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Gurdev Singh Vs. Punjab and Pepsu Finance Co. Ltd. and anr. - Court Judgment

LegalCrystal Citation
SubjectCommercial;Limitation
CourtPunjab and Haryana High Court
Decided On
Case NumberF.A.O. No. 65 of 1970
Judge
Reported inAIR1973P& H139
ActsArbitration Act, 1899; Limitation Act, 1963 - Schedule - Article 123 ; Code of Civil Procedure (CPC), 1908 - Order 21, Rule 22
AppellantGurdev Singh
RespondentPunjab and Pepsu Finance Co. Ltd. and anr.
Cases ReferredPesu Mal Harbhagwan Das v. Bishen Das Mewa Ram
Excerpt:
.....was barred by time. notices of this application before the filing of the award were issued to gurdev singh as well in which his parentage continued to be given as tara chand. 1964 shows that it was directed to get service effected on gurdev singh in the ordinary way as well as by issue of summons through the process serving agency. i am satisfied that the findings of the trial court cannot be sustained. this amendment does not does not provide that if after the first failure of service in the ordinary way, summons is sent by registered post and the same reported to be refused, it is to be assumed that the defendant has been duly served. such a refusal does not furnish a good ground for ex parte proceedings and any decree so obtained must be set aside on the ground that there was no..........is punjab and pepsu finance company ltd., ambala cantt. referred to hereinafter as the company. gurdev singh is stated to have taken a truck on hire-purchase system which, for his alleged omission to pay instalments of the amount due from him, was seized by the company. in the hire-purchase agreement dated 21st october, 1960. exhibit dhw 3/1. it is provided that all differences arising between the parties in regard to rights, duties and obligations under the agreement shall be referred to the arbitration of shri brij bhushan gupta, advocate. ambala city who was to settle the same in accordance with the provisions as contained in the indian arbitration act (act 9 of 1899). first party to the agreement is the company and the second party is gurdev singh who is described as son of s......
Judgment:

1. This is an appeal against an order of the Subordinate Judge, 1st class Ambala, who on 19th March 1970, declined the application of the appellant to set aside an ex parte decree against him both on merits as well as on the ground that the application was barred by time.

2. The decree-holder is Punjab and Pepsu Finance Company Ltd., Ambala Cantt. referred to hereinafter as the Company. Gurdev Singh is stated to have taken a truck on hire-purchase system which, for his alleged omission to pay instalments of the amount due from him, was seized by the Company. In the hire-purchase agreement dated 21st October, 1960. Exhibit DHW 3/1. it is provided that all differences arising between the parties in regard to rights, duties and obligations under the agreement shall be referred to the arbitration of Shri Brij Bhushan Gupta, Advocate. Ambala city who was to settle the same in accordance with the provisions as contained in the Indian Arbitration Act (Act 9 of 1899). First party to the agreement is the company and the second party is Gurdev Singh who is described as son of S. Tara Singh, resident of Kothi No. 45-A, Sector 22, Chandigarh. The third party is the surety, Sudagar Singh, resident of Manimajra, then within the district of Ambala. The Arbitrator issued a notice by registered post for 2nd February, 1964, to Gurdev Singh on the following address:--

'Gurdev Singh s/o Tara Chand, resident of village Ran Singh Wala. District Bhatinda.'

The notice was received back with a report of the postal department that the address was not correct. The Arbitrator on 2nd February, 1964, without making any other attempt to get service effected in the ordinary way ordered the same by publication in the English newspaper. 'The Tribune', the father's name of Gurdev Singh was given as Tara Chand. Notice by substituted service was for 1st March, 1964, and on this hearing too Gurdev Singh was absent. The Arbitrator proceeded to record ex parte evidence and he gave the award dated 29th April 1964, whereby the appellant was made jointly and severally liable with his surety in a sum of Rs. 36,587/85. The award also describes Gurdev Singh as son of Tara Chand of village Ran Singh Wala, Post Office Kotkapura, District Bhatinda.

3. The company (decree-holder) then made an application in the Civil Court at Ambala on 16th May, 1964, for the filing of the award. Notice of this application was issued to the Arbitrator for 18th July 1964, though by that time the award had been filed. Notices of this application before the filing of the award were issued to Gurdev Singh as well in which his parentage continued to be given as Tara Chand. On 28th November, 1964 it occurred to the sub ordinate Judge that he was making a mistake in issuing notice only of the application to Gurdev Singh when the award had actually been filed and that proper notice was to call upon the latter to prefer objections to the award. If so, advised and to show cause why award be not make a rule of the Court. He accordingly issued a fresh notice to Gurdev Singh to the said effect for 30th December, 1964. It was sent per registered post and received back with a report bearing no date that the same had been refused by the addressee. The order of 28th November. 1964 shows that it was directed to get service effected on Gurdev Singh in the ordinary way as well as by issue of summons through the process serving agency. There are, however, no indications as to what happened to the summons so issued. No such summons could be pointed out on the record and it cannot therefore, be ascertained as to whether any summons was issued at all.

