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IN THE SUPREME COURT OF INDIA
CIVIL APPEAL NO. OF 2022
(ARISING OUT OF S.L.P.(C) NO. 13941 OF 2021)
M/S GARMENT CRAFT ..... APPELLANT(S)
JUDGMENT
2. Limited issue which arises for our consideration in this appeal is whether the High Court was justified and correct in law and on facts in exercising powers under Article 227 of the Constitution of India to set aside the order dated 24th July 2018 allowing the application under Order IX Rule 13 of the Code of Civil Procedure, 1908 (“the Code”) filed by Shailendra Garg, sole proprietor of M/s Garment Craft – the appellant before us.
3. In 2011, Prakash Chand Goel – the respondent before us, filed a civil suit on the original side of the Delhi 2022 INSC 37 of Rs.81,24,786.23p against the appellant.
4. The appellant contested the suit by filing written statement on various grounds, inter alia, claiming that the goods were not accepted or returned due to reasons mentioned in debit notes and in fact, the respondent owes Rs.88,785/- to the appellant.
5. After the admission and denial of documents and framing of issues, the suit was set for trial. The respondent as the plaintiff lead evidence which concluded on 1st May 2015 and the case was put up for the appellant’s evidence on 28th October 2015.
6. On 29th September 2015, Shailendra Garg, the sole proprietor of the appellant was arrested by the Rajasthan Police in an unrelated case, and thereafter on 6th October 2015, he was sent to judicial custody and detained in Central Jail, Jaipur. He was released on bail on 6th May 2017. It is the appellant’s case that due to the detention, the appellant was prevented from effectively contesting and participating in the civil suit. Consequently, since none appeared for the appellant, vide the order dated 28th October 2015, the Joint Registrar, Delhi High Court, directed closure of the defence evidence.
7. On raising the plea of pecuniary jurisdiction, the suit was transferred to the court of District Judge, Tis Hazari, Delhi.
8. On an application moved by the appellant, the Additional District Judge, vide order dated 14th March 2016, recalled the order directing closure of defence evidence and the appellant was granted opportunity to lead defence evidence subject to costs of Rs.5,000/-.
9. As Shailendra Garg was incarcerated, the Additional District Judge, (Central), Tis Hazari, Delhi, on the next date of hearing on 22nd April 2016 observed that the counsel for the appellant should have filed an application for issuance of production warrant to enable Shailendra Garg to appear before court. Cost of Rs.5,000/- was imposed and the case was adjourned for recording of the defence evidence on 31st May 2016.
10. Consequent to the order, the counsel for the appellant moved an application for issuance of production warrant for the appearance of Shailendra Garg. Accepting the application, vide order dated 11th May 2016, the Additional District Judge, (Central), Tis Hazari, Delhi, ordered for the issuance of production warrant for appearance of Shailendra Garg from Central Jail, Jaipur.
11. Constable Jitendra Kumar, thereupon, had appeared along with written communication from the Jail Superintendent, Jaipur, Rajasthan, seeking clarifications whether Shailendra Garg was on bail in that matter or not. The Additional District Judge, (Central), Tis Hazari, Delhi rejected the request for clarifications observing that Shailendra Garg should have been produced, but did not issue further directions as it was stated by the respondent that the suit was required to be re-transferred to the High Court in view of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015. It was listed for arguments on 8th June 2016 on the said aspect.
12. After hearing arguments on 8th June 2016, the suit was directed to be transferred to the High Court, but vide order dated 10th August 2016 the suit was directed to be renumbered and listed before the Additional District Judge, (Central), Tis Hazari, Delhi.
13. On 22nd August 2016 the suit was listed before Additional District Judge, (Central), Tis Hazari, Delhi, and directed to be listed for defence evidence on 9th September 2016. The counsel for the appellant on 9th September 2016 filed an application for the issuance of production warrant of Shailendra Garg. The Additional District Judge, (Central), Tis Hazari, Delhi, rejected the request for want of an appropriate affidavit, notwithstanding that it was known that Shailendra Garg was in jail and not in the position to appear and follow up the civil suit. After recording the aforesaid position, the suit was nevertheless adjourned to 4th November 2016 for recording of defence evidence on payment of costs of Rs.5000/-.
14. On 4th November 2016 the counsel for the appellant did not appear and the defence evidence was closed. Final arguments were heard on 7th November 2016 and the case was fixed for clarification on 8th November 2016. On 8th November 2016, an ex-parte judgment was passed, decreeing the suit filed by the respondent in the sum of Rs.81,24,786.23p along with pendente lite interest at the rate of 24 percent per annum and post decree interest at the rate of 18 percent per annum till the realization.
15. Shailendra Garg was released on bail on 6th May 2017 and within 10 days of his release on 16th May 2017, he filed an application under Order IX Rule 13 of the Code for setting aside of the ex-parte decree. In particular, it was pleaded that the High Court had failed to issue production warrant for appearance of Shailendra Garg before closing the defence evidence, despite the fact that earlier production warrant had been issued and Constable Jitendra Kumar had appeared seeking clarifications. It was highlighted that Shailendra Garg being in detention, could not follow up the proceedings in the suit and it was very difficult for him to communicate with and give instructions to his counsel.
