005-NLR-NLR-V-28-SAYADOO-MOHAMADO-v.-MAULA-ABUBAKKAR.pdf
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1926,
Present: Dalton J. and Jayewardeue A.J.
8AYADOO MOHAMADO v. MAULA ABUBAKKAB.
78—D. C. (Inty.) Kurunegala, 11,359.
Action by summary procedure under Chapter LIII. of the Code—Leaveto defend granted on ex parte application — Rescission ormodification of such order on application of plaintiff—OrdinanceNo. 3 of 1889, ss. 704 and 706.
Held, that ait order made ex parte, granting leave to defend,may oc vacated by the Court making the order.
The rule in Vonlintzgy v. Narayansingh 1 followed.
Allan Drieherg, K.C. (with H. V. Pcrera) for appellant.
Hay ley. for respondent.
August 3, 1926. Dalton J.—
I have had the advantage of reading the judgment of my brother,who has gone into the question raised so thoroughly that I feelI cannot usefully add anything to what he has stated. The deci-sion of Phear J. in Vonlintzgy v. Narayansingh (supra) was not cited
1 (2S7J) 6 Bengal L. R. {App.) 64.
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to, nor was it before, the Court at the argument on the appeal, butit seemed to me at the conclusion of the argument that there wasnothing in principle in the Code to prevent a party coining in, ashere, after leave had been granted ex parte to appear and defend;to debar a party from doing so might well in fact cause greatinjustice. It is satisfactory, however, to fiud decided authorityon the point. I entirely concur in the conclusion arrived at bymy brother, and would dismiss this appeal, with costs.
Jayewardene A..).—
This case raises an important question of practice under ChapterLIII. of the Civil Procedure Code, which provides a summaryprocedure for the enforcement of liquid claims. The question is:whether, where a defendant obtains leave to appear and defendan action on an' ex parte application, the plaintiff can ask the Courtto rescind or modify the order granting such leave? It is somewhatsurprising that although the Code has been in operation for overthirty-five veal’s there has been no definite ruling on the point.
In the present case the plaintiff sued the defendant to recovera sum of Es. 5,000 due to him on a promissory note mode by thelatter. He proceeded uuder Chapter LIII., and a summons inform No. 19 was issued to the defendant directing him to obtainleave to appear anil defend the action within seven days of theservice of the summons. The defendant appeared within thetime fixed and filed an affidavit and moved that lie be grantedpermission to file answer and proceed with the case withoutfamishing security. This was allowed. This application wasmade and granted ox parte. A few days later the plaintiff filed anaffidavit and moved that the defendant be called upon to givesecurity to the extent of the plaintiff’s claim and costs beforefiling answer. The plaintiff’s application was fixed for inquiry.At the inquiry, defendant’s Proctor contended first, that theCourt could not vary its order giving leave to defend the action;and second, that the defendant's affidavit disclosed an answerto the plaintiff's claim. After argument, the learned District-Judge held that as the order in question was ex parte it can bevaried, and he directed the defendant to give security beforefiling answer, as the bava fides of the defence appeared to him,questionable. The defendant appeals against the judgment,and the same objections have been pressed before us.
The first question came before this Court last year in the P. <£ 0.Banking Corporation v. L. P. do Mel e't al.1 There, the defendanthad obtained an order granting leave to appear and defendthe action unconditionally, and the plaintiff moved for a noticeon the defendant to show cause why his application for leaveto defend unconditionally should not he fixed for inquiry. The
1980.
Daltox J.
