Saturday, 12 November 2016

Principles to be followed by court for striking off defence for disobedience of order of court

The provisions of Order 39 Rule 11(2) of the Civil Procedure Code,
would also have to be taken note of which clearly provides that when sufficient
cause is shown, the Court may hear the parties in defence upon such terms as it
deems fir. The provisions under Order 39 Rule 11(1) of the Civil Procedure Code

are directory in nature. In this connection, the Judgment passed by this Court in
Writ Petition no. 381 of 2013 along with Appeal From Order Nos. 40 of 2013 and
other connected Appeals dated 03.07.2014, in the case of M/s. V. G. Quenim &
Ors. vs Bandekar Brothers Pvt. Ltd. & Ors., at Paras 16, 17, 19 and 20 would be
material which read thus :
“16. On plain reading of sub-section (2) of Order 39
Rule 11 of Civil Procedure Code, I find that in case the
party who has been responsible for the default or
contravention, makes amends for such default or
contravention to the satisfaction of the Court and
shows sufficient cause, the Court may hear the parties
in defence upon such terms as it deems fit. In the
present case, taking note of the fact that it is not in
dispute that the value of the re-constructed bungalow
would exceed the total claim of the Plaintiffs in the said
suits, the breach or contravention, if any, by the
defendants can be said to have been amended.
These aspects have not been considered by the
learned Judge whilst passing the impugned Order. No
doubt, the conduct of the Plaintiffs to demolish the
bungalow without taking any permission from the
Court nor informing the Court to that effect is
deplorable. The defendants ought to have taken
necessary precautions to see that they had taken
appropriate permission from the Court before
embarking into the exercise of demolishing the
construction. In fact the Judgments relied upon by the
learned Counsel appearing for the Plaintiffs clearly
suggests that it is not open to a party to make its own
interpretation of the order to defeat such orders. In the
present case, the defendants are not at all justified to

demolish the construction without informing the Court
what further course of action they wanted to follow
after such demolition. In such circumstances, the
apprehension of the Plaintiffs that the defendants
wanted to breach the orders of temporary injunction
and the undertaking, were well founded. But,
however, in order to suffice the consequences
provided in Order 39 Rule 11 as well as Order 39 Rule
2-A of the Civil Procedure Code there should be willful
disobedience of such orders and the party should
persist in committing such contempt. In the present
case, in the reply filed to the application, the defendant
offered to give a Bank Guarantee covering the value of
the said bungalow. Apart from that, they have clearly
stated that they had no intention not to comply with the
Orders passed by the Court. In this connection, there
is also an apology given by the Defendants. In such
circumstances, considering that the Defendants made
amends to the contravention or the default of the
undertaking, I find that the learned Judge was not
justified to strike off the defence of the defendants and
dismiss the counter claim filed by the Defendants. No
doubt, exercise of such powers under Order 39 Rule
11(2) of the Civil Procedure Code, would have to be
upon terms deemed fit. The terms to be imposed
would be dealt with whilst dealing with the challenge to
the Orders under Order 39 Rule 2-A of the Civil
Procedure Code.
17. The Division Bench of this Court in the
Judgment reported in 2004(1) ALL M. R. 822, in the
case of Ramavatar Surajmak Modi vs. Mulchand

Surajmal Modi, has observed at Para 7 thus :
“7. Rule 11 of Order 39 as introduced
by the Bombay amendment provides for
a procedure on parties defying orders of
the Court and/or committing breach of
any undertaking to the Court. We are
concerned with the question whether
sub-rule (1) of Rule 11, Order 39 leaves
no discretion on the Court and that it
obliges the Court to visit the defaulting
party with the penalty prescribed therein
irrespective of the circumstances that
default is not willful or the conduct of the
party responsible for the default is not
contumacious or there is reasonable
explanation for default. The meaning
and intention of the rule making authority
must govern, and these are to be
ascertained not only from the
phraseology of the provision but also by
considering its nature, its design, and
the consequences which would follow
from construing it the one way or the
other. Inter alia the courts have applied
the test whether the object of the
provision will be defeated or furthered by
holding the provision mandatory or
directory. Let us not forget that the
dismissal of suit or proceeding or striking
out the defence of a defendant for noncompliance
of the Courts order or

breach of an undertaking is serious and
grave consequence. By making
provision of serious penalty of dismissal
of suit or striking out the defence against
the party responsible for default, the rule
making authority did not intend to leave
no discretion to the Court. The object of
the provision of Order 39, Rule 11(1) is
not defeated if it is held to be directory
as the Court can in its discretion for
adequate reasons visit the defaulting
party with the penalty envisaged therein.
On the other hand if the provision is held
mandatory, the Court "shall" be left with
no discretion and peremptorily shall
have to dismiss the suit where the
plaintiff is responsible for the default or
to strike off the defence when the
defendant is guilty of default even
though the default is not found willful or
conduct of such party not obstinate or
contumacious. In our considered view,
the provision in sub-rule (1) merely vests
power in the Court to dismiss the suit or
proceeding where the default is by the
plaintiff and strike off the defence of the
defendant where the defaulter is the
defendant. It does not obligate to do so
in every case of default. This is further
fortified by the provision contained in
sub-rule (2) which gives a discretion to
the Court that even after the order

