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Aviation Travels Pvt. Ltd. v. Bhavesha Suresh Goradia

Civil Appeal · 2020 INSC 245Decided 2 Mar 2020
Civil Appeal Nos. 1890-1891 of 2020
Justice R. Banumathi · Justice A.S. Bopanna

Background

A trust sued a travel company and a restaurant it ran for damages and injunctions relating to a leased property, but the company never filed a written statement, and in 2003 the Bombay High Court passed an ex-parte decree against it for over Rs. 1.2 crore with interest. Fifteen years later, the company sought to set aside that decree, claiming it was never personally served: a lawyer had instead appeared on its behalf under a Power of Attorney the company disputed having validly authorized. The High Court (Single Judge, Division Bench, and in review) all rejected the company's bid to reopen the case, finding the Power of Attorney and resulting vakalatnama (lawyer's authorization) to be genuine.

Decision Breakdown

Without going into whether the Power of Attorney and service were in fact valid, the Supreme Court held that given the serious amount of damages at stake (over Rs. 1.2 crore) and the fact that damages can only fairly be assessed after both sides present evidence, the company should be given a chance to contest the suit on merits rather than remain bound by an undefended ex-parte decree. The Court set aside the High Court's orders refusing to reopen the case, restored the original 1994 suit for trial, and directed the company to file its written statement within four weeks, while also addressing related directions for partial deposit of money by the company and its withdrawal by the trust's beneficiaries.

Lesson Learnt

Courts lean in favour of giving a party a genuine opportunity to defend a large money claim on its merits, especially when liability and damages have never actually been tested through evidence, even a long-standing ex-parte decree can be reopened for trial in the interest of justice.

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

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