In C.A. No.3858 OF 2023-SC- Applicant seeking to set aside ex-parte decree u/s 17 of Provincial Small Cause Courts Act must either make deposit of amount or give security; Such application can be filed up to date of application under Order IX Rule 13 CPC alongwith security: SC
Justices K.M. Joseph & Hrishikesh Roy [18-05-2023]

Read Judgment:ARTI DIXIT & ANR Vs. SUSHIL KUMAR MISHRA & ORS

Tulip Kanth

New Delhi, May 20, 2023: The Supreme Court has clarified that when an ex-parte Decree is passed under the proviso to Section 17 of the Provincial Small Cause Courts Act, an  applicant filing the Application to set aside the Decree has to deposit due amount or give security for performance of Decree ‘on a previous Application’ made by him in this behalf.

“The appellants had filed an Application under Order IX Rule 13 of the CPC and Section 17 of the Act, on the same day. If the Application under Section 17 was accompanied with a cash deposit, then, the Application under Order IX Rule 13 would have been, indeed, maintainable”, the Division Bench of Justice K.M. Joseph and Justice Hrishikesh Roy asserted.

In this case, the respondents obtained an ex-parte decree for ejectment and recovery of arrears of rent, taxes, damages against the appellants. The appellants filed an application under Order IX Rule 13 read with Section 151 of the Code of Civil Procedure on May 6, 2014 claiming knowledge of the Decree on execution proceeding It was numbered as 4C and on the very same day, an application was filed under Section 17 of the Provincial Small Cause Courts Act 1887.

The applicants prayed in this application to grant the permission for depositing/ paying the balance amount and furnish the surety of a sum of Rs 50,000.This Application came to be numbered as 8C. Subsequently, an Application was filed with a prayer that the security in the form of a rental shop owned by the Nagar Nigam may be taken on record and the same was allowed.

This was the Application numbered as 14C. Later, the Trial Court dismissed Application 8C filed under Section 17. This Order was challenged by the appellants by filing a Revision and the High Court ordered an expeditious disposal of the case.

The Trial Court rejected the application under Section 17 as well as the surety provided by the appellants. This order was confirmed by the ADJ in revision filed by the appellants. The appellant’s plea before the High Court was also rejected.

It was the case of the appellants, before the Top Court, that they had moved the Application under Order IX Rule 13 of the CPC as well as the Application under Section 17 on the same day and this was validly filed in terms of the Judgment of the Apex Court in Kedarnath v. Mohan Lal Kesarwari and others.

In Kedarnath Case (Supra) it was held that the obligation of the applicant is to move a previous application for dispensation. It is then for the court to make a prompt order. The delay on the part of the court in passing an appropriate order would not be held against the applicant because none can be made to suffer for the fault of the court.

The Bench clarified, “When a Decree is passed by a Court of Small Causes ex-parte, inter alia, under the proviso to Section 17 of the Act, the applicant, who files an Application to set aside the ex-parte Decree is bound to do the following:

a. He must deposit in the Court, the amount due under the Decree;

b. In the alternative, he should give security for the performance of the Decree ‘on a previous Application’ made by him in this behalf;”

Noting that in view of the Judgment in Kedarnath (supra), the words ‘on a previous application’ in proviso to Section 17, have been understood to be an application, which may be made along with the application under Order IX Rule 13 of the CPC, the Bench observed that if the Application under Section 17 was accompanied with a cash deposit, then, the Application under Order IX Rule 13 would have been, indeed, maintainable.

It was noticed that the applicant didnot furnish any security and thus did not seek for dispensing with deposit as such.Therefore, the appellant had not in the said sense complied with the mandatory requirement of Section 17.

“We must observe that what Section 17 of the Act contemplates in the proviso is that the applicant seeking to set aside an ex-parte decree inter alia must either make a deposit of the amount in question or give security”,the Bench said while adding,“What this Court in Kedarnath (Supra) laid down was that the provision as to deposit can be dispensed with by the Court. The applicant can, in other words, seek a dispensing with of the deposit and seek leave for furnishing such security as the Court may direct. Therefore, the High Court was not correct in proceeding on the basis that appellants did not make any application for dispensing with surety.”

The Bench was of the view that the security furnished by the appellants in the form of the rented shop belonging to a third party cannot be accepted as security in law. It is a patent.  “If security is given, which is later found to be unacceptable even if it is within 30 days within the meaning of Article 123 of the Limitation Act, then it would not be complying with Section 17”, the Bench said while referring to the judgment in Ram Bharose v. Ganga Singh  AIR 1931 Allahabad 727.

Considering the fact that no order was passed by the Court on  May 6, 2014, the Bench noticed that the security was clearly unacceptable in law.The appellants also did not challenge the order of the Additional District Judge and the trial Judge was bound by the same. 

“The fact that the appellants, after participating in the remanded proceedings mounted a challenge in a writ to the order dated 01.08.2017 appears to us as not advancing the case of the appellants. This is both for the reason of the belated challenge as also the nature of the earlier order involved”, the Top Court held while dismissing the appeal.