India Brewary & Distillery Ltd vs Shaw Wallace & Company Ltd

Sahidullah Munshi, J

The Court : This is an application filed by United Sprits Limited (formerly known as Shaw Wallace & Company Ltd.), a company within the meaning of the provision of the Companies Act, 2013. The application has been contested by filing affidavit-in-opposition affirmed by Balkrishnan Mankani, a Managing Director of the plaintiff Company being acquainted with the facts and circumstances of the case. The application by the petitioner has been made to invoke Court's jurisdiction under Order IX Rule 13 of the Code of Civil Procedure hereafter referred to as the 'said Code'. The application seeks for recalling of an ex parte order and decree dated 14th November, 2014 passed by this Court in the suit. The petitioner on 20th September, 2016 received a letter dated 6th September, 2016 from the learned advocate for the plaintiff, inter alia, including there with a copy of E.C. No. 431 of 2016 and an order dated 1st September, 2016 passed by this Court. The said letter disclosed that the said application was filed by the plaintiff, inter alia, seeking execution of a decree passed in the suit. The defendant against whom the decree was passed, appeared to be Shaw Wallace Company Limited, a company, which had, according to the present petitioner, stood amalgamated with the petitioner by an order dated 12th March, 2008 passed by this Court. On being so informed the petitioner made a contact with his learned advocate and made over papers received by him from the plaintiff. After ascertaining the fact that the said suit against Shaw Wallace Company Limited was decreed by the Order dated 14th November, 2014 the petitioner filed the instant application wherein it was, inter alia, demonstrated that the suit was instituted in 1992; writ of summons was never served upon the defendant in the regular course; on 5th January, 2010 the suit was dismissed for default; an application being G.A. no. 3662 of 2011 had been filed by the plaintiff after such order of dismissal; restoration application itself was dismissed for default on 4th January, 2012; on 5th January, 2012 the order dated 4th January, 2012 was recalled, the said application was again dismissed for default on 10th February, 2012; another application being G.A. no. 2419 of 2013 was filed by the plaintiff seeking restoration of the suit; by an order dated 6th September, 2013 department was directed to file a report as to the status of the said suit; by an order dated 20th September, 2013 the Hon'ble Court was pleased to dismiss the application upon contest, inter alia, on the ground that no explanation had been offered for not taking any steps in the suit since its inception with respect to lodging of the writ of summons; the plaintiff preferred an appeal being APOT 27 of 2014 from the order dated 20th September, 2013; when it was submitted by the plaintiff before the Appellate Court that defendant could not be served owing to the fact that it could not be able to collect present whereabouts of the defendants who left the premises without any address, the Court directed that notice of appeal be served through substituted services by publication; the appeal was disposed of by setting aside the order dated 20th September, 2013 and directed for service of writ of summons by publication. Thereafter, the suit again appeared before the Suit Court and finally it was decreed ex parte on 14th November, 2014.

It is the specific case of the petitioner that it has never received notice of suit. In the affidavit-in-opposition filed by the plaintiff a stand has been taken that in view of the publication made by it in pursuance of the order passed by the Division Bench through substituted service of notice of appeal it should be deemed that the defendants had knowledge of the suit and summons had been served upon them.

