TEA AUCTION LTD. versus GRACE HILL TEA INDUSTRY & ANR.

TEA AUCTION LTD. versus GRACE HILL TEA INDUSTRY & ANR.

Court has discretion under Order IX Rule 13 CPC to impose reasonable terms, including security, when setting aside an ex-parte decree; imposing security for entire decreed amount was unreasonable in this case—security of Rs.5 lakhs is appropriate.

Parties
Appellant: Tea Auction Ltd.; Respondent: Grace Hill Tea Industry; Respondent: Grace Hill Tea Industry & Anr.
Jurisdiction
India
Judgment Date
13 September 2006
Procedural Posture
Civil Appeal / Appeal From Division Bench Judgment of Calcutta High Court
Outcome
Appeal partly allowed
Legal Topics
Ex Parte Decree, Order IX Rule 13 CPC, Discretionary Power and Conditions for Setting Aside Decree, Reasonable Conditions for Security
Civil Procedure Ex Parte Decree Order IX Rule 13 CPC Discretionary Power and Conditions for Setting Aside Decree Reasonable Conditions for Security

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Parties

Tea Auction Ltd.

Appellant

Grace Hill Tea Industry

Respondent

Grace Hill Tea Industry & Anr.

Respondent

Procedural Posture

Civil Appeal / Appeal From Division Bench Judgment of Calcutta High Court

Legal Issues

  1. 1 Interpretation and application of Order IX Rule 13 of CPC regarding setting aside ex-parte decrees
  2. 2 Whether court can impose condition of security as precondition for setting aside ex-parte decree

Ratio Decidendi

Court has discretion under Order IX Rule 13 CPC to impose reasonable terms, including security, when setting aside an ex-parte decree; imposing security for entire decreed amount was unreasonable in this case—security of Rs.5 lakhs is appropriate.

Court Disposition

Appeal partly allowed

Orders

  • Respondent No. 1 to furnish security to the extent of Rs.5 lakhs to the satisfaction of learned Single Judge within 12 weeks.
  • Court to consider matter on merits after expiry of 12 weeks if respondent complies; otherwise, decree passed by trial court shall stand.