1

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO._________ OF 202 3

(Arising Out of SLP (C)NO. 13564/2021)

ARTI DIXIT & ANR …APPELLANT (S)

VERSUS

SUSHIL KUMAR MISHRA & ORS …RESPONDENT (S)

J U D G M E N T

K.M. JOSEPH, J.

1. Leave granted.

2. The Respondents No.1 to 4 obtained an ex-parte

decree against the appellant s. The decree was one for

ejectment and recovery of arrears of rent , taxes,

damages etc. This decree was passed on 18.10.2012. The

appellants filed an application under Order IX Rule 13

read with Section 151 of the Code of Civil Procedure

(hereinafter referred to as ‘CPC’) on 06.05.2014

claiming knowledge of the Decree on execution

proceeding on 05.04.2014. It was numbered as 4C. On the

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very same day, an application was filed under Section

17 of the Provincial Small Cause Courts Act 1887

(hereinafter referred to as the ‘Act’ ).

3. Section 17 of the Act reads as follows:

“17. Application of the Code of Civil

Procedure.— (1) The procedure prescribed in

the Code of Civil Procedure, 1908 (5 of 1908),

shall save in so far as is otherwise provided

by that Code or by this Act,] be the procedure

followed in a Court of Small Causes, in all

suits cognizable by it and in all proceedings

arising out of such suits:

Provided that an applicant for an order to set

aside a decree passed ex parte or for a review

of judgment shall, at the time of presenting

his application, either deposit in the Court

the amount due from him under the decree or in

pursuance of the judgment, or give

such

security for the performance of the decree or

compliance with the judgment as the Court may,

on a previous application made by him in this

behalf, have directed.

(2) Where a person has become liable as surety

under the proviso to sub -section (1), the

security may be realised in manner provided by

section

145 of the Code of Civil

Procedure,

1908 (5 of 1908).”

(Emphasis Supplied)

4. The relevant contents of the Application under

Section 17 and the relief sought was as follows:

“3. That the applicants pray to the Hon’ble

Court that it shall be necessary in the

interest of justice to grant the permission for

depositing/ paying the total amount of Rs.

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98,624/- (Rupees Ninety Eight Thousand Six

Hundred Twenty Four Only) including de crial

amount, compensation, incurred expenses etc.,

out from such amount, a sum of Rs. 12,600/ -

(Rupees Twelve Thousand Six Hundred Only) have

already been deposited under section 30 (1) of

Uttar Pradesh Act No. 13 of 1972 and balance

amount is calculated Rs. 86,024/- (Rupees

Eighty Six Thousand Twenty Four Only), out from

the same, the applicants intend to furnish the

surety of a sum of Rs. 50,000/ - (Rupees Fifty

Thousand Only) and deposit balance amount

before Hon’ble Court.

4. That the applicants are annexing the

Tendering Application for depositing cash

amount of Rs. 36,024/ - (Rupees Thirty Six

Thousand Twenty Four Only), it shall be

appropriate in the interest of justice to pass

tender for depositing the such amount.

PRAYER

Therefore, it is humbly prayed to this Hon’ble

court that grant the permission for depositing/

furnishing the surety of a sum of Rs. 50,000/ -

(Rupees Fifty Thousand Only) by passing the

annexed tender along with application in

compliance of section 17 of P rovincial Small

Cause Act, 1800 presented by applicants. ”

(Emphasis supplied)

5. This Application came to be numbered as 8C.

Subsequently, on 12.05.2014, an Application was filed

with a prayer that the security in the form of a rental

shop owned by the Nagar Nigam may be taken on record.

This Application was ‘allowed’ or ‘admitted’ on

24.05.2014, a point of controversy to be noticed and

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dealt with. The surety was one Abhishek Dixit (the 7

th

proforma respondent in this appeal). This was the

Application numbered as 14C. On 23.09.2015, the Trial

Court dismissed Application 8C filed under Section 17

of the Act. The Order, inter alia, states as follows:

“In the light of above contentions/ argume nts,

I carefully inspected record file and found

that the Restoration Application i.e. 08C was

presented itself on 06.05.2014, but this

application was not corroborated before the

then Presiding Officer, but after submitting

the application i.e. 8C, it has been submitted

the application i.e. 14C before Court, which

was admitted by Court on 24.05.2015, but it was

not deposited necessary compensation with the

same. Therefore, it was not remained any

relevance to again pass the order on

application i.e., 08C after submitting the

application i.e., 14C. In the above

circumstances, the application i.e. 08C has

been fruitless as the application i.e. 14C has

already been admitted on 24.05.2014 by the then

Presiding Officer. Therefore, at this stage,

it is not any re levance of application i.e.,

08C and the same is liable to be dismissed.”

(Emphasis supplied)

6. This Order was challenged by the appellants by

filing a Revision before the High Court. It is relevant

to notice the following part of the Order passed by the

High Court:

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“Heard Sri Umesh Narain Sharma, learned Senior

Advocate, assisted by Sri Shailendra Kumar

learned counsel for the revisionists and Sri

W.H.Khan, learned Senior Advocate assisted by

Sri Anand Srivastava learned counsel for the

opposite parties. The present revision has been

filed against the order dated 23.09.2015 passed

by learned Additional District Judge/Special

Judge (E.C. Act) Kanpur Nagar, in Misc. Case

No. 11/74/2014 whereby application paper no.

