Allowed

M/S Mosaic Industries Pvt. Ltd. v. Smt Sadaram D Nayak

Karnataka HC2 Nov 2023RSA/932/2016

Case brief

AI extract

What is this about?

This Second Appeal against limiting an appeal on delay grounds by the lower appellate court. The High Court found that dismissing the appeal solely on limitation without examining evidence violated the statutory duty to independently assess facts. It allowed the appeal, remitted the case for merits hearing subject to deposit of the decree amount.

What did the court decide?

The impugned order dismissing the appeal on limitation is set aside. The appeal is allowed and remitted to the lower appellate court for hearing on merits subject to deposit of the decree amount.

M/S Mosaic Industries Pvt. Ltd. Vs Smt… — Civil Procedure and Limitation | Karnataka HC (2023)

¶1

1 - NC: 2023:KHC:39076 RSA No. 932 of 2016

¶2

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

¶3

DATED THIS THE 2^ND DAY OF NOVEMBER, 2023

¶4

BEFORE

¶5

THE HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM REGULAR SECOND APPEAL NO. 932 OF 2016

¶6

BETWEEN:

¶7

M/S MOSAIC INDUSTRIES (PVT) LTD., KASTURI VIHAR, KADRI TEMPLE ROAD, MANGALORE - 575 002 REPRESENTED BY APPELLANT NO.2, AS ITS DIRECTOR.

¶8

SRI. GOPALAKRISHNA RAO, S/O LATE M. UMESH RAO, AGED ABOUT 41 YEARS, R/AT KASTURI VIHAR, KADRI TEMPLE ROAD, MANGALORE - 575 002.

¶9

Digitally signed by CHAITHRA A Location: HIGH COURT OF KARNATAKA

¶10

(BY SRI. UDAYA PRAKASH M., ADVOCATE)

¶11

AND:

¶12

SMT. SADARAMA D NAYAK, (SINCE DEAD).

¶13

…APPELLANTS

¶14

MRS. VIJAYALAKSHMI, ADULT, W/O DR. SURESH, R/AT KRISHNA SOUDHA, KANKANDY BYE PASS, PUMPWELL, MANGALORE - 575 002.

¶15

¶16

NC: 2023:KHC:39076 RSA No. 932 of 2016

¶17

SRI. RAJARAM BHARADWAJ, S/O LATE A.D. NAYAK, AGED ABOUT 41 YEARS, R/AT KRISHNA SOUDHA, KANKANDY BYE PASS, PUMPWELL, MANGALORE - 575 002.

¶18

…RESPONDENTS

¶19

(BY SRI. O. SHIVARAM BHAT, ADVOCATE FOR R2; R2 IS THE GPA HOLDER OF R1)

¶20

THIS RSA IS FILED UNDER SEC.100 OF CPC, AGAINST THE JUDGMENT AND DECREE DATED 22.04.2016 PASSED IN R.A.NO.134/2010 ON THE FILE OF III ADDL. DISTRICT AND SESSIONS JUDGE, D.K., MANGALORE, DISMISSING THE APPEAL AND FILED AGAINST THE JUDGMENT AND DECREE DATED 30.06.2009 PASSED IN O.S.NO.94/2007 ON THE FILE OF III ADDL. CIVIL JUDGE (SR.DN.), MANGALORE.

¶21

THIS APPEAL, COMING ON FOR FINAL HEARING, THIS DAY, THE COURT DELIVERED THE FOLLOWING:

¶22

JUDGMENT

¶23

The captioned second appeal is by the defendants assailing the judgments of the courts below wherein, the respondents-plaintiffs' suit in O.S.No.94/2007 seeking recovery of Rs.4,34,375/- with interest at 15% p.a. is decreed by both the courts.

¶24

For the sake of brevity, the parties are referred as they are ranked before the Trial Court.

¶25

¶26

NC: 2023:KHC:39076 RSA No. 932 of 2016

¶27

The facts leading to the case are as under:-

¶28

The plaintiffs instituted a suit in O.S.N.94/2007 seeking recovery of Rs.4,34,375/- with interest at 15% p.a. from the date of the suit till payment of the entire amount.

