High Court's restoration of suit set aside; Supreme Court distinguishes condonation of delay from setting aside ex‑parte decree

A Bench of Justices Pamidighantam Sri Narasimha and Manoj Misra heard an appeal against a Division Bench order of the Telangana High Court which had condoned delay in seeking to set aside an ex‑parte decree and, subsequently, set aside that decree and restored the suit. The core challenge before the Supreme Court was whether the High Court exceeded its revisional jurisdiction by deciding the fate of the ex‑parte decree when the revision petition had attacked only the trial court's refusal to condone delay.

The Court allowed the appeal in part. It affirmed the High Court's conclusion that there was a justifiable reason to condone delay in filing the application to set aside the ex‑parte decree, but held that the High Court erred in proceeding to set aside the ex‑parte decree and restoring the suit without any challenge or adjudication on I.A. No.1163 of 2021 in the trial court. The Court emphasized that the legal remedies and procedures for "condoning the delay" and for "setting aside the ex‑parte decree" were distinct and must be addressed independently. The Court, in its reasoning, observed: "To start with, facts and events relating to passing of an ex‑parte decree are distinct from the facts and events relating to the delayed filing of the application for setting aside of the ex‑parte decree. Secondly, the procedure for setting aside the ex‑parte decree will again be distinct from the procedure for condoning the delayed filing of the application to set aside the ex‑parte decree. Thirdly, the adjudication and determination of a court with respect to setting aside the ex‑parte decree are independent of the adjudication with respect to condoning the delay. Finally, the remedies against these orders are independent and one remedy would not subsume the other. They must be adopted and pursued independently. This much of clarity is sufficiently borne by our practice and procedure of law." The Court further quoted the trial court's finding that "the petitioner kept quite till 2021 by sleeping over his rights" to record the trial court's reasons for refusing condonation.

Background The dispute arose from an agreement for sale dated 2015 for land allegedly sold by the first respondent and his daughter to the appellants for Rs.1,89,75,000/-. The appellants alleged payment of part consideration and sought specific performance after the respondents purportedly cancelled the agreement by notice on 07.04.2016. The respondents entered appearance (vakalatnama filed 30.11.2016) but did not file a written statement and were set ex‑parte by the trial court on 14.02.2018. The trial court passed an ex‑parte decree on 20.08.2018 directing execution of a sale deed after deposit of the balance consideration.

Respondents later filed two interlocutory applications in 2021: I.A. No.493 of 2021 for condoning delay in filing the application to set aside the ex‑parte decree, and I.A. No.1163 of 2021 to set aside the ex‑parte decree itself. The trial court dismissed the condonation application (finding an unexplained delay of 939 days and observing that the petitioner "failed to show sufficient cause to condone the delay of more than two years") and, consequentially, dismissed the application to set aside the decree.

The respondents challenged only the trial court's order on condonation by filing Civil Revision Petition No.710 of 2024 before the High Court. The High Court allowed the revision, condoned the delay and proceeded to set aside the ex‑parte decree and restore the suit, directing the trial court to dispose of the suit within six months and awarding costs. The appellants challenged that order in the present appeal.

The Supreme Court held that while condonation could be sustained on the High Court's reasoning — which noted the value of the property and that the respondents "must have at least one opportunity to contest the suit" — the High Court's restoration of the suit was unsustainable because it had not considered I.A. No.1163 on merits and no revision lay against the order dismissing that application. The Supreme Court therefore affirmed condonation, set aside the High Court's directions restoring the suit, revived I.A. No.1163 of 2021 and directed the trial court to decide it on merits, preferably within two months. The appellants were awarded costs of Rs.50,000 payable by the respondents.

Case No.: 2025 INSC 311 (Civil Appeal arising out of SLP (C) No. 29261 of 2024) Case Title: C Prabhakar Rao and Anr v. Sama Mahipal Reddy and Anr Appearances: For the Petitioner(s): Mr. Raavi Yogesh Venkata, Advocate For the Respondent(s): (No advocate name recorded in the judgment)