8-C under Section 17 of the Small Causes Court

Act filed by the revisionists has been rejected

arising out of ex -parte Judgement and decree

dated 18.10.2013 passed in Small Causes Case

No. 27 of 2012. Learned counse l for the

revisionists contends that no notice in the SCC

suit was served upon the revisionists and ex -

parte order passed against the defendants -

revisionists and even in execution proceedings

no notice was served and ex -parte order passed

against which application under Order IX Rule

13 C.P.C.. Learned counsel further contends

that application under Section 17 of Small

Causes Court Act was filed which remain pending

which application was also filed within the

statutory period. Learned has next contended

that again another application under the

statutory period was filed accepting the

sureties which was accepted by the learned

court below after one year. Thereafter earlier

application paper no.8Ga has been rejected vide

order impugned which is impugned in the present

revision. Sri W.H.Khan, learned Senior Counsel

assisted by Sri Anand Srivastava, learned

counsel for the opposite parties states that

once the surety has been accepted, the earlier

application has become redundant which is the

order impugned in th e present revision,

therefore no adversity has been attended to by

the revisionists. In view of the submissions

made by learned counsel for the parties this

Court is of the opinion that once the surety

has been accepted by the Court below as has

also been stated by Sri W.H.Khan, learned

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counsel for the opposite parties, the matter

may be directed to be decided expeditiously,

according it is directed as such. With the

aforesaid directions, this revision stands

disposed off”.

(Emphasis supplied)

7. This Order was passed on 03.12.2015. On the basis

of the said order the Trial Court by Order dated

07.12.2016, after noticing the Order of the High Court,

found that the appellants have presented the

Application under Section 17 of the Act at the time of

presenting the Application under Order IX Rule 13 of

the CPC, and that though the Application 8C was

dismissed by Order dated 23.09.2015 on the basis of the

Application No. 14C, in view of the decision of this

Court in Kedarnath v. Mohan Lal Kesarwari and others

1

,

the Trial Court found that the appellant had complied

with Section 17(1) of the Act in relation to depositing

the decretal amount and also in view of the High Court

order about surety being ‘admitted’ it was found that

the surety submitted by the appell ants was also

sufficient. It further proceeded to find that service

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AIR 2002 SC 582

7

of summons could not be inferred on the appellants.

Therefore, the application under Order IX Rule 13, (4C)

was allowed with cost of Rs.1500. This Order was, in

turn, challenged before the Additional District Judge,

Kanpur (Urban). By Order dated 01.08.2017 , the Orders

dated 07.12.2016, 23.09.2015 and 04.10.2016 were

‘dismissed’ and it was found, inter alia, as follows:

“26. In the apparent view of this Court in

judicial citation i.e. Kedarnath (above), the

Hon’ble Supreme Court established the

principle, such principle completely clarified

in the judicial citation i.e. Rajkumar Makhija

(above) by the Bench of Hon’ble High Court. If

it is any previously established lega l

principle contrary to above both legal

principles, in such circumstances, it cannot

be given preference to established principle

in the same. It is mandatory and prior to

considering the revision application, the

Learned Trial Court must satisfy by this fact

that whether the above section 17 has been

complied or not? and Such kind of satisfaction

cannot be left for later stage. In the present

case, it was presented the application i.e.

document no. 28C under section 17 of Provincial

Small Cause Act, in f act till date, it is not

passed any order on the same and on 23.09.2015

the application dismissed on the ground that

it has already been passed order on the

application i.e. document no. 34C. The

application i.e. document no. 34C had been

presented only wi th the intention that the

surety is to be taken on record, which was

admitted by Court, it means the surety had

been taken on record, but this order cannot be

considered that the surety was admitted by

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considering/ inferring sufficient. Thereafter

again, when on the direction of Court, it was

presented the applications i.e. document nos.

90C and 102C on behalf of defendant, in such

circumstances; it was not passed any

appropriate order on such applications. If

it is observed in these circumstances, it is

not placed any order for admitting surety, in

absence of the same, it cannot be inferred/

considered to not comply in any condition to

the provisions of section 17 of Provincial

Small Cause Act, but as the principle

established by Hon’ble Supreme Court in the

case of Kedarnath that in the condition of

causing delay in passing order on the part of

Court, the defendant cannot be declared guilty/

defaulter, in the present case also, this

Revision Court cannot declare guilty/

defaulter to the defendants.

27. Whether the defendant complied the

provisions of section 17 of Provincial Small

Cause Court Act or not? It is the question of

one fact and it can only be decided/

adjudicated by Learned Trial Court

accordingly. In such circumstances, it was not

in accordance of stipulated provisions of law

to admitted revision petitioner without

concrete conclusion in relation of compliance

of above section 17 and the impugned order is

liable to be set aside.”

