Supreme Court Sets Aside Ex-Parte Decree for Lack of Fair Hearing in Property Dispute: Ranjit Singh vs. State of Uttarakhand (2024)

Date of the Judgment: 12 September 2024

Citation: 2024 INSC 724

Judges: Abhay S. Oka, J., Ahsanuddin Amanullah, J., Augustine George Masih, J.

Can a court proceed with a case and strike out a defendant’s defense without proper notice, even if the defendant has not filed a written statement? The Supreme Court of India recently addressed this critical question in a property dispute case, emphasizing the fundamental principles of natural justice and fair hearing. This judgment highlights the importance of ensuring that all parties have a reasonable opportunity to present their case, even in situations where they may be considered to be in default. The bench comprised Justices Abhay S. Oka, Ahsanuddin Amanullah, and Augustine George Masih, with the judgment authored by Justice Abhay S. Oka.

Case Background

The case involves a property dispute where the State of Uttaranchal (now Uttarakhand) was a tenant of the plaintiffs, Ranjit Singh and Shanti Devi (now deceased, represented by legal heirs). The plaintiffs filed a suit on 8th November 2001, seeking possession of the property, alleging that the State had not paid the monthly rent of Rs. 86,232, which was fixed by the court on 18th May 1999, with effect from 1st September 1993. The plaintiffs issued a notice of termination of tenancy under Section 106 of the Transfer of Property Act, 1882, and filed the suit for eviction when the State failed to comply. The defendants, including the State of Uttarakhand, appeared in court and sought adjournments to file their written statement.

Timeline

Course of Proceedings

Initially, the defendants sought adjournments to file their written statement. On 22nd April 2002, the trial court ordered the suit to proceed ex parte due to the defendants’ failure to file their written statement. Subsequently, on 3rd May 2002, the court allowed the plaintiffs’ application to strike out the defendants’ defense. The defendants’ application to set aside the ex parte order was rejected on 30th May 2002. The defendants also applied to set aside the order striking out their defense, which was also rejected. The High Court rejected the defendants’ revision application against the ex parte decree. The defendants were then advised to raise objections under Section 47 of the Code of Civil Procedure, 1908, in the execution proceedings, leading to the present appeal before the Supreme Court.

Legal Framework

The case primarily involves the interpretation of procedural law and the principles of natural justice. Section 106 of the Transfer of Property Act, 1882, deals with the termination of tenancy by notice. The core legal issue revolves around whether the defendants were given a fair opportunity to be heard before the court proceeded ex parte and struck out their defense. The Supreme Court emphasized that even when a suit proceeds ex parte, the defendant retains the right to cross-examine the plaintiff’s witnesses and argue on points of law. The court also highlighted the importance of giving notice to the defendants before taking up any application that could adversely affect their rights, especially when a date for hearing has already been fixed.

The relevant provision is Section 106 of the Transfer of Property Act, 1882 which deals with the termination of tenancy by notice.

Arguments

Plaintiffs’ Arguments:

• The plaintiffs argued that the defendants were tenants who had not paid rent as per the order of the 3rd Additional District Judge, Dehradun.
• They contended that they had issued a notice of termination of tenancy under Section 106 of the Transfer of Property Act, 1882, and the defendants failed to comply.
• They submitted that the defendants were given sufficient opportunity to file their written statement but failed to do so, justifying the ex parte proceedings.
• They argued that since the suit was directed to proceed ex parte, there was no need to give intimation to the defendants or their counsel that the application for striking out the defence would be taken up on 3rd May, 2002.

Defendants’ Arguments:

• The defendants argued that they were not given a fair opportunity to be heard before the trial court ordered the suit to proceed ex parte.
• They contended that the District Judge was holding a Camp Court at Mussoorie on 22nd April 2002, and they were under the impression that the suit would not proceed.
• They submitted that the application for striking out their defense was taken up on 3rd May 2002, without any notice to them, even though the next date of hearing was fixed for 30th May 2002.
• They argued that the order striking out their defense was illegal and contrary to the principles of natural justice.
• They also contended that they were not served with a copy of the amended plaint.

Innovativeness of the argument: The defendants’ argument that the trial court’s actions violated natural justice principles by preponing the hearing without notice was crucial in persuading the Supreme Court.

Submissions Table

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issue that the court addressed was:

• Whether the ex parte decree passed by the trial court was valid, considering the lack of proper notice to the defendants and the striking out of their defense without a hearing.