contemplated under the sub-rule (1) of
Rule 11 has been passed, upon
sufficient cause being shown by the
party responsible for the default or
contravention or breach and such party
makes amend for the default or
contravention or breach to the
satisfaction of the Court, the Court may
restore the suit or hear the defence on
such terms and conditions it deems fit. If
the Court has power to restore the party
to the same position even after the
adverse order has been passed under
sub-rule (1) of Rule 11 if the case is
made out under sub-rule (2), the
provision of sub-rule (1) has to be held
to be directory and not imperative. The
provision in the nature of sub-rule (2)
leaves no manner of doubt the intention
of the rule making authority that the
provision of sub-rule (1) of Rule 11 is
directory and that by such provision
power has been vested in the Court to
dismiss the suit or proceeding where the
plaintiff is in default or striking off the
defence of the defendant, where
defendant is responsible for the default.
Unfortunately, neither in Ratnakar D.
Patade nor in Smt. Asha M. Joshi, the
learned Judges adverted to sub-rule (2)
of Rule 11 and its effect. The Supreme
Court in (M/s. Babbar Sewing Machine

Co. v. Tirlok Nath Mahajan)6, A.I.R. 1978
S.C. 1436 held that the power of
dismissal of suit or striking out of the
defence under Order 11, Rule 21 of the
Code of Civil Procedure should be
exercised only where the defaulting
party fails to attend the hearing or is
guilty of prolonged or inordinate and
inexcusable delay which may cause
substantial or serious prejudice to the
opposite party. It was further observed
that an order striking out the defence
under Order 1, Rule 21 should be made
unless there has been obstinacy or
contumacy on the part of the defendant
or willful attempt to disregard the order
of the Court to produce the
documents.....
This Court has observed that the
provisions and nature of sub-rule (2) leaves no
manner of doubt that the intention of the rule making
authority is that the provisions of sub rule (1) of Rule
11 of Order 39 of the Civil Procedure Code, is
directory and by such provision, power has been
vested in the Court to dismiss the suit when the
Plaintiff is in default and struck off the defence of the
defendants when the defendant is responsible for the
default. In this connection, taking note of the fact that
the defendants made amends to the default by
furnishing a fresh undertaking of the new bungalow
constructed in the same property, the question of
passing a harsh Order striking off the defence would

lead to grave consequences to the defendant and, as
such, would not be justified in the facts of the present
case.
IN THE HIGH COURT OF BOMBAY AT GOA
WRIT PETITION NOS. 279, 362 AND 626 OF 2006
WRIT PETITION NO. 279 OF 2006
Sachin Y.Mense,


 Shri Sunil Noronha,

 Coram :- F. M. REIS, J

 Dated  : 16th January, 2015.
Citation:2016(5) ALLMR 146

Heard Shri P. P. Singh, learned Counsel appearing for the Petitioner in
Writ Petition no. 279 of 2006, Mr. Anthony D' Silva, learned Counsel appearing for
the Respondent no. 1 and Shri J. P. Mulgaonkar, learned Counsel appearing for the
Petitioners in Writ Petition nos. 362 and 626 of 2006 and for Respondent nos. 2
and 3 in Writ Petition no. 279 of 2006.

2. All the above Writ Petitions were ordered to be taken up together by
an Order dated 09.08.2007.
3. WRIT PETITION NO. 279 OF 2006
Briefly, the facts of the case as stated by the Petitioners is that on
22.11.1993, the IDC leases of Plot no. 49 in Tivim Industrial Estate and shed no. D-
310 was sold to Mrs. Alpine Engineering Works. An agreement of assignment
dated 28.09.1994, came to be executed between Mrs. Alpine Engineering Works.
But, however, the Agreement was not performed till August 2003 on account of
paucity of funds with the Respondent no. 3. Consequently, the Petitioner agreed to
assign the shed together with the lease hold rights in the plot for a total
consideration of Rs.6,50,000/-. The draft of the Agreement for the assignment of
rights between the Alpine Engineering, the Respondent no. 3 and the Petitioners
was prepared and handed over to the Respondent no. 2 for execution. A sum of
Rs.2,00,000/- was advanced by the Petitioners. Simultaneously, the Petitioner was
put in actual physical possession of the plot shed. But, however, such document
was not executed. Thereafter, M/s. Alpine Engineers on 01.08.2003, sold their
share to the Respondent no. 3 and IDC leases the plot to the Respondent no. 3.
Subsequently, on 28.10.2003, a fresh Agreement of Assignment was drafted and
executed between the Respondent no. 3 through the Respondent no. 2 and the
Petitioners. Thereafter, on 09.03.2004, the Respondent no. 3 through the
Respondent no. 2, sold the share to the Petitioner. IDC leases plot to the
Petitioners on 16.04.2004. Somewhere on 03.04.2004, Regular Civil Suit no. 69 of
2004, was filed by the Respondent no. 1 in the Court of the learned Civil Judge,