(Emphasis supplied)

8. It was thereafter ordered as follows:

“The revision is admitted. The impugned order

dated 07.12.2016 and orders dated 23.09.2015

and 04.10.2016 respectively are dismissed and

it is direction to Learned Trial Court that

firstly, in the light of objections of

plaintiff, pass the decree after com pliance of

section 17 of Provincial Small Cause Act or

non-compliance in relation its report on

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deposited amount and presented surety i.e.

document nos. 16C/36C and thereafter pass the

appropriate order in accordance of stipulated

provisions of law on hear ing the parties on

revision petition. In the facts and

circumstances of present case, the parties

shall afford their respective incurred

expenses. Return the record file. The parties

are directed to appear on 24.08.2017 before Ld.

Trial Court”.

(Emphasis supplied)

9. On the basis of the aforesaid order the Trial Court

by order dated 11.02.2019 rejected the application

under Section 17 dated 06.05.2014 and also the

application dated 12.05.2015. The surety provided by

the appellants was also rejected . This order was

confirmed by the AD J by Order dated 26.02.2021 in

revision filed by the appellants. It was found that the

Order dated 01.08.2017 passed by the ADJ was binding

on the Trial Court. We notice the following reasoning:

“ … It is apparent on the basis of above whole

discussion that applicant no. 3 namely Abhishek

Dixit is not owner of the lan d of shop, of

which, it was presented the surety of shop by

the applicant no. 3 namely Abhishek Dixit on

behalf of revisionists/ applicants and the

ownership of above land of shop is vested in

Municipal Corporation Kanpur Metropolitan,

Kanpur. Therefore, under the provisions of

section 145 of Civil Procedure Code, the surety

cannot be recovered by selling the said shop

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as it is vested ownership right of Municipal

Corporation, Kanpur Metropolitan, Kanpur on

the said land of shop. The applicant no. 3

namely Abhishek Dixit is not owner of said land

of shop. …

… In accordance of principle established by the

Bench of Hon’ble High Court in judicial

citation/ judgment i.e. Rajkumar Makheja &

Others Versus M/s. S.K.S. & Company & Others,

2012 (3) A.R.C. 117, now it cannot be granted/

extended the time limit to the revisionists for

presenting surety at this stage as now, the

limitation period of presenting the surety has

been ceased. In this way, it is clear that

applicants/ revisionists have completely not

complied the provisions of section 17 of

Provincial Small Cause Act.”

10. The appellants thereupon filed a Writ Petition

before the High Court of Allahabad by challenging the

Order dated 01.08.2017 passed by the A DJ, the Order

dated 11.02.2019 passed by the Trial Court and the

order dated 26.02.2021 passed by the AD J. Further order

dated 09.03.2021 passed by the AD J in Execution Case,

ordering the eviction of the appellants based on the

ex-parte decree, was also challenged.

11. By the impugned Order, the High Court has dismissed

the said Writ Petition. It was, inter alia, found by

the High Court that no Application for dispensing with

surety was filed. Rather permission was sought for the

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security being given. It was further found that the

requirement of Section 17 is mandatory and filing of

application without furnishing surety and making no

prayer for dispensing would be read against the

appellants. It was found that only an Application (14C)

was filed on 12.05.2014, wherein the only prayer was

to keep the ‘Application on record ’. On 24.05.2014,

Order was passed for keep ing the Application on record.

There was neither any prayer for accepting the surety

towards the part of the decretal amount nor any such

Order was passed. The Application (14C), it was found,

was made after the filing of the Application under

Order IX Rule 13 of the CPC. The security for the amount

of Rs.50,000/- was submitted on 24.05.2014. This Court

in Kedarnath (supra), it was found, has not held that

where the incompetent surety had been furnished, the

Court may dispense with the same. It was also found

the Judgments relied upon by the appellants would not

apply as instead of making prayer before the Trial

Court to furnish appropriate security, prior to the

Order dated 23.09.2015 was passe d, the appellants

resorted to litigation and at no stage they offered any

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surety as per law. The concession by a Counsel

regarding a question of law, it was found, was not

binding on the party. This is by way of dealing with

the submission of the appellants based on the statement

of the Senior Counsel for the plaint iffs, as seen

reflected on the Order of the High Court, which we have

extracted.

12. We have heard Sh ri Pranaya Kumar Mohapatra on

behalf of the appellants . We have also heard Sh. S.R.

Singh, learned Senior Counsel on behalf of the

respondents.

THE CONTENTIONS OF THE APPELLANTS

13. The appellants had moved the Application under

Order IX Rule 13 of the CPC as well as the Application

under Section 17 of the Act on the same day, i.e.,

06.05.2014. The Trial Court did not pass any Order on

the Application under Section 17 dated 06.05.2014. The

Application under Section 17 being filed on the same

day as an Application under Order IX Rule 13, was

validly filed in terms of the Judgment of this Court

in Kedarnath (supra). There was a fault on the part of

the Court in not passing Order on the Application under

13

Section 17 filed on 06.05.2014. The appellants cannot

be made to suffer on account of the fault of the Court.

