M/S ANIL SHARMA & SONS v. M/S NATIONAL SMALL INDUSTRIES CORPORATION LTD & ORS

2. With the consent of the parties the appeal is being disposed of at the admission stage itself.

3. A brief background of the matter would be necessary.

4. In this case the respondent had filed suit bearing CS(OS) No.2613/2000 for recovery on 18.11.2000. Plaintiff (respondent No.1 herein) entered into a settlement with defendant Nos.[1] to 3 on 23.08.2012 and a compromise decree was passed against defendants Nos.[1] to 3. The appellant was arrayed as defendant No.4. Defendant No.4 was proceeded ex parte by an order dated 27.02.2015. On the next date of hearing i.e. 07.05.2015 issues were framed. Subsequently defendant No.4 filed I.A. No.25510/2015 for recall of ex-parte order and deletion of issue framed. The order by which defendant No.4 was proceeded ex parte was recalled; however, the prayer for deletion of the issue was declined by the learned Single Judge vide order dated 29.03.2016. Since the prayer made in I.A. No.25510/2015 was declined, defendant No.4 filed an appeal being FAO(OS) No.140/2016. By an order dated 17.04.2017 this appeal was disposed of; and the Division Bench made it clear that the settlement was only between plaintiff and defendants Nos.[1] to 3 and that defendants Nos.[4] and 5 to 8 would not be bound by the terms of the settlement. Para 10 of the Division Bench order reads as under:-

5. It may also be noted that the Division Bench also granted liberty to the appellant/defendant No.4 to make an appropriate application before the Single Judge as the grievance of defendant No.4 was that the plaintiff had not prayed for foreclosure of the mortgage under Order 34 of CPC. The Division Bench observed as under:-

6. In this backdrop, defendant No.4 filed I.A. No.9870/2017. The following prayers were made:- “a) Strike out issue no 1 and 2 against the defendant no.4. b) Declare terms of compromise dated 23.08.2012 is not binding upon Defendant no.4/Applicant and the present proceedings cannot continue against defendant no.4; And/Or; c) Frame additional issue as whether clause 6 H of the settlement for continuation of suit against nonparties to the settlement can be held to be binding on applicant/ defendant no.4 and the suit can continue; d) Declare that no cause of action survives against defendant no.4 as the present suit is not covered by Order 34 relating to foreclosure of mortgage; d) To pass such other Order(s) as this Hon’ble Court may deem fit and proper considering the facts and circumstances of the case.”

7. This application of defendant No.4 was dismissed by impugned order dated 13.02.2018. The grievance of the appellant is that the aspect of the plaintiff not having prayed for foreclosure of the mortgage under Order 34 of CPC has not been considered.

8. At this stage, counsel for the parties are in agreement that the impugned order be set-aside and that the matter be remanded to the learned Single Judge for fresh hearing of I.A. No.9870/2017.

9. Accordingly, with consent of the parties, impugned order dated 13.02.2018 is set-aside; and the matter is remanded to the Single Judge. The matter be listed before the Single Judge on 12th December 2019; and parties are directed to appear through their counsel before the learned Single Judge on the said date, for a fresh hearing.

10. Appeal is disposed of in the above terms. C.M. No.13105/2018(stay)

11. Since the appeal is disposed of, this application is also disposed of. G.S.SISTANI, J ANUP JAIRAM BHAMBHANI, J NOVEMBER 20, 2019