Under Section 27 of the General Clauses Act, 1897, service of a letter
is presumed to be effective if sent to the correct address
Case Name: Strix Limited Vs. Maharaja Appliances Limited
Court: High Court of Delhi at New Delhi
Case Number: CS(COMM) 403/2018
Neutral Citation: 2025:DHC:828
Date of Judgment: February 11, 2025
Judge: Hon'ble Ms. Justice Mini Pushkarna
Introduction:The case revolves around an intellectual property dispute, where Strix Limited, the plaintiff, secured an ex-parte decree against Maharaja Appliances Limited. The defendant later moved applications seeking to set aside the decree and stay execution proceedings, citing lack of notice and procedural lapses. The Delhi High Court examined the legitimacy of these claims, applying principles of due diligence, procedural compliance, and delay condonation in commercial litigation.
Factual Background:
Nature of Suit: Strix Limited had filed a commercial suit against Maharaja Appliances Limited, which was decreed ex-parte on October 20, 2023. The court awarded damages of Rs. 50,00,000 and costs of Rs. 31,44,925 against the defendant, payable within three months, failing which interest at 7% simple interest would accrue from the judgment date.
Defendant’s Claims: The defendant claimed it was unaware of the ex-parte judgment until November 30, 2023, when it received a legal notice from the plaintiff’s counsel. The defendant attributed its lack of participation in the case to a change in company management, miscommunication, and procedural irregularities.Organizational Changes: The defendant's business division, Maharaja Whiteline Industries Pvt. Ltd., was sold to M/s SEB Internationale SAS (France), which allegedly led to disruption in legal oversight.
Procedural Background:The plaintiff secured an interim injunction on September 10, 2009, restraining the defendant from certain actions.The defendant's right to lead evidence was closed on May 21, 2014, as its witness failed to appear.The defendant’s counsel sought discharge on August 12, 2014, citing lack of instructions.Notices were issued to the defendant on March 22, 2022, but the defendant did not appear.The matter was listed for final hearing on July 27, 2023, noting that the defendant had ceased participation.The court delivered an ex-parte decree on October 20, 2023.The defendant filed applications under Order IX Rule 13 CPC, seeking to set aside the decree, along with condonation of delay applications.
Issues Involved:Whether the defendant was prevented by sufficient cause from appearing when the suit was called for hearing? Whether the ex-parte decree should be set aside under Order IX Rule 13 CPC? Whether the delay of 156 days in filing and 110 days in re-filing the setting-aside application should be condoned? Whether the execution proceedings should be stayed pending disposal of these applications?
Submissions of the Parties:
Defendant’s Submissions:The defendant was unaware of the suit's progress due to management transfer. No explicit order directing ex-parte proceedings was passed.Notices were sent to an outdated email registered with the MCA, which was no longer in use.The delay in filing the application was due to administrative lapses and counsel’s unavailability.Relief should be granted based on Collector, Land Acquisition, Anantnag & Anr. v. Mst. Katiji & Ors., (1987) 2 SCC 107 and Rani Kusum (Smt) v. Kanchan Devi (Smt) & Ors., (2005) 6 SCC 705.
Plaintiff’s Submissions:The defendant was aware of the proceedings and had willfully neglected to appear.The previous counsel had formally notified the defendant via registered post.Court-issued notices were deemed served, as per Section 27 of the General Clauses Act, 1897.The defendant acted negligently and cannot claim ignorance.The applications should be dismissed under Govt. of Maharashtra (Water Resources Department) v. Borse Brothers Engineers and Contractors Pvt. Ltd., 2021 SCC OnLine SC 233, which mandates strict adherence to procedural timelines in commercial litigation.
Judgments Cited and Their Context in This Case:
Jain Developers &
Others Versus Raja R. Chhabria and others, 2018 SCC OnLine Bom 121,
Para 29: Under Section 27 of the General Clauses Act, 1897, service of a letter is presumed to be effective if sent to the correct address.
Parimal v. Veena Alias Bharti, 2011 SCC OnLine SC 311: Defined "sufficient cause" in setting aside ex-parte decrees. Applied here to assess the defendant's claims.
Jain Developers & Ors. v. Raja R. Chhabria & Ors., 2018 SCC OnLine Bom 121: Established presumption of service if notice is sent to the correct address. Applied to rebut the defendant’s claim of non-service.
Moddus Media Pvt. Ltd. v. M/s Scone Exhibition Pvt. Ltd., 2017 SCC OnLine Del 8491: Held that corporate litigants must act diligently. Used to counter the defendant's negligence argument.
Dwarika Prasad (D) Thr. LRs v. Prithvi Raj Singh, 2024 SCC OnLine SC 3828: Relied on by the defendant but distinguished as it involved an illiterate party, whereas the defendant here was a corporate entity.
Balu @ Madhavrao Shankarrao Ghorpade v. Radhakkabai Panditrao Ghorpade, 2003 SCC OnLine Bom 739: Established that a decree can be ex-parte even if no formal order is passed. Applied to validate the proceedings.
Court’s Reasoning and Analysis:
Presumption of Service under General Clauses Act: Under Section 27 of the General Clauses Act, 1897, service of a letter
is presumed to be effective if sent to the correct address. Once a letter is
properly dispatched by registered post, the burden shifts to the party
disputing the delivery to provide contrary proof. (See: Jain Developers &
Others Versus Raja R. Chhabria and others, 2018 SCC OnLine Bom 121,
Para 29). In the present case, the defendant has failed to provide such proof.
Delay in Filing and Re-Filing: The cumulative delay of 266 days was held inexcusable, reflecting gross negligence.
No Sufficient Cause: The defendant’s explanations were deemed inadequate, and its conduct was seen as deliberate delay.
Commercial Courts Act, 2015: The court emphasized strict adherence to timelines in commercial litigation, citing Borse Brothers Engineers (2021 SCC OnLine SC 233).
Final Decision:
Application to Set Aside Ex-Parte Decree (I.A. 39008/2024): Dismissed.
Application for Condonation of Delay in Filing (I.A. 39010/2024): Dismissed.
Application for Condonation of Delay in Re-Filing (I.A. 39009/2024): Dismissed.
Application for Stay on Execution Proceedings (I.A. 43736/2024): Dismissed.
Execution Proceedings to Continue: The executing court was allowed to proceed with execution.
Conclusion: This case underscores the importance of due diligence and procedural compliance in commercial litigation. The court reinforced the principle that a litigant, especially a corporate entity, cannot claim ignorance when multiple notices have been served. The ruling strengthens the jurisprudence on setting aside ex-parte decrees and delay condonation in commercial disputes, setting a high bar for defendants seeking relief under Order IX Rule 13 CPC.
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Written by: Advocate Ajay Amitabh Suman,IP Adjutor [Patent and Trademark Attorney],High Court of Delhi