On 24.05.2014, the Application filed for taking on

record the security, was accepted. The prayer in the

application (14C) was ‘TAKEN ON RECORDS’. The earlier

Application dated 06.05.2014, under Section 17, was

pending consideration. The security, which was

accepted, was Shop No. 25. The same was allott ed by

the Municipal Council, Kanpur . For the allotment, a sum

of Rs.85,000/- had been received by the Local Body,

which had been deposited. Once the security was

accepted, any insufficiency found after the prescribed

period, cannot be laid at the doorstep of the

appellants. Reliance is placed on the Judgment of the

Full Bench of the Allahabad High Court in the case of

Bhagwandas Arora v. First ADJ Rampur . Also, reliance

is placed on the decision of this Court reported in

Bhagwan Dass Arora v. First Additional District Judge,

Rampur and others

2

. The Trial Court passed Order on

security after two years, viz., on 29.03.2015 with the

expression ‘inappropriate security’. The Trial Court

2

(1983) 4 SCC 1

14

had to give direction on sufficiency of security within

the prescribed period. If that had been passed and the

Trial Court raises questions about sufficiency of the

security, the appellants could not have submitted other

security or cash without the Order of the Court.

Reliance is placed on the Order dated 03.12.2015 passed

by the High Court. In view of the Order passed by the

High Court, in the hierarchical system, the ADJ erred

in overlooking the Order of the High Court. We are

reminded that the Order of the ADJ dated 01.08.2017 was

also challenged before the High Court in the Writ

Petition. The merits of the case must be considered.

THE SUBMISSIONS OF RESPONDENTS 1 TO 6

14. The requirements under Section 17 are mandatory.

Security was not filed on 06.05.2014 but on 24.05.2014.

Therefore, the mandatory condi tion in proviso to

Section 17(1) was not complied with. The Court should

have passed an Order on the Application under Section

17(8C) dated 06.05.2014 indicating the nature of the

security, that would be sufficient for the performance

of the Decree. However, it was contended that it is

15

not forthcoming as to why appellants did not press the

Application under Section 17 dated 06.05.2014 and also

filed other Application for security. Therefore, the

failure on the part of the Court to pass Orders on the

Application dated 06.05.2014 under Section 17 could not

be a factor entitling appellants to contend that in the

absence of an Order, they were prejudiced. This is for

the reason that they are presum ed to know, having

regard to Section 17(2) of the Act, that security must

be such as may be enforceable in law. The security,

which was furnished, consisted of a shop room, which

belonged to the Municipal Corporation and not to Shri

Abhishek Dixit (the surety) who was the third Writ

Petitioner and who is shown as Proforma Respondent No.7

in the Appeal. The security was not enforceable . The

period of limitation for providing security had

expired. While an Application under Section 17 can be

filed with application under Order IX Rule 13, the

security must be filed along with the Application.

Otherwise, it may not be possible for the Court to find

whether the security, which was filed, was in

conformity of the Section 17(2) of the Act. Even

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assuming that the security could be furnished

subsequently, the subsequently furnished security was

not enforceable in law. The Application under Order IX

Rule 13 has not been rejected on the ground that

security was not furnished but on the ground that the

security furnished on 12.05.2014 (Application 14C) was

not a valid security. Therefore, the plea that the

appellants cannot suffer on account of the fault of the

Court, does not arise.

ANALYSIS; 3 DECISIONS; KEDARNATH (SUPRA)

15. We have already set out Section 17 of the Act. It

is necessary to notice that in Kedarnath (supra), this

Court, inter alia, held as follows:

“8. A bare reading of the provision shows that

the legislature has chosen to couch the

language of the proviso in a mandatory form and

we see no reason to interpret, construe and

hold the nature of the proviso as directory.

An application seeking to set as ide an ex parte

decree passed by a Court of Small Causes or

for a review of its judgment must be

accompanied by a deposit in the court of the

amount due from the applicant under the decree

or in pursuance of the judgment. The provision

as to deposit can be dispensed with by the

court in its discretion subject to a previous

application by the applicant seeking direction

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of the court for leave to furnish security and

the nature thereof. The proviso does not

provide for the extent of time by which such

application for dispensation may be filed. We

think that it may be filed at any time up to

the time of presentation of application for

setting aside ex parte decree or for review and

the court may treat it as a previous

application. The obligation of the applican t

is to move a previous application for

dispensation. It is then for the court to make

a prompt order. The delay on the part of the

court in passing an appropriate order would not

be held against the applicant because none can

be made to suffer for the fau lt of the court.

9. In the case at hand, the application for

setting aside ex parte decree was not

accompanied by deposit in the court of the

amount due and payable by the applicant under

the decree. The applicant also did not move any

application for dispensing with deposit and

seeking leave of the court for furnishing such

security for the performance of the decree as

the court may have directed. The application

for setting aside the decree was therefore

incompetent. It could not have been entertained

and allowed.

