M/S NEERJA REALTORS PVT LTD versus JANGLU (DEAD) THR. LR. on 29 January 2018

M/S NEERJA REALTORS PVT LTD

v.

JANGLU (DEAD) THR. LR.

(Civil Appeal No. 71 of 2018)

JANUARY 29, 2018

[DIPAK MISRA, CJI, A. M. KHANWILKAR ANDDR. D. Y. CHANDRACHUD, JJ.]

Code of Civil Procedure, 1908:

Or. V, rr. 17 and 20 – Application for susbstituted service –Allowed – Subsequent to substitued service by publicatin, ex-partedecree – Appeal under s.96 CPC – Allowed by High Court – Onappeal, held: In the present case there was a breach of the provisionsof Or. V, r.17 – Substituted service is an exception to the normalmode of service – Or. V, r. 20 requires the Court to be satisfiedeither that there is reason to believe that the defendant is keepingout of the way for the purpose of avoiding service or that for anyother reason, the summons cannot be served in the ordinary way –Trial court failed to apply its mind to the requirements of Or. V, r. 20and passed a mechanical order – Trial court also ignored theprovisions contained in Chapter 3 of Civil Manual – Civil Manualissued by High Court of Bombay – Chapter III – Paragraphs 33 to36.

Decree:

Ex-parte decree – Remedy against – Held: Remedy againstex-parte decree is either an appeal u/s 96 CPC or an application u/Or. IX, r. 13 CPC or both the proceedings simultaneously – Right ofappeal is not taken away by filing application u/Or. IX, r.13 – But ifappeal is dismissed, application u/Or. IX, r.13 is not maintainable –When application u/Or. IX r.13 is dismissed, remedy lies u/Or. XLIII,r.1 – However once appeal u/Or.XLIII, r.1 is dismissed samecontention cannot be raised in appeal u/s. 96 – Code of CivilProcedure, 1908 – s.96, Or.IX, r.13 and Or. XLIII, r.1.

Dismising the appeal, the Court

HELD: 1.1 The record before the Court would indicate thatthe Trial Court by its order dated 9 February 2011 directed the

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Aissuance of summons to the original defendant, returnable on 15March 2011. In pursuance of the order, summons were issuedon 4 March 2011. The report of the bailiff dated 11 April 2011indicates that the summons were returned unserved and the bailiffwas informed that the original defendant had left the premisesnearly two years earlier and resided elsewhere. The report ofBthe bailiff does not indicate that the summons were affixed on aconspicuous part of the house, at the address mentioned in thesummons. There was a breach of the provisions of Order V Rule17 CPC. When the application for substituted service was filedbefore the Trial Court under Order V Rule 20 CPC, a crypticCorder was passed on 2 September 2011. Order V Rule 20 requiresthe Court to be satisfied either that there is reason to believethat the defendant is keeping out of the way for the purpose ofavoiding service or that for any other reason, the summons cannotbe served in the ordinary way. Substituted service is an exception to the normal mode of service. The Court must apply its mind toDthe requirements of Order V Rule 20 and its order must indicatedue consideration of the provisions contained in it. Evidently theTrial Court failed to apply its mind to the requirements of OrderV Rule 20 and passed a mechanical order. Besides this, the TrialJudge ignored the provisions contained in Chapter III of the CivilEManual issued by the High Court on its appellate side for theguidance of civil courts and officers subordinate to it. [Paras14,15][364-D; 365-A-D]

1.2 There was a clear breach of the procedure prescribedin Order V Rule 17 even antecedent thereto. Besides, the orderFof the Court does not indicate due application of mind to therequirement of the satisfaction prescribed in the provision. TheHigh Court was, in these circumstances, justified in coming tothe conclusion that the ex-parte judgment and order in the suitfor specific performance was liable to be set aside. [Para 15][366-D-E]G

2. A defendant against whom an ex-parte decree is passedhas two options: The first is to file an appeal. The second is tofile an application under Order IX Rule 13 CPC. The defendantcan take recourse to both the proceedings simultaneously. Theright of appeal is not taken away by filing an application under H

