caselaws
Supreme Court of India
M/S Garment Craft vs Prakash Chand Goel on 11 January, 2022Author: Sanjiv Khanna
Bench: Sanjiv Khanna, Hrishikesh Roy
NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. OF 2022
(ARISING OUT OF S.L.P.(C) NO. 13941 OF 2021)
M/S GARMENT CRAFT ….. APPELLANT(S)
VERSUS
PRAKASH CHAND GOEL ….. RESPONDENT(S)
JUDGMENT
SANJIV KHANNA, J.
Leave granted.
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.
Signature Not Verified
Digitally signed by Dr.
Mukesh Nasa
Date: 2022.01.11
17:35:25 IST
Reason:
3. In 2011, Prakash Chand Goel – the respondent before us, filed a
civil suit on the original side of the Delhi High Court for the recovery
Civil Appeal a/o. of SLP (C) No. 13941/2021 Page 1 of 14
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.
Civil Appeal a/o. of SLP (C) No. 13941/2021 Page 2 of 14
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.
Civil Appeal a/o. of SLP (C) No. 13941/2021 Page 3 of 14
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
Civil Appeal a/o. of SLP (C) No. 13941/2021 Page 4 of 14
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
Civil Appeal a/o. of SLP (C) No. 13941/2021 Page 5 of 14
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:
“8. From the certified copy of the proceedings of the suit
filed by the applicant/defendant, it is evident that matter
was transferred from the Hon’ble High Court to the
District Court vide order dated 17.12.2015 and the
same was assigned to the Court of my Ld. Predecessor
on 18.02.2016. It is recorded in the order dated
14.03.2016 that defendant had been sent to jail on
06.10.2015 and thus found sufficient cause for non-
filing of list of witnesses by defendant and therefore
gave further time to file list of witnesses subject to costs
of Rs.5,000/- and fixed the matter for 22.04.2016. On
22.04.2016, none had appeared on behalf of plaintiff
whereas associate counsel for defendant had appeared
who made further submissions that defendant is in
judicial custody and matter was adjourned for 3.00 PM
and at 3.00 PM the associate counsel produced the
certificate issued by jail dated 24.01.2016 as per which
defendant was in JC in connection with FIR bearing
no.422/2014 in Jaipur Jail from 06.10.2015 till
24.02.2016. Therefore, the Court was of the opinion
that the defendant’s counsel should have moved an
application for issuance of production warrants and
since same was not moved the case was adjourned for
DE for 31.05.2016 subject to further cost of M.
No.264/17 Prakesh Chand Goel Vs. M/s Garment Craft
Page 5 of 9 Rs.5,000/-. On 11.05.2016, file was again
taken up on an application filed by the defendant for
issuance of production warrants and accordingly
production warrants were issued in the name of SSP
concerned for 31.05.2016. On 31.05.2016, the counsel
for the plaintiff as well as counsel for the defendant
appeared and one Ct. Jitender appeared from the
Civil Appeal a/o. of SLP (C) No. 13941/2021 Page 6 of 14
Jaipur Jail who filed some written clarifications sought
from (though it should be by) concerned Jail
Superintendent whether defendant is on bail in the said
matter or not and the Hon’ble court found the said
clarification baseless and directed against Jail
Superintendent to produce the defendant and the
matter was adjourned for 08.06.2016. On 08.06.2016,
in view of the circular of the Hon’ble High Court, matter
was sent back to the Ld. District Judge to transfer the
case to the Hon’ble High Court. Thereafter, on
10.08.2016, the matter was again sent to the Ld. ADJ
and then matter was listed for 22.08.2016. On
22.08.2016, the Court fixed the case for DE for
09.09.16. On 09.09.2016, proxy counsel for the
defendant has appeared and filed an application for
issuance of production warrants. The Court observed
that it is incline to issue production warrants provided
proper affidavit filed either by plaintiff or his counsel that
defendant is actually happened to be in jail till date
along with particular of the case and that he has not
been released from jail and court adjourned the matter
for 04.11.2016. On 04.11.2016, only plaintiff counsel
has appeared but M. No.264/17 Prakesh Chand Goel
Vs. M/s Garment Craft Page 6 of 9 none appeared on
behalf of defendant, hence after noting down the
previous proceedings, DE was closed and case was
listed for final arguments for 07.11.2016. On
07.11.2016, the case was fixed for clarifications for
08.11.2016 and on 08.11.2016 judgment was passed.
xx xx xx
11. Since technically on 04.11.2016 defendant was not
proceeded ex parte hence in technical sense the
judgment cannot be said as an ex parte judgment but
actually this is an ex parte judgment as for all practical
purpose defendant has been proceeded ex parte on
04.11.2016 when his DE was closed in his absence.