(Emphasis supplied)

THE FULL BENCH IN RAM BHAROSE

16. Since the appellants have also relied upon the

Judgment of the Full Bench of the High Court of

Allahabad, we deem it appropriate to advert to the

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same, i.e., Ram Bharose v. Ganga Singh

3

. The Full Bench

of the High Court was dealing with the following facts:

The Application under Order IX Rule 13 was

accompanied by a security bond to cover the

decretal amount. One of the questions, which arose

was, as to whether the Application was not

maintainable in as much as the direction of the

Court had not been obtained in regard to the

deposit of the decretal amount or the filing of

the security in terms of the proviso to Section 17

of the Act. Three separate opinions were

pronounced. In the opinion rendered by Mukherjee,

J., we consider it appropriate to refer to the

following:

“17. Now I come to consider the second point.

On a plain reading of Section 17, Provincial

Small Cause Courts Act, the applicant for the

setting aside of a judgment has to do these

things: To start with, he ought to apply to

the Court to which he proposes to make an

application, to tell him what kind of

security, in the circumstances detailed in the

applicant's application, the Court would

require of him to furnish. Usually th e Court

would ask for a cash security, but it may be

satisfied on the applicant's representation

that a cash security may be dispensed with.

In rare cases, as in the illustration given

3

AIR 1931 Allahabad 727

19

by me in my judgment in Jhabboo Misir's case,

cited below, the Court may refuse to take a

cash security and may insist on other kind of

security being taken and may insist on the

move-able property in dispute being itself

produced. When the Court gives its direction,

namely, whether the applicant is to furnish

cash security or is to give some other kind

of security, the applicant should present his

application for setting aside the decree,

together with the security demanded. Then his

duties are over. The security filed will then

be scrutinized by the Court, and the Co urt

shall see whether the security is to its

satisfaction. Then 'presumably a notice would

go to the plaintiff to show cause why the

decree should not be set aside. This was also

the view which I took in the case of Jhabboo

Misir v. Howladar Tewari.

18. Although the rule (Section 17, Small Cause

Court Act), requires that the security is to

be furnished at the time of presenting an

application for setting an ex parte decree,

it has been held in this Court in Moti Lal Ram

Chandar Das. v. Durga Prasad

MANU/UP/0193/1930 : AIR1930All830 that the

security may be furnished even after the

application has been made provided the

security is forthcoming within the period of

30 days of limitation. To this decision I was

a party. This view was taken by other High

Courts also : see V. M. Assan Mohamad Sahib

v. M.E. Rahim Sahib [1920] 43 Mad. 579, Jenu

Muchi v. Budhiram Muchi [1905] 32 Cal. 339 and

Narain v. Pudan MANU/OU/0001/1929. The reason

of this decision is that the previously made

application may be taken as made on the date

on which the security was furnished, as the

period of limitation has not yet expired, and

it would be a mere formality (which may be

safely dispensed with) to direct the applicant

to file a fresh application on the day when

he furnishes the security.

20

xxx xxx xxx

20. Where an applicant, without formally

applying for the Court's direction, makes an

application for setting aside an ex parte

decree and furnishes security with it, and the

Court directs a notice to issue to the other

side, it must be taken that the Court is

cognizant of the fact that the applicant has

furnished security as required by Section 17,

Small Cause Courts Act. The order that notice

should issue may be taken as an approval by

the Court of the security furnished, in the

circumstances disclosed by the applicant in

his application and affidavit (if any). We may

also take it that, the Court, by implication,

gave the applicant a direction that he should

furnish security of the kind actually

furnished by him. This is not a mo re attempt

to get over what may be believed to be rather

hard directions of the law. If the Court

instead of issuing a notice in the case just

mentioned, rejects this application because

its direction has not been obtained, and if

limitation has not alread y expired, it would

be open to the applicant to make a fresh

application and to furnish such security as

the Court may direct. A party cannot suffer

by the act of a Court, and therefore we must

accept the position that the Court has given

the direction, ac cording to law to the

furnishing of the security actually

furnished, where the Court instead of

rejecting the application of the defendant

directs that a notice should issue.

23. The conclusion that I arrive at; therefore

is that the proper course is for a party to

make an application to the Court to obtain its

direction as to the nature of the security,

and then to apply with the security of the

nature directed by the Court for setting aside

the ex parte decree. The security furnished

must comply with the directions of the Court,

21

and the Court will see that the security is

to its satisfaction, i. e., sufficient. But

where the Court adopts a security without

question and directs a notice to issue, it,

by necessary implication, gives a direction

that the security should be of the nature

directed by it 'and that the security

furnished is sufficient to its mind. ”

(Emphasis supplied)

The view taken by Boys J., insofar as it is

relevant, is contained in the following paragraph:

“37. The conclusion from this, then, is that

no initial defects in the making of the

application must be allowed to stand in the

way of the applicant getting a notice issued

to the decree -holder, provided that an

application has been filed, and further that

cash has been deposited, or, if the Court has

so permitted, security has been given, all

before the expiry of 30 days. A reasonable and

practical interpretation of the section is

therefore as follows: (1) the applicant must

within 30 days file his application either

with cash or with a [statement that he is

prepared to give security (and in the latter

case, he may, of course, tender the security

he proposes and ask for the direction of the

Court (2) In the case where he wants to give

security, if the Court refuses to direct

(security, he must deposit cash within [the

30 days, or his application will be [rejected.