Order IX Rule 13. But if the appeal is dismissed as a result ofwhich the ex-parte decree merges with the order of the AppellateCourt, a petition under Order IX Rule 13 would not bemaintainable. When an application under Order IX Rule 13 isdismissed, the remedy of the defendant is under Order XLIIIRule 1. However, once such an appeal is dismissed, the samecontention cannot be raised in a first appeal under Section 96.[Para 16][366-G-H; 367-B]

Bhanu Kumar Jain v Archana Kumar [2004] 6 Suppl.SCR 1104 : (2005) 1 SCC 787; Rabindra Singh vFinancial Commissioner, Cooperation, Punjab [2008]8 SCR 813 : (2008) 7 SCC 663; Mahesh Yadav vRajeshwar Singh [2008] 17 SCR 726 : (2009) 2SCC 205 – relied on.

Case Law Reference

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 71 of

2018.

From the Judgment and Order dated 07.07.2015 of the High Courtof Judicature at Bombay at Nagpur in FA No. 928 of 2014.

Kumar Shashank, Ms. Rukhmini Bobde, Vishal Prasad, Advs. forthe Appellant.

The Judgment of the Court was delivered by DR. D. Y. CHANDRACHUD, J. 1. Delay condoned.

2. The present appeal is from the judgment of a Single Judge atthe Nagpur Bench of the High Court of Judicature at Bombay. Whileallowing a first appeal, the High Court set aside the judgment andorderof the Civil Judge (SeniorDivision) at Nagpur which had decreed a suitfor specific performance instituted by the appellant, ex-parte.

3. The subject matter of the suit for specific performance is anagreement dated 15 July 2006 entered into by the appellant with theoriginal defendant in respect of agricultural land admeasuring 1.66Hectares (4.07 acres) situated in Mauza-Sondapar, Tahsil Hingna, DistrictNagpur. The total consideration payable under the agreement was A

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ARs 13,04,391 out of which an amount of Rs 3,26,000 was recorded tohave been paid. The balance of Rs 9,78,391 was to be paid at the timeof the execution of the sale deed.

4. On 30 June 2007,Shobha, who is the daughter of the originalrespondent instituted a suit (Old Regular Suit No 726/2007 which wasBrenumbered as Regular Suit No 269/2008) against her father and theappellant for partition, possession and for declaratory and injunctive reliefsin relation to the land. In that suit the plaintiff claimed that her fatherwas in dire financial need and had obtained a loan from the appellantand that as security,the appellant got certain documents executed.According to the plaintiff, the agreement was vitiated by fraud andCmisrepresentation and the land being ancestral property, the agreementwas not binding on her. The original defendant entered appearance anddisclosed his residential address in a proceeding under Order VIII Rule11 of the Code of Civil Procedure, 1908 (‘the CPC’). The appellantalsofiled her written statement. The suit was dismissed on 8 July 2010 on theDground that the land belonged to the original defendant and that the plaintiffhad no right, title and interest.

5. On 5 February 2011, the appellant filed a suit for specificperformance (Suit 184 of 2011) of the agreement to sell dated 15 July2006. On 9 February 2011, the Trial Court issued notice to the originalEdefendant for settlement of issues. It appears that summons were issuedon two occasions to the original defendant but were returned unserved.On 11 April 2011, the bailiff submitted a report stating that when he wentto serve the defendant, he was informed by persons residing in the villagethat he had left the premises two years earlier and was residingelsewhere. The summons were returned since the defendant was notFresiding at the address given therein.

6. The appellant filed an application for substituted service underOrder V Rule 20 (1-A) of the CPC on 2 September 2011. The TrialCourt allowed the application on the same day in terms of the followingorder:G

“Issue S/S to deft. u/o 5 R 29 (1-A) of CPC at the expense of thePlaintiff.”

7. The appellant claims to have effected substituted service bypublication in the Marathi daily Lokmat. On 29 November 2011, theTrial Court passed the following order:H

“Deft. served on public notice in daily news paperLokmat on04.10.2011 but he remained absent. Suit proceeded ex parte againstthe defendant. Suit proceeded ex parte against the Deft.”

