Background
This case involves an appeal filed by M/s Swikriti Travels in the Delhi High Court challenging an order dated February 12, 2025, passed by the District Judge (Commercial Court) in a suit (CS DJ 1511/18) filed by M/s Mini Pocket OPC Pvt. Ltd. The Commercial Court had allowed the appellant’s application under Order IX Rule 13 of the Code of Civil Procedure, 1908, to set aside an ex parte decree but imposed a condition requiring the appellant to deposit the entire decretal amount of Rs. 38 lakhs as a fixed deposit.
Procedural History
The Commercial Court proceeded ex parte against the appellant on July 25, 2023, due to repeated non-appearances and passed an ex parte decree on October 10, 2023. The appellant filed an application under Order IX Rule 13, citing miscommunication by their previous counsel as the reason for non-appearance. The Commercial Court accepted this explanation but conditioned the setting aside of the decree on the deposit of Rs. 38 lakhs to safeguard the plaintiff’s interests.
Appellant’s Challenge
The appellant contested the condition of depositing the full decretal amount, arguing it was excessive and unjustified. Relying on the Supreme Court’s judgment in Tea Auction Ltd. v. Grace Hill Tea Industry, the appellant contended that such conditions must be reasonable and not oppressive, and the impugned order lacked reasoning for imposing the deposit.
Court’s Analysis
The Delhi High Court, presided over by Justices C. Hari Shankar and Ajay Digpaul, reviewed the impugned order and found it deficient in reasoning. The court noted that the Commercial Court accepted the appellant’s explanation for non-appearance but failed to justify the deposit condition with specific circumstances, as required by Tea Auction. The Supreme Court’s ruling emphasized that conditions under Order IX Rule 13 should not be unreasonably harsh, and any deposit requirement must be supported by clear reasons, particularly in special circumstances.
Outcome
The High Court set aside the impugned order’s deposit condition and remanded the matter to the Commercial Court to reconsider the conditions, if any, for allowing the Order IX Rule 13 application. The court directed that the application could not be rejected and instructed the Commercial Court to align any conditions with the principles in Tea Auction. The matter was scheduled for rehearing on April 30, 2025, and execution proceedings were adjourned pending the outcome.
Case Title: Swikriti Travels Vs. Mini Pocket OPC Pvt. Ltd.Date of Order: April 17, 2025
Case No.: FAO (COMM) 81/2025
Neutral Citation: 2025:DHC:2737-DB
Name of Court: High Court of Delhi
Name of Judges: Hon’ble Mr. Justice C. Hari Shankar and Hon’ble Mr. Justice Ajay Digpaul