Senior Division at Mapusa for a declaration that the Respondent no. 1 is a Director
of the Respondent no. 3 and for a permanent injunction restraining the Respondent
nos. 2 and 3 from alienating the assets of the Respondent no. 3. An Application
under Order 39 Rule 1 and 2 was also filed in the said suit for temporary injunction.
The application for temporary injunction was dismissed by the learned Civil Judge,
Senior Division at Mapusa by Order dated 12.04.2005. The Order was challenged
before the learned District Judge by preferring a Misc,. Civil Appeal no. 46 of 2005.
By an Order dated 28.11.2005, the learned Judge cancelled the registration of the
Deed of Sale dated 09.03.2004 in favour of the Petitioners as also the Tri-partite
Deed of Lease dated 16.04.2004.
4. Being aggrieved by the said Order, the Petitioners have filed the
above Writ Petition challenging the adverse findings in the impugned Order against
the Petitioner after he learnt about the said Order.
5. The main contention of the Petitioner in the above Writ Petition is that
the Lower Appellate Court was in law obliged not to make any Order pre-judicial to
the interest of the Petitioners behind his back and that the Lower Appellate Court
has exceeded its jurisdiction in directing the cancellation of the registration of the
Deed of Sale dated 09.03.2004 and the Tri-partite Lease Deed dated 16.04.2004
executed in favour of the Petitioners. It is further the contention of the Petitioner
that the Petitioner neither has title to the said plot nor the factory shed nor the
money paid by him to the Respondent nos. 2 and 3 to acquire title on the basis of
the said documents.

6. Briefly, the facts of the Petition as stated in the above Writ Petition are
that the Petition has been filed by the Petitioners who are the defendants in the
said Regular Civil Suit no. 69 of 2004 filed in the Court of learned Civil Judge
Senior Division in the Court of Mapusa challenging the Order dated 28.10.2005
passed by the learned Addl. District Judge, at Panaji, allowing the Misc. Civil
Appeal no.46 of 2005 filed by the Respondent-Plaintiff in the said suit challenging
the Order dated 12.04.2005 of the learned Trial Judge.

7. Briefly, the facts of the Petition as stated in the above Writ Petition are
that the impugned Order therein has also been passed in the same suit filed by the
Respondent-Plaintiff against the Petitioners herein wherein the Respondent has
claimed that he was a permanent Director of the Petitioner no. 2-Company having
valuable stakes in the business operations therein. The application for temporary
injunction was also filed in the said suit which was opposed by the defendantPetitioners
herein. It was the case of the Petitioners who are defendants in the said
suit that they had already surrendered on 09.03.2004 in terms of the Sale Deed
executed between the defendant no. 1 and the third party purchaser who is the
Respondent no. 2 in the above Petition and defendant no. 3 in the suit and the Tripartite
Lease Deed which came to be registered before the Sub-Registrar. It was
also claimed by the Petitioners-defendants that the Plaintiff-Respondent no. 1herein
ceased to be a Director of the Company in terms of Section 283(1)(g) of the
Companies Act, 1956. The application for temporary injunction was dismissed on

12.04.2005 which came to be challenged by the Respondent no. 1 before the
Appellate Court. In the said suit application under Order 39 Rule 11 was also filed
by the Respondent no. 1 claiming that the Petitioners have sold the factory shed in
breach of the ex-parte Order dated 06.04.2004 restraining the Petitioners from
alienating/transferring/encumbering the property. The application under Order 39
Rule 2-A was also filed by the Respondent no. 1 and both the applications were
opposed by the Petitioners. By the impugned Order dated 26.092006, the learned
Trial Judge without conducting any inquiry and based solely on the findings arrived
at by the learned Addl. District Judge in Misc. Civil Appeal no. 46 of 2005 , allowed
the application filed by the Plaintiffs-Respondent no. 1 thereby ordering the defence
of the defendants be struck off. Being aggrieved by the said Order, the Petitioners
filed the present above Writ Petition.
8. The parties shall be referred to as they so appear in the cause title of
the suit. It is to be noted that the Petitioners in Writ Petition no. 279 of 2006, were
impleaded in the suit as defendant no. 3; the Petitioners in Writ Petition no. 362 and
626 of 2006, are the defendants in the suit and the Respondent no. 1 in all the
Petitions are the Plaintiffs in the suit.
9. I have extensively heard Shri P. P. Singh, learned Counsel appearing
for the defendant no. 3, Shri Anthony D' Silva, learned Counsel appearing for the
Plaintiffs as well as Shri J. P. Mulgaonkar, learned Counsel appearing for the
Defendant nos. 1 and 2.

