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Citation Codes
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Case Number
Advocates
  • Mr. Sanjeev Sachdeva, Advocate for Petitioner.
  • Mr. M. Wadhwani, Advocate for Respondents.
Judges
  • S.K Mahajan, J.
Acts
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Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
  • Mr. Sanjeev Sachdeva, Advocate for Petitioner.
  • Mr. M. Wadhwani, Advocate for Respondents.
Judges
  • S.K Mahajan, J.
Acts
See more information ...
Smart Summary

Structured Summary of the Opinion by S.K. Mahajan, J.

Factual and Procedural Background

An arbitral award resolving disputes between the parties was filed in this Court. Both parties filed objections to the award under Sections 30 and 33 of the Arbitration Act. The Court framed issues and directed evidence to be led by affidavits. Both parties filed affidavits and the matter was adjourned for arguments. On 11 January 1996, no one appeared for the respondent; the Court proceeded to hear and decide the objections on merits. The petitioner's objections were dismissed as withdrawn. The respondent's objections were dismissed on merits, the arbitral award was made a rule of the Court, and a decree was passed in terms of the award. The respondent was ordered to pay interest at 12% per annum on the awarded amount from the date of the award till realisation.

On 12 February 1996 the respondent moved under Order 9 Rule 13 CPC to set aside the decree dated 11 January 1996. The respondent's stated ground was non-appearance of his counsel due to the counsel being abroad (in the United States from 17 December 1995), delayed return because of severe climatic conditions and flight suspensions (expected return 8 January 1996 but reached Delhi only on 16 January 1996), and that upon inspecting the file after return he discovered that the objections had been dismissed and the award made a rule of the Court. The respondent sought restoration of the suit to the stage it was on 11 January 1996.

The petitioner did not file a substantive reply, but objected that an application under Order 9 Rule 13 CPC was not maintainable because the Court had decided the objections on merits under Order 17 Rule 2 CPC. Counsel for the petitioner relied on Hoechst Aktiengesellschaft v. B.S. Chemical Industries (Regd), AIR 1979 NOC 107 (Delhi).

Legal Issues Presented

  1. Whether an application under Order 9 Rule 13 CPC to set aside a decree is maintainable after the Court has decided the suit or objections on merits under Order 17 Rule 2 CPC.
  2. Whether Rule 2 of Order 17 CPC gives the Court wholly arbitrary or unfettered powers and is therefore violative of Article 14 of the Constitution of India.
  3. Whether Section 151 CPC may be invoked analogously to Order 41 Rule 21 CPC to obtain re-hearing where a matter was decided in the absence of a party.
  4. Whether the Court may proceed to decide a suit on merits in the absence of a party when substantial evidence (here, affidavits) has already been recorded, without affording a further opportunity to that absent party.

Arguments of the Parties

Petitioner's Arguments

  • The application under Order 9 Rule 13 CPC is not maintainable because the Court decided the objections on merits under Order 17 Rule 2 CPC, and an application under Order 9 Rule 13 therefore does not lie after a merits decision.
  • Relied on the decision in Hoechst Aktiengesellschaft v. B.S. Chemical Industries (Regd) (AIR 1979 NOC 107 — Delhi) to support the principle that when the Court has decided on merits under Order 17 Rule 2, relief under Order 9 Rule 13 is not available.

