Case Note & Summary
The petitioner, M/s Delux Plastic Industries, through its proprietor Mohd. Ejaz Mohd. Riyaz, had taken a loan of Rs.6,80,000/- from the respondent, Maharashtra State Finance Corporation, for purchase of plant and machinery, secured by mortgage of land, building, plant, machinery, furniture and fixtures at MIDC, Waluj, Aurangabad. The loan was repayable in eight years with interest at 21.5% p.a. and penal interest of 2.5% p.a. on default. The petitioner defaulted, and after several demand notices and a notice under Section 29 of the State Financial Corporations Act, 1951, the respondent took possession of the property on 17.2.2005. The petitioner filed RCS No.686 of 2005 for perpetual injunction, which was dismissed in default. The petitioner then filed MARJI No.1061 of 2010 for restoration, which was rejected by the 20th Joint Civil Judge J.D., Aurangabad on 23.1.2012. Aggrieved, the petitioner filed the present writ petition. The legal issues were whether the trial court erred in rejecting the restoration application and whether the petitioner showed sufficient cause for non-appearance. The petitioner argued that he was pursuing a One Time Settlement and that the suit was dismissed due to his advocate's absence. The respondent contended that the petitioner had not been diligent and that the suit had been pending since 2005 without progress. The court analyzed that the petitioner's explanation was not supported by evidence, and the trial court's order was not perverse. The court held that the petitioner failed to show sufficient cause, and dismissed the writ petition, upholding the rejection of restoration.
Headnote
A) Civil Procedure - Restoration of Suit Dismissed in Default - Sufficient Cause - Order IX Rule 9 of Code of Civil Procedure, 1908 - The petitioner sought restoration of RCS No.686 of 2005 which was dismissed for default. The court held that the petitioner failed to demonstrate sufficient cause for non-appearance, as the explanation that he was pursuing a One Time Settlement was not supported by evidence and the suit had been pending for years without progress. (Paras 3-10) B) State Financial Corporations Act, 1951 - Section 29 - Possession and Sale of Mortgaged Property - The respondent corporation took possession of the mortgaged property after the petitioner defaulted on a loan of Rs.6,80,000/-. The court noted that the petitioner had ample opportunities to repay but failed, and the corporation acted within its rights under Section 29. (Paras 4-6) C) Writ Jurisdiction - Article 227 of Constitution of India - Interference with Interlocutory Orders - The High Court declined to interfere with the trial court's order rejecting restoration, as the order was neither perverse nor suffered from any jurisdictional error. The petitioner's conduct showed lack of diligence. (Paras 9-10)
Issue of Consideration
Whether the learned trial court erred in rejecting the application for restoration of the suit dismissed in default, and whether the petitioner had shown sufficient cause for his non-appearance.
Final Decision
The writ petition is dismissed. The impugned order dated 23.1.2012 passed by the learned 20th Joint Civil Judge J.D., Aurangabad in MARJI No.1061 of 2010 is upheld. Rule is discharged. No order as to costs.
Law Points
- Restoration of suit dismissed in default
- Sufficient cause for non-appearance
- Section 29 of State Financial Corporations Act
- 1951
- One Time Settlement
- Writ jurisdiction under Article 227