¶29

The plaintiffs' case is that father of defendant Nos.2 and 3 viz., Umesh Rao was the Managing Director of the first defendant company. The plaintiffs entered into an agreement with the first defendant company who agreed to pay Rs.10.00 lakhs to the plaintiffs towards rent/compensation for having utilized 'Sri Krishna Soudha' Mangalore. The plaintiffs further claim that as per the mutual discussion, an agreement came to be executed on 05.08.2000. The plaintiffs further pleaded that the father of defendant Nos.2 and 3 on behalf of defendant No.1 company paid a sum of Rs.1.00 lakh, vide cheque bearing No.307357 drawn on Canara Bank, Hampankatta, Mangalore towards part payment of the total amount of Rs.10.00 lakhs. The present suit is instituted by the plaintiffs alleging that the defendants having paid part payment in terms of the agreement 05.08.2000, failed to pay balance amount of Rs.4,34,375/-. The present suit is filed in respect of

¶30

¶31

NC: 2023:KHC:39076 RSA No. 932 of 2016

¶32

the legal notice dated 22.04.2006 calling upon the defendants to pay the entire amount. The defendants instead of paying the amount as agreed under the agreement have issued frivolous reply notice and therefore, the present suit.

¶33

The defendants though served with summons failed to contest and they have been placed ex-parte .

¶34

The plaintiffs to substantiate their claim examined plaintiff No.1 as PW-1 and produced the original agreement vide Ex-P1 and passbooks vide Ex-P3. The learned Judge in the absence of contest, having taken cognizance in view of the original agreement at Ex-P1, recorded a finding that the defendants are liable to pay Rs.4,34,375/-. Referring to Exs-P1 to P6, the Court of first instance held that the pleadings coupled with Exs-P1 to P6 corroborates and substantiates the plaintiffs' claim. The Trial Court held that defendant Nos.2 and 3 having entered into an agreement with the plaintiffs have failed to pay the remaining instalment for a sum of Rs.3.00 lakhs which was payable on or before 31.03.2004.

¶35

Feeling aggrieved by the judgment and decree of the trial court, the defendants who failed to contest the suit,

¶36

5 - NC: 2023:KHC:39076 RSA No. 932 of 2016

¶37

preferred an appeal in R.A.No.134/2010. The defendants filed an application-I.A.II under section 5 of the Limitation Act seeking condonation of delay of 378 days in filing the appeal. The Appellate Court has dismissed the appeal only on the ground of delay.

¶38

This Court vide order dated 27.10.2023 was pleased to

¶39

admit the appeal on the following substantial questions of law:-

¶40

1. Whether both the Appellate Court erred in dismissing the appeal on the ground of delay, ignoring the fact that the right of an appeal under Section 96 is an inherent right and the Appellate Court, being the final finding authority, is under bounden duty to discuss the entire evidence afresh, take notice of grounds taken and reasons advanced by the Trial Courtto reach its decision?

¶41

2. Whether the dismissal of an appeal by the Appellate Court on the ground of delay has led to miscarriage of justice, having regard to the fact that appellants have questioned a money decree?

¶42

Heard learned counsel for the appellants-defendants and

¶43

learned counsel for the respondent-plaintiffs. Perused the order

¶44

¶45

NC: 2023:KHC:39076 RSA No. 932 of 2016

¶46

passed by the Appellate court on application-I.A.No.II filed under section 5 of the Limitation Act.

¶47

The plaintiffs have instituted a money suit seeking recovery of Rs.4,34,474/-. On examining the reasons assigned by the Appellate Court, this Court is more than satisfied that the Appellate Court has adopted an hypothetical approach while dealing with the application filed by the defendants under section 5 of the Limitation Act. Even if the defendants have failed to contest the suit and have suffered the ex-parte decree, the defendants deserve an opportunity to demonstrate before the Appellate Court that, even in the absence of contest, the evidence let in by the plaintiffs is not sufficient to decree the suit. It is equally trite law that in the absence of defence, the defendants can question the ex-parte decree under section 96(2) of CPC. It is equally trite law that the Regular first appeal under section 96 CPC is not an independent proceedings, but, it is only a continuation of original proceedings and if such an application is filed under section 96(2) CPC, the Appellate Court being final fact finding authority is bound to independently assess the entire evidence on record. Though the defendants have set up a new defence, it is very much open for the

¶48

¶49

NC: 2023:KHC:39076 RSA No. 932 of 2016

¶50

defendants to question the reasoning and findings of the trial court. In the absence of contest, the defendants still are entitled to demonstrate to the Appellate Court that the decree granted in favour of the plaintiffs is not sustainable and warrants reversal at the hands of the Appellate Court.