Respondent's Arguments

  • Non-appearance of respondent's counsel on 11 January 1996 was not deliberate but due to unforeseen travel disruption (counsel held up in the USA and flights suspended due to severe climatic conditions), and therefore the decree should be set aside and the suit restored to its earlier stage.
  • Order 17 Rule 2 grants arbitrary powers to the Court and is violative of Article 14 of the Constitution; relied upon several Supreme Court decisions (Suraj Mall Mohta & Co. v. A.V. Visvanatha Sastri; Shree Meenakshi Mills Ltd. v. A.V. Visvanatha Sastri; Abdul Aziz v. State of Maharashtra; Northern India Caterers (Pvt.) Ltd. v. State of Punjab; Savithri Amma Seethamma v. Aratha Karathy) to support the contention that procedural discretion may offend Article 14.
  • Invoked Order 41 Rule 21 CPC (right to move for re-hearing where a judgment is given in absence) and urged that the Court should exercise its inherent powers under Section 151 CPC analogously to grant re-hearing.
  • Argued that evidence was not complete and that he should have been given opportunity to file replies to affidavits already filed by the petitioner before the Court proceeded to decide the matter on merits.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Hoechst Aktiengesellschaft v. B.S. Chemical Industries (Regd), AIR 1979 NOC 107 (Delhi) Authority relied on for the proposition that where the Court decides the case on merits under Order 17 Rule 2 CPC, an application under Order 9 Rule 13 CPC does not lie. The Court stated it was "fully in agreement" with this judgment and relied on it to support dismissal of the respondent's Order 9 Rule 13 CPC application as not maintainable.
Suraj Mall Mohta & Co. v. A.V. Visvanatha Sastri & Another, AIR 1954 SC 545 Cited by respondent among authorities invoked in support of Article 14/procedural-equality arguments. The Court grouped this case with other authorities relied upon by the respondent but concluded that none of these judgments assisted his contentions in the present factual matrix.
Shree Meenakshi Mills Ltd. & Others v. A.V. Visvanatha Sastri & Another, AIR 1955 SC 13 Held that Article 14 extends to procedural laws and guarantees equal procedural rights to similarly placed litigants; relied upon to contend that discretionary procedural rules can violate Article 14. The Court accepted the principle that Article 14 covers procedural rights but held that Order 17 Rule 2 CPC did not create discriminatory or unguided discretion in the present case and therefore this authority did not persuade the Court to strike down Rule 2.
Abdul Aziz v. State of Maharashtra, AIR 1963 SC 1470 Cited by respondent among cases supporting challenge to discretionary procedural provisions under Article 14. The Court regarded this and the other authorities as not advancing the respondent's claim because the circumstances that made the statutes in those cases objectionable (e.g., unguided discretion creating discriminatory outcomes) were absent here.
Northern India Caterers (Pvt.) Ltd. & Another v. State of Punjab & Another, AIR 1967 SC 581 Dealt with provisions of the Punjab Public Premises and Land (Eviction and Rent Recovery) Act; principle that conferring unguided discretion to choose alternative remedies on an official can render a statutory scheme violative of Article 14. The Court distinguished this authority: it arose from a statute that provided an additional remedy to Government and conferred unguided discretion on the Collector, leading to discriminatory application. The Court found that distinction dispositive and that Northern India Caterers did not assist the respondent.
Savithri Amma Seethamma v. Aratha Karathy & Others, AIR 1983 SC 318 Cited by respondent as another authority concerning procedural fairness/Article 14 issues. The Court included this authority among those relied on by the respondent but concluded that the cited judgments did not support invalidating Rule 2 of Order 17 CPC in the present circumstances.

Court's Reasoning and Analysis

The Court proceeded through a structured analysis of the contested points:

  1. Nature and scope of Order 17 Rule 2 CPC:

    The Court observed that Order 17 Rule 2 CPC confers a discretion on the Court to deal with a suit in one of three ways: proceed under Order 9, adjourn the hearing to a subsequent date, or proceed to decide the matter on merits. The discretion is vested in the Court, not in either party, and is exercised having regard to the conduct of the parties and the state of proceedings.

  2. Article 14 challenge:

    The respondent argued that Rule 2 conferred arbitrary powers and violated Article 14. The Court distinguished the cited authorities (notably the Northern India Caterers case) where statutory schemes conferred unguided discretion on an administrative officer or provided an additional remedy to one party (the Government), producing a risk of discriminatory application. In contrast, Order 17 Rule 2 grants judicial discretion to the Court, does not provide an additional remedy to any party, and applies equally to either party. On that basis the Court held that Rule 2 is not wholly arbitrary or violative of Article 14.

