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Arti Dixit & Anr. vs. Sushil Kumar Mishra & Ors.

Not available · 2023 INSC 556Decided 18 May 2023
Not available
K.M. Joseph · Hrishikesh Roy

Background

The respondents had obtained an ex-parte decree in 2012 for eviction and recovery of rent/damages against the appellants (tenants) in a Small Causes Court. On learning of the decree during execution proceedings in 2014, the appellants filed an application to set aside the ex-parte decree along with an application under Section 17 of the Provincial Small Cause Courts Act, which requires a person seeking to set aside such a decree to either deposit the decretal amount or furnish security. Instead of depositing the money on the same day, they sought permission to furnish partial security, and a few days later offered as surety a rented shop that was actually owned by the Municipal Corporation, Lucknow (with a third party merely a tenant in it) rather than owned outright by the person offering it.

Decision Breakdown

The Supreme Court held that while an applicant can, per its earlier ruling in Kedarnath, ask the court to dispense with the cash deposit and instead permit alternative security, the security actually offered here, a shop that was not owned by the surety but only rented by him from the Municipal Corporation, could not lawfully be enforced as security under Section 17(2) (which requires enforcement via sale under CPC Section 145), since it was not the surety's own property to sell. The Court found no error warranting interference even though the trial court had failed to promptly rule on the initial application, because the later-furnished security was independently invalid in law, and the appellants had also failed to challenge an intervening 2017 order that went against them. Consequently, the appeal was dismissed and the ex-parte decree against the appellants stood.

Lesson Learnt

When challenging an ex-parte decree by offering security instead of a cash deposit, the security must genuinely belong to the person offering it (or be otherwise legally enforceable by sale), offering property one does not own, even in good faith, will not satisfy the legal requirement and can cause the entire challenge to fail regardless of other procedural lapses by the court.

Official source (sci.gov.in)View Judgment (PDF)

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