On behalf of the plaintiff an affidavit-in-opposition has been filed opposing the prayer for recalling made by the defendant petitioner. In the said affidavit it has been categorically stated that plaintiff having its Office at Bangalore had engaged an advocate in Calcutta for carrying out all procedural formalities in the suit but the advocate's office after filing of the suit, did not pursue the matter. According to the plaintiff only on 2nd August, 2011 that one of the Directors of the plaintiff/company while surfing the internet, came to learn about an order dated 5th January, 2010 whereby the suit was dismissed. It is on record that after the filing of the suit an application was filed praying for restoration and the same was running in the list but suddenly the matter ceased to appear. The clerk of the plaintiff's advocate tried to ascertain the reason of the matter not appearing in the list but was unable either to know as to what happened to the general application or to be able to trace the papers of the general application. In the meantime there was renovation going on in the departments of the High Court and once again the file was untraceable. The ledger also did not reflect passing of any orders in the said general application nor was there any order in the High Court's server. In such circumstances, the advocate for the plaintiff was compelled to file another application being G.A. No. 2419 of 2013. The plaintiff, however, mentioned in this G.A. about the earlier application filed by it. The second G.A. was taken up for hearing by Hon'ble Single Judge of this Court and by an order dated 6th September, 2013 directed the department to produce the original writ of summons and all papers connected with the suit on 13th September, 2013. Second G.A. was taken up by the Court and by order dated 20th September, 2013 dismissed the suit of the plaintiff. An appeal was preferred against the said order of dismissal. But since service could not be shown upon the defendant the Hon'ble Division Bench recorded an order on 24th January, 2014 and directed that gist of the notice of the appeal be published in the "Times of India". The said publication was, accordingly, made in terms of the aforesaid order and an affidavit of compliance was filed in Court. The notice of appeal has been annexed with the affidavit-in-opposition at page 34.

Opposing the prayer for setting aside ex parte decree it is submitted by the learned counsel for the defendant that although, defendant's address remains the same at 4, Bankshall Street, Kolkata-700001, and notice of appeal was published in the newspaper with the same address and prior thereto notice was sent under registered cover which came back with the endorsement no one available to receive the same at the said address, it is contended that sufficient service was made and the ex parte order was justified, particularly, when the appeal Bench permitted the plaintiff to issue writ of summons by publication and notice being settled by the Registrar which has not been annexed to the affidavit-in-opposition but has been annexed to the written notes filed before this Court, it has been argued by the opposite party that where newspaper publication has been made it is for the defendant to prove that he had no notice of the suit and he had also no laches to appear before the Court when the ex parte order was passed. Reliance has been placed in a decision in the case of Sunil Poddar and Ors. -Vs. - United Bank of India reported in (2008) 2 SCC 326. The decision relied on is in respect of an appeal directed against an order of the High Court of Judicature at Allahabad whereby the High Court dismissed the Writ Petition filed by the appellant/writ petitioner and confirmed the order of Debts Recovery Appellate Tribunal, Allahabad. It was held by the Supreme Court that since the appellants have suppressed material and extremely important fact that they had appeared before the Civil Court and had filed written statement, the application proceeded on the footing as if the appellant was never aware of any proceeding initiated against them by the plaintiff/Bank. The Hon'ble Supreme Court held "DRT, was therefore, wholly right in dismissing the application and the said order was correctly confirmed by DRAT and by the High Court." The fact leading to that case has been narrated in Paragraphs 7 to 14 of the decision. The said paragraphs are set out below:

"7. It is asserted by the appellants that they were not aware of the proceedings before the DRT and no summonses were served upon them. In the circumstances, they could not remain present before the DRT. It was on December 16, 2000 when Mr. G. Karmakar, who was working for the appellants, happened to visit the office of M.P. Audyogik Vikas Nigam Ltd. at Bhopal for some official work that the officials of the Nigam informed him that a suit pending in the Civil Court, Raipur was transferred to DRT, Jabalpur and an ex-parte decree had been passed against the appellants. Immediately on December 18, 2000, Mr. Karmakar went to DRT, Jabalpur for getting requisite information and came to know that notice was sent to the appellants at the old address though new address was available. An advertisement was also published in a Hindi daily. He also came to know that since nobody appeared on behalf of the appellants, ex-parte decree had been passed. In the circumstances, the appellants herein made an application under Section 22(2)(g) of the Act on January 10, 2001 for setting aside an ex-parte order passed by the DRT. The DRT, however, on December 20, 2001 dismissed the application. The appellants appealed against the order passed by the DRT, but the Debt Recovery Appellate Tribunal, Allahabad ("DRAT" for short) also dismissed the appeal. A writ petition filed against the order of DRAT also met with the same fate. The High Court dismissed the writ petition. All these orders have been challenged by the appellants in the present appeal.