  3. Applicability of Order 41 Rule 21 CPC and Section 151 CPC:

    The respondent relied on Order 41 Rule 21 (which gives a right of application for re-hearing where an appeal has been decided in the absence of a party) and urged the Court to use Section 151 CPC analogously. The Court rejected that approach: where a specific statutory provision (Order 41 Rule 21) exists, Section 151 cannot be invoked to create an analogous remedy in a different context.

  4. Whether the Court could decide on merits in absence of respondent:

    The Court referred to the Explanation to Order 17 Rule 2, which permits the Court, where a party's evidence or a substantial portion of it has already been recorded, to proceed as if that party were present. Both parties here had led evidence by affidavits. The respondent did not contend that there was no evidence before the Court to enable it to decide on merits. Given that substantial evidence was on the file, the Court was entitled to proceed to decide the objections on merits in the absence of the respondent's counsel.

  5. Precedential support:

    The Court expressly agreed with the decision in Hoechst Aktiengesellschaft v. B.S. Chemical Industries (Regd) and found no reason to differ from it. The other authorities cited by the respondent were considered but found not to assist the respondent's position on the facts of this case.

Holding and Implications

Holding: The application under Order 9 Rule 13 CPC is not maintainable and is dismissed.

Direct consequences and orders in the opinion:

  • The respondent's application under Order 9 Rule 13 CPC to set aside the decree dated 11 January 1996 was dismissed.
  • In the particular facts and circumstances, the parties were directed to bear their own costs.
  • I.A. No. 4472/97 was dismissed as infructuous in view of the earlier order on I.A. No. 1557/96.

Implications beyond the parties: The Court confined its decision to the facts and the proper construction of Order 17 Rule 2 CPC and related procedural provisions. The opinion does not purport to lay down any new wide-ranging precedent beyond applying existing principles (including reliance on Hoechst) to the facts before it; the direct effect is the dismissal of the respondent's application and confirmation of the decree made a rule of the Court.

Show full summary ...

    I.N.C.A Builders v. I.A.A.I.

    S.K Mahajan, J.— The award made and published by the Arbitrator in the matter of certain disputes which had arisen between the parties was filed in this Court and objections thereto were filed by both the parties under Sections 30 and 33 of the Arbitration Act. On the said objections, issues were framed by the court and the evidence was directed to be led by means of affidavits. Both the parties filed their affidavits by way of evidence in support of their contentions and the matter was adjourned for hearing arguments. On 11.1.1996 when the matter came up before the court no one had appeared on behalf of the respondent and the court proceeded to decide the objections filed by both the parties on merits. While the objections filed by the petitioner were dismissed as withdrawn, the objections filed by the respondent were dismissed by the court by a detailed judgement on merits and the award made and published by the arbitrator was made a rule of the court and decree in terms of the award was passed by this Court. The respondent was also held liable to pay interest @ 12% per annum on the awarded amount from the date of the award till realisation.

    On 12.2.1996 an application was filed by the respondent under Order 9 Rule 13 CPC for setting aside the decree passed on 11.1.1996 inter alia on the grounds that the counsel for the respondent could not appear before the court on 11.1.1996 because he was held up in United States of America where he had gone on 17.12.1995; he was scheduled to return to Delhi on 8.1.1996 but due to serve climatic condition the airports were closed, the flights suspended and re-scheduled and he, therefore, could reach Delhi only on 16.1.1996 It was further stated that after he had returned to India he filed an application for inspection of the court file as he had not appeared in this Court on 11-1-1996 and he came to know that this court had dismissed the objections and the award has been made a rule of the court. It is, therefore, averred in the application that non-appearance of the counsel for the respondent was neither deliberate nor intentional but was because of unforeseen circumstances beyond his control and he wanted this court to set aside the order 11.1.1996 and restore the suit at the stage it was on the said date.