SayadooMohamadov. ManiaAbubaHw
1 D. G. Golmnbo, 17,075.
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1&26* learned District Judge refused to entertain the plaintiff's motion.Jayuwab- as h© thought he had no power to vacate his order made underMiraiA.J. section 704. He said:“ I do not think that this judgment
Stxyadoo (^. L. U. 26, at p. 28) is an authority for the proposition thatthe Court has the power to vacate every order which has beenAbi&Mar made by it ex parte. An order giving a defendant leave to appearand defend the action is made under section 704, and under thatsection I do not think the Court is required, nor has it been thepractice in this Court, to notice the plaintiff to show cause againstthe defendant’s application. An order under that section must,therefore, be necessarily ex parte, and I do not think that an orderof this kind can be vacated by the Court which made it.” The.plaintiff appealed against this order. He did not make thedefendant a respondent to the appeal, but Counsel appeared forhim and contended that the appeal was not in order in the absenceof the defendant as a party to the appeal. The case was arguedbefore the late Chief Justice and myself. We dismissed the appeal.,and later put our reasons in writing. In the course of his judgment(S. C. Minutes, November 9, 1925) His Lordship saict: “ We werein effect asked by Mr. Bartholomeusz, who appeared for the plaintiff-appellant, to lay down for guidance in this and future cases thecourse to be pursued upon applications under section 706. If wehad adopted his argument, the procedure would in future be veri-similar to that in England under Order XIV., rule 1. Mr. Pererapointed out that if this matter went back for re-hearing with theadditional evidence afforded by the counter-affidavit his clientwould be affected. I understand that the practice has always'been in Colombo, at any rate, to treat applications under section
706 as ex parte applications, and that there is no record of anycase in which the plaintiff has appeared on such an application orhas hied a counter-affidavit. I am not very clear how, in the absenceof the plaintiff, satisfactory action can be taken under section 706in certain cases, but 1 am not prepared, in view of the" practicewhich I am told has prevailed for over thirty years, to order thesubstantial departure therefrom asked for the plaintiff, and inany case it would be necessary, I think, to hear the defendanton the point. If the matter comes up again before this Court,
I think that information as to the practice in all the' Courtsshould be given. If there is any doubt a.s to the practice—asMr. Bartholomeusz seems to think there is—then the procedurenow in question can receive further consideration.” That case,therefore., decided nothing, but it is important to note that thelearned Chief Justice’s observation that he was not very clearhow, in the absence of the plaintiff, satisfactory action can betaken under section 706, I would add, and under section 704.There is no doubt that applications for leave to appear and defendunder sections 704 and 706 are made ex parte and generally dealt
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W'ilU without notice to llie plaintiff. Hut 1 think it is often the 19®®.practice to have these cases called in open Court on the last date javewah-iixed forthe defendant to appearfor tlm Court' to make its order, ueneA.J.
andthisgives the j da ill till miopportunity ol' beingpresent in
Court and being heard on the application, if necessary, Forsometimes the defendant takes objection to the plaintiff following AbuMkkorthe summary procedure laid down under Chaplet- LOT. on technicalgrounds. Thus in Natchiappa Chetly v. Tamhydk,' where thedefendant on liis ex parte motion for leave to appear and defendtook the objection that the pluiutiff could not adopt this procedureas he claimed interest not pi-ovided for in the promissory notesuedon,the plaintiff offered towaive interest. ThisCourt held
thattheplaintiff’s offer shouldhave been accepted. Again, in
Muttaiya Cliciiy a. Arumugam,- the defendant, who contendedthat his application for leave to appear and defend was in time,and that the. Fiscal’s return to the summons was erroneous, wasdirected to notice the plaintiff.
The practice I am referring to, if followed, would avoid-thenecessity of a special notice on the plaintiff.
Chapter LIU. . has been taken over from Chapter XXXIX.of the Indian Civil Procedure Code (sections 532 to 537) entitled“ Of Summary Procedure on Negotiable Instruments.” TheIndian sections were based on “ the Summary Procedure on.Bills of Exchange Act, 1655 (IS and 19 Vic. v. 67). which appliedto County Courts in England till 1919, when it was repealed by9 and 10 Geo. V. c. 53. The. proviso to section 704 finds no placein the English Act, but the language of section 706 is identicalwith that used in section 2 of the Act apart from alterations madeto suit local requirements. The proviso to section 704, which issomewhat inconsistent with section 706 (see liengasamy v. Pakeer :<),has been introduced in view of the construction placed on theEnglish Act in Agra and Master-man's Bank r. LeightonA Underthe English Act, where a defendant has obtained leave to defend—such leave is granted ex parte—the Court may set aside the orderon the plaintiff’s application. Thus in Pollock v. Turnock5 whereit was contended that under the Act the Court had power torescind an ex parte order by virtue Of its general jurisdiction.
