Can a decree passed in the absence of the defendants be undone because the companies were caught up in the wider Sahara proceedings? The Bombay High Court has allowed Aamby Valley Limited and another Sahara group company to reopen an ex-parte decree, but only if they deposit ₹3,48,39,298 within four weeks of the order’s upload. The Court held that the Supreme Court’s earlier bar on litigation concerning Aamby Valley City and the companies’ disrupted functioning justified relief, and that the deposit is needed to protect the plaintiff’s interests.
Mumbai: Aamby Valley Limited and Qing Ambay City Developers Corporation Limited will be able to contest a commercial summary suit on merits once they make the stipulated deposit, the Bombay High Court has ruled while conditionally recalling the ex-parte decree obtained by AYG Realty Private Limited against them. [AYG Realty Private Limited v. Aamby Valley Limited and Another]
Justice Abhay Ahuja, in an order pronounced on November 5, 2026 and uploaded on November 9, directed the applicants to deposit ₹3,48,39,298 within four weeks from the date of uploading. They must then file their written statement within 30 days of the deposit.
The order disposes of the application to set aside the July 29, 2021 ex-parte decree. It does not finally determine the parties’ competing claims in the underlying suit.
AYG Realty’s case against reopening
AYG Realty resisted the application on the strength of the service of summons and the communication of the decree. It argued that the application was delayed, that no separate application for condonation had been filed, and that the applicants had not shown the special circumstances or the defence needed to reopen a summary decree.
It also disputed how the applicants read the Supreme Court’s orders, maintaining that they gave no blanket immunity from debts and pointing to the September 4, 2024 order allowing claims to proceed before other forums in accordance with law. A further objection was res judicata, based on an earlier application concerning the decree.
The applicants’ answer: a Supreme Court bar and disrupted management
The applicants relied on a February 7, 2018 Supreme Court direction that no other court in the country should entertain litigation pertaining to Aamby Valley City while the apex court was seized of the matter. They argued that AYG Realty nevertheless instituted its suit in 2019 and obtained the decree without drawing that restriction to the High Court’s attention.
They also submitted that successive orders in the Sahara proceedings had severely disrupted their functioning and management, preventing effective monitoring of litigation. The bailiff’s report showed postal service of the summons in April 2019, yet the High Court found believable their explanation that, in those circumstances, the papers may not have reached the persons concerned.
Why the Court permitted reopening
In paragraphs 31–34, Justice Ahuja held that the chronology and the disruption of the companies’ functioning supplied sufficient cause for the delay. Applying Supreme Court precedent, the judge declined to take a hyper-technical approach to the absence of a separate delay-condonation application when the substantive application itself contained the explanation.
The Court then examined Order XXXVII Rule 4 of the Code of Civil Procedure, which permits a summary decree to be set aside in special circumstances. It stressed that a defendant must show more than circumstances preventing appearance: facts supporting leave to defend must also be placed before the Court.
On these facts, the judge found the circumstances exceptional and considered it unfair to deny the applicants an opportunity to defend. In paragraph 45, the Court held that it could not have entertained the suit had it been informed of the Supreme Court restriction operating when the suit was filed and the decree passed.
The res judicata objection also failed. The earlier application had been disposed of with liberty to pursue appropriate remedies following the Supreme Court’s September 2024 order, and the High Court held that it did not bar the present proceedings.
Relief remains subject to the deposit
Against the opportunity to defend, the Court weighed the plaintiff’s existing decree for ₹3,48,39,298 with interest at nine per cent per annum until realisation. Paragraphs 43 and 49 make the deposit of ₹3,48,39,298 a condition of allowing the application.
If payment is made within the four-week period, the ex-parte decree is to be recalled and the applicants may defend the suit by filing a written statement. Paragraph 50 sets the further deadline of 30 days from the deposit for that filing.
The decision illustrates the fact-sensitive nature of relief under Order XXXVII Rule 4: exceptional circumstances can justify reopening a summary decree, while a deposit condition preserves protection for the decree-holder pending adjudication on merits.
Application: Aamby Valley Limited and Another, Interim Application No. 5256 of 2025
Underlying suit: AYG Realty Private Limited v. Aamby Valley Limited and Another, Commercial Summary Suit No. 414 of 2019
Court: Bombay High Court, Ordinary Original Civil Jurisdiction, Commercial Division
Bench: Justice Abhay Ahuja
Order pronounced: November 5, 2026; uploaded: November 9, 2026
Neutral citation: 2026:BHC-OS:24312
Outcome: Recall application allowed subject to deposit; suit to be heard on merits.