    Reply to the applications has not been filed by the petitioner and the only objection taken is that the objections having been dismissed on merits and the award having been made a rule of the court and decree in terms thereof having been passed, the application under Order 9 Rule 13 CPC was not maintainable and was liable to be dismissed on this short ground alone.

    Mr. Sachdeva, appearing on behalf of the petitioner has placed reliance upon a judgment Hoechst Aktiengesellschaft v. B.S Chemical Industries (Regd). AIR 1979 NOC 107 (Delhi). He submits that in view of the pronouncement of this Court that the court having decided the case under Order 17 Rule 2 CPC on merits, the application under Order 9 Rule 13 CPC does not lie because the decision was on merits as if the party was present.

    Mr. Wadhwani, however appearing on behalf of the respondent submits that Rule 2 of Order 17 CPC gives arbitrary powers to the court and is, therefore, violative of Article 14 of the Constitution of India. He relies upon the judgments reported as Suraj Mall Mohta & Co. v. A.V Visvanatha Sastri & Another, AIR 1954 SC 545, Shree Meenakshi Mills Limited & Others v. A.V Visvanatha Sastri & Another, AIR 1955 SC 13, Abdul Aziz v. State Of Maharashtra., AIR 1963 SC 1470, Northern India Caterers (Pvt.) Ltd. & Another v. State of Punjab & Another, AIR 1967 SC 581, and Savithri Amma Seethamma v. Aratha Karathy & Others, AIR 1983 SC 318.

    In Shree Meenakshi Mills Limited & Others v. A.V Visvanatha Sastri & Another, (supra) it was held that Article 14 guarantees to all persons the right of equality before the law and equal protection of the laws within the territory of India. This Article not only guarantees equal protection as regards substantive laws but procedural-laws also come within its ambit. The implication of the Article is that all litigants similarly situated are entitled to avail themselves of the same procedural rights for relief, and for defence with like protection and without discrimination. Taking support from this judgment, it is contended by Mr. Wadhwani that Rule 2 of Order 17 CPC gives unfettered powers to the court to decide in any of the three manners mentioned in Rule 2 and, therefore, the Rule in wholly arbitrary. The other judgments cited by Mr. Wadhwani are also to the same effect.

    In Northern India Caterers (Private Limited) & Another v. State of Punjab & Another (supra) the Supreme Court was dealing with the provisions of Punjab Public Premises and Land (Eviction and Rent Recovery) Act. The Objects and Reasons of the Punjab Act show that the Legislature intended to provide an additional remedy to the Government, a remedy which it though was speedier than the one by way of a suit under the ordinary law of eviction. It was in this context that the Supreme Court held that there was nothing in the Act to warrant the conclusion that it impliedly took away the right of suit by Government or that, therefore, it was substitutive and not supplemental. Nor was it possible to say that the co-existence of the two remedies would cause such inconvenience or absurdity that the Court would be compelled to infer that the enactment of the Act resulted in an implied deprivation of the Government's right to sue in the ordinary courts. The Supreme Court, therefore, held the provisions of the Punjab Act to be void on the ground that the same were violative of Article 14 of the Constitution as it provided two alternative remedies to the Government and left it to the unguided discretion of the Collector to resort to one or the other and to pick and choose some of those in occupation of public premises for the application of more drastic procedure under Section 5 of the Act leaving itself to the charge of discrimination.

    In my opinion, none of the aforesaid judgments is of any assistance to Mr. Wadhwani. In the Punjab Act, an additional remedy was provided to the Government and it was left for the Government to decide as to whether it wanted to avail the remedy by way of suit under the ordinary law or it wanted to avail of the forum provided by the Punjab Public Premises and Land (Eviction and Rent Recovery) Act. It was in this context that the Supreme Court observed that when unguided discretion has been conferred upon the Collector to decide a forum the law leaves itself open to the charge of discrimination and for that reason the Punjab Public Premises and Land (Eviction and Rent Recovery) Act was held to be violative of Article 14 of the Constitution of India.