Notice was issued by this Court on March 6, 2006. After hearing the parties, execution proceedings were stayed and the matter was ordered to be posted for final hearing. That is how the matter has been placed before us.

We have heard the learned counsel for the parties.

The learned counsel for the appellants contended that DRT committed grave error of law and jurisdiction in proceeding with the application and deciding it on merits ex-parte in absence of the appellants. It was submitted that no summonses were served upon the appellants and thus no opportunity of hearing was afforded to them before passing the impugned order which is liable to be set aside. The DRT in the circumstances, ought to have allowed the application for setting aside ex-parte order. By not doing so, the DRT had committed grave error and the said order deserves to be quashed.

It was also submitted that appellants were not informed about the transfer of case from Civil Court to DRT and no summonses were served upon them. According to the appellants, they had changed their address and new address was available with the Bank. In spite of that, with mala fide intention and oblique motive, summonses were sought to be served upon appellants at an old address but the appellants were not served because of change of address. Summonses were then published in a Hindi newspaper which had no "wide circulation". That action was also taken with a view to deprive the appellants from knowing about the proceedings before the DRT so that they may not be able to appear and defend themselves and the Bank would be able to obtain ex parte order. The appellants had led the evidence in support of their say that they were not in Mumbai at the relevant time and they were not subscribers of Hindi newspaper Nav Bharat Times. They had produced necessary particulars and yet the DRT failed to consider the said evidence in its proper perspective and dismissed the application observing that the appellants must be deemed to be aware of the proceedings.

According to the DRT, the appellants appeared in Civil Court, filed written statement but all those facts were suppressed by them while filing the application before the DRT for setting aside ex parte order. The same mistake has been repeated by the Appellate Tribunal as also by the High Court. It was submitted (sic by the appellants) that all those facts were not relevant in the present proceedings. On all these grounds, the orders are liable to set aside by directing the Debt Recovery Tribunal, Jabalpur to consider the matter afresh and to decide it in accordance with law.

The learned counsel for the respondent-Bank, on the other hand, supported the order passed by the DRT, confirmed by the DRAT as well as by the High Court. An affidavit-in-reply is filed by Senior Manager (Law) of the respondent-Bank, wherein it was submitted that the appellants were aware of the proceedings initiated by the Bank against them. In civil suit, the appellants were joined as defendant Nos. 7-9. They appeared before the Court through an advocate and filed written statement in March, 1995. They also raised preliminary objections by filing applications, requesting the Court to treat the issues as to maintainability of suit and liability of the appellants as preliminary issues. It was, therefore, clear that they were served with the summonses and were in know of the proceedings. It was thereafter their duty to take care of their interest, when the suit was transferred to DRT, Jabalpur.

It was further stated that summonses were issued to the appellants at the addresses at which they were earlier served. In fact, according to the respondent-Bank, it was the same address which was given by the appellants themselves before both the Tribunals and before the High Court. But with a view to deprive the Bank of the legitimate dues and to delay the proceedings initiated against them, they did not appear before the DRT. Though it was not necessary for the Bank to serve the appellants once again, they made a prayer to the Bank to get the summonses published in a newspaper which was done and in Nav Bharat Times, Bombay as well as Nav Bharat Times, Raipur summonses were published. Nav Bharat Times is having very wide circulation at both the places, i.e. Bombay as well as at Raipur. It was, therefore, not open to the appellants to contend that they were not subscribing and/or reading a Hindi newspaper by producing a bill from a newspaper agent. Such a bill can be obtained from any vendor. No reliance can be placed on such evidence. Moreover, an extremely important fact which weighed with both the Tribunals as well as with the High Court was that in an application under Section 22(2)(g) of the Act for setting aside ex parte order passed by DRT, the appellants have suppressed material and extremely important fact that they had appeared before the Civil Court and had filed written statement. The application proceeded on the footing as if the appellants were never aware of any proceedings initiated against them by the plaintiff-Bank. The DRT was, therefore, wholly right in dismissing the application and the said order was correctly confirmed by the DRAT and by the High Court. No case can be said to have been made out by the appellants to interfere with those orders and the appeal deserves to be dismissed."