10. The main contentions of the defendant no. 3 is that though the Sale
Deed which has been ordered to be cancelled was for a valuable consideration
which was paid by the defendant no. 3 to the defendant no. 2, he has been
deprived of the benefits of the said Sale Deed in view of the impugned Order
passed by he learned Additional District Judge thereby depriving the defendant no.
3 from enjoying the property despite of the defendant no. 3 parting with the
consideration to the defendant no. 2. On perusal of the impugned Order passed
by the Lower Appellate Court dated 28.10.2005, the learned Judge has noted that
the Plaintiffs had approached the Court claiming that he was a Director of the
defendant no. 2-Company and, on such basis, had filed an application for
injunction. The learned Judge noted that defendant nos. 1 and 2 had taken the
stand that the Plaintiff had been disqualified under Section 283(1)(g) of the
Companies Act, 1956. The learned Judge also noted that it is the case of the
Plaintiff that he had never been served with a notice of the meeting. The learned
Judge also noted that it is the case of the Plaintiff that he had never been served
with a notice of the meeting. The learned Judge further found that there was no
proof, prima facie, to establish that the first notice dated 12.02.2001 was actually
posted or received by the Plaintiff. The learned Judge also noted that as far as
second notice is concerned, the seal appears to be dated 10.04.2001 and not 9th or
10th of March, 2001. The learned Judge also noted that as far as other notice dated
28.03.2001 is concerned though it was sent by registered post, but, however, the
AD card has not been produced to show that it was actually sent. The learned
Judge as such found that merely producing the notice cannot attract the
consequences in terms of the provisions of Section 283(1)(g) of the Companies

Act, 1956. The learned Judge as such noted that, prima facie, the defendants have
failed to establish that the Plaintiff was disqualified as a Director of the Company.
The learned Judge also noted that the transaction of the Sale entered into by the
defendant no. 1, prima facie, appears to be in contravention of the provisions of the
Companies Act, 1956. The learned Judge further noted that in the present case,
the Plaintiff had approached the Court on 03.04.2004. The learned trial Judge
passed an ad-interim Order on 06.04.2004. The defendant no. 1 appeared in the
Court on 19.04.2004. The Sale Deed transfering the factory shed was executed by
the defendant no. 1 on 09.03.2004. But, however, it was presented for registration
on 06.05.2004. The learned Judge also noted that prima facie it appears that the
transaction of sale as well as the Sale Deed in favour of the defendant no. 3 was
executed simultaneously when the Tri-partite Lease Deed was executed. The
learned Judge further noted that the Deed of Sale as well as the Deed of Lease
was executed in contravention of the Exparte Order of the Court prohibiting the
transfer and alienation of the property. The learned Judge as such found that the
alienation of the suit shed was made by the defendant no. 1 in violation of the
Order of the Court. The learned Judge furher found that as the said Deed of
Conveyance and the Tri-partite Lease Deed document was executed in breach of
the exparte Order, such acts are to be undone and, consequently, directed that the
registration of the Sale Deed on 19.05.2004 and Tri-partite Lease Deed executed
on 16.04.2004 and registered on 20.05.2005, stand cancelled. A further relief was
granted, inter alia, restraining he defendants from
alienating/transferring/encumbering the suit shed by temporary injunction in any
manner in the suit shed existing in the suit property.

11. Upon hearing the learned Counsel, I find that admittedly defendant
no. 3 was not a party to the Appeal preferred before the Appellate Court. The relief
of cancellation of registration essentially affects the rights of the defendant no. 3. In
such circumstances, before directing the cancellation of the registration, the
learned Judge ought to have heard the defendant no. 3 in the matter. The findings
of the learned Judge that the Deed of Conveyance and the Tri-partite Lease Deed
was submitted for registration after the exparte Order was passed on 03.04.2004,
cannot be faulted. No doubt, there is a contention raised by the defendants to the
effect that the Deed of Conveyance was executed much before the service of the
Exparte Order. This aspect in any case would have to be examined by the learned
Judge while deciding the suit on merits. After examining the paramount
consideration of granting such injunctions, the Court also has to balance the
equities of the parties. No doubt, a contemptuous act cannot be condoned by a
Court of equity. But, in the present case, it is the contention of the defendants that
much prior to the exparte Order, there were documents executed between the
defendant inter se in connection with the shed, There are also allegations that
possession was also parted in favour of defendant no. 3 pursuant to documents
executed by the defendant nos. 1 and 2. In such circumstances, one will have to
examine whether in the peculiar facts and circumstances of this case and
considering that admittedly the defendant no. 3 and the Goa Industrial Corporation
were not parties to the suit, what could be a just and appropriate relief. The learned
Trial Judge on the basis of the findings in the impugned Order passed by the Lower
Appellate Court, has proceeded to dispose of the application under Order 39 Rule