The Civil Court considered the alleged refusal to receive registered notice as sufficient service and proceeded to make an ex parte order on 4th January, 1965, making the award a rule of the Court and consequently a decree, in terms of the award, was also passed on the same date.

4. Another phase of the litigation then started. The decree holder applied for execution of the decree to the Court which had passed the same and also prayed for transfer of the execution proceedings to a Civil Court at Faridkot. It was in this application for the first time that the correct parentage of Gurdev Singh was given. Since the execution was being sought more than one year after passing of the decree, a notice to the judgment-debtor under Order 21, Rule 22, Code of Civil Procedure, to show cause against the execution was necessary. The transferee Court issued such notice on 28th October, 1967 for 10th November 1967, and was sent both by registered post contained in an envelope and in the ordinary course through the process serving agency. Exhibit R-1 is a copy of the writing on the registered envelope which was addressed to Gurdev Singh son of Tara Singh, Jat. grandson of Sunder Singh, village Gurusar, Tehsil Faridkot, District Bhatinda, and was alleged to have been refused on 8th November, 1967. Exhibit R-2 is a copy of the summons, service of which is also said to have been refused by Gurdev Singh on 9th November, 1967, when Amar Singh Process Server, R.W.2 took the same for service. Another notice Exhibit A as contemplated by Order 21, Rule 66(2), Code of Civil Procedure addressed to the judgment-debtor was received by him on 18th March, 1968. This notice intended to settle the proclamation of sale of land of Gurdev Singh judgment-debtor, which land is situate in village Gurusar and had been attached in execution of the decree. After receipt of this notice, the judgment debtor made an application under O. 9, R.13 Code of Civil Procedure, on 4th April, 1968 for setting aside the ex parte decree as passed on 4th January, 1965. It was claimed by the judgment-debtor that he came to know of the decree on or about 18th march, 1968 when notice Exhibit A was served on him by registered Post and the decree-holder had deliberately given wrong addresses earlier both before the Arbitrator and the Civil Court to obtain an ex parte decree. It was averred by the judgment-debtor that his application was within time as instituted on 5th April 1968, being within 30 days from the date he obtained knowledge of the decree. The decree holder controverted the averments of the judgment-debtor and pleaded that the application was barred by time, notices by the Arbitrator and Civil Court were duly served on him and that he was aware of the proceedings before the Arbitrator and at any rate he got knowledge of the decree when the property was attached and the proclamation made in the village on 4th March, 1968.

5. On the pleadings of the parties, the following issues were struck:--

1. Whether the application is within time?

2. Whether there are sufficient grounds for setting aside of the ex parte decree?

3. Relief

The trial court decided both the issues against the appellant and refused to set aside the ex parte decree.

6. After hearing the learned counsel for the parties. I am satisfied that the findings of the trial Court cannot be sustained. The manner in which services was sought to be effected throughout both when the proceedings were before the Arbitrator and the Civil Court shows a design to somehow get the award and a decree passed there without getting proper service effected on the judgment debtor. In the hire-purchase agreement the address of Gurdev Singh given is 'Kothi No. 45-A, Sector 22, Ghandigarh; and his father's name is stated therein to be Tara Singh. The Arbitrator issued a notice for service describing Gurdev Singh as resident of village Ran Singh Wala, but no attempt was made to serve him at the address as given in the hire-purchase agreement. The report of the postal authorities was that the address was not correct. Instead of obtaining fresh particulars and making an attempt to serve Gurdev Singh in the ordinary way, the Arbitrator straightway proceeded to serve him by substituted service by publication in the English newspaper. The Tribune, it is not known whether Gurdev Singh knows English or not and moreover no ground for substituted service had been made out. In this publication the name of the father of Gurdev Singh was given as Tara Chand instead of Tar Singh. On the date fixed for hearing as per publication the Arbitrator took ex parte proceedings. Again, when the matter went to court on an application for making the award a rule notices were issued to Gurdev Singh from time to time and every time wrong parentage was given. The last notice issued was per registered post for 30th December, 1964. A report was received that the addressee had refused service. It is not clear whether summons in the ordinary course was issued. The Civil Court treated the alleged refusal of service as reported by the postal department to be sufficient service and proceeded ex parte to make the award a rule of the court on 4th January, 1965. There was no justification whatsoever for the Civil Court to have taken ex parte proceedings on the mere report of the postal department that the addressee had refused to receive the registered cover. No doubt service by post is one of the permissible modes of service and to order 5, Rule 10 of the Code of Civil Procedure has by a Punjab amendment been added a proviso that 'in any case if the plaintiff so wishes the Court may serve the summons in the first instances by registered post (acknowledgment due) instead of in the mode of service laid down in this rule', but such a provision is not to be understood as vouchsafing for the sufficiency of service. The addressee appeared in the witness box and denied having received any registered letter stated to have been refused by him and none from the postal department appeared to contradict him. When a summons is sent by registered post and returned as refused, it cannot, in the absence of any direct evidence, be held proved that it was so refused. The normal procedure is to deliver or tender a copy of the summons to the person sought to be served, though according to the Punjab Amendment, it is open to the plaintiff, if he so wishes, to serve the summons in the first instance by registered post (acknowledgement due) instead of normal mode of service.this amendment does not does not provide that if after the first failure of service in the ordinary way, summons is sent by registered post and the same reported to be refused, it is to be assumed that the defendant has been duly served. Such a refusal does not furnish a good ground for ex parte proceedings and any decree so obtained must be set aside on the ground that there was no due service. It was observed by Chagla, C.J. in Appabhai Mothibhai v. Laxmichand Zaverhcand & Co., AIR 1954 Bom 159, that the Court must allow the defendant a retrial where 'after the decree has been passed against him on evidence that the summons was sent by registered post and returned refused. he appears and denies that the packet had ever been delivered to him by the postal authorities.' To almost the same effect are the observations of Jai Lal, J. in Pesu Mal Harbhagwan Das v. Bishen Das Mewa Ram, AIR 1927 Lah 376. The learned Judge observed that:--