16. Upon consideration of the facts, vide detailed reasoned order dated 24th July 2018, the application under Order IX Rule 13 of the Code was allowed, setting aside the ex-parte decree, restoring it to its original number and listing it for defence evidence. Paragraphs 8, 11 and 12 of the order read thus:
17. Thereupon, the respondent preferred a miscellaneous petition under Article 227 of the Constitution of India, which vide the impugned order dated 4th July 2019 has been allowed primarily for the reason that the counsel for the appellant had applied and taken certified copy of the judgment dated 8th November 2016 in December, 2016 which shows that the appellant was represented by his counsel even at that stage. The contention of the appellant that he acquired knowledge of the decree only after his release from custody on 6th May 2017 was wrong. In view of the aforesaid facts, the trial court should not have accepted the argument that the appellant and his counsel were not in communication during the period when the appellant was in judicial custody. Earlier, the application for reopening the defence evidence was filed by pairokar of the appellant.
18. Having heard the counsel for the parties, we are clearly of the view that the impugned order is contrary to law and cannot be sustained for several reasons, but primarily for deviation from the limited jurisdiction exercised by the High Court under Article 227 of the Constitution of India. The High Court exercising supervisory jurisdiction does not act as a court of first appeal to reappreciate, reweigh the evidence or facts upon which the determination under challenge is based. Supervisory jurisdiction is not to correct every error of fact or even a legal flaw when the final finding is justified or can be supported. The High Court is not to substitute its own decision on facts and conclusion, for that of the inferior court or tribunal.[1] The jurisdiction exercised is in the nature of correctional jurisdiction to set right grave dereliction of duty or flagrant abuse,
1 Celina Coelho Pereira (Ms) and Others v. Ulhas Mahabaleshwar Kholkar and Others, (2010) 1 SCC violation of fundamental principles of law or justice. The power under Article 227 is exercised sparingly in appropriate cases, like when there is no evidence at all to justify, or the finding is so perverse that no reasonable person can possibly come to such a conclusion that the court or tribunal has come to. It is axiomatic that such discretionary relief must be exercised to ensure there is no miscarriage of justice. Explaining the scope of jurisdiction under Article 227, this Court in Estralla Rubber v. Dass Estate (P) Ltd.[2] has observed:-
19. The factum that the counsel for the appellant had applied for the certified copy would show that the counsel for the appellant was aware that the ex-parte decree had been passed on the account of failure to lead defence evidence. This would not, however, be a good ground and reason to set aside and substitute the opinion formed by the trial court that the appellant being incarcerated was unable to lead evidence and another chance should be given to the appellant to lead defence evidence. The discretion exercised by the trial court in granting relief, did not suffer from an error apparent on the face of the record or was not a finding so perverse that it was unsupported by evidence to justify it. There could be some justification for the respondent to argue that the appellant was possibly aware of the ex-parte decree and therefore the submission that the appellant came to know of the ex-parte decree only on release from jail on 6th May 2017 is incorrect, but this would not affect the factually correct explanation of the appellant that he was incarcerated and could not attend the civil suit proceedings from 6th October 2015 to 6th May 2017. If it was felt that the application for setting aside the exparte decree was filed belatedly, the court could have given an opportunity to the appellant to file an application for condonation of delay and costs could have been imposed. The facts as known, equally apply as grounds for condonation of delay. It is always important to take a holistic and overall view and not get influenced by aspects which can be explained. Thus, the reasoned decision of the trial court on elaborate consideration of the relevant facts did not warrant interference in exercise of the supervisory jurisdiction under Article 227 of the Constitution.
20. Consequently, we set aside the impugned order dated 4th July 2019 and restore the order dated 24th July 2018 passed by the Additional District Judge, (Central), Tis Hazari, Delhi, allowing the application under Order IX Rule 13 of the Code and setting aside ex-parte decree and the judgment dated 8th November 2016.
21. We should not, however, be misunderstood as prescribing or accepting that a production warrant must invariably be issued when a party is in custody. It would depend upon the facts of each case and whether the party can adduce evidence to prove its case, given the assertion that witness is in custody. The purpose and objective is to give an adequate and fair opportunity to the party to establish their case. The appellant is a sole proprietor and in the given facts, production warrant was issued for recording of his testimony, including examination-in-chief in the court. In any case, he had to appear for cross-examination.
22. Parties or their representatives would appear before the trial court on 2nd February 2022 when the appellant would file list of witnesses as well as his affidavit by way of evidence. The trial court will fix three consecutive dates on which the appellant would lead third party evidence, if any, and the witnesses will be subjected to crossexamination. These dates would be given on the first date of hearing on 2nd February 2022.
23. During the course of hearing, it was pointed out that the properties belonging to the appellant have been put to auction and even bids have been received. It is obvious that the proceedings for enforcement of the decree which we have set aside, shall be treated as void. However, to protect the interest of the respondent, who has pleaded and argued that the appellant is trying to dissipate or transfer his assets, we deem it appropriate to direct the appellant to file details of all of his movable and immovable assets as in existence on the date of filing of the suit in an affidavit which will be filed within three weeks from the pronouncement of this order.[3] The affidavit should also indicate his present assets and transfers including relinquishment etc. of the appellant’s movable and immovable properties/assets during the pendency of the suit. It will
3 The order dated 21st May 2013 passed by the High Court, by which the applications of the respondent under Order XXXIX, Rules 1 and 2 and Order XXXVIII, Rule 5 were rejected, does refer to the immovable assets owned by the appellant. be open to the respondent to file an application under Order XXXVIII Rule 5 of the Code before the trial court, which application if filed, will be dealt with in accordance with the law.
24. The appeal is allowed in the aforesaid terms with no order as to costs ....................................... J. (SANJIV KHANNA) ...................................... J. (BELA M. TRIVEDI) NEW DELHI; JANUARY 11, 2022.