2-A and 11 of the Civil Procedure Code by striking off the defence of the
defendants. No doubt, the rights of the Plaintiffs would have to be established in the
suit and ascertain whether the transactions intended to be executed were in fact
contrary to the provisions of the Companies Act, 1956 and the effects thereof. In
such circumstances, one will have to grant an appropriate relief in the facts of the
present case. By directing the cancellation of the registration of the deeds, the
learned Judge has in fact granted at this stage, a final relief when the rights of the
Plaintiffs have not been established. No doubt, an act committed in contravention
of an Order of the Court is to be dealt with severely and ensure that the illegality
which has been committed is undone in the facts and circumstances of each case.
Admittedly, the transactions which are impugned were with the consent of the Goa
Industrial Corporation who are not parties to the suit and the registration would also
effect their rights. In the present case, the party who is affected is in fact the
defendant no. 3 and the Industrial Corporation who were admittedly not parties to
the suit. In this background, one would have to examine what would be an
appropriate relief in the facts and circumstances of the case.
12. Shri P. P. Singh, learned Counsel appearing for the Defendant no. 3,
has pointed out that the injunction granted by the Lower Appellate Court as against
the original defendant nos. 1 and 2 could also operate against the defendant no. 3
and, as such, the defendant no. 3 is restrained not to alienate/transfer or encumber
the disputed shed until the disposal of the suit. In such circumstances, the rights of
the Plaintiff would be protected at this stage as far as the disputed shed is
concerned. Apart from that, the learned Counsel appearing for defendant no. 3

further points out that the defendant no. 3 shall not carry out any activities in the
said shed until the disposal of the suit. The said statement is accepted as an
undertaking on behalf of the Respondent no. 3 which would continue to be in
operation until the disposal of the suit on merits.
13. In this background, one have to examine whether the learned Trial
Court was justified to direct the striking off of the defence of the defendants.
14. In order to grant such relief, the disobedience of the Order should be
willful and persistent. The provisions of order 39 Rule 2-A are curative in nature.
The Court has powers and can pass appropriate Orders to ensure that the
directions issued by the Court are implemented and enforced. The purpose of such
provisions are to ensure that the directions of the Court are implemented and the
disobedience of the Orders are remedied so that the status quo ante is restored.
The punishment imposed on the party disobeying the Orders is primarily for
upholding the dignity of the Court and showing respect for judicial process. There
should be no element of vindictiveness nor can the proceedings be allowed to be
used for feeding personal grudge or as an offensive weapon to satisfy private
vendetta. In the present case, as pointed out above, the learned Judge whilst
passing the impugned Order has ordered to strike off the defence of the
defendants. The provisions of Order 39 Rule 11(2) of the Civil Procedure Code,
would also have to be taken note of which clearly provides that when sufficient
cause is shown, the Court may hear the parties in defence upon such terms as it
deems fir. The provisions under Order 39 Rule 11(1) of the Civil Procedure Code

are directory in nature. In this connection, the Judgment passed by this Court in
Writ Petition no. 381 of 2013 along with Appeal From Order Nos. 40 of 2013 and
other connected Appeals dated 03.07.2014, in the case of M/s. V. G. Quenim &
Ors. vs Bandekar Brothers Pvt. Ltd. & Ors., at Paras 16, 17, 19 and 20 would be
material which read thus :
“16. On plain reading of sub-section (2) of Order 39
Rule 11 of Civil Procedure Code, I find that in case the
party who has been responsible for the default or
contravention, makes amends for such default or
contravention to the satisfaction of the Court and
shows sufficient cause, the Court may hear the parties
in defence upon such terms as it deems fit. In the
present case, taking note of the fact that it is not in
dispute that the value of the re-constructed bungalow
would exceed the total claim of the Plaintiffs in the said
suits, the breach or contravention, if any, by the
defendants can be said to have been amended.
These aspects have not been considered by the
learned Judge whilst passing the impugned Order. No
doubt, the conduct of the Plaintiffs to demolish the
bungalow without taking any permission from the
Court nor informing the Court to that effect is
deplorable. The defendants ought to have taken
necessary precautions to see that they had taken
appropriate permission from the Court before
embarking into the exercise of demolishing the
construction. In fact the Judgments relied upon by the
learned Counsel appearing for the Plaintiffs clearly
suggests that it is not open to a party to make its own
interpretation of the order to defeat such orders. In the
present case, the defendants are not at all justified to

demolish the construction without informing the Court
what further course of action they wanted to follow
after such demolition. In such circumstances, the
apprehension of the Plaintiffs that the defendants
wanted to breach the orders of temporary injunction
and the undertaking, were well founded. But,
however, in order to suffice the consequences
provided in Order 39 Rule 11 as well as Order 39 Rule
2-A of the Civil Procedure Code there should be willful
disobedience of such orders and the party should
persist in committing such contempt. In the present
case, in the reply filed to the application, the defendant
offered to give a Bank Guarantee covering the value of
the said bungalow. Apart from that, they have clearly
stated that they had no intention not to comply with the
Orders passed by the Court. In this connection, there
is also an apology given by the Defendants. In such
circumstances, considering that the Defendants made
amends to the contravention or the default of the
undertaking, I find that the learned Judge was not
justified to strike off the defence of the defendants and
dismiss the counter claim filed by the Defendants. No
doubt, exercise of such powers under Order 39 Rule
11(2) of the Civil Procedure Code, would have to be
upon terms deemed fit. The terms to be imposed
would be dealt with whilst dealing with the challenge to
the Orders under Order 39 Rule 2-A of the Civil
Procedure Code.
17. The Division Bench of this Court in the
Judgment reported in 2004(1) ALL M. R. 822, in the
case of Ramavatar Surajmak Modi vs. Mulchand