The fact of that case is distinguishable because the defendant entered appearance and filed written statement. The case is completely different from the present one. Learned counsel for the defendant/petitioner submitted that service of Writ of summons has not been proved by the plaintiff even upon the defendant named in the suit apart from the fact of amalgamation of the petitioner with the defendant/Company.

Admittedly, no writ of summons was lodged by the plaintiff upon the defendant at the address mentioned both in the plaint as well as the restoration application.

Mr. Ghosh, appearing for the defendant/petitioner has relied on a decision in the case of Sushil Kumar Sabharwal -Vs. - Gurpreet Singh reported in (2002) 5 SCC 377 which has dealt with the provision of Order V Rule 17 and 18 in an application under Order IX Rule 13 seeking recalling of ex parte decree. It was held by the Hon'ble Apex Court that Order IX Rule 6 contemplates three situations when on a date fixed for hearing the plaintiff appears and the defendant does not appear, three courses to be followed by the Court depending on the given situation. The three situations are:-

(i) when summons duly served, (ii) when summons not duly served, and (iii) when summons served but not in due time.

The present case relates to a situation where summons not at all served. In the said decision the Hon'ble Apex Court interpreted the provisions of Order IX Rule 13 CPC and has clarified that it is the knowledge of the "date of hearing" and not the knowledge of "pendency of suit" which is relevant for the purpose of the proviso to Rule 13 under Order IX of the Code. The Hon'ble Apex Court further held that the proviso casts an obligation on the Court and simultaneously invokes a call to the conscience of the Court to feel satisfied in the sense of being "proved" that the summons were duly served when and when alone, the Court is conferred with a discretion to make an order that the suit be heard ex parte. The Hon'ble Apex Court further held that "the date appointed for hearing in the suit for which the defendant is summoned to appear is a significant date of hearing requirement a conscious application of mind on the part of the Court to satisfy itself on the service of summons. Any default or casual approach on the part of the Court may result in depriving a person of his valuable right to participate in the hearing and result in a defendant suffering an ex parte decree or proceedings in the suit wherein he was deprived of a hearing for no fault of his."

In the said decision it was observed by the Supreme Court that summons was not duly served and Order IX Rule 13 application of the defendant was allowed. The decision relied on by the defendant/petitioner squarely covers the satiation here. I am satisfied that under no circumstances the trial Court which passed the ex parte decree could have come to a conclusion that the writ of summons was duly served upon the defendant in view of the paper publication made in pursuance of the direction of the Appeal Court. I cannot be unmindful that the Appeal Court while dealing with an appeal against the order refusing to restore the suit in its original file and number against the order of dismissal for default had directed for issuance of notice of appeal and since it was submitted before the Appellate Court that a writ of summons could not be served, Court permitted to issue such summons through paper publication but when the matter went before the trial Court after restoration of the suit the trial Court is to strictly follow the provision of the Code and the Original Side Rules as well whether the summons had at all been lodged or not. And whether writ of summons through paper publication could at all be conclusive proof of service of summons as per Code. When the matter was placed before the trial Court after the order of dismissal was set aside by the Appeal Court in view of the fact that procedure began in respect of the suit, the suit Court ought to be satisfied about the formalities to be adopted by it before passing a decree ex parte. In my considered view the proper adherence to the rules prescribed under the Code of Civil Procedure has not been complied with. I have already indicated that the suit was instituted in 1992 and the Appellate Court set aside the order of dismissal in an appeal being APOT 27 of 2014.