Bramwell B. remarked that both he and Baron Martin had beenin the habit at Chambers of setting aside orders of this kind wherethey had he.en obtained fraudulently, and in Agra anil Mdsterman’sBank *. Leighton (supra), where, leave to appear and defeud had beengranted, an application by the plaintiff to rescind this order, orfor the defendant to bring the amount claimed into Court, wasentertained and considered. The Couvt held.,that where in an
(JS06) 6 X. L. R. 205.
(1905) 0 X. L. R. 502.
(1857) 1 H. <fc X. 711.
(1911) 14 X. L. R. 190.»(I860) L. R. 2 Hie. 50.
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action by an endorsee leave has been given on affidavits showingJayewab- a good defence as between the original parties to the. bill, andi>aHBjA.J.cireum6tances which raise the inference that, the plaintiff
Sayadoo js not a holder for value, or for any other reason liable to beMohatoido 0ppOSe(^ jjy same defence, affidavits in answer will be receivedAbvbokkar t0 contradict that inference, and will, if clear and cogent, be. ground'for rescinding the lease. Baron Bramwell said:“But, further,
it often happens that a man comes in before the Judge, and showsa good defence as between the parties to the bill, and also stateshis belief, from certain circumstances of more or less credit., thatthe plaintiff is not a holder for value; afterwards the plaintiffcomes and shows that belief to be groundless. In such a casethe leave to appear is rescinded, because it appears that the leavewas originally given to him on a supposed state of facts whichis shown to be erroneous.” The Court, in the circumstances ofthe case, refused to rescind the leave granted. But the powerof the Court to rescind or modify the order giving leave to appearand defend was not even questioned. See also Girr.in v. Grcpe.'
In India the same rule has been followed. Section 53d of theIndian Civil Procedure Code, which is identical with section 706of our Code, was section 2 of the Indian Bills of Exchange Act V.,1866. This section was construed in the case of Vonlintzgy v.
N arayansingh (supra) by Phear J.,' who was afterwards Chief Justiceof Ceylon. That was a suit on a bill of exchange drawn and acceptedby the defendants, who carried on business under the name ofXarayan Singh & Co. Application was made by one of thedefendants, who had been sued as a partner in the defendant’sfilm for leave to come in and defend the suit. The applicationwas supported by an affidavit which stated that this defendant -was not a member of the defendants’ firm nor indebted to theplaintiff. The application was made ex parte. Phear, .T. ingranting the application said: “ The practice I have alwaysthought right under the Indian Act is that which was laid downby Baron Bramwell ill The Agra and Mastcmian's Dank v.- Leighton(supra).” Then, after stating the facts of the case and quotingthe passage from the judgment of Bramwell B. I have reproducedabove, he continued:“ The words of the Indian Act are slightly
larger than those of ihe English Act, but in spirit the two Actsare precisely the same. It is only when there is a doubt as to thebona fides of the defence set up that payment of money into Courtshould be ordered, or security for the same be directed to be given.Restrictions as to the time of pleading or as to the issues to beraised, may in any case be imposed, whenever t-liey may seem to theCourt to be required for the purpose of preventing unnecessaryexpense or delay; and I think the Court has a discretion to ordersecurity for costs to be given, not only when it doubts the bona 1
1 {1879) JS Ch. D. 174.
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tides of iht'. defence, but also when it* consider (hat mutter ofdefence is raised which does not appear to be strinly nocoAsary,though it is not such as the Court ought to disallow.
“ If ike plaintiff has not been heard at first against the dcfoinlant'sapplication, he may always be allowed to come in afterwards for thepurpose of h-Itowing that the leave to appear and defend outfit not tohave been granted, or that the terms upon which it has been grantedought to have bran more stringent than they were
1926.
<fAYEWAK-DENE A.J.