8. The suit was decreed on 13 June 2014 and the appellant wasdirected to deposit the balance consideration of Rs 9,78,391 within onemonth.

9. The appellant claims to have deposited the amount on 17 July2014.

10. On 12 September 2014, the original defendant filed a firstappeal under Section 96 of the CPC before the High Court. He died on21 August 2015. The appellant submitted an application for bringinghislegal representatives on record. The application was eventually allowedon 23 September 2016.

11. The High Court by its judgment dated 7 July 2015 held thatneither the report of the bailiff nor the order of the Trial Court indicatethat a copy of the summons was affixed in a conspicuous place on thecourt house and at the house where the defendant was known to havelast resided. The High Court held that there was a breach of the provisionsof Order V Rule 20 (1) of the CPC. The High Court observed that theorder of the Trial Court permitting substituted service was cryptic andthat the Court had not recorded its satisfaction that the defendant waskeeping out of the way to avoid service or that the summons could notbe served in the ordinary manner for any other reason. Moreover, theserving officer had not followed the procedure stipulated in Order VRule 17 where the defendant was not found to reside at the place wherehe was last residing. The Court noted that besides the service to beeffected through the bailiff, the summons werenot sent to the defendantat the address furnished by the plaintiff by registered post, withacknowledgment due. The High Court also found that the Trial Judgehad ignored the provisions of Chapter III of the Civil Manual issued bythe High Court on the Appellate side for guidance of Civil Courts andofficers subordinate to it.

12. On behalf of the appellant, it has been submitted that the HighCourt has misconstrued the provisions of Order V Rule 20. Accordingto the appellant, Order V Rule 20 allows an option to either affix thenotice at the court premises coupled with affixation at the home of thedefendant orby any other mode including publication in a newspaper. In A

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SUPREME COURT REPORTS

Athe present case, service of summons waseffected on the originaldefendant by publication in the newspaper on 4 October 2011. Hence, itwas urged that there was no further requirement to affix the summonsat the court premises and at the house of the original defendant.Moreover, it was urged that the order of the Trial Court was not crypticand the report of the bailiff clearly indicated that the original defendantBwas not residing at the address submitted by the appellant because ofwhich the summons werereturned.

13. On the other hand, learned counsel for the respondent urgedthat the findings of the High Court in the first appeal are borne out fromthe record and are in accordance with law. Hence no interference isCwarranted in the present proceedings.

14. The record before the Court would indicate that the Trial Courtby its order dated 9 February 2011 directed the issuance of summons tothe original defendant, returnable on 15 March 2011. In pursuance ofthe order, summons wereissued on 4 March 2011. The report of theDbailiff dated 11 April 2011 indicates that the summons were returnedunserved and the bailiff was informed that the original defendant hadleft the premises nearly two years earlier and resided elsewhere.

15. Order V Rules 17 provides as follows:

E“17. Procedure when defendant refuses to accept service,or cannot be found.- Where the defendant or his agent or suchother person as aforesaid refuses to sign the acknowledgment, orwhere the serving officer, after using all due and reasonablediligence, cannot find the defendant, who is absent from hisresidence at the time when service is sought to be effected onFhim at his residence and there is no likelihood of his being found atthe residence within a reasonable time and there is no agentempowered to accept service of the summons on his behalf, norany other person on whom service can be made, the serving officershall affix a copy of the summons on the outer door or some otherGconspicuous part of the house in which the defendant ordinarilyresides or carries on business or personally works for gain, andshall then return the original to the court from which it was issued,with a report endorsed thereon or annexed thereto stating that hehas so affixed the copy, the circumstances under which he did so,and the name and address of the person (if any) by whom theHhouse was identified and ‘whose presence the copy was affixed.”

