WRIT PETITION NO. 7627 OF 2017

2nd March 2020

Petitioner Counsel: Mr. H.A. Khedikar
Respondent Counsel: Mr. S.S. Dewani

Cases Cited :

JUDGEMENT

1. By this writ petition the petitioner has challenged order dated 20.01.2016, passed by 6th Joint Civil Judge Senior Division, Nagpur in Special Civil Suit No.1035/2009, whereby an application (Exhibit 47) filed by the petitioners for setting aside ex parte order and grant of permission to deposit costs has been rejected. As a consequence, the order to proceed ex parte against the petitioners is holding the field due to which grave inconvenience is caused to them.

2. In the present case, the respondent filed a suit before the Court below for declaration, injunction and damages against the petitioners herein. One of the declarations sought was that an arbitration agreement said have been executed between the parties was not binding on the respondent herein. It is brought to the notice to this Court that the arbitration proceedings were conducted in the United States of America (U.S.A.) and as on today the arbitration award has been already passed, which is put to execution before the competent Court in this Country.

3. In the said suit, the petitioners had failed to file written statement within the time period specified in the Code of Civil Procedure, due to which they were constrained to move an application seeking permission of the Court below to place their written statement on record. This was marked as Exhibit 44. On 26.04.2010, the Court below passed an order permitting the petitioners to file their written statement, subject to payment of costs of Rs. 500/-. The material on record shows that the petitioners failed to deposit the amount of costs, as consequence of which the written statement was not taken on record and by order dated 01.12.2012, the Court below directed that the suit shall proceed further without written statement of the petitioners.

4. It is in this backdrop, that on 07.12.2015, the petitioners filed the aforesaid application (Exhibit 47) requesting the Court below for setting aside the ex parte order and for grant of permission to deposit the costs in terms of the order of the Court below, so that the written statement could be taken on record.

5. The Court below passed the impugned order rejecting the said application, primarily on the ground that said application (Exhibit 47) was moved after more than five years of the order passed by the Court below permitting filing of written statement subject to payment of Rs. 500/- and also after considerable period had elapsed after the Court below had passed the order dated 01.12.2012, whereby it was directed that the suit would proceed against petitioners without their written statement.

6. The learned counsel for the petitioners submitted that the petitioner No.1 is an overseas entity and petitioner No.2 is also resident of U.S.A. They were not informed by the counsel in the first instance regarding imposition of costs of Rs. 500/-, due to which default had occurred before the Court below. It was further submitted that with passage of time the arbitration proceedings had culminated in an award in favour of the petitioners, which was now pending execution before the competent Court in this country. It was submitted that certain orders passed in the said execution proceedings had reached upto the Hon’ble Supreme Court, wherein a direction was already given to the respondent to deposit a sum of 0.3 million U.S. Dollars in the Registry of the Hon’ble Supreme Court. In this backdrop, it is submitted that if the petitioners were made aware about of the requirement of depositing costs of only Rs. 500/- before the Court below, the same would have been done within time and therefore in peculiar facts and circumstances of the present case the impugned order deserves to be set aside.

7. The learned counsel for the respondent opposed the said contentions raised on behalf of the petitioners and he submitted that a perusal of sequence of events and the relevant dates would indicate that the impugned order passed by Court below was justified. It was submitted that the petitioners were themselves to blame for the predicament in which they found themselves and no error could be attributed to the course adopted by the Court below, in the facts and circumstances of the present case.

8. Having heard the learned counsel for the rival parties and on perusal of the impugned order, it would evident that substantial period of time elapsed before the petitioners moved the application (Exhibit 47) before the Court below. The order permitting the petitioners to file their written statement, subject to payment of costs of RS. 500/- was passed way back on 26.04.2010 and no effort was made by the petitioners to deposit the said costs. Despite an order dated 01.12.2012 passed by the Court below directing that the proceedings would continue ex parte against petitioners without their written statement, no further steps were taken in the matter by the petitioners. It was only on 07.12.2015 that the application (Exhibit 47) was filed by the petitioners. In this situation the petitioners are not entitled to put the blame entirely on their counsel and the sequence of events does indicate that they themselves were negligent in pursuing the matter and in seeking appropriate information regarding progress of the matter before the Court below.

9. At the same time, there is substance in the contention raised on behalf of the petitioners that looking to the stakes involved in the matter and the fact that the arbitration proceedings were continued in the U.S.A., which culminated in the aforesaid award that has been put to execution, it would be difficult to accept that the petitioners would not have deposited the amount of costs of only Rs. 500/- for their written statement to be taken on record despite having knowledge about such direction to deposit costs. Although the contention raised on behalf of the petitioners has been vehemently opposed by the learned counsel appearing for the respondent, this Court is of the opinion that the looking to the facts and circumstances of the present case, the lis between parties deserves to be considered on merits upon granting opportunity to the petitioners to place their written statements on record, so that fair opportunity is granted to the rival parties to lead evidence in support of their respective contentions. But, such liberty can be granted to the petitioners by imposing appropriate costs for their approach in the matter before the Court below. This Court is of the opinion that imposition of appropriate costs is necessary as a condition for setting aside the impugned order passed by the Court below.

10. Accordingly, the writ petition is allowed. The impugned order is quashed and set aside. The application at Exhibit 47 filed on behalf of the petitioners is allowed. Consequently, the order dated 01.12.2012 passed by the Court below is set aside and the petitioners are permitted to file their written statements on record before the Court below within a period of four weeks from today, subject to deposit of costs of Rs. 50,000/- in the Court below. The amount of costs shall also be deposited in the aforesaid time period, which the respondent will be at liberty to withdraw. Considering the fact that the suit is pending since 2009, the Court below is expected to dispose of the same expeditiously.

11. The writ petition is disposed of in above terms.