In a significant legal development, a court has quashed the ex-parte judgment and decree in a case involving international parties. The decision highlights the court’s emphasis on fair proceedings and providing a chance for the defendants to defend their case. This ruling sets the stage for a fresh legal analysis in the Trial Court, ensuring that all parties have the opportunity to present their arguments and evidence. Stay tuned for more updates on this case!
Facts
- The appellants have deposited 50% of the decretal amount with the High Court and 50% with the Registry of this Court.
- Summons sent by the Trial Court were returned ‘unclaimed’ as the appellants were residing in the USA.
- Appellants have now deposited the entire decretal amount to show their bonafides and secure the amount alleged to be due to the Bank.
- Given one additional opportunity to defend the suit as the appellants have shown good faith.
- The present appeal succeeded in light of the above reasons and the dismissal of the revision application by the High Court.
- The DRT issued a notice on 07.06.2013 for the appellants to pay Rs.47,21,320.53, which was sent to an address in Chennai where the property had been sold in 2002.
- The application to pay the said amount was dismissed by the Trial Court, leading to an ex-parte decree in favor of the respondent Bank in February 2004.
- Appellant no.1, the company that availed the loan, and appellant nos. 2 and 3, the Directors residing in the USA, were the defendants in the suit.
- Substituted service by newspaper publication was ordered by the Court due to difficulties in serving the appellants in the USA.
- Despite the summons and notices being sent to their Chennai address and returned ‘unclaimed’, the Bank proceeded with the recovery certificate from the DRT.
- Appellant no.2 discovered the recovery certificate and ex-parte decree in 2014 upon visiting India, leading to the application to set aside the ex-parte judgment and decree.
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Decision
- The impugned judgment and order passed by the High Court and the Trial Court are quashed and set aside.
- The Bank shall retain the ordered amount without prejudice to the rights of the parties.
- The ex-parte judgment and decree are quashed, and the original suit is restored to the Trial Court for a fresh decision.
- The defendants are required to appear before the Trial Court on a specified date and file their written statements.
- The amount deposited by the defendants is to be kept in an interest-bearing fixed deposit by the plaintiff.
- If the suit is dismissed, the deposited amount shall be repaid to the defendants.
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Case Title: M/S JERSEY DEVELOPERS (P) LIMITED Vs. CANARA BANK (2022 INSC 425)
Case Number: C.A. No.-002708-002708 / 2022
