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1997 INSC 779
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  • Section 5, Subsection 2 of the 1983 Income Tax Act
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Cites
Cited by
Citation Codes
Neutral Citations
1997 INSC 779
Equivalent Citations
citation codes
Case Number
Disposition
Advocates
Judges
Acts
  • Section 5, Subsection 2 of the 1983 Income Tax Act
Smart Summary

Factual and Procedural Background

The appellants were previously convicted of murdering one Harpal Singh and sentenced to life imprisonment by the Special Court, Ludhiana on 1 April 1985. On 16 August 1989, the respondents—family members of the deceased—filed a civil suit before the Sub-Judge, Ist Class, Samrala seeking Rs 1,00,000 as compensation for loss of income allegedly caused by the death of Harpal Singh. The appellants appeared in the civil suit, filed a written statement, and engaged counsel. After two plaintiff witnesses were examined and cross-examined, the appellants’ counsel on 18 November 1991 reported “no instructions,” leading the trial court to proceed ex parte. An ex parte decree in favour of the respondents was passed on 8 February 1992.

Upon learning of these developments from their former counsel on 6 June 1992, the appellants engaged new counsel and, on 10 June 1992, moved an application under Order 9 Rule 13 of the Code of Civil Procedure (CPC) to set aside both the order dated 18 November 1991 and the ex parte decree. While this application was pending, the Supreme Court, on 7 March 1995, set aside the criminal conviction against the appellants. Nevertheless, the civil application under Order 9 Rule 13 was dismissed by the trial court on 22 January 1996, affirmed by the District Judge on 18 October 1996, and summarily dismissed by the High Court on 13 December 1996. The appellants obtained special leave to appeal to the Supreme Court, resulting in the present decision.

Legal Issues Presented

  1. Whether an ex parte decree passed after the appellants’ counsel withdrew by stating “no instructions,” without notice to the appellants, should be set aside under Order 9 Rule 13 CPC.
  2. Whether the lower courts erred in holding the appellants negligent in the conduct of the civil suit, thereby justifying refusal to set aside the ex parte proceedings.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Tahil Ram Issardas Sadarangani v. Ramchand Issardas Sadarangani, 1993 Supp (3) SCC 256 When counsel withdraws without the client’s presence or knowledge, the court should issue fresh notice; a party not at fault should not suffer. The Supreme Court relied on this principle to hold that the trial court ought to have issued notice to the appellants after counsel’s withdrawal and that the appellants should not be penalised for circumstances beyond their control.

Court's Reasoning and Analysis

The Supreme Court observed that the appellants had duly engaged counsel and were actively defending the civil suit. Once their counsel pleaded “no instructions” on 18 November 1991, the trial court proceeded ex parte without issuing any notice to the appellants, who were admittedly absent and unaware of their counsel’s withdrawal. The record showed no carelessness or negligence on the appellants’ part; they discovered the ex parte decree only when they contacted counsel on 6 June 1992 and promptly filed an Order 9 Rule 13 application within four days.

Invoking the principle laid down in Tahil Ram Issardas Sadarangani, the Court held that fairness required the trial court to notify the appellants and give them an opportunity to be heard. Failure to do so vitiated the ex parte proceedings. The Court emphasised that litigants should not suffer for the unilateral actions of their counsel when they are not at fault.

Holding and Implications

The appeal is allowed. The Supreme Court set aside: (i) the trial court’s order dated 18 November 1991; (ii) the ex parte decree dated 8 February 1992; and (iii) the appellate and revision orders of the District Judge and High Court. The matter is remanded to the trial court to proceed from the stage at which counsel reported “no instructions,” with no order as to costs.

Implications: The decision reinforces the duty of courts to protect litigants from prejudice caused by unexpected withdrawal of counsel and clarifies that absence of negligence is a strong ground for setting aside ex parte decrees under Order 9 Rule 13 CPC. No new legal doctrine is created, but the judgment underscores existing procedural safeguards.

