Case: Shalimar Rope Works Ltd Vs. Abdul Hussain H. M. Hasan Bhai Rassiwala And Ors

The appellant company had filed that case under Order 9 Rule 13 of theCode of Civil Procedure, hereinafter called the Code, for setting aside an ex-parte decree for Rs. 28, 479/- passed in favour of the respondent firm on 22-4-1975 against the appellant. The learned Additional District Judge held that summons in the suit was not duly served on the company and it came to know about the decree on 29-7-1975. Hence he set aside the ex-parte decree. The respondent firm filed a revision in the High Court under section 115 of the Code. The High Court allowed the revision, set aside the judgment of the Trial Court and upheld the passing of the ex-parte decree. Hence thisrespondent filed the suit at Indore on 24-2-1975 against the appellant claiming damages to the tune of Rs. 26, 000/- on account of the alleged non-delivery of certain goods. Summons in the suit was sent to the registered office of the company in Calcutta and is said to have been served on one Shri Navlakha on 17-3-1975 asking the company to appear at Indore on 25-3-1975 for settlement of issues. Since the company did not appear in the Court on that date, eventually, the ex-parte decree was passed on 22-4-1975. According to the case of the appellant the company came to know about the ex-parte decree for the first time when its constituted attorney Shri S. K. Jhunjhunwala received a notice from the respondent by registered post demanding the decretal dues. Thereupon Shri N. S. Pareek, the Works Secretary of the company who is in-charge of the legal matters was sent to Indore to ascertain as to how the ex-parte decree came to be passed. Pareek learnt that the summons purported to have been served on Navlakha on 17-3-1975. Navlakha was mere Office Assistant in the Sales Department of the company. He was neither a Secretary nor a Director nor any other Principal Officer of the company authorised to receive summons in the suit. He did no t bring the fact of the receipt of summons by him to the knowledge of any responsible officer of the company. The company remained in dark and, as stated above, learnt for the first time on 29-7-1975 about the passing of the ex-parte decree.S. Pareek was the only witness examined on behalf of the appellant in the Miscellaneous case tried by the learned Additional District Judge. No witness was examined on behalf of the respondent. The Trial Courthold that handing over of summons to Navlakha who was only an Office Assistant working in the company and who was not an officer duly authorised to accept summons on behalf of the company did not amount to valid service of summons on the applicantalso accepted the appellants case about the knowledge of the ex-parte decree for the first time on 29-7- 1975 and hence the application filed is about a weeks time thereafter was held t o be within time.The High Court in its impugned judgment hasis not in dispute that the person who received the summons in the office of the Company is not a person who is entitled to be served on behalf of the company in accordance with sub-clause (a) of Rule 2 of Order 29 of C.P.C."

Court's reasoning:
The High Court, however, took the view that since Navlakha was an employee of the company sitting in its registered office in Calcutta the summons will be deemed to have been duly served on the company within the meaning of the first part of clause (b) of Order 29, Rule 2 of the Code. In the opinion of the High Court since the learned Additional District Judge did not apply his mind to the provision of law contained in clause (b), it committed a material irregularity and illegality in exercise of its jurisdiction in setting aside the ex-parteour opinion the High Court was clearly wrong in upsetting the judgment of the Trial Court. There was no error in that judgment much less any error of jurisdiction entitling the High Court to interfere withsummons to a corporation by post addressed to it at its registered office may be a good mode of service either by itself, or preferably, by way of an additional mode of service. But leaving the summons at the registered office of the corporation if it is literally interpreted to say that the summons can be left anywhere uncared for in the registered office of the company, then it will lead to anomalous and absurd results. It has to be read in the background of the provision contained in Order 5 Rule 17 of the Code. In other words, if the serving peon or bailiff is not able to serve the summons on the Secretary or any Director or any other Principal Officer of the Corporation because either he refuses to sign the summons or is not to be found by the serving person even after due diligence then he can leave the summo ns at the registered office of the company and make a report to that effect. In the instant case nothing of the kind was done. It was not the case of the respondent in its rejoinder filed in the Miscellaneous case that the service of the summons as effected in accordance with the first part of clause (b) of Rule 2 of Order 29 of the Code. Annexure A to the counter affidavit filed by the respondent is the petition filed by the appellant under Order 9 Rule 13 of thewhere in the rejoinder a stand was taken that the summons was duly served on the company because it was left at the registered office of the company. Reference to the Madhya Pradesh amendment of Order 9 Rule 13 is immaterial as the Trial Court has pointed out that the company had no knowledge of the ex-parte decree, even otherwise, before 29- 7-1975. No contrary finding has been recorded by the Hightherefore, hold that the judgment by the Trial Court setting aside the decree was correct. In any event no error of jurisdiction was committed by it. The High Court went wrong in interfering with it.