RAHINI ROY Vs. JETHMULL BHOJRAJ

JUDGEMENT

(1.) This is an application on behalf of the petitioner, a partnership firm, under Order XXXVII Rule 4 of the Code of Civil Procedure for setting aside a decree passed by me as an undefended suit on 8th September, 1967. Admittedly, this suit was instituted as a summary suit under Order XXXVII on three hundis for Rs. 10,000/- each payable to the plaintiff or order 180 days after the said date without grace. The said hundis were drawn by the petitioner firm, M/s. Jethmull Bhojraj on K.K. Sukhani and were purported to have been accepted by one K.C. Sukla, the defendant No. 2. The said hundis on maturity were duly presented to the defendant No, 2 for payment but were dishonoured by non-payment due notice of which was given to the defendant No. 1 also. The defendants having failed and neglected to pay the amounts of the said hundis, the present suit was instituted against the defendants for a decree for Rs. 35,365/- on 12th January, 1967. On 9th February, 1967, the defendant No. 1 was informed by one of its assistants that Writ of Summons in the said summary suit along with a notice dated 8th February, 1967, was purported to have been served upon the defendants. On 21st February, 1967, the firm by a Master's Summons taken out by its attorneys, Khaitan & Co. made an application in the said suit, inter alia, for setting aside the purported service of the writ of summons and alternatively, for leave to enter appearance and to defend the suit. On 28th June, 1967, the said application came up for hearing before R.M. Dutta, J., who was pleased to grant him leave to defend on condition that the petitioner would furnish security to the extent of Rs. 30,000/- to the satisfaction of the Registrar within one month. His Lordship was further pleased to direct that in case no security is furnished, there would be no order on the said application. Thereafter, an application for leave to file the Memorandum of Appeal without a certified copy was presented before the Court of Appeal consisting of Ray and S.K. Mukherjee, JJ., against the said order of R.M. Dutta, J. The said application however was withdrawn with the leave of the Appeal Court. The defendants having failed to deposit the sum of Rs. 30,000/- in pursuance of the order of Dutta, J., the matter appeared in my undefended list on 8th September, 1967, and a decree was passed. It is alleged that the petitioner for the first time came to know of the ex parte decree on 21st December, 1967. On 2nd February, 1968, the Memorandum of Appeal was filed on behalf of the petitioner against the said decree. But the said Memorandum of Appeal was returned to the defendant No. 1's solicitor as the same was filed out of time. On 19th February, 1968, the petitioner made an application before the Appellate Court for condonation of delay in preferring the said appeal and for extension of time to file the Memorandum of Appeal. On 5th March, 1968, the said application came up for hearing before the Appellate Court and their Lordships were pleased to deliver a judgment by which the said application was dismissed. Thereafter, on 11th March, 1968, the present application is filed.

(2.) The short point to be decided in this application is whether there are "special circumstances" within the meaning of Order XXXVII Rule 4 of the Code which would enable me to exercise my discretion to set aside the decree passed by me, Order XXXVII, Rule 4 reads as follows:

(3.) Mr. Tebriwalla, Counsel for the petitioner, has contended that on the face of the three hundis, no decree could have been passed against the petitioner and, as such, I should exercise my discretion under Order XXXVII, Rule 4 in setting aside the decree. According to him, the drawer of the hundis, K.K. Sukhani had no authority to sign the documents on behalf of the petitioner either as a partner or otherwise. Secondly, K.K. Sukhani as partner or authorised agent is the drawer and the drawee is also K.K. Sukhani in his individual capacity; the acceptor is K.C. Sukla, a different man who is unknown to the petitioner. Thirdly, the plaintiff's cause of action rested on the presentment of the hundis to the defendant No. 2 for payment and on the fact that the same were dishonoured by non-payment by the defendant No. 2. Relying on Section 37 of the Negotiable Instruments Act 1881, he has argued that no case has been made out in the plaint that K.K. Sukhani in his individual capacity has accepted the hundis, or that the drawer has dishonoured it by non-payment. A specific case was made out that K.C. Sukla is the acceptor and the cause of action arose as a result of Mr. Sukla's failure to pay. He has drawn my attention to Sections 27, 33, 61, 91-93 and 148 and wanted me to hold that, on a proper construction of the said sections read with Section 37, I should hold that there was no cause of action against the petitioner.