Surajmal Modi, has observed at Para 7 thus :
“7. Rule 11 of Order 39 as introduced
by the Bombay amendment provides for
a procedure on parties defying orders of
the Court and/or committing breach of
any undertaking to the Court. We are
concerned with the question whether
sub-rule (1) of Rule 11, Order 39 leaves
no discretion on the Court and that it
obliges the Court to visit the defaulting
party with the penalty prescribed therein
irrespective of the circumstances that
default is not willful or the conduct of the
party responsible for the default is not
contumacious or there is reasonable
explanation for default. The meaning
and intention of the rule making authority
must govern, and these are to be
ascertained not only from the
phraseology of the provision but also by
considering its nature, its design, and
the consequences which would follow
from construing it the one way or the
other. Inter alia the courts have applied
the test whether the object of the
provision will be defeated or furthered by
holding the provision mandatory or
directory. Let us not forget that the
dismissal of suit or proceeding or striking
out the defence of a defendant for noncompliance
of the Courts order or

breach of an undertaking is serious and
grave consequence. By making
provision of serious penalty of dismissal
of suit or striking out the defence against
the party responsible for default, the rule
making authority did not intend to leave
no discretion to the Court. The object of
the provision of Order 39, Rule 11(1) is
not defeated if it is held to be directory
as the Court can in its discretion for
adequate reasons visit the defaulting
party with the penalty envisaged therein.
On the other hand if the provision is held
mandatory, the Court "shall" be left with
no discretion and peremptorily shall
have to dismiss the suit where the
plaintiff is responsible for the default or
to strike off the defence when the
defendant is guilty of default even
though the default is not found willful or
conduct of such party not obstinate or
contumacious. In our considered view,
the provision in sub-rule (1) merely vests
power in the Court to dismiss the suit or
proceeding where the default is by the
plaintiff and strike off the defence of the
defendant where the defaulter is the
defendant. It does not obligate to do so
in every case of default. This is further
fortified by the provision contained in
sub-rule (2) which gives a discretion to
the Court that even after the order

contemplated under the sub-rule (1) of
Rule 11 has been passed, upon
sufficient cause being shown by the
party responsible for the default or
contravention or breach and such party
makes amend for the default or
contravention or breach to the
satisfaction of the Court, the Court may
restore the suit or hear the defence on
such terms and conditions it deems fit. If
the Court has power to restore the party
to the same position even after the
adverse order has been passed under
sub-rule (1) of Rule 11 if the case is
made out under sub-rule (2), the
provision of sub-rule (1) has to be held
to be directory and not imperative. The
provision in the nature of sub-rule (2)
leaves no manner of doubt the intention
of the rule making authority that the
provision of sub-rule (1) of Rule 11 is
directory and that by such provision
power has been vested in the Court to
dismiss the suit or proceeding where the
plaintiff is in default or striking off the
defence of the defendant, where
defendant is responsible for the default.
Unfortunately, neither in Ratnakar D.
Patade nor in Smt. Asha M. Joshi, the
learned Judges adverted to sub-rule (2)
of Rule 11 and its effect. The Supreme
Court in (M/s. Babbar Sewing Machine

Co. v. Tirlok Nath Mahajan)6, A.I.R. 1978
S.C. 1436 held that the power of
dismissal of suit or striking out of the
defence under Order 11, Rule 21 of the
Code of Civil Procedure should be
exercised only where the defaulting
party fails to attend the hearing or is
guilty of prolonged or inordinate and
inexcusable delay which may cause
substantial or serious prejudice to the
opposite party. It was further observed
that an order striking out the defence
under Order 1, Rule 21 should be made
unless there has been obstinacy or
contumacy on the part of the defendant
or willful attempt to disregard the order
of the Court to produce the
documents.....
This Court has observed that the
provisions and nature of sub-rule (2) leaves no
manner of doubt that the intention of the rule making
authority is that the provisions of sub rule (1) of Rule
11 of Order 39 of the Civil Procedure Code, is
directory and by such provision, power has been
vested in the Court to dismiss the suit when the
Plaintiff is in default and struck off the defence of the
defendants when the defendant is responsible for the
default. In this connection, taking note of the fact that
the defendants made amends to the default by
furnishing a fresh undertaking of the new bungalow
constructed in the same property, the question of
passing a harsh Order striking off the defence would