¶51

It is equally trite law that civil litigations cannot be given quietus by adopting hypothetical approach. Though the material on record gives an impression that there is laxness on the part of the defendants in not contesting the suit and not filing an appeal within the prescribed stipulated period, but, that in itself should not constitute a ground to take away the valuable right of statutory remedy available to the defendants under section 96(2) of CPC.

¶52

If the findings recorded by the First Appellate Court at these relevant paragraphs are examined, then this Court is of the view that the power which is invested with the Appellate Court in independently assessing the entire material on record is not forthcoming from the judgment under challenge. Section 107(2) of CPC does invest the Appellate Court with some powers that are conferred on Court on original jurisdiction. It is

¶53

¶54

NC: 2023:KHC:39076 RSA No. 932 of 2016

¶55

a trite law that it is a bounden duty of the Appellate court to see whether the evidence taken as a whole can reasonably justify the conclusion which the Trial Courtarrived at or whether there is an element of improbability arising through a number of circumstances which in the opinion of the Court outweights such finding. Though the First Appellate Court is still incumbent on the part of the First Appellate Court to formulate proper issues that would arise for consideration in the light of the grounds urged in regular appeal. The legislature has entrusted a very important duty to the First Appellate Court and it is for Appellate Court to decide finally all questions of facts on which the disposal of the suit might depend. The First Appellate Court has to make an honest endeavor to make a proper apprising of the merits of the case putup by the parties. But on plain reading of above culled out paragraphs of the judgment of the First Appellate Court, it can be easily inferred that the First Appellate Court has not taken trouble to give a re-look into the matter. The First Appellate Court being a final fact finding authority has to exhaustively deal with every contention, which would be vital and would have a bearing on the conclusions that are arrived at by the Trial court. There must be sufficient

¶56

¶57

NC: 2023:KHC:39076 RSA No. 932 of 2016

¶58

discussion to show that it has applied its own mind to the evidence. The First Appellate Court has to pronounce the judgment only after applying judicial mind to the appreciation of evidence and thereafter has to manifestly convey the judicial thinking by which it either confirms or reverse with the judgment of the Trial court. It is a trite law that the appeal is a continuation of suit and therefore, the First Appellate Court is under a bounden duty to revisit over the disputed questions of fact and thereafter come to a conclusion. In the process if the First Appellate Court comes to a conclusion that it cannot accept the reasons assigned by the Trial court, then it can divert with the reasons which are recorded by the Trial Courtand while reversing the decree of the Trial court, it has to attend all relevant questions, which would arise for consideration in the context of issues framed therein and ocular and documentary evidence which would be let in by the parties.

¶59

It would be relevant for this Court to refer to the principles laid down by the Kerala High Court in the case of Kurian Chacko v. Varkey Ouseph, AIR 1969 Kerala 316 while examining the power of the Appellate Court hearing an appeal under section 96 has held as under:-

¶60

10 -

¶61

NC: 2023:KHC:39076 RSA No. 932 of 2016

¶62

"Civil P.C. (5 of 1908) S.96, S.107- Duty of appellate Court to consider evidence independently.

¶63

An appellate court is the final Court of fact ordinarily and therefore a litigant is entitled to a full and fair and independent consideration of the evidence at the appellate stage. Anything less than this is unjust to him. No supplementing of appreciation is contemplated at the appellate stage. But, an independent appraisal of the evidence is the duty of the Court at that level. Failure to do that is an abdication of appellate power. It is the appellate Court's function not to find out whether there is perversity in the trial Court's judgment but whether it is wrong. There is very wide difference between a wrong conclusion and a perverse conclusion. A restricted revisional jurisdiction may be invoked under certain statutes only where there is perversity in the findings but the wider appellate jurisdiction conferred under Section 96 of the Civil Procedure Code demands a little more effort on the part of the appellate Court in going into the evidence to come to its own conclusion and reversing the trial Court's decision if it is found to be wrong."

¶64

(Emphasis supplied)

¶65

The Full Bench of the Hon'ble Apex Court in the case of Santosh Hazari v. Purushottam Tiwari(deceased) by LRs, (2001) 3 SCC 179 has held that the judgment of the First Appellate Court under Section 96 of CPC read with Order XLI Rule 1 and 2 of CPC must display conscious application of mind and record findings supported by reasons on all issues and contentions.