SayadooMohamadov. ManiaAbubalcltaP
(The Bengal Law Reports are nob available locally, and I haveto thank Messrs. Butterworth & Co., Calcutta, the well-knownLaw Publishers, who very kindly obtained a copy of the judgmentfor me.) The rule laid down in the Calcutta case is still regardedas good law. It is given as a decision on section 538 in O’Kinealy'sCode of Civil Procedure, published in 1005, and on the correspondingprovision (Order 87, rule 3) of the Civil Procedure Code of 1908 inIVoodroffe and Amir Alps Commentary. Such being the practiceprevailing in England and in India wider a Statute whose provisionsare almost, if not entirely, identical with those of Chapter LITI.,I think we should follow that practice. We are at least bound tofollow the procedure which obtained in England and which hasbeen established by, and recognized in, the cases I have cited aboveand which will be referred to later. So far as I can see there is nocwrsus curiae or authoritative ruling to preclude us from doing so.This practice also appeal’s to me to be sound on principle, andappeals to one's sense of fairness and justice. I might here referto the local case of Nallan r. Ohhcu,1 where, after the defendanthad obtained leave to appear ancl defend, the plaintiff movedthe Court to vacate the order and to enter up judgment in hisfavour on the ground that the defendant was out of time and thatthe Court’s order had been made per incunam, the applicationwas entertained. I would, therefore, hold that where a defendantlias obtained leave ex parte to appear and defend unconditionally,or on terms under section 704 or section 706 of the Civil ProcedureCode, it is open to jbhe plaintiff to move to have the order rescindedor made subject to terms, or that the terms imposed should berendered more stringent. An ex parte order under these sectionsshould, I think, be treated as any other ex parte order made by theCourt, and any party affected by it' should be entitled to applyto vacate it on notice to the party in whose favour it was made.(Muttiah v. Muttusamy,3 Gargial v. Somasunderam Chetty.3)There is, as a rule, no right of appeal against such an order, butthe Court may, in certain circumstances, admit an appeal (Scott iMohamodu).4 The Court will, however, not- rescind, vary, ormodify such order lightly. It will do so if leave has been obtained
1 {1897) 2 N. L. R. SSL
5 {7895) IN. L. R. 26.
28/8
3 (1905) 9 N. L. R. 26.
* (1914) IS N. L. R. S3.
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•jAYBWAb-
dsmb A.J.
fiayadoo
Mohamado
Manila
Abubabkar
fradulently (Pollock v. Tut nook (supra) ), or it the plaintiff'saffidavit contradicting that of. the defendant affords “ clear andcogent ” proof that the defendant has no defence, or a doubtfulone (Agra and Master man 8 Bank v. Leighton (supra) ), and asBaron Martin said in the former case, “ we have always acted uponthe principle that where a Judge has made an order for the defendantto be at liberty to appear, it will not be set aside, unless the casebe clear. If it were otherwise, the act might lead to great abuse."But an order for leave will not be rescinded if the affidavits raise abona fide conflict of testimony. (Bmtton v. Thomas 1 and l'cbart r.Stevens.2) As Wilde B. said in the latter case:“ Where a defence
is sworn to, and is shown to the satisfaction of a Judge, the practice isto allow the defendant to appear. If it can be shown by anything,for instance, under the defendant’s own hand, that he has swornfalsely, and that it is clear that there is no defence, the order forleave to appear will be rescinded. But when the plaintiff merelysets up a case in answer to the case sworn to by the defendant,the order will stand; for it never was intended that the causeof action should be tried upon affidavits.” The Court was,therefore, right in over-ruling the first* objection. As regards tireanerits, the defendant in his affidavit swore that he paid theplaintiff Rs. 4,000 out of the Rs. 5,000 admittedly received on thenote. But he produced no receipt for this payment. The learnedJudge held that the absence of a receipt makes the bona fides of thedefence questionable. I ana unable to say he is wrong. This isone of those cases in which, to use the words of Bramwell B. inAgra and Mastcrmans Bank v. Leighton (supra), ” an apparentlyreal defence is shown, but its sincerity is doubtful,” and shedefendant is let in to defend only on terms. In the local case ofSuppramanian Chctty v. Krishnasamy,3 the non-production of areceipt for payments alleged to have been made was consideredto throw doubt on the bona jidcs of the defence. As regards thebalance Rs. 1,000, the defendant gives certain reasons for notpaying this sum to the plaintiff. These reasons appear to meto be wholly unconvincing. The District Judge was thereforejustified in ordering the defendant to give security. The security willbe for the amount of the plaintiff’s claim. The appeal will bedismissed, with costs.
Appeal dismissed.
1 (1858) 1 F. & F. 877.
(7550) 30 L. J. Ex. 1.3 {1907) 10 N. L. R. 327.