Ex-Parte Decree in Property Dispute Set Aside: Supreme Court Orders Fresh Trial

The Supreme Court’s judgment in Laldhari Mistri (Dead) Through LRs & Anr. vs. Vijay Kumar, delivered on July 13, 2017, addressed a contentious property dispute involving an ex-parte decree passed in 1987. The ruling clarifies the principles regarding setting aside ex-parte decrees and ensuring justice in cases where litigants may have been unfairly denied a hearing. The Court set aside three lower court orders that upheld the decree, allowing the case to be heard afresh on merits.

The case revolved around a residential property in Munger, Bihar, originally owned by Hira Mistry, who rented it to one Surendra Narayan Sinha. Eviction proceedings initiated by the landlord culminated in a favorable judgment in 1992. However, in a parallel dispute, the property became the subject of a specific performance suit filed by Vijay Kumar in 1986, resulting in an ex-parte decree on June 9, 1987. The appellants challenged this decree under Order IX Rule 13 of the Code of Civil Procedure (CPC), seeking its reversal, but were denied relief at all judicial levels until the matter reached the Supreme Court.

Background of the Case

The dispute stemmed from an alleged agreement to sell the property between Hira Mistry and Vijay Kumar in 1983, when eviction proceedings against the tenant were ongoing. Vijay Kumar later filed a suit for specific performance, claiming that the agreement entitled him to ownership. When the defendants failed to appear in court, an ex-parte decree was granted in his favor.

Key developments in the case:

• 1983: Alleged agreement to sell between Hira Mistry and Vijay Kumar.
• 1986: Vijay Kumar filed a suit for specific performance.
• June 9, 1987: Ex-parte decree passed in favor of Vijay Kumar.
• 1992: Eviction decree against the tenant upheld in second appeal.
• 1994: Vijay Kumar filed another suit to declare the eviction decree void.
• 1999-2005: Trial and appellate courts rejected efforts to set aside the ex-parte decree.
• July 13, 2017: Supreme Court set aside the ex-parte decree and ordered a fresh trial.

Arguments by the Petitioners (Laldhari Mistri & Anr.)

The appellants contended:

• They were unaware of the ex-parte decree until much later.
• They were deprived of a fair opportunity to contest the case.
• Vijay Kumar’s existence and claims were highly dubious, as he never personally appeared in court.
• The ex-parte decree was engineered to thwart the eviction proceedings against the tenant.
• The trial and appellate courts erred in denying their plea under Order IX Rule 13 of the CPC.

Arguments by the Respondent (Vijay Kumar)

The respondent countered:

• The appellants had been properly served with summons in the suit.
• The delay in filing the application to set aside the decree was unjustified.
• The courts had correctly ruled that service of summons was deemed to have been completed.
• The claim of the appellants was barred due to laches and delay.

Supreme Court’s Observations

The Supreme Court, comprising Justices Rohinton Fali Nariman and Sanjay Kishan Kaul, made several key observations:

“Fact is indeed stranger than fiction, as the unfolding of the drama of this case shows.”

“Vijay Kumar himself has never surfaced either in Court or at the tenanted premises.”

“It can be said, at the very least, that this gentleman has been put up by the tenant in order to stultify a final decree of eviction obtained by the landlord of the premises way back in 1992.”

Supreme Court’s Judgment

The Supreme Court ruled that:

• The ex-parte decree dated June 9, 1987, was set aside.
• The trial and appellate court orders refusing relief under Order IX Rule 13 CPC were quashed.
• The case was remanded for a fresh trial on merits before the Sub-Judge, Munger.
• The suit should be disposed of within one year.
• Possession status quo should be maintained until the case is finally decided.

Key Takeaways

1. Fair Trial Principle: The judgment upholds the fundamental right of litigants to contest claims affecting their property.
2. Fraudulent Claims Scrutinized: Courts must be cautious about claims made by dubious litigants to frustrate legitimate eviction proceedings.
3. Timely Challenge to Ex-Parte Decrees: Delay in challenging an ex-parte decree can be condoned if exceptional circumstances exist.
4. Order IX Rule 13 CPC Interpreted Broadly: Courts must exercise discretion judiciously when setting aside ex-parte decrees.

Impact of the Judgment

The ruling reinforces the importance of procedural fairness in property disputes:

• Ensures property owners have a chance to defend their rights.
• Prevents misuse of ex-parte decrees to bypass eviction orders.
• Strengthens judicial scrutiny of suspicious transactions.
• Directs expeditious trial disposal to avoid prolonged litigation.

Conclusion

The Supreme Court’s decision in Laldhari Mistri vs. Vijay Kumar serves as a crucial precedent for setting aside ex-parte decrees obtained under questionable circumstances. By ordering a fresh trial, the Court ensured procedural fairness and safeguarded property rights from fraudulent claims. The ruling underscores the judiciary’s role in preventing abuse of process while reinforcing the need for timely legal recourse.

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