Case Note & Summary
The dispute arose from a civil appeal filed by M/s Jersey Developers (P) Limited and its directors against Canara Bank concerning an ex parte decree passed for recovery of a loan amount. The appellants, who had been residing in the USA for 40 years, were not properly served with summons for the suit filed by the bank, leading to the decree being passed without their presence. After becoming aware of the decree in 2014, they sought to set it aside, but their application was dismissed by the Trial Court and subsequently by the High Court. During the appeal, it was noted that the appellants had deposited 50% of the decretal amount as directed by the High Court, and later the remaining amount with the Supreme Court. The Supreme Court found that the appellants were not given a fair chance to defend themselves due to improper service of summons and the closure of their residence in Chennai. The Court decided to quash the ex parte decree and restore the original suit, allowing the appellants to file their written statements and defend the case. The bank was permitted to withdraw the deposited amount and keep it in an interest-bearing fixed deposit, subject to the outcome of the suit. The appeal was allowed without any order as to costs.
Headnote
A) Civil Procedure - Ex parte Decree - Right to Defend - Code of Civil Procedure, 1908 - The court held that the appellants, who were not properly served due to their residence in the USA, should be given an additional opportunity to defend the suit as the entire decretal amount was deposited, ensuring the bank's claim was secured. The ex parte decree was quashed, and the original suit was restored for trial on its merits (Paras 3-4).
Issue of Consideration
Whether the appellants should be given an opportunity to defend the suit after the ex parte decree was passed.
Final Decision
The Supreme Court allowed the appeal, quashed the ex parte decree, restored the original suit, and directed the appellants to file their written statements within four weeks. The bank was permitted to withdraw the deposited amount and keep it in an interest-bearing fixed deposit.
Law Points
- Ex parte decree
- Substituted service
- Right to defend
- Recovery of loan
- Interest bearing fixed deposit