(3) If the Court agrees to direct security,

then (a) it will consider (the security

already offered, if it has been so offered;

or (b) name security to its satisfaction which

must be filed within the 30 days. (4) If the

applicant does not in fact ask for a direction

or if, though the applicant does ask for a

direction, the Court does not in fact give any

22

direction, but in fact the Court does issue

notice, the Court shall be take n to have

approved the deposit of cash or the security

offered as the case may be. (5) If filed

within the 30 days and accepted by the Court

expressly or impliedly by the issue of notice

the application is a good application, though

it will be open to the decree-holder to

challenge the nature land sufficiency of the

security and to the Court under Order 9, Rule

9 to make such further conditions as it thinks

fit. In the course of the argument it has been

suggested that difficulty might arise if the

Court delayed in giving its direction, or

approving expressly or impliedly the security

already tendered, so long that the period of

limitation had expired before the applicant

had fair opportunity of complying with the

direction. It is not a case which we have now

to consider, but in a suitable case it would

bet open to the Court itself to consider and

exercise its inherent powers reserved to it

by Section 151, Civil P.C. ”

(Emphasis supplied)

Chief Justice Suleman concurred with the other

Judges that the Revision must be dismissed and he,

inter alia, held as follows:

“46. No doubt the language of the proviso -is

very unhappy and there is some apparent

inconsistency between the expression " at t he

time of presenting his application " and the

expression " as the Court may direct. " If we

take the two expressions literally, the two

things cannot happen exactly simultaneously.

But the direction of the Court may be obtained

before the application is presented or just

after presenting the application.

23

47. It is quite clear to me that an

application cannot be presented after the

prescribed period, nor can cash or security

be deposited after the expiry of that period.

The Court is not given any discreti on at all

to extend the time. If the security deposited

within the time is discovered afterwards to

be defective or unsatisfactory in any way, the

Court has no power to direct a fresh security

to be substituted for it after the expiry of

the period.

52. Of course, the question whether the

security is sufficient and satisfactory need

not be finally determined during the period

of 30 days. Indeed, the plaintiff decree -

holder may come in afterwards and challenge

its sufficiency. The mere fact that it is

found afterwards that the security was

sufficient, would not make the deposit of the

security within the time in any way

defective.”

BHAGWANDAS (SUPRA)

17. As far as the Judgment of this Court in Bhagwandas

(supra) is concerned, the relevant facts were as

follows:

A suit was decreed ex-parte on 06.08.1977. The

appellant moved an Application on the said day

within the meaning of the proviso to Section 17 of

the Act to permit him to furnish such security for

the performance of the decree in lieu of cash due

under the decree. On the same day, Court granted

24

him permission subject to making a cash deposit

for part and for the balance he had to furnish the

security. Thereafter, on the 31.08.1977, he moved

the Application under Order IX Rule 13 to set aside

the ex-parte decree. He also deposited the cash on

31.08.1977. On the basis of a defect pointed in

the security bond on 21.09.1977, the Court directed

the appellant to supply the defect, which consisted

of deficient stamp in the security bond. The

appellant complied with the said Order. It was in

these facts, the Court took the view that the

Application of the appellant was wrongly reject ed

on the basis that there was a legal infirmity in

the bond as instead of i t being stamped under the

Stamp Act it was stamped with court fee of Rs.2/.

OUR FINDINGS

18. When a Decree is passed by a Court of Small Causes

ex-parte, inter alia, under the proviso to Section 17

of the Act, the applicant, who files an Application to

set aside the ex -parte Decree is bound to do the

following:

25

a. He must deposit in the Court, the a mount due under

the Decree;

b. In the alternative, he should give security for

the performance of the Decree ‘on a previous

Application’ made by him in this behalf;

19. In view of the Judgment of this Court in Kedarnath

(supra), the words ‘on a previous applic ation’ in

proviso to Section 17, ha ve been understood to be an

application, which may be made along with the

application under Order IX Rule 13 of the CPC. On

06.05.2014, on the same day the Court ordered notice

to be issued fixing 19.07.2014 as the date. The

execution proceeding was stayed till 19.07.2014. It

could indeed be said, that even notice being issued was

permissible only after compliance with the proviso to

Section 17 of the Act. The appellants had filed an

Application under Order IX Rule 1 3 of the CPC and

Section 17 of the Act, on the same day. If the

Application under Section 17 was accompanied with a

cash deposit, then, the Application under Order IX Rule

13 would have been, indeed, maintainable. The

controversy arises as in the Applicati on dated

26

06.05.2014, filed under Section 17, the appellants

sought for permission to deposit/furnish surety for a

sum of Rs.50,000/- out of a total sum of Rs.98,624/ -.

No order was passed on the said Application . On

12.05.2014, appellant moved an Applicati on (14C).

Therein, the appellant sought to furnish security in

the form of a shop room of which the Proforma Respondent

in this Appeal, Shri Abhishek Dixit was the tenant, but

the owner was the Municipal Corporation, Lucknow. On

the said Application, the C ourt passed an Order on

24.05.2014. It reads:

“Order

24.05.2014

Today application has been filed on behalf of

the judgment debtor Dr. Aarti Di kshit for

taking on record surety. Order passed.