Evidently as the report of the bailiff indicates, he was unable tofindthe defendant at the address which was mentioned in the summons.The report of the bailiff does not indicate that the summons were affixedon a conspicuous part of the house, at the address mentioned in thesummons. There was a breach of the provisions of Order V Rule 17.When the application for substituted service was filed before the TrialCourt under Order V Rule 20, a cryptic order was passed on 2 September2011. Order V Rule 20 requires the Court to be satisfied either thatthere is reason to believe that the defendant is keeping out of the wayfor the purpose of avoiding service or that for any other reason,thesummons cannot be served in the ordinary way. Substituted service isan exception to the normal mode of service. The Court must apply itsmind to the requirements of Order V Rule 20 and its order must indicatedue consideration of the provisions contained in it. Evidently the TrialCourt failed to apply its mind to the requirements of Order V Rule 20and passed a mechanical order. Besides this, as observed by the learnedSingle Judge of the High Court, the Trial Judge ignored the provisionscontained in Chapter III of the Civil Manual issued by the High Court onits appellate side for the guidance of civil courts and officers subordinateto it. Paragraphs 33 to 36 of Chapter III are extracted below:

“33. In addition to the service to be effected through a bailiff, asummons may also be sent to the defendant, to the address givenby the plaintiff, by registered post, prepaid for acknowledgement,provided there is a regular daily postal service at such place.

34. Rules as to service of summons are contained in rules 9 to 30of Order V. Care should be taken to see that bailiffs follow thoserules as well as the instructions given in the Bailiffs’ Manual.

35. It is the duty of the serving officer to follow the procedure andtake all the steps laid down in rule 17 of Order V. He has nodiscretion for not taking the necessary steps, when the conditionslaid down in the said rule are fulfilled.

36. It is for the Court to determine whether the service is good orbad. In determining whether the service is good or not, the attentionof Courts is drawn to the necessity of strictly following theprovisions of the Civil Procedure Code as to the service ofprocesses. Ordinarily, service should not be considered sufficient AB

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Aunless all the requirements of the law in that behalf are fulfilled.The object of the service is to inform a party of the proceedings indue time. When from the return of a serving officer it appearsthat there is no likelihood that a process will come to the knowledgeof the party in due time, or a probability exists that it will not socome to his knowledge, the service should not be considered toBbe proper. The law contemplates that the primary method ofservice should be tendering or delivering a copy of the process tothe party personally, in case in which it may be practicable to doso. It is the duty of the serving officer to make all proper effortsto find the party, with a view to effect personal service. If it beCnot possible after reasonable endeavour to find the party, thenonly the service may be made on an adult male member of thefamily residing with him.”

The submission that under Order V Rule 20, it was not necessaryto affix a copy of the summons at the court house and at the houseDwhere the defendant is known to have last resided, once the court haddirected service by publication in the newspaper really begs the question.There was a clear breach of the procedure prescribed in Order V Rule17 even antecedent thereto. Besides, the order of the Court does notindicate due application of mind to the requirement of the satisfactionprescribed in the provision.The High Court was, in these circumstances,Ejustified in coming to the conclusion that the ex-parte judgment andorder in the suit for specific performance was liable to be set aside.

16. In Bhanu Kumar Jain v Archana Kumar[1], a Bench of threeJudges of this Court has held that :F“An appeal against an ex parte decree in terms of Section 96(2)of the Code could be filed on the following grounds:

(i) the materials on record brought on record in the ex parteproceedings in the suit by the plaintiff would not entail a decreein his favour; and G(ii) the suit could not have been posted for ex parte hearing.”A defendant against whom an ex-parte decree is passed has twooptions:The first is to file an appeal.The second is to file an applicationunder Order IX Rule 13. The defendant can take recourse to both the proceedings simultaneously. The right of appeal is not taken away byfiling an application under Order IX Rule 13. But if the appeal is dismissedas a result of which the ex-parte decree merges with the order of theAppellate Court, a petition under Order IX Rule 13 would not bemaintainable. When an application under Order IX Rule 13 is dismissed,the remedy of the defendant is under Order XLIII Rule 1. However,once such an appeal is dismissed, the same contention cannot be raisedin afirst appeal under Section 96. The three Judge bench decision inBhanu Kumar Jain has been followed by another bench of three Judgesin Rabindra Singh v Financial Commissioner, Cooperation,Punjab[2]and by a two Judge bench in Mahesh Yadav v RajeshwarSingh[3]. In the present case, the original defendant chose a remedy offirst appeal under Section 96 and was able to establish before the HighCourt, adequate grounds for setting aside the judgment and decree.