    I am unable to reconcile myself with the arguments advances by Mr. Wadhani. Under Order 17 Rule 2 CPC it has been left to the discretion of the Court to decide a suit in any of the three modes provided therein. The Court has discretion to proceed under Order 9 of the Code or adjourn the hearing to a subsequent date or to proceed to decide the matter on merits. The matter having been left to the discretion of the court it cannot be said that the powers which have been given are wholly arbitrary or unfettered or that the same are ultra vires the provisions of Article 14 of the Constitution of India. In this case, the discretion is not with any of the parties to ask the court to decide in a particular way but it is the court who is to decide the suit in any of the three modes provided in Rule 2 of Order 17. No additional remedy has been provided in the Code to any party to the suit which could render itself open to the charge of discrimination. If the court after seeing the conduct of the parties and the proceedings which have been before it earlier proceed to decide the suit on merits, in view, there cannot be any objection to the same and it cannot be said that the powers given to the court are arbitrary or that the Court could not exercise the discretion so given to it by the legislature. The guarantee of equality before law and equal protect on under Article 14 is that there should be no discrimination between one person and another if as regards the subject matter of legislation, their position is the same. In the present case, under Order 17 Rule 2 CPC no additional remedy having been provided to any one of the two parties and the court having been given the discretion to proceed with the matter in any of the three modes provided in the Rule against any one of the two parties, in my opinion, no case whatsoever of discrimination has been made out so as to hold that Rule 2 of Order 17 is violative of Article 14 of the Constitution of India.

    Mr. Wadhwani also places reliance upon Order 41 Rule 21 CPC in support of his contention that an opportunity of re-hearing should have been given to the respondent. It is submitted by him that while Order 41 Rule 21 CPC specifically provides that in case the Court has proceeded to decide an appeal and has given a judgment in the absence of a party, the party against whom the judgment has been given has a right to move an application for re-hearing of the same. It is, therefore, submitted by him that the court should exercise powers under Section 151 CPC analogous to the powers which have been given under Order 41 Rule 21 CPC. In my opinion, the arguments are wholly fallacious. Rule 21 specifically provides a remedy to a litigant against whom a judgment has been given under Order 41. When there is a specific provision in the Statute, in my opinion, the provisions of section 151 cpc cannot be made applicable.

    It is then submitted by Mr. Wadhwani that in this case the evidence was not complete and, therefore, the court could not proceed to decide the matter it is submitted by him that an opportunity should have been given to him to file reply to the affidavits which have been tiled by the petitioner. Explanation to Rule 2 of Order 17 provides that where the evidence or a substantial portion of the evidence of any party has already been recorded and such party fails to appear on any date to which the hearing of the suit is adjourned, the Court may, in its discretion, proceed with the case as if such party were present. In the present case, it is not even the case of Mr. Wadhwani that there was no evidence before the court to enable it to proceed with the decision on merits. The Explanation clearly states that even in case substantial portion of the evidence of the party is before the court, the court can proceed with the case as if such party was present. In the present case, admittedly both the parties had led evidence by means of affidavits and the Court having exercised its jurisdiction to decide the case on merits on the basis of the evidence which was before it, in my opinion, there is no breach of any of the provisions of law. I am fully in agreements with the judgment reported as Hoechst Aktiengesellschaft v. B.S Chemical Industries (Regd). (supra) and I do not find any reason to differ with the same.

    In view of the above discussion, the suit having been decided on merits, the application under Order 9 Rule 13 CPC is not maintainable and is accordingly dismissed. In the peculiar facts and circumstances of the case, the parties are left to bear their own costs.

    I.A.No 4472/97

    In view of order passed on I.A.No 1557/96 this application has become infructuous and the same is accordingly dismissed.

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    Comments

    I.N.C.A Builders v. I.A.A.I.
    (Jul 21, 1998)