Immediately, thereafter, matter was placed before the Trial Court and by the order dated 14th November, 2014 the suit was decreed ex parte. The trial Court without considering as to what could happen in these 22 years, placed the suit in the ex parte board.

Learned counsel for the defendant has relied on another decision in the case of Auto Cars -Vs. - Trimurti Cargo Movers Private Limited and Ors. reported in (2018) 15 SCC 166 having a fact similar to the present case where relying on a paper publication made in the daily newspaper where it was contended by the plaintiff that suit was rightly decided ex parte, the Hon'ble Apex Court in the appeal against the judgment of the High Court passed by the Division Bench dismissed the appeal filed by the appellant before the Supreme court affirming the ex parte decree of Trimurti Cargo Movers (P) Ltd. Defendant was the appellant before the Hon'ble Apex Court where as the respondent was the plaintiff. The respondent filed a civil suit in High Court at Calcutta on its Original Side against the defendant/appellant before the Supreme Court for recovery of money.

Summons of the suit was initially sent to the defendants at their place of business mentioned in the Cause Title of the plaint, which was shown at Aurangabad (MH). Since the defendants were not being served with the ordinary mode of service, the plaintiff sought permission to serve them with the substituted service by way of publication under Order 5 Rule 20 of the Code of Civil Procedure. The permission was granted to the plaintiff. Summons was, accordingly, published in the "Times of India" (Pune Edition) and Dainik Bhaskar (Aurangabad Edition). The defendant appeared in the case even after the summons was published and the Court placed the defendants ex parte and proceeded to decide the suit on merits in their absence and eventually passed an ex parte decree. On coming to know the passing of the decree against them defendants filed an application under Order IX Rule 13 of the Code before the Court praying therein for setting aside the ex parte decree, inter alia, on the ground that summons of the suit was duly served on them, therefore, they had no knowledge of filing of the suit by the plaintiff against them. The defendants also contended that their place of business is at Aurangabad whereas the summons in question was published in the daily newspaper, The Times of India at Pune. The defendants contended that due to this reason a case for setting aside of the ex parte decree as contemplated under Order IX Rule 13 of the Code was made out and the ex parte decree should have been set aside.

The Hon'ble Single Bench dismissed the application filed by the defendant holding that summons was duly served on them. Appeal filed by the defendant in Division Bench of the High Court and by thej udgment impugned Division Bench dismissed the appeal and affirmed the judgment of the Single Bench. Appellant thereafter, filed appeal before the Supreme Court. In dealing with the provisions of Section 27 of the Code of Civil Procedure, Appendix B appended to the Code read with Order V Rule 20(3) and Order IX Rule 13 of the Code.

Paragraphs 20 to 29 and important here and are set out below:

"20. In the format prescribed in the Appendix-B Process No.I or No.IA (which is applicable to the case at hand because the suit in question originates from Calcutta), we find that there is a specific column in the summons where a "day, date, year and time" for defendant's appearance is required to be mentioned.

In other words, the legislature while prescribing the format of summons in the Code has provided one column where the Court is required to mention a specific "day, date, year and time" for the defendant's appearance in the Court to enable him to answer the suit filed against him/her. This is also the requirement prescribed under Section 27 of the Code as is clear from the words occurring therein "and may be served in the manner prescribed on such day".

Order V Rule 20(3) provides that when the service is effected by way of publication by the orders of the Court, the Court has to fix "time" for the appearance of the defendant, as the case may require. In our opinion, this does not dispense with the requirement of mentioning the actual day, date, year and time for defendant's appearance in the Court because it is prescribed in format.

The expression "time" has to be read harmoniously and in juxtaposition with the requirement prescribed under Section 27 read with statutory format Process IA of Appendix-B appended to the Code.