lead to grave consequences to the defendant and, as
such, would not be justified in the facts of the present
case.
18. …
19. On perusal of the impugned Order, the
very fact that the learned Judge has granted an
application under Order 39 Rule 2-A of the Civil
Procedure Code, without even specifying the period of
such detention would itself suggest that the learned
Judge has not examined the predicates of granting
said punishment under the said provisions. No doubt,
under the provisions of Order 39 Rule 2-A of the Civil
Procedure Code, the Court can detain the person in
breach of an Order to civil imprisonment in cases in
which there is contemptuous breach of a temporary
injunction. Nevertheless, the provisions also
recognises that the properties of the defaulter can be
attached or be detained in civil imprisonment. No
doubt, these powers are not in the alternative but can
be exercised independently. But, however, the said
provisions are not exhaustive. The Court has power
and can pass appropriate Orders to ensure that the
directions issued by the Court are implemented and
enforced. In such circumstances, Rule 2-A of Order
39 of the Civil Procedure Code, is a curative provision.
Its purpose is to ensure that the direction of the Court
is implemented and the disobedience of the Orders
are remedied and status quo ante is restored. Any
punishment awarded on the party disobeying the
Orders is primarily for upholding the dignity of the
Court and showing respect for judicial process. There
should be no element of vindictiveness and the

proceedings should not be allowed to be used for
feeding personal grudge or as an offensive weapon to
satisfy private vendetta.
20. In the present case, as pointed out
herein above, the purpose of granting the injunction as
well as taking an undertaking has been attained as the
defendants have given a fresh undertaking in respect
of the same land and the re-constructed bungalow in
terms of the directions of the Apex Court referred to
herein above. Apart from that, the defendants also
offered during the course of the hearing that in lieu of
such undertaking, they would even furnish a Bank
Guarantee of a Nationalised Bank to the satisfaction of
the Court to cover the total claim of the Plaintiffs if
decreed in the suit as security during the pendency of
the suit. The said offer was not accepted by the
learned Counsel appearing for the Plaintiffs. In such
circumstances, the provisions of Order 39 Rule 2-A
and Rule 11 of the Civil Procedure Code, cannot be
used as a tool to get the private rights of the parties
decided or to satisfy any private vendetta. Taking note
of the observations of the Apex Court, as referred to
herein above, I find that detaining the defendants in
civil imprisonment would be very harsh and
inappropriate in the facts and circumstances of the
case. The Plaintiffs as pointed out herein above are
adequately secured in case any Decree for recovery
of money is passed in their favour ultimately in the
suits filed by the Plaintiffs. But, however, the act of the
defendants to demolish the bungalow without
informing the Court cannot be condescended and for

this act, the defendants should be directed to pay an
amount as compensation/fine in the facts and
circumstances of the case instead of being detained in
civil imprisonment. It is also to be noted that the
original undertaking was given by the defendant no.
2, who is the widow and her deceased husband. The
conduct of the defendants, inter alia, to furnish the
undertaking, offer to furnish a Bank Guarantee,
tendering an apology in the reply, cannot rule out that
the Defendants had bonafidely misinterpreted the
Order and the undertaking. As such, the Judgments
relied upon by Shri Doctor, learned Counsel appearing
for the Respondents, would not be applicable to the
facts of the present case considering the view taken
herein above. Thus, looking at the facts in its entirety,
I find that the directions to detain the defendants in
civil imprisonment is unjustified and in lieu thereof, an
amount of compensation/fine would meet the interest
of justice in the peculiar facts of this case. The
undertaking given by the Defendant nos. 1(e) and 1(f)
in terms of the directions issued by the Hon'ble
Supreme Court in the Judgment dated 13.04.2012 is
accepted and shall continue to be in force during the
pendency of all the four Suits filed by the Plaintiffs.”
15. A Special Leave Petition preferred against the said Judgment bearing
no. 34221 and 34222 of 2014, came to be dismissed by Order dated 06.01.2015.
16. Taking note of the said observations and applying them to the facts of
the present case, the learned Judge by the impugned Order has already protected

the Plaintiffs by granting an injunction restraining the defendants by a temporary
injunction, inter alia, from alienating, transferring or encumbering the suit shed.
Apart from that, Shri P. P. Singh, learned Counsel appearing for the Defendant no.
3 has pointed out upon instructions of the Defendant no. 3 that Defendant no. 3
shall give an undertaking to the Court that until the disposal of the suit filed by the
Plaintiffs the defendant no. 3 shall not alienate, transfer or encumber the suit shed
in any manner whatsoever nor carry out any activities therein. Accepting the said
statement of Mr. P. P. Singh, learned Counsel appearing for the defendant no. 3, I
find that such undertaking coupled with the injunction granted by the learned Judge
in the impugned Order would sufficiently protect the claim of the Plaintiffs in the
suit. The directions of the learned judge to cancel the registration of the Tri-partite
Lease Deed and the Sale Deed in the impugned Order as such are not at all
justifiable and unsustainable and to that extent the impugned Order passed by the
Lower Appellate Court deserves to be quashed and set aside.
17. The only aspect that would have to be examined is the conduct of the
defendant no. 1. No doubt, it is the contention of the defendant no. 1 that the suit
transaction was in fact executed four weeks prior to the exparte Order dated
03.04.2004, nevertheless, the learned Judge, prima facie, has not accepted the
said contention and, as such, the conduct of the Defendant no. 1 in the disputed
transaction is not at all appropriate. No doubt, to ascertain whether there was
willful disobedience, an inquiry otherwise would have to be conducted with that
regard. But, however, the peculiar facts and circumstances of the case would
sufficiently show that the defendant no. 1 has committed a breach of the directions

