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Civil Revision Application No. 432 of 1962, decided on 20th December 1962.

Scope and application. Rules 2 and 3 of Order XVII, Civil Procedure Code, 1908 are not in conflict with each other, nor are they mutually exclusive. The distinction between rule 2 and rule 3 of Order XVII is that while rule 2 applies to hearings adjourned at the instance of the Court, rule 3 applies to hearings adjourned at the instance of a party, to whom time has been allowed to do some act to further the progress of the suit, but who has defaulted. There is yet another distinction between the rules. Where there are no materials on the record, the proper procedure to be followed would be that laid down in rule 2, but if there are materials on the record, the Court ought to proceed under rule 3. To apply the procedure, therefore, laid down in rule 3 to a case, there must be the presence of both the elements, namely, (1) the adjournment must have been at the instance of a party and (2), there must be material on the record for the Court to proceed to decide the suit. The presence of one without the other does not justify the application of rule 3. Even in the case where a special adjournment is granted and the defendant fails to appear in person and his Pleader withdraws for want of instructions, it would be a case of double default in so far as there is default of appearance, and the case would fall under Order XVII, r. 2 of the Code. Enattulla Basunia v. Jiban Mohan Roy I L R 41 Cal. 956 ; I L R 23 Cal. 738 ; A I R 1943 Bom. 321 ; A I R 1941 Bom. 83 and A I R 1947 Sind I ref.

Words "material irregularity" in S. 115-Court having *urisdiction arriving at erroneous decision-Cannot be said to have committed "material irregularity" Lower Court setting aside ex parte decree passed in absence of defendant holding decree improper under O. XVII, r. 2-Plaintiff in revision cannot challenge lower Court's jurisdiction to set aside decree as decree passed was on merits under O. XVII, r. 3.

A I R 1928 Lah. 427 ref.

Word "case" includes even interlocutory order - Such order open to revision only if condition expressly laid down in section is satisfied and impugned order results or likely to result in gross injustice or irreparable loss which cannot be remedied except by way of revision.

A I R 1943 Lah. 65 ref.

Nathulal for Applicant.

Mulraj Kundanmal for Respondent.

Date of hearing : 20th December 1962.

In this revision application under section 115, C. P. C., the applicant is aggrieved with the order dated the 17th of May 1962, passed by the learned Civil Judge and Additional City Magistrate, Hyderabad, allowing the application for setting aside the ex parte decree passed on the 8th of February 1962, and ordering further that the suit be heard in consequence of it and the evidence of the defendant-respondent be recorded.

2. The facts briefly stated are that the applicant filed a suit on the 30th of May 1961, claiming a sum of Rs. 3,000 on the ground that on the 29th of November 1959, the parties had entered into a contract by which the respondent-defendant had agreed to sell, to the plaintiff, and the applicant-plaintiff had agreed to purchase for a sum of Rs. 4,000, a second hand printing machine lying in the defendant-respondent's printing press. Rs. 500 were paid as advance towards this contract and the respondent-defendant agreed to install the machine in office of Hilal-e-Pakistan Daily of which the applicant-plaintiff is the owner, on or before the 1st of December 1959. The applicant plaintiff had agreed to pay the balance of Rs. 3,500 on the 20th of December 1959. It was also decided that in the case of breach of contract by the respondent-defendant he would return the advance amount of Rs. 500 and liquidate the damages to the extent of additional Rs. 500. The plaint further stated that at the request of the defendant, the time was extended up to the 27th of January 1960. On 1-1-1960, the applicant-plaintiff paid a further sum of Rs. 1,500 to the defendant, and on the same day the respondent agreed to sell to the plaintiff-applicant a half horse-power motor attached to the Printing Press for Rs. 500 which had been paid to him in advance. Thereafter the defendant respondent failed to install the Printing Press and the half horse power motor, and the plaintiff therefore considered that he was entitled to the return of Rs. 2,500 paid in cash to the respondent and damages to the extent of Rs. 500.