¶66

11 -

¶67

NC: 2023:KHC:39076 RSA No. 932 of 2016

¶68

The Full Bench of the Hon'ble Apex Court in the case of Madhukar and others v. Sangram and Others, (2001) 4 SCC 756 reiterating the principles laid down in the case of Santosh Hazari (supra) has further held that if Court fails to fulfil its obligations, the parties would not get the true benefit of a first appeal, which is a valuable right on the basis of which parties have the right to be heard on questions of law as well as of fact.

¶69

The Apex Court in the case of Collector, Land Acquisition, Anantnag and another v. Mst. Katji and Others, AIR 1987 SC 1353 has laid down illustrative contours under which an application for condonation of delay requires to be examined. It has been held in the aforesaid judgment to the following effect:

¶70

"3. The legislature has conferred the power to condone delay by enacting Section 5 of the Indian Limitation Act of 1963 in order to enable the Courts to do substantial justice to parties by disposing of matters on 'merits'. The expression "sufficient cause" employed by the legislature is adequately elastic to enable the courts to apply the law in a meaning- ful manner which subserves the ends of justice--that being the life-purpose for the existence of the institution of Courts. It is common knowledge that this Court has been making a justifiably liberal approach in matters instituted in this Court. But the

¶71

12 -

¶72

NC: 2023:KHC:39076 RSA No. 932 of 2016

¶73

message does not appear to have percolated down to all the other Courts in the hierarchy."

¶74

It is in this background, this Court is of the opinion that the judgment rendered by the Appellate Court by dismissing the appeal only on the ground of delay suffers from serious infirmities. The dismissal of the appeal only on the ground of limitation has led to miscarriage of justice and the defendants' right to statutory appeal is taken away by the Appellate Court. This Court is also of the view that if the delay is condoned, no serious prejudice would be caused to the plaintiffs. On the contrary, the appeal having been dismissed on the ground of delay has virtually affected the rights of the defendants.

¶75

In the light of the discussions made supra, the impugned order passéd by the Appellate Court on application-I.A.II filed under section 5 of the Limitation Act warrants interference at the hands of this Court. The Appellate Court ought to have allowed the application and by condoning the delay, was required to relegate the parties to argue the matter on merits. Therefore, the substantial questions of law framed by this Court

¶76

13 -

¶77

NC: 2023:KHC:39076 RSA No. 932 of 2016

¶78

are accordingly answered in the affirmative. This Court is of the view that dismissal of the appeal merely on the ground of delay has led to miscarriage of justice.

¶79

For the reasons stated above, I pass the following order:-

¶80

I. The appeal is allowed. The order dated 22.04.2016 passed on I.A.No.II in R.A.No.134/2010 by learned III Addl. District & Sessions Judge, Dakshina Kannada, Mangalore, is set aside. The appeal filed by the defendants stands registered. Matter is remitted back to the Lower Appellate Court, subject to defendants depositing the entire decreetal amount alongwith interest before the Appellate Court within a period of four weeks.

¶81

II. The Appellate Court shall permit the defendants to prosecute the appeal only subject to deposit of entire decreetal amount with interest.

¶82

III. If the defendants fail to deposit the decreetal amount with interest, it is open for the Appellate Court to dismiss the appeal only on that count.

¶83

14 -

¶84

NC: 2023:KHC:39076 RSA No. 932 of 2016

¶85

IV.The Appellate Court shall decide the appeal within a period of four months from the date of receipt of a copy of this order.

¶86

Sd/JUDGE

¶87

MN List No.: 1 Sl No.: 43 CT:SNN

M/S Mosaic Industries Pvt. Ltd. v. Smt Sadaram D Nayak

Case brief

What is this about?

What did the court decide?

M/S Mosaic Industries Pvt. Ltd. v. Smt Sadaram D Nayak

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Siddananjaiah Vs D K Ramaiah

Smt Jayalakshmamma Vs Sri Paramesh

Chowdareddy Since Dead by His Lrs Vs Sri Venkatareddy

Smt. Jayamma Vs Sri Vinod Kumar

Sri Sanath Kumar Padival Vs Smt Vijayamma

Sri Sonnegowda M Vs Sri Muniswamigowda