Allowed”.

20. The contention of the appellants appear s to be that

the Application dated 06.05.2014, was in order as it

was filed along with the Application under Order IX

Rule 13 and it accords with the law laid down in

Kedarnath (supra). Once such an Application is filed,

it was the duty of the Court to pass an Order. The

Court according to the appellants had a duty to

27

indicate as to whether the Application for permission

to give security was allowed and in what form the

security should be furnished. It was as no orders were

passed, that the appellants on their own filed

Application and purported to furnish the security in

the form of the rented shop. The High Court in its

Order dated 03.12.2015, accepted the submission of the

Counsel for the parties that the surety was accepted

by the Court on 25.04.2015 and the matter was directed

to be decided expeditiously and on the said basis, the

Trial Court had allowed the Application under Order IX

Rule 13. This order was set aside by the ADJ by order

dated 01.08.2017 on the basis that the order dated

24.05.2014 did not mean that the security was accepted.

The trial court was to consider the application dated

06.05.2014 on its own merits. This was so ordered after

finding that no order had been passed on the

application dated 12.05.2014 accepting the security.

It must be noticed that the appellants did not

challenge the Order dated 01.08.2017. Pursuant to the

Order dated 01.08.2017, the Trial Court , by Order dated

11.02.2019, did not find merit in the case of the

28

appellants and dismissed the Application filed under

Section 17 dated 06.05.2014 as also the Application

dated 12.05.2014 and rejected the surety. It is this

Order, which has been upheld again by the ADJ by Order

dated 26.02.2021 and then by the High Court, by the

impugned Order.

21. On a literal interpretation of Section 17 of the

Act, which contemplates the Application under Section

17 being filed before the Application under Order IX

Rule 13, whether appellants have made out a case . The

first question, which we would have to consider is,

whether the Application is in conformity with the

proviso to Section 17. Did the applicant furnish any

security on 06.05.2014? The answer can only be in the

negative. The appellant did not seek for di spensing

with deposit as such. [See paragraph-9 of Kedarnath

(supra)]. Therefore, the appellant had not in the said

sense complied with the mandatory requirement of

Section 17. Next, was the prayer, viz., the request to

permit the appellant to deposit/furnish security for a

sum of Rs.50,000/- due under the Decree in consonance

with Section 17? What was the duty of the Court in the

29

face of such prayer under Section 17? Was the

furnishing of the security consisting of the rented

shop belonging to the Local Body, sufficient compliance

of Section 17? What is the effect of the application

dated 12.05.2014 and the order dated 25.05.2014 on the

same which is obviously after 06.05.2014 (the date of

the application under Order IX Rule 13).

22. The High Court in the impugned order finds that no

application for dispensing with surety was filed and

that this will be read against the appellants. The High

Court perseveres in this observation on three

occasions. We must observe that what Section 17 of

the Act contemplates in the proviso is that the

applicant seeking to set aside an ex-parte decree inter

alia must either make a deposit of the amount in

question or give security. What this Court in Kedarnath

(Supra) laid down was that the provision as to deposit

can be dispensed with by the Court. The applicant can,

in other words, seek a dispensing with of the deposit

and seek leave for furnishing such security as the

Court may direct. Therefore, the High Court was not

correct in proceeding on the basis that appellants did

30

not make any application for dispensing with surety.

No doubt, at one place, the High Court states that

there is no prayer for dispensing with the surety or

the amount sought to be deposited by way of security.

The prayer of the appellants was to permit

deposit/furnishing surety of Rs.50000/ - which was part

of the decretal amount. This could be treated impliedly

as seeking a direction within the meaning of Section

17. An applicant could no doubt also propose the

security which he wishes to give. In fact, ordinarily,

an application for dispensing with the cash deposit and

for direction to furnish security should be made prior

to application under Order IX Rule 13 of CPC. On the

order passed on the same, the applicant is to comply

with the same and furnish the security at the time when

he files the application under Order IX Rule 13. Since

an application under Section 17 which is really

required only in the absence of the cash deposit can

be filed up to the date of the application under Or der

IX Rule 13 as held in Kedarnath (supra)ordinarily, the

security must be made available along with such

application. There then arises the aspect that the

31

application under Order IX Rule 13 can be filed within

30 days as provided in Article 123 of the L imitation

Act. Undoubtedly, the deposit or security must be

furnished within 30 days as held by the full Bench of

the Allahabad High Court in Ram Bharose (supra). This

is on the basis that the application can be made under

Order IX Rule 13 upto the 30

th

day but at the same time,

the conditions in the proviso, namely, the deposit or

the security must be furnished at the time of

presenting the application under Order IX Rule 13. But

if the application under Section 17 can be moved along

with the application under Order IX Rule 13, then if a

direction is required for furnishing security and the

Court grants permission and time, then it may be

possible to furnish the security only after the date

of the application under Order IX Rule 13. As held by

this Court in Kedarnath (supra), the Court is expected

to pass an order promptly on the application which may

be filed under Section 17 which may be of the same date

as the application under Order IX Rule 13. Any delay

on the part of the Court cannot prejudice the

applicant.

