Case Note & Summary
The dispute originated from a suit for recovery of money filed by respondent no. 2 against respondent no. 1 regarding part sale consideration for property. The suit was filed on 25.05.1993, and after summons sent by registered post were returned with 'refusal' endorsement, the trial court proceeded ex-parte and passed a decree on 16.09.1997. Execution proceedings commenced, and the property was attached. On 02.04.2000, notice in execution was served on respondent no. 1, who acknowledged it. The property was auctioned on 16.12.2000, with the appellant being the highest bidder. Only after the auction, on 19.12.2000, respondent no. 1 filed an application under Order IX Rule 13 CPC to set aside the ex-parte decree, which was dismissed by the Additional District Judge on 05.07.2005. Respondent no. 1 appealed to the High Court, which allowed the appeal on 21.04.2006, setting aside the ex-parte decree and restoring the suit. Respondent no. 2's recall application was dismissed on 18.10.2019. The Supreme Court considered whether the High Court was justified in restoring the suit. The appellant argued that respondent no. 1 was always aware of proceedings and deliberately avoided appearance, and as an auction purchaser, he had complied with all legal requirements. Respondent no. 1 contended that the High Court orders should not be interfered with. The Court analyzed the service of summons under Order V Rule 9(5) CPC, noting the presumption of service when summons are returned with 'refusal' endorsement, citing C.C. Alavi Haji vs. Palapetty Muhammed. It observed that respondent no. 1 had knowledge of execution proceedings since 02.04.2000 but filed the application only after the auction, indicating lack of diligence. The Court emphasized that the auction had been completed, a sale certificate issued, and the appellant's rights as an auction purchaser deserved protection. It held that respondent no. 1 was disentitled to relief due to his conduct and the stage of proceedings. The Supreme Court allowed the appeals, set aside the High Court orders, and dismissed respondent no. 1's application under Order IX Rule 13 CPC.
Headnote
A) Civil Procedure - Service of Summons - Presumption of Service - Code of Civil Procedure, 1908, Order V Rule 9(5) - When summons sent by registered post is returned with endorsement of 'refusal', the court shall declare that summons had been duly served on defendant - Held that order dated 19.02.1997 declaring service was completely in conformity with legal requirements (Paras 19-19). B) Civil Procedure - Setting Aside Ex-parte Decree - Limitation and Diligence - Code of Civil Procedure, 1908, Order IX Rule 13 - Application to set aside ex-parte decree must be filed within limitation and applicant must show sufficient cause for non-appearance - Held that respondent had knowledge of execution proceedings since 02.04.2000 but filed application only after auction in December 2000, indicating lack of diligence (Paras 10-10, 20-20). C) Civil Procedure - Auction Sale - Protection of Auction Purchaser's Rights - Code of Civil Procedure, 1908, Order XXI - Auction purchaser who complied with all legal requirements and obtained sale certificate is entitled to protection of his rights - Held that appellant as auction purchaser had complied with all legal requirements and sale certificate was issued in his favour (Paras 17-17, 21-21). D) Civil Procedure - Judicial Discretion - Restoration of Suit - Code of Civil Procedure, 1908 - Court must exercise discretion judiciously considering conduct of parties and stage of proceedings - Held that High Court erred in granting relief to respondent despite finding he was not vigilant and auction had been completed (Paras 20-20, 21-21).
Issue of Consideration
Whether the High Court was justified in setting aside the ex-parte decree and restoring the suit despite evidence of proper service of summons and execution proceedings, and whether the auction purchaser's rights should be protected
Final Decision
Supreme Court allowed the appeals, set aside the orders dated 21.04.2006 and 18.10.2019 passed by the High Court, and dismissed the application preferred by respondent no. 1 under Order IX Rule 13 of the Code of Civil Procedure. No costs.
Law Points
- Presumption of service under Order V Rule 9(5) CPC when summons returned with 'refusal' endorsement
- Limitation for setting aside ex-parte decree under Order IX Rule 13 CPC
- Auction purchaser's rights after completion of sale
- Judicial discretion in restoration applications