3. The written statement was filed on the 5th of October 1961. It was admitted that the parties had entered into an agreement by which the defendant agreed to sell the machine to the plaintiff on certain conditions which the plaintiff failed to comply with, and in addition that the plaintiff had failed to pay the balance of the price of the machine by the 20th of December which was the stipulated date in consequence of which Rs. 500 was considered to be forfeited ; further that there had been criminal proceedings between the parties and although the respondent had also agreed to sell the half horse-power electric machine to the plaintiff and had received a sum of Rs. 1,500 from him, the latter was responsible for failing to pay the balance on the stipulated date and, therefore, the respondent was not liable and the suit should therefore be dismissed with compensatory costs.

4. On 15-12-1961, seven issues were framed. The diary of the record and proceedings indicates that the next date of hearing was the 9th of January 1962 and that the order dated the 15th of December 1961, was passed in the presence of the parties and their Advocates. On 9-1-1962 the parties and their Advocates were present, and an application was made on behalf of the Advocate for the plaintiff and the matter was adjourned to the 8th of February 1962. On that date, the defendant-respondent and his Advocate, on being called out, were absent and the learned Judge proceeded to pass a detailed judgment and gave his findings on the issues already framed in consequence of which he decreed the suit for Rs. 3,000. Thereafter on the 14th of February 1962, the respondent-defendant filed an application under Order IX, rule 3, and Order XLVII, rule 1 and section 151, C. P. Code, standing that the matter had proceeded ex parte and had been decided on the 8th of February 1962, on the contention that the defendant and his Advocate had been called out and were absent, and after recording the evidence of the plaintiff and praying that the ex parte decree be set aside on several grounds, amongst them being that the defendant had not been specifically ordered by the Court to produce his evidence on the 8th of February, since at the previous hearing the matter had been adjourned at the request of the plaintiff. Para. 2 stated thus

"The suit is decided though purporting to be under Order XVII, rule 3, C. P. C. legally under Order XVII, rule 2, C. P. C. and Order IX, rule 6, C. P. C. and not under Order XVII, rule 3, C. P. C."

The other additional ground was that the defendant had engaged a new set of Advocates for conducting the suit as from the 8th of February 1962, that an application for the adjournment had been prepared to be made, accompanied by a vakalatnama, but this was not placed before the Court, although the defendant had purchased the Court-fee stamp for the vakalatnama and for the application for adjournment, and from 9-30 a.m., to 11-30 a.m., respondent was present outside the Court, waiting to be called, and in between saw the applicant-plaintiff who is an Advocate entering the Court and leaving it. Respondent himself did not hear the call of the suit to which he would otherwise have immediately responded, and that at 11-30 a.m., he went inside the Court-room and after making enquiries from the clerk concerned, approached the presiding Judge and narrated the incident to him and stated to him that he desired to submit an application for adjournment, but was informed that the suit had already been decreed. In consequence he urged that his failure to attend at the proper time was not intentional, and that he was not guilty of any negligence, and further that the plaintiff had received a sum of Rs. 2,500 towards final settlement of the claim in suit and the defendant had a writing in his possession to that effect, the plaintiff had arranged to have him denied the oppor tunity of being heard. An affidavit by the respondent was filed in support of this application. On the 21st of March, the plaintiff-applicant filed objections to the application, and after hearing the parties, the impugned order dated the 17th of May 1962, was passed.

5. The point for consideration in this case is whether the order of the trial Court comes within the purview of rule 2 or rule 3 of Order XVIL Rule 2 reads as follows

"(2) Where, on any day to which the hearing of the suit is adjourned, the parties or any of them ;fail to appear, the Court may proceed to dispose of the suit in one of the modes directed in that behalf by Order IX or make such other order as it thinks fit."

Rule (3) of Order XVII reads as under

"(3) Where any party to a suit to whom time has been granted fails to produce his evidence, or to cause the attend ance of his witnesses, or to perform any other act necessary to the further progress of the suit, for which time has been allowed, the Court may, notwithstanding such default, proceed to decide the suit forthwith."