32

23. In this case, the appellants filed the application

both under Section 17 of the Act and under Order IX

Rule 13 on the same day, namely, 06.05.2014. The

application under Order IX Rule 13 is premised on

knowledge of the ex parte decree being obt ained on

05.05.2014 in the Execution Proceedings. There was no

security offered on 06.05.2014. Though a direction as

such was not expressly sought for but permission was

sought for to furnish security, it could be said that

in substance the appellants es sentially sought for

direction within the meaning of the proviso to Section

17. We have already found that the High Court was in

error in finding that the appellants did not seek for

dispensing with the security, and therefore, apparently

holding the same against the appellants. When the

appellants sought for permission to furnish security,

if the permission was granted and a direction to

furnish security was given on the same date and it had

been complied with within the time, then the appellants

would have been compliant with Section 17. No orders

were passed on the application under Section 17 dated

06.05.2014. Within 6 days, on 12.05.2014, the

33

appellants on their own purported to furnish security.

The surety was one Abhishek Dixit (the 3

rd

writ

petitioner who is the 7

th

proforma respondent in the

appeal). The security was however, a shop. The shop

was not owned by the surety. The Municipal Corporation,

Lucknow was the owner. The surety was a tenant. A

security to be provided under Section 17 by a sur ety

is to be enforced under the provisions of Section 145

of the Code of Civil Procedure as contemplated in

Section 17 (2) of the Act. Section 145 of the CPC inter

alia provides that the security provided by a surety

can be enforced by effecting sale of th e property. The

courts in this case have held that the security

provided by the appellants through the surety is not

acceptable in law having regard to Section 17 (2) as

the shop belonged to the Municipal Corporation, Lucknow

and it could not be sold for enforcing the surety.

24. While it is true that no order was passed on the

application under Section 17 on 06.05.2014, the fact

remains that the appellants on their own furnished a

surety as stated. The High Court reasons that the

security so provided was unacceptable on two grounds.

34

Firstly, it was not furnished along with the

application under Order IX Rule 13 on 06.05.2014.

Secondly, it is found that it was not acceptable in

law.

25. It is true that the High Court in the order dated

03.12.2015 proceeded to find that the “ security was

accepted by the court below”. This is by way of

accepting the submission of the counsel for the

plaintiffs. It was on this basis that the matter w as

remanded. Following the remand, the trial court allowed

the application filed b y the appellants and also the

application under Order IX Rule 13. This has been set

aside as noticed by us by the ADJ and the matters stood

remanded back by Order dated 01.08.2017. This order

was not challenged by the appellants. It is thereafter

that the courts have concurrently found that there was

non-compliance of Section 17. The earlier order of the

High court dated 03.12.2015 has been overcome by

finding that there was a sweeping statement before the

High Court in the earlier round that the surety

furnished had been accepted. The High Court further

finds that actually the prayer made in application

35

dated 12.05.2014 was only to take the surety on record.

The order dated 25.04.2014 only shows that only the

surety was taken on record. It is further f ound that

the application dated 12.05.2014 was filed after

06.05.2014 and could not be the basis for a valid order

under Section 17.

26. We are in agreement with the courts that the

security furnished by the appellants in the form of the

rented shop belonging to a third party cannot be

accepted as security in law. It is patent. It is not

clear from the order dated 24.05.2014 that the Court

had applied its mind to the sufficiency of the security

or as to whether it was acceptable security. If

security is given, which is later found to be

unacceptable even if it is within 30 days within the

meaning of Article 123 of the Limitation Act, then it

would not be complying with Section 17 [see the

observations of the full Bench of the Allahabad High

court in Ram Bharose (supra)].

27. While it is true that there may have been a failure

on the part of the court to pass orders on the

application dated 06.05.2014 apparently, the

36

appellants proceeded to furnish the security in this

case on 12.05.2014. Therefore, we proceed o n the basis

that within 30 days of the date of knowledge of the

decree, as alleged by the appellants, but after the

date of the application under Order IX Rule 13, the

appellants have furnished security. We are mindful of

the fact that no order was passed by the Court on

06.05.2014. Even proceeding to consider the security

however we would find that it is clearly unacceptable

in law. The effect of the order of the High Court dated

03.12.2015 must be understood with reference to the

concession made by the c ounsel and may not withstand

the requirement of law under Section 17 of the Act

being fulfilled. We cannot be unmindful of the fact

that the appellants did not challenge the order of the

Additional District Judge dated 01.08.2017. The trial

Judge was bound by the same as the appellants did not

challenge the order dated 01.08.201 7. The fact that the

appellants, after participating in the remanded

proceedings mounted a challenge in a writ to the order

dated 01.08.2017 appears to us as not advancing the

case of the appellants. This is both for the reason of

37

the belated challenge as also the nature of the earlier

order involved.

28. In the facts, having regard to the Order dated

01.08.2017 and the security being found unacceptable,

we find no merit in the appeal generated by special

leave. The appeal will stand dismissed. There shall be

no order as to costs.

………………………………………….J.

[K.M. JOSEPH]

………………………………………….J.

[HRISHIKESH ROY]

New Delhi

Dated; May 18, 2023.