Indeed, mentioning of the specific "day, date, year and time" in the summons is a statutory requirement prescribed in law (Code) and, therefore, it cannot be said to be an empty formality. It is essentially meant and for the benefit of the defendant because it enables the defendant to know the exact date, time and the place to appear in the particular Court in answer to the suit filed by the plaintiff against him.

If the specific day, date, year and the time for defendant's appearance in the Court concerned is not mentioned in the summons though validly served on the defendant by any mode of service prescribed under Order V, it will not be possible for him/her to attend the Court for want of any fixed date given for his/her appearance.

The object behind sending the summons is essentially threefold- First, it is to apprise the defendant about the filing of a case by the plaintiff against him; Second, to serve the defendant with the copy of the plaint filed against him; and Third, to inform the defendant about actual day, date, year, time and the particular Court so that he is able to appear in the Court on the date fixed for his/her appearance in the said case and answer the suit either personally or through his lawyer.

Now coming to the facts of the case, we find that the summons dated 17.11.2014, which was sought to be served on the defendants by publication published on

11.2014 in the Times of India and Dainik Bhaskar did not comply with the requirement of Section 27 read with Appendix-B (process) No.I and IA.

In other words, the summons dated 17.11.2004 published in the papers (Times of India and Dainik Bhaskar) had material infirmity therein, which rendered the summons so also the service made on the defendants bad in law.

The material infirmity in the summons was that it did not mention any specific day, date, year and time for the defendants' appearance in the Court. This being the requirement of Section 27 read with Order V Rule 20(3) and Process-IA of Appendix-B, it was mandatory for the Court to mention the specific working day, date, year and time in the columns meant for such filling. It would have enabled the defendants to appear before the Court on the date so fixed therein. It is a settled rule of interpretation that when the legislature provides a particular thing to be done in a particular manner then such thing has to be done in the same prescribed manner and in no other manner."

As I have already pointed out that the writ of summons which has been published in the newspaper is contrary to the rules and therefore, cannot be justified to be a proper writ of summons of the suit upon the defendant.

In this case it is undisputed rather admitted that the plaint was presented on 6th April, 1992 and was registered as C.S. no. 291 of 1992; no summons were issued and lodged as per Original Side Rules; dismissed for default on several occasions when defendant remains unserved; last order of dismissal passed and seeking restoration of which under G.A. 2419 of 2013 was dismissed on the ground that no explanation had been offered for not taking any steps in the suits since its inception with respect to issuance and lodging of writ of summons.

Provision of Order 9 Rule 13 envisages two different situations. It provides for setting aside ex parte decree where summons had not been duly served on the defendant or where he was prevented by any sufficient cause from appearing and the suit is taken up for hearing. In such a situation where the defendant has sought for recalling of the ex parte order the Court has to see the existence otherwise of a sufficient cause of non appearance on the date when he was proceeded ex parte by the Court. The case here is covered by the first part of Order 9 Rule 13 where it lacks issuance of service of writ of summons and imputation of knowledge of the suit through paper publication or by alleged substituted service cannot be held to be sufficient compliance of the provisions of Order 5 Rule 19 of the Code regarding service of summons. In my view, Order 5 Rule 19 mandates upon the Court to record a declaration of due service before it can proceed ex parte which was completely lacking before the Court when it placed the matter before the ex parte board in 2014 without considering for a moment that the suit was instituted in 1992 and all throughout it remained dismissed for default and in 2013 the suit was restored in appeal.

Therefore, I have no hesitation to hold that defendant is entitled to an order under the provisions of Order 9 Rule 13 consequently, the ex parte order and decree dated 14th November, 2014 is set aside. And the suit is restored to its original file and number.

Urgent Photostat certified copy of this judgment, if applied for, be delivered to the learned counsel for the parties, upon compliance of all usual formalities.

(Sahidullah Munshi, J.)

Later

Learned Advocate for the plaintiff prays for an order of stay of the judgment delivered today. I am not inclined to grant stay of my order. Prayer for stay is, thus, refused.