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    Malkiat Singh And Another v. Joginder Singh And Others

    Order

    1. Special leave granted.

    2. The appellants were tried for the murder of one Harpal Singh and on conviction, were sentenced to suffer life imprisonment and to pay a fine of Rs 1000 by the learned Special Court, Ludhiana vide judgment dated 1-4-1985. The respondents, it appears, on 16-8-1989 filed a suit in the Court of learned Sub-Judge, Ist Class, Samrala claiming damages from the appellants to the tune of Rs 1,00,000 for deprivation of the income to the family members which they used to get from the deceased Harpal Singh. The claim in the suit was contested by the appellants. They filed their written statement and engaged a counsel to defend the suit. The trial court, on the basis of the pleadings of the parties, framed a number of issues. After two witnesses for the plaintiffs in that suit had been examined and cross-examined, it transpires that, on 18-11-1991, learned counsel who had been engaged by the appellants herein for defending them in the suit, pleaded “no instructions” before the court. As a result of the counsel pleading no instructions, the appellants were proceeded ex parte. On 8-2-1992, the learned trial court passed an ex parte decree against the appellants.

    3. The appellants went to enquire about the proceedings in the case from their counsel. On 6-6-1992, on their enquiry, their counsel informed them that he had pleaded “no instructions” as a result of which they were proceeded ex parte and the suit had been decreed ex parte on 8-2-1992. The appellants then engaged another counsel and on 10-6-1992, filed an application under Order 9 Rule 13 CPC for setting aside the order dated 18-11-1991 and the ex parte judgment and decree dated 8-2-1992. While that application was pending adjudication, the appeal filed by the appellants against their conviction and sentence was heard by this Court. On 7-3-1995, the order of conviction and sentence was set aside.

    4. The trial court dismissed the application filed by the appellants under Order 9 Rule 13 CPC on 22-1-1996. Their appeal failed before the learned District Judge on 18-10-1996. The High Court dismissed the civil revision petition filed by them in limine on 13-12-1996. Hence this appeal by special leave.

    5. We have heard learned counsel for the parties in this appeal and perused the record.

    6. There is no denying the fact that the appellants had engaged a counsel to defend them in the civil suit. The counsel for the appellants pleaded “no instructions” but the court did not issue any notice to the appellants, who were admittedly not present on the date when their counsel reported no instructions in the court. It is nobody's case that the counsel informed them after he had reported no instructions to the court. The appellants only came to know about the order dated 18-11-1991 and the ex parte decree dated 8-2-1992 when they approached their counsel on 6-6-1992. It was within four days thereafter that the appellants filed an application under Order 9 Rule 13 CPC for setting aside the order dated 18-11-1991 and the decree dated 8-12-1992.

    7. The appellants in their application clearly pleaded that they were neither careless nor negligent and as soon as they learnt about the ex parte decree dated 8-2-1992 and the order dated 18-11-1991, they filed the application to set aside the order and ex parte decree. A perusal of the record also reveals that the appellants were neither careless nor negligent in defending the suit. They had engaged a counsel and were following the proceedings. In this fact situation, the trial court, which had admittedly not issued any notice to the appellants after their counsel had reported no instructions, should have, in the interest of justice, allowed that application and proceeded in the case from the stage when the counsel reported no instructions. The appellants cannot, in the facts and circumstances of the case, be said to be at fault and they should not suffer. In taking this view, we are fortified by a judgment of this Court in Tahil Ram Issardas Sadarangani v. Ramchand Issardas Sadarangani 1993 Supp (3) SCC 256 wherein the Bench opined:

    “4. It is not disputed in the present case that on 15-3-1974 when Mr Adhia, Advocate withdrew from the case, the petitioners were not present in court. There is nothing on the record to show as to whether the petitioners had the notice of the hearing of the case on that day. We are of the view, when Mr Adhia withdrew from the case, the interests of justice required, that a fresh notice for actual date of hearing should have been sent to the parties. In any case in the facts and circumstances of this case we feel that the party in person was not at fault and as such should not be made to suffer.”

    8. In view of what we have said above, this appeal succeeds and is allowed. The order of the trial court dated 18-11-1991 and the ex parte decree dated 8-2-1992 are set aside. We also set aside the order of the District Judge and that of the High Court dismissing the civil revision petition. The case is remanded to the trial court for its disposal in accordance with law. The trial court shall proceed with the case from the stage, where the case was on 18-11-1991. There shall be no order as to costs.

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    Malkiat Singh And Another v. Joginder Singh And Others
    (Dec 2, 1997)