6. It has been held that to attract the provisions of rule 3 of Order XVII, it is necessary that-

(1) the hearing was adjourned at the request of the party,

(2) the said party made a default,

(3) the adjournment was granted for the production of evidence or to perform any act necessary for the progress etc. of the suit, and

(4) that the party failed to perform the said act.

7. Mr. Nathulal for the applicant-plaintiff contends that if the Court below had passed the present order on 9-1-1962 it could be said to have been passed under rule 2, but since it was assed on 8-2-1962, it would come within the purview of rule 3. 'I his contention was made solely on the ground that the matter was adjourned from the 9th of January 1961, to the 8th of February 1962, at the request of the plaintiff, although both parties were present at the time. Mr. Mulraj for the respondent has referred me to what I consider an extremely important ruling Enatulla Basunia v. Jiban Mohan Roy (I L R 41 Cal. 956). This case is on all fours with the present one and enunciates the principles for the distinc tion of what rule a matter will fall under. It has been held that the distinction between rule 2 and rule 3 of Order XVII is that while the former rule applies to hearings adjourned at the instance of the Court, the latter applies to hearings adjourned at the instance of a party, to whom time has been allowed to do some act to further the progress of the suit, but who has defaulted. There is yet another distinction between the rules. Where there are no materials on the record, the proper procedure to follow would be that laid down in rule 2, but if there are materials on the record, the Court ought to proceed under rule 3. To apply the procedure, therefore, laid down in rule 3 to a case, there must be the presence of both the elements, namely, (1) the adjournment must have been at the instance of a party and (2) ; there must be material on the record for the Court to proceed to decide the suit. The presence of one without the other does not justify the applica tion of rule 3. The same principle has been upheld in I L R 23 Cal. 738. In A I R 1943 Born. 321, it was held that Order XVII, rule 3 applies only if the previous adjournment was granted for any of the purposes mentioned in that rule, and the party committed default in compliance with it on the adjourned, date. It would not apply to a general adjournment under) Order XVI, rule 3 (A I R 1941 Bom. 83). Even in the case where a special adjournment is granted and the defendant fails to appear in person and his Pleader withdraws for want of) instructions, it would be a case of double default in so far as there is default of appearance, and the case would fall under Order XVII, rule 2. It was further held that

"It is not correct to say that Order XVII, rules 2 and 3 are in direct conflict with each other. They are neither conflicting nor mutually exclusive. The scope of rule 2 is quite distinct from that of rule 3. Rule 3 contemplates a case in which the Court has materials before it to enable it proceed to a decision of the suit. The mere fact of a party making default in the performance of what he was directed to do would not lead to the dismissal of the plaintiff's suit, if he was the party in default, or the decreeing of the claim against the defendant, if the defendant was the person, who made the default ; the words notwithstanding such default in rule 3 clearly imply that the Court is to proceed with the disposal of the suit inspite of the default, upon such materials as are before it. Order XVII, rule 2 on the other hand, speaks of the disposal of the suit, and includes cases in which there might not be any materials before the Court to enable it to pronounce a decision on the merits. It is clear, however, that the contingency contemplated in rule 2 may happen in a case which falls within the letter of rule 3. It may well happen, for instance, that a plaintiff to whom time has been granted to produce evidence, not only fails to do so, but also fails to appear. In such a case, if there are no materials on the record, the appropriate procedure to follow would be that laid down in rule 2, but if there are materials on the record, the Court ought to proceed under rule 3 : (34 Cal. 235 rel. on)."

8. A I R 1947 Sind 1, which is a Full Bench Ruling, refers to Order XVII, rule 2, in connection with a commission being issued and the plaintiff being ordered to pay a further sum for expenses of the commission and declining to do so, the Court in consequence consigning the case to the record room, held that the Court was not justified in doing so, and pointing out the proper procedure, observed in passing (page 3)

"But the question as to whether rule 3, Order XVII applies depends in the first instance, we think, upon a request being made by the party concerned to the Court itself. And we think there is so much judicial authority on this point that, as Carr, J., said in 6 Rang. 323 at p. 325, this point is no longer res integra ; and we should not, we think, differ."

