there is lack of bonafide in pursuing the remedy of appeal under Section 96(2) of the code after the dismissal of the application under Order IX Rule 13 CPC, is a question of fact and the same has to be considered depending upon the facts and circumstances of each case.

The court further observed that when the defendant filed appeal under Section 96(2) CPC against an ex-parte decree and if the said appeal is dismissed, thereafter, the defendant cannot file an application under Order IX Rule 13 CPC. The bench said:

This is because after the appeal filed under Section 96(2) of the Code has been dismissed, the original decree passed in the suit merges with the decree of the appellate court. Hence, after dismissal of the appeal filed under Section 96(2) CPC, the appellant cannot fall back upon the remedy under Order IX Rule 13 CPC. 

The court referred to its two earlier judgments in this regard: Bhanu Kumar Jain v. Archana Kumar (2005) 1SCC 787 and Neerja Realtors (P) Ltd. v. Janglu (Dead) 

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