Supreme Court Partially Allows Appeal in Ex-Parte Decree Case: Key Legal Analysis
The Supreme Court of India has recently delivered a significant ruling in the case of C. Prabhakar Rao & Anr. vs. Sama Mahipal Reddy & Anr., concerning an ex-parte decree in a suit for specific performance of an agreement for sale. The Court partially allowed the appeal, affirming the High Court’s decision to condone the delay but setting aside its order that automatically restored the suit without due consideration.
Background of the Case
The dispute began when the appellants, C. Prabhakar Rao & Anr., entered into an agreement with the respondents, Sama Mahipal Reddy & Anr., in 2015 for the sale of certain property for Rs. 1,89,75,000. According to the appellants:
- A total of Rs. 45,00,000 was paid as an advance.
- The respondents were responsible for conducting a land survey and demarcating the boundaries before executing the sale deed.
- However, instead of fulfilling their obligations, the respondents issued a legal notice on April 7, 2016, unilaterally canceling the agreement.
As a result, the appellants filed O.S. No. 150 of 2016 before the Civil Court, seeking specific performance of the agreement.
Trial Court Proceedings
The respondents entered appearance through their counsel but failed to file a written statement despite multiple opportunities. Consequently, the Trial Court set them ex-parte on February 14, 2018. Subsequently, on August 20, 2018, the Court passed an ex-parte decree directing the respondents to execute the sale deed in favor of the appellants within six months, upon deposit of the balance sale consideration.
Delay in Respondents’ Challenge to the Ex-Parte Decree
After more than two years, the respondents approached the Trial Court by filing two applications:
- I.A. No. 493 of 2021: Seeking condonation of 939 days of delay in filing the application to set aside the ex-parte decree.
- I.A. No. 1163 of 2021: Seeking to set aside the ex-parte decree itself.
The Trial Court dismissed I.A. No. 493 of 2021, finding that the respondents had failed to provide sufficient cause for the delay. Consequently, I.A. No. 1163 of 2021 was also dismissed, as the challenge to the ex-parte decree was time-barred.
High Court’s Ruling
The respondents then filed Civil Revision Petition No. 710 of 2024 before the Telangana High Court, challenging only the dismissal of I.A. No. 493 of 2021 (delay condonation). The High Court:
- Allowed the revision petition and condoned the delay.
- Set aside the ex-parte decree and restored the suit.
- Directed the Trial Court to dispose of the suit within six months.
This automatic restoration of the suit without independent adjudication of I.A. No. 1163 of 2021 led the appellants to approach the Supreme Court.
Arguments Before the Supreme Court
Arguments by the Appellants:
- The High Court exceeded its jurisdiction by setting aside the ex-parte decree when no revision was filed against I.A. No. 1163 of 2021.
- The facts and legal considerations for condoning delay and setting aside an ex-parte decree are distinct and must be adjudicated separately.
- The High Court’s ruling effectively granted relief that was not even sought by the respondents.
Arguments by the Respondents:
- The delay in filing the application to set aside the ex-parte decree was due to their counsel’s failure to inform them about case developments.
- The ex-parte decree was unfair since they had already paid a substantial portion of the consideration.
- They should be given a fair opportunity to defend the case.
Supreme Court’s Observations and Ruling
The Supreme Court agreed with the appellants and ruled that:
- Condoning the delay and setting aside the ex-parte decree are separate legal matters: The Court held that while the High Court had the authority to condone the delay, it could not automatically restore the suit without a proper adjudication of I.A. No. 1163 of 2021.
- High Court exceeded its jurisdiction: Since the respondents did not challenge the Trial Court’s dismissal of I.A. No. 1163 of 2021, the High Court had no basis to grant that relief.
- The Trial Court must hear and decide I.A. No. 1163 of 2021 separately: The case was remanded for consideration on whether the ex-parte decree should be set aside based on merits.
“The order passed by the High Court setting aside the ex-parte decree when no revision is filed against the said order of the Trial Court in I.A. No. 1163 of 2021 cannot be sustained.”
Accordingly, the Supreme Court:
- Affirmed the High Court’s decision to condone the delay.
- Set aside the High Court’s decision to restore the suit.
- Revived I.A. No. 1163 of 2021 and directed the Trial Court to decide it on merits within two months.
- Ordered the respondents to pay Rs. 50,000 as costs to the appellants.
Key Takeaways from the Judgment
- Condonation of delay and setting aside an ex-parte decree require separate consideration: A court cannot assume that one automatically follows the other.
- Jurisdictional limits of High Courts in revision petitions: The High Court cannot grant relief that was not specifically challenged before it.
- Procedural fairness in civil litigation: Even if delay is condoned, the decision to set aside an ex-parte decree must be based on legal merits.
- Responsibility of litigants to follow their cases: Courts expect parties to be diligent in tracking the progress of their cases.
Conclusion
The Supreme Court’s ruling in this case reinforces the importance of procedural fairness and judicial discipline. It clarifies that the process of setting aside an ex-parte decree requires independent adjudication and cannot be presumed upon delay condonation. The decision also serves as a reminder that parties must diligently monitor their cases and take timely action to avoid adverse judicial outcomes.
Petitioner Name: C. Prabhakar Rao & Anr..Respondent Name: Sama Mahipal Reddy & Anr..Judgment By: Justice Pamidighantam Sri Narasimha, Justice Manoj Misra.Place Of Incident: Telangana.Judgment Date: 04-03-2025.
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