Treatment of the Issue by the Court

Authorities

The Supreme Court did not cite any specific cases or books in this judgment. However, the Court considered the following legal provisions:

• Section 106 of the Transfer of Property Act, 1882: This section deals with the termination of tenancy by notice.
• Section 25 of the Provincial Small Cause Courts Act, 1887: This section deals with the power of the High Court to call for records of cases decided by a Small Cause Court.
• Section 47 of the Code of Civil Procedure, 1908: This section deals with questions to be determined by the court executing a decree.

Authorities Table

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The court acknowledged the relevance of Section 106 of the Transfer of Property Act, 1882, but emphasized that procedural fairness must be followed even when a notice of termination has been issued.
• The court referred to Section 25 of the Provincial Small Cause Courts Act, 1887, to highlight the defendants’ attempt to challenge the ex-parte decree.
• The court acknowledged Section 47 of the Code of Civil Procedure, 1908, and the defendants’ attempt to raise objections in the execution proceedings.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily driven by the principles of natural justice and the need to ensure a fair hearing for all parties. The court was concerned that the defendants were not given proper notice of the application to strike out their defence. The court emphasized that even if a defendant does not file a written statement, they still have the right to cross-examine the plaintiff’s witnesses and argue on points of law. The court also noted that the trial court had preponed the hearing without notice to the defendants, which was deemed illegal. The court’s reasoning was heavily influenced by the need to uphold the fundamental principles of fairness and due process.

Sentiment Analysis of Reasons Given by the Supreme Court

Fact:Law Ratio

Logical Reasoning

Key Takeaways

• Importance of Notice: Courts must ensure that all parties receive proper notice of any proceedings that may affect their rights.
• Right to be Heard: Even if a defendant does not file a written statement, they still have the right to cross-examine witnesses and argue on points of law.
• Natural Justice: The principles of natural justice must be followed in all judicial proceedings.
• Procedural Fairness: Courts must adhere to procedural fairness in all cases.
• Consequences of procedural lapses: Ex-parte decrees can be set aside if the defendant has not been given a fair opportunity to be heard.

Directions

The Supreme Court issued the following directions:

• The ex parte decree dated 24th August 2002 was set aside, and the suit was restored to the file of the District and Session Judge, Dehradun.
• The defendants were directed to deposit an ad hoc amount of Rs. 1,00,000 per month from 14th July 2014 with the Trial Court within two months.
• The defendants were entitled to an adjustment of Rs. 86,232 per month already deposited by them.
• The orders dated 22nd April 2002 and 3rd May 2002 were set aside if the above conditions were met.
• The defendants were required to continue depositing Rs. 1,00,000 per month until the disposal of the suit.
• The restored suit was to be listed before the District and Session Judge, Dehradun, on 25th November 2024.
• The defendants were required to file a reply to the application for striking out their defense on that day.
• The Trial Court was to decide the application for striking out the defense before allowing the defendants to file a written statement.
• The amounts deposited in the Supreme Court were to be transferred to the Trial Court.
• The Trial Court was to give priority to the hearing of the application for striking out the defense and the disposal of the suit.
• The pending execution application was not to survive unless the ex parte decree was revived.
• The findings in the judgment were only for the limited purpose of considering the legality of the ex parte order.

Development of Law

The ratio decidendi of this case is that an ex parte decree can be set aside if the defendant was not given a fair opportunity to be heard, and the principles of natural justice were violated. This judgment reinforces the importance of procedural fairness and the right to be heard, even in cases where a defendant is considered to be in default. The court emphasized that even in ex parte proceedings, the defendant retains certain rights, such as the right to cross-examine witnesses and argue on points of law. This judgment does not introduce any new legal principles but reaffirms the existing principles of natural justice and procedural fairness.

Conclusion

The Supreme Court’s judgment in Ranjit Singh vs. State of Uttarakhand (2024) sets aside the ex parte decree due to the violation of natural justice principles. The court emphasized that the defendants were not given a fair opportunity to be heard, as the trial court preponed the hearing without notice and struck out their defense without a hearing. The judgment underscores the importance of procedural fairness and the right to be heard in all judicial proceedings. The court restored the suit to the trial court, directing the defendants to deposit an ad hoc amount as a condition for setting aside the ex parte decree.