Supreme Court Restores Ex-Parte Decree in Gujarat Electricity Dues Case

The case of Khodiyaar Rolling Mills vs. Paschim Gujarat Vij Company Ltd. involved a long-standing dispute regarding outstanding electricity dues. The primary issue before the Supreme Court was whether an ex-parte decree passed against the appellant should be set aside, allowing them an opportunity to contest the case.

The Supreme Court ruled in favor of the appellant, Khodiyaar Rolling Mills, setting aside the ex-parte decree and directing the trial court to restore and hear the case on its merits.

Background of the Case

Khodiyaar Rolling Mills operated a mill and was supplied electricity by Paschim Gujarat Vij Company Ltd. (PGVCL), the electricity distributor for the area. The dispute arose when PGVCL claimed that the appellant had an outstanding electricity bill amounting to Rs. 63,41,994.20.

PGVCL filed Special Civil Suit No. 56 of 2006 for the recovery of this amount. The appellant failed to appear in court, resulting in an ex-parte decree passed on April 17, 2007. Subsequently, the appellant filed an application under Order 9 Rule 13 of the Civil Procedure Code (CPC) to set aside the decree. However, the trial court dismissed the application, citing an unexplained delay of twenty months and thirteen days in filing the appeal.

The Gujarat High Court upheld this decision, holding that the appellant had knowledge of the ex-parte decree and failed to act promptly.

Arguments by the Petitioner (Khodiyaar Rolling Mills)

• The delay in filing the application to set aside the decree was unintentional and should not prevent them from contesting the case.
• The trial court failed to appreciate the financial difficulties faced by the appellant, which contributed to the delay.
• The decree involved a significant financial liability, and they should be given an opportunity to defend their case on merits.
• They had already deposited Rs. 70,00,000/- (Rupees Seventy Lakhs) as per the Supreme Court’s interim order, showing their bona fide intentions.

Arguments by the Respondents (Paschim Gujarat Vij Company Ltd.)

• The appellant was aware of the decree but failed to take any steps within the stipulated legal timeframe.
• Setting aside the decree would set a precedent that encourages negligence in responding to legal proceedings.
• The courts had already examined the delay and found no valid justification for condoning it.
• The ex-parte decree was legally sound, and reopening the case would unnecessarily prolong the litigation.

Supreme Court’s Judgment

The Supreme Court ruled in favor of the appellant and set aside the ex-parte decree, stating:

• The trial court failed to consider the appellant’s bona fide attempt to contest the case.
• Since the appellant had already deposited Rs. 70,00,000/-, it demonstrated their willingness to comply with judicial proceedings.
• The delay in filing the application under Order 9 Rule 13 CPC should not completely deny the appellant an opportunity to present their case.
• The case should be restored to its original number and heard on merits.
• “Since the appellant has shown his bona fide by depositing Rs. 70,00,000/-, without going into the merits of the case, with a view to afford an opportunity of hearing to the appellant in the suit, the ex-parte decree (dated 17.4.2007) passed in Special Civil Suit No. 56 of 2006 is set aside.”

The Court further observed:

“The deposit of Rs. 70,00,000/- (Rupees Seventy Lakhs) will be subject to the final outcome of the dispute between the parties.”

Implementation of the Judgment

The Supreme Court directed the following actions:

• The trial court must restore Special Civil Suit No. 56 of 2006 to its original number.
• The case must be heard and decided expeditiously.
• The appellant must file its written statement within four weeks.
• The deposited amount of Rs. 70,00,000/- shall be subject to the final outcome of the dispute.

Significance of the Judgment

This ruling reinforces the principle that procedural delays should not result in an absolute denial of justice. The Supreme Court recognized the importance of giving litigants a fair chance to defend themselves, particularly in cases involving significant financial liability.

By setting aside the ex-parte decree, the Court ensured that the matter would be decided on its merits rather than dismissed on technical grounds.

Conclusion

The Supreme Court’s decision in this case ensures that litigants are not unfairly penalized due to procedural lapses. By restoring the case for reconsideration, the Court upheld the right to a fair hearing and reinforced the principles of justice.

This ruling serves as an important precedent for cases involving ex-parte decrees, highlighting that courts must balance procedural discipline with substantive justice.

Petitioner Name: Khodiyaar Rolling Mills.
Respondent Name: Paschim Gujarat Vij Company Ltd..
Judgment By: Justice R. Banumathi, Justice Indira Banerjee.
Place Of Incident: Gujarat.
Judgment Date: 20-11-2018.

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