Hence I consider the judgment dated 08.11.2016 as ex
parte judgment. Therefore, in my view application U/o 9
Rule 13 CPC filed by the defendant is maintainable.
12. Now coming to the merits. From the aforesaid order
sheets, it is evident that the fact of defendant being in
JC was intimated by the defendant’s counsel on
22.04.2016 and in fact thereafter Ld. Predecessor has
Civil Appeal a/o. of SLP (C) No. 13941/2021 Page 7 of 14
issued the production warrants on 11.05.2016 for
production of the defendant from the jail. But he was not
produced by the Jail Superintendent from Jaipur jail and
court has again directed to produce him for 08.06.2016.
But in between matter was transferred to the Hon’ble
High Court and then again transferred to the District
Court for 09.09.2016. On 09.09.2016, my Ld.
Predecessor was not sure that accused is in JC
therefore she has asked for the affidavit of the counsel
for the defendant regarding the defendant being still in
JC on 09.09.2016 and apparently same was not
furnished when the case was listed on 04.11.2016. In
fact some proxy counsel appeared on behalf of
applicant/ defendant on that day to apprise the status of
defendant whether he was in JC or not, due to which
court closed the DE. As M. No.264/17 Prakesh Chand
Goel Vs. M/s Garment Craft Page 8 of 9 averred by the
defendant, he was in JC and only released from jail on
06.05.2017. This fact has not been contradicted by the
applicant/ plaintiff. Therefore in my view there was no
fault for his non-appearance for leading DE or not filing
the list of witnesses as same was beyond his control.
The record shows that some proxy counsel might be
appearing on his behalf but when a person remains in
jail and that too in Jaipur jail it become very difficult to
give instructions to his counsel on each and every date.
Even the counsel also become lethargic as he might not
be getting his fees therefore even proxy counsel was
not appeared on 04.11.2016 due to which DE was
closed. Hence in these circumstances, in my view there
is sufficient ground to set aside the order dated
04.11.2016 closing DE in the interest of justice.”
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
Civil Appeal a/o. of SLP (C) No. 13941/2021 Page 8 of 14
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,
1Celina Coelho Pereira (Ms) and Others v. Ulhas Mahabaleshwar Kholkar and Others, (2010) 1 SCC
217
Civil Appeal a/o. of SLP (C) No. 13941/2021 Page 9 of 14
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:-
“6. The scope and ambit of exercise of power and
jurisdiction by a High Court under Article 227 of the
Constitution of India is examined and explained in a
number of decisions of this Court. The exercise of
power under this article involves a duty on the High
Court to keep inferior courts and tribunals within the
bounds of their authority and to see that they do the duty
expected or required of them in a legal manner. The
High Court is not vested with any unlimited prerogative
to correct all kinds of hardship or wrong decisions made
within the limits of the jurisdiction of the subordinate
courts or tribunals. Exercise of this power and
interfering with the orders of the courts or tribunals is
restricted to cases of serious dereliction of duty and
flagrant violation of fundamental principles of law or
justice, where if the High Court does not interfere, a
grave injustice remains uncorrected. It is also well
settled that the High Court while acting under this article
cannot exercise its power as an appellate court or
substitute its own judgment in place of that of the
subordinate court to correct an error, which is not
apparent on the face of the record. The High Court can
set aside or ignore the findings of facts of an inferior
court or tribunal, if 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, which the court
or tribunal has come to.”
2(2001) 8 SCC 97
Civil Appeal a/o. of SLP (C) No. 13941/2021 Page 10 of 14
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.
Civil Appeal a/o. of SLP (C) No. 13941/2021 Page 11 of 14
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.
Civil Appeal a/o. of SLP (C) No. 13941/2021 Page 12 of 14
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 cross-
examination. 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
3The 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.
Civil Appeal a/o. of SLP (C) No. 13941/2021 Page 13 of 14
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.
Civil Appeal a/o. of SLP (C) No. 13941/2021 Page 14 of 14
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