9. It is clear in the context of the progress of the suit before the order dated the 8th of February was passed, that the matter was adjourned at the previous hearing, namely, the 9th of January 1961,at the request of the application made on behalf of the plaintiff. It was not the plaintiff who was the defaulting party in consequence of which the Court proceeded to hear this evidence and decided the matter in his favour on the due date. Bearing in mind the scope of rule 3 and the details of which I have already enunciated namely that the hearing was not adjourned to the 8th of February at the request of the defendant and that in consequence it was not the defendant who was the defaulting party nor did defendant pray for an adjournment on the ground of production of evidence and failed to do so, it cannot therefore be said that the impugned order falls under rule 3. 1 am firmly of the opinion in view of the law as laid down in the rulings previously referred to, and on the facts of the case as have emerged, that the order dated 17th May 1962, falls within the purview of rule 2 of Order XVIL.

10. The next point for consideration is whether this being an application under section 115, C. P. C., this Court has jurisdic tion to hear the matter, for it is the contention of Mr. Mulraj for the respondent that if it is held that the impugned order falls under rule 2 of Order XVII, this Court has no jurisdiction, and that it is within the purview of the trial Court to decide whether sufficient cause has been made out on behalf of the respondent. Reliance has been placed on A I R 1928 Lah. 427, where it was held that where a Court has jurisdiction to determine a question and does determine that question, it cannot be said to have committed a material irregularity because it has come to an erroneous decision. Where the lower Appellate Court set aside the decree that had been passed in the absence of the defendant holding that it was an improper decree under Order XVIL rule 2, C. P C., and the plaintiff applied in revision on the ground that the lower Appellate Court had no jurisdiction to set aside the decree as it was a decree on merits passed under Order XVII, rule 3, it was held that the lower Appellate Court had jurisdiction to determine the question whether the decree was passed under Order XVII, rule 2 or Order XVII, rule 3, and having decided that question it cannot be said to have exercised jurisdic tion not vested in it, even though it came to an erroneous con clusion. ' Mr. Nathutal for the applicant-plaintiff has referred me to the provisions of section 115, C. P. C., as recently amended and stated that the revision under these provisions can lie only on certain specific grounds. Reference has also been made by Mr. Nathulal to A I R 1943 Lah. 65 to support his contention that the word "case" in section 115, C. P. C., does not always mean the whole suit. It is of a very wide import, and means any statement of fact judicially considered. This meaning is wide enough to include a decision of any substantial question in controversy between the parties affecting their rights, even though such order was passed m the course of the trial of the suit. An interlocutory, order deciding a question of this kind as distinguished from purely formal and incidental order is a case decided' within the meaning of section 115, but it will be open to revision only if the other conditions expressly laid down C in section 115 are satisfied, and the order has resulted or is likely to result in such gross injustice or irreparable injury as cannot be remedied otherwise than by the exercise of the extraordinary jurisdiction of the High Court at that stage.

11. It cannot be held that the impugned order dated the 8th of February 1962, finally decides the controversy between the parties affecting their rights, for the case of the defendant has been set out in detail in the Written Statement filed before the trial Court and indeed, it is contended not only that there has been a settlement between the parties, but that the defendant has in his possession what purports to be the terms of the settle ment between the parties and the receipt of some amounts alleged to have been paid to the applicant-plaintiff in consequence of it. The impugned order dated 8th February 1962, can, therefore, merely be called a formal or incidental order, and cannot be considered to be a case decided as referred to in section 115, Cr. P. C.

12. Even on facts, the impugned order was justified the strongest point being that the learned A. C. M. did not contest .the fact that -respondent had made an oral request to him almost immediately after the impugned order was passed. This supports respondent's presence outside Court on 8-2-1962.

13. For the reasons given above, there is no doubt in my mind as to the correctness of the order of the learned Civil Judge and A. C. M. Hyderabad that rule 2 of Order XVII came into operation and that, therefore, the ex parte decree passed against the defendant should be set aside. I, therefore, dismiss this revision application with no order as to costs.

K. B. A.

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