Supreme Court Upholds Delay Condonation but Sets Aside High Court’s Order Restoring Suit, Directs Trial Court to Decide Ex-Parte Decree Independently
Kiran Raj
The Supreme Court has directed the Trial Court to decide afresh on an application seeking to set aside an ex-parte decree in a suit for specific performance. The Division Bench, comprising Justice Pamidighantam Sri Narasimha and Justice Manoj Misra, allowed the appeal in part while upholding the High Court’s decision to condone the delay in filing the application.
The dispute arose from an agreement for sale executed in 2015. The appellants asserted that the respondents had agreed to sell a certain property for a total consideration of Rs. 1,89,75,000/-. According to the appellants, an advance payment of Rs. 5 lakhs was made at the time of execution of the agreement, followed by an additional payment of Rs. 40 lakhs on December 21, 2015. It was further alleged that clause six of the agreement required the respondents to conduct a land survey, demarcate boundaries, and execute the sale deed. However, instead of proceeding with the sale, the respondents issued a legal notice on April 7, 2016, cancelling the agreement. The appellants then instituted a suit for specific performance before the Civil Court.
The respondents entered an appearance through their counsel, who filed a vakalatnama on November 30, 2016. However, they failed to file a written statement or participate in the proceedings diligently. As a result, the Trial Court set the respondents ex-parte on February 14, 2018. Subsequently, on August 20, 2018, the Trial Court passed an ex-parte decree directing the respondents to execute the sale deed in favor of the appellants within six months after the appellants deposited the balance sale consideration.
In 2021, the respondents approached the Trial Court, seeking to have the ex-parte decree set aside. Two applications were filed: one for condonation of delay (I.A. No. 493 of 2021) and another for setting aside the decree (I.A. No. 1163 of 2021). The Trial Court considered the delay condonation application first and dismissed it on September 29, 2023, noting that the delay of 939 days had not been sufficiently explained. The court stated:
"Now-a-days E-courts website is available to check the status of the case and even the petitioner is not prevented from coming to the court for approaching section officers to know the status of their case but the petitioner kept quiet till 2021 by sleeping over his rights."
Further, the Trial Court observed:
"The petitioner filed vakalath on 30-11-2016 whereas ex-parte decree passed on 20-08-2018. However, in spite of ample opportunities the petitioner failed to file written statement and failed to know the status of the case and failed to defend bonafidely which show the negligent conduct of the petitioner."
Since the delay condonation application was dismissed, the Trial Court did not separately consider the application for setting aside the ex-parte decree and proceeded to dismiss it as well.
The respondents then filed a revision petition before the High Court of Telangana (Civil Revision Petition No. 710 of 2024), challenging only the dismissal of the delay condonation application. No revision was filed against the order dismissing the application for setting aside the ex-parte decree.
The High Court allowed the revision and condoned the delay. In its order, the High Court stated:
"Considering the facts, this Court finds that it is just and reasonable to set aside the order of the trial Court and grant an opportunity to the petitioner herein to file a written statement and file a counter immediately before the trial Court."
The High Court further directed the Trial Court to dispose of the suit within six months.
The Supreme Court noted that the High Court had exercised its revisional jurisdiction only in relation to the condonation of delay. The Court observed that the High Court, while condoning the delay, had also set aside the ex-parte decree despite there being no revision against the order refusing to set aside the decree.
The Court stated:
"To start with, facts and events relating to passing of an ex-parte decree are distinct from the facts and events relating to the delayed filing of the application for setting aside of the ex-parte decree. Secondly, the procedure for setting aside the ex-parte decree will again be distinct from the procedure for condoning the delayed filing of the application to set aside the ex-parte decree. Thirdly, the adjudication and determination of a court with respect to setting aside the ex-parte decree are independent of the adjudication with respect to condoning the delay. Finally, the remedies against these orders are independent and one remedy would not subsume the other."
The Supreme Court held that since the application for setting aside the ex-parte decree (I.A. No. 1163 of 2021) was not subject to revision before the High Court, the High Court could not have set aside the decree. The Court stated:
"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."
The Supreme Court upheld the High Court’s finding that there was sufficient justification to condone the delay in filing the application for setting aside the ex-parte decree. However, the Court set aside the High Court’s direction restoring the suit. It observed that the question of setting aside the ex-parte decree must be adjudicated separately by the Trial Court.
The Court directed:
"For the reasons stated above, the appeal is allowed in part. The finding of the High Court that there is a justifiable reason for condoning the delay in filing the application for setting aside the ex-parte decree is affirmed. The conclusion of the High Court that the suit is restored is set aside. We revive I.A. No. 1163 of 2021 and direct the Trial Court to take up said application and dispose it of as expeditiously as possible, preferably within two months from the date of the receipt of this order."
Additionally, the Supreme Court directed that the appellants be entitled to costs of Rs. 50,000, payable by the respondents.
Case Title: C. Prabhakar Rao and Anr v. Sama Mahipal Reddy and Anr
Neutral Citation: 2025 INSC 311
Case Number: SLP (C) No. 29261 of 2024
Bench: Justice Pamidighantam Sri Narasimha, Justice Manoj Misra
[Read/Download order]