in the exparte Order which otherwise came to be vacated by the learned Trial
Judge. In such circumstances, taking note of the observations of this Court in a
Judgment referred to herein above, a fine deserves to be imposed on the
defendant no. 1 on that count. Such fine is fixed at Rs.10,000/- to be paid by the
defendant no. 1 to the Plaintiff herein. Besides that, admittedly, on the basis of the
disputed transaction, the defendant nos. 1 and 2 have received a sum of
Rs.6,50,000/-. The question of the defendant no. 2 enjoyed the benefits of the said
amount is not at all justified. In such circumstances, the defendant nos. 1 and 2 are
directed to deposit the total consideration of Rs.6,50,000/- received pursuant to the
disputed transaction before the learned Trial Judge within four weeks from today
and after such amount is deposited, the learned Judge shall invest the amount in
fixed deposit in any Nationalised Bank initially for a period of one year and the
same shall be renewed from time to time until the disposal of the suit.
18. In this connection, the observation of the learned Single Judge of this
Court reported in 2003(2) BCR 132 in the case of Chandrashekhar Govind
Daiwatkar & anr. vs. Ramdas Govindrao Daiwatkar at para 10 would be relevant
which reads thus :
“10. The learned Counsel for the respondent has
stated that the respondent is willing to purge the
contempt and is ready and willing to deposit before
the trial Court the entire consideration which has been
received out of the sale-deeds which were executed
by the respondent. I am of the view that it would be
appropriate, in the interests of justice, to grant one

final opportunity to the respondent to purge the
contempt. In order to enable the respondent to do so,
the order of sentence should be suspended for an
appropriate period so as to furnish that opportunity to
the respondent. Accordingly, there shall be a direction
to the effect that the respondent shall, within one
week from today, file an affidavit before the trial Court
in Special Civil Suit No. 1385 of 1995, containing a
full disclosure of the sale transactions which have
been entered into by the respondent in respect of the
property which forms the subject matter of the order
of injunction that was passed by this Court on 11-2-
1998 with full particulars of the dates on which the
transactions were entered into, the parties with whom
the transactions were entered into and the
consideration that has been received in respect
thereof. The respondent shall also file before the trial
Court, within the aforesaid period, authenticated
copies of the sale documents and all other documents
which have been executed. The respondent shall also
within a period of four weeks from today deposit
before the trial Court the full consideration that has
been received by him in respect of the aforesaid sale
transactions. The learned trial Judge is directed to
submit a report to this Court after verifying that
compliance has been made by the respondent. The
contempt petition shall be listed before this Court for
verifying compliance on 19-8-2002. Until 23-8-2002,
the sentence which has been imposed on the
respondent shall remain suspended.
19. Taking note of the said observations and in order that the Respondent

nos. 1 and 2 may purge the contravention of the exparte Order passed by the
learned Trial Judge, I find that the defendant nos. 1 and 2 shall also deposit the
sum of Rs.6,50,000/- before the learned Trial Court within four weeks from today as
condition precedent.
20. In view of the above, I pass the following :
O R D E R
(I) The impugned Orders dated 28.10.2005 passed by
the Lower Appellate Court and the Order dated
02.09.2006 passed by the learned Trial Court, stands
modified.
(II) The directions of the learned Judge to cancel the
registration of the Deed of Sale and the Tri-partite
Lease Deed registered on 19.05.2004, stands
quashed and set aside.
(III) The relief of temporary injunction granted by
the learned Lower Appellate Court stands confirmed
and would also operate as against defendant no. 3 in
the suit.
(IV) The defendant no. 3 shall furnish an
undertaking to the satisfaction of the learned Trial
Judge to the effect that the defendant no. 3 shall not
alienate or transfer nor carry out any activities in the
disputed shed until the disposal of the suit filed by the
Plaintiff.

(V) The impugned Order dated 02.09.2006 striking off of
the defence of the defendants stands quashed and
set aside.
(VI) The Defendant no. 1 shall pay a sum of
Rs.10,000/- to the Plaintiffs as condition precedent to
defend the suit.
(VII) The defendant nos. 1 and 2 are directed to
deposit the total amount of consideration received on
the basis of the disputed transaction amounting to
Rs.6,50,000/- before the learned Trial Court within
four weeks from today. After such amount is
deposited, the learned Trial Court shall invest such
amount in fixed deposit in any Nationalised Bank
intially for a period of one year and the same shall be
renewed from time to time until the disposal of the suit
on merits.
(VIII) The learned Judge shall proceed to dispose of
Regular Civil Suit No.69 of 2004 as expeditiously as
possible preferably on or before 15.06.2016.
(IX) The parties are directed to appear before the learned
Trial Judge on 02.03.2015 at 10.00 a.m.
(X) Rule is made absolute in above terms.
(XI) All the Writ Petitions stands disposed of
accordingly with no order as to costs.
F .M. REIS, J.

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