'It is quite clear that even if the defendant had received a copy of the plaint with the summons by registered post and had not appeared in Court, thereafter, the Court was not entitled to proceed ex parte against him but was bound to send summons in the ordinary manner.'

7. The sole question that survives for consideration therefore is whether the application to set aside ex parte decree was within time. This decree was passed on 4th January, 1965, and the appellant judgment-debtor claims to have acquired knowledge of it only on 18th March, 1968 during execution proceedings when a notice under Order 21, Rule 66(2). Code of Civil Procedure for the settlement of proclamation of sale of agricultural land belonging to him and situate in village Gurusar. Tehsil Faridkot was received by Post. He made an application to set aside the ex parte decree on 5th April, 1968, which on being refused led to the present appeal.

8. It may be mentioned again that the decree was originally passed by the Subordinate Judge 1st Class, Ambala Cantt., but was later transferred to Faridkot for execution. To fix knowledge of the decree, the decree-holder relied on a notice by the transferee Court at Faridkot alleged to have been sent under registered cover and refused by the judgment-debtor on 8th November, 1967. There is then the evidence of the process server. Amar Singh R. W.2 who stated that he was entrusted with the service of summons on the appellant in execution proceedings. According to him the judgment-debtor refused to accept service and a copy of his report is placed on the record as Exhibit R-2. It is stated by him that on 5th November, 1967, he went to village Gurusar but was informed that the judgment-debtor had gone to kotkapura. There is then s second report by him of 9th November, 1968,to the effect that he met the judgment-debtor at Kotkapura bus stop and that he was known to him before. We have it in the statement of this witness that the judgment-debtor declined to accept service and rather on seeing the summons he threw it on the ground. The judgment-debtor declined to accept service and rather on seeing the summons he threw it on the ground. The judgment-debtor appellant led evidence to show that he never resided in village Ran Singh Wala and on the other hand was staying in village Gurusar. Tehsil Faridkot along with his wife and children, and he cultivated his land there. He appeared as his own witness and stated that he never received any registered notices and that the knowledge of the decree came to him when he received a notice from the Civil Court at Faridkot on 18th March, 1968. He denied having refused service as stated by Amar Singh R.W.2. On an overall assessment of the evidence, it is clear that the judgment-debtor has been residing in village Gurusar where the land was sought to be sold. Major Bhai Fateh Jang Singh appeared as R.W. 3 and admitted that he knew personally that the judgment-debtor was residing in village Gurusar. The evidence of the process server that he endeavoured to effect service on the appellant at Kotkapura bus stand on 9th November, 1967 does not inspire confidence. In my opinion, the trial Court erred in relying on the same. The judgment-debtor appeared in the witness-box and denied that he ever refused service as stated by the Process Server. The curious thing about the whole affair is that it is for the first time when proclamation for sale was to be drawn up that a correct address of the judgment-debtor was given in the summons sent through post. It is equally clear that during the proceedings before the Arbitrator and the Civil Court the judgment-debtor was residing in village Gurusar but every time his wrong parentage was given and summons sent to other places. A feeble attempt was made by the learned counsel for the respondents to show that the judgment-debtor came to know of the decree when his land was attached. No evidence has been led as to how and when the land was attached and if really any publication took place.

9. I am satisfied on the present record that the ex parte decree was obtained without ever effecting due services on the appellant and that he came to know of the decree against him when notice was received by him on 18th March, 1968. The period of limitation as prescribed by Art. 123 of the Limitation Act, 1963 to set aside a decree passed ex parte is thirty days from the date of the decree or where the summons or notice was not duly served, when the applicant had knowledge of the decree. In this view of the matter, the application having been filed within thirty days from the date of knowledge of the decree was within time.

10. In the result the appeal is allowed, order of the trial court reversed and the ex parte decree against the appellant passed by the Civil Court on 4th January, 1965, set aside with costs.

11. Appeal allowed.


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