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Haryana Breweries Ltd. Vs. Aluminium Manufacturing Co. Ltd. and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtDelhi High Court
Decided On
Case NumberRegular First Appeal (Original) No. 6 of 1980
Judge
Reported inAIR1980Delhi311; 18(1980)DLT122
ActsCode of Civil Procedure (CPC), 1908 - Order 37, Rule 3 and 3(1)
AppellantHaryana Breweries Ltd.
RespondentAluminium Manufacturing Co. Ltd. and anr.
Advocates: J.S. Chakat,; J.C. Batra,; C.M. Oberoi and;
Excerpt:
.....them would work serious general inconvenience and injustice in such prescription are generally understood as directory. courts must also see the serious or trivial consequences that flow there from and above all, whether the object of legislation will be defeated or furthered. 1 was served on 7.4.1979 and 'allegedly' entered appearance on 24.4.1979 but it was also alleged that he failed to comply with the mandatory provision of law in so far as no notice of such appearance has been given by defendant no. clearly when defendant no'.2 applied on 19.7.1979, that itself was entering appearance. 2 was good service under order 29 of the code of civil procedure......was filed by the appellant under order 37 rule 3 g. p. c. seeking leave to defend the suit. the learned judge has held that as no appearance was entered by the defendant there was no question of permitting the appellant to defend the suit. that is why he refused leave and decreed the plaintiff's suit. hence the appeal. (4) order 37 rule 3(1) of the code of civil procedure provides that the defendant may at any time within 10 days of the service of summons under rule 2 enter an appearance either in person or by pleader and shall file in court an address for service of notice on him. 1. a. 1476/79 was filed on 24.4.1979 not within 10 days but within 20 days, i.e. within the time the summons had mentioned. evidently the learned judge rightly did not entertain any objection to nor did the.....
Judgment:

Rajinder Sachar, J.

(1) This is a defendant's appeal against the order of Sultan Singh, J. by which he refused leave to defend the suit under Order 37 of the Code of Civil Procedure to the defendant No. 1 appellant and defendant No. 2 (who is respondent No. 2 in the appeal) and thereafter passed a decree for Rs. 50,247-73 against the appellant and respondent No. 2.

(2) It is unfortunate that when it comes to setting the matters in a spirit of mutual accomodtion the public sector and the Government undertakings seem to behave in as small and petty a manner as unfortunately the individuals sometimes do. The allegation in the plaint is that the respondent No. I which is being managed by West Bengal government had supplied certain goods to the appellant. The goods were negotiated by respondent No. 2 on behalf of the appellant. The goods supplied were worth over 6 lakhs, and according to the plaintiff the balance amount of over Rs. 50,000.00 has not been paid. Though at one stage in 1976, it appears that the appellant had acknowledged, according to the plaintiff, to pay this amount but asked for time because they were in financial difficulty, the appellant, it is alleged is now apparently refusing to pay. Appellant has also made counter claims on account of alleged non-delivery of goods in time and also because of the excess charges in transport. These allegations on merit need not detain us because they have not been examined on merits by the Court. We just noticed this aspect and were wondering whether better sense should not even now prevail with the parties so that they could settle matters amicably rather than resort to the destructive litigation, which will cost the public exchequer more than the amount in dispute. The court can however do no more than point out the direction and leave it to the parties to work out the details.

(3) Summons of the institution of suit were served on defendant No. 1, appellant on 9.4.1970. The summons specifically asked the appellant to put in appearance within 20 days. On 24.4.1979 the appellant moved on 1. A. 1476/79 which purported to be under Section 21 C.P.G. taking the plea that this court had no jurisdiction. Fortunately for the appellant it also specifically mentioned in the very same application that defendant though it does not submit to the jurisdiction of the court, but is putting in his appearance in order to avoid an ex-parte order at the back of the defendant. The matter thereafter came up ultimately before the Deputy Registrar on 10.5.1979 and plaintiff accepted notice of 1. A.-1476/79. On 12.7.1979 1. A.- 2285/79 was filed by the plaintiff for issue of summons of Judgment in Form. Iv A in appendix B. No order however, was passed on it and the application remained pending in the Registry. On 10.8.1979 1. A. 2840/79 was filed by the appellant under Order 37 Rule 3 G. P. C. seeking leave to defend the suit. The learned Judge has held that as no appearance was entered by the defendant there was no question of permitting the appellant to defend the suit. That is why he refused leave and decreed the plaintiff's suit. Hence the appeal.

(4) Order 37 Rule 3(1) of the Code of Civil Procedure provides that the defendant may at any time within 10 days of the service of summons under Rule 2 enter an appearance either in person or by pleader and shall file in court an address for service of notice on him. 1. A. 1476/79 was filed on 24.4.1979 not within 10 days but within 20 days, i.e. within the time the summons had mentioned. Evidently the learned Judge rightly did not entertain any objection to nor did the plaintiff object that the appearance should have been entered within 10 days. In view of 20 days mentioned by summons from this court the plainiff could not insist upon the appellant entering appearance before 20 days. But what has been held against the appellant is that though on 24.4.1979 it was within 20 days of service of summons on 7.4.1979 when in Jaw the appellant had not entered appearance. Now it will be seen that 1. A. 1476/79 was moved on 24.4.1979. Though it purports to be under Section 21 G. P. C., it did contain a categorical assertion that the defendant/appellant was putting in appearance There is no particular form prescribed for entering appearace under Order 37 Rule 3(3) C. P. C. and we fail to see how this categorical assertion in the application of 24.4.1979 could not be and should not be taken to be in law entering of appearance by the appellant. Along with the application, as is usual, a power of attorney of the counsel for the defendant was also filed. Both the application and the power of attorney contain the address of the appellant. As a matter of fact because an application was filed under Section 21 C. P. C. the address of the appellant is given in full detail. We fell to appreciate as to how it could be urged that notwithstanding all these details Order 37 Rule 3(1) had not been complied with. It must be held that on the day of moving 1. A. 1476/79, on 24.4.79, appellant must be deemed to have entered appearance. What is however, objected by Mr. Batra the learned counsel for the plaintiff is that Sub-rule (3) of Rule 3 of Order 37 C. P. C. further provides that not only would defendant enter the appearance but that notice of such appearance shall be given by the defendant to the plaintiff's pleader, by a notice delivered at or sent by a prepaid letter directed to the address of the plaintiff's pleader.........Admittedly when on 24.4.1979 the appellant filed 1. A. 1476/79, no separate notice as required by Sub-rule (3) of Rule 3 of Order 37 G. P.O. was sent by the defendant to the plaintiff's pleader or to the plaintiff. To the extent, thereforee, that a point is raised that a separate notice of entering appearance was not sent to the plaintiff, it is factually correct. But the question still remains that assuming there was a non-compliance of the later part of Sub-rule (3) of Rule 3 of Order 37 C.P.G. in as much as the notice was not sent to the plaintiff on the day of entering appearance, is it such a fatal omission and can such an ommission amount to the finding as has been given by the learned single Judge, that the defendant/appellant has not entered appearance and thereforee was not entitled to defend the suit in terms of Order 37 Rule 2(3) C. P. G. We feel that this finding of the learned Judge cannot be upheld, on a correct interpretation of the provision.

(5) Now it will be seen that Sub-rule (3) of Rule 3 of Order 37 G. P. C. itself postulates that a notice of appearance has to be sent by the defendant to the plaintiff on the date of entering appearance. Sub-rule (3) thereforee thus assumes that the defendant has entered appearance and intimation of that appearance has to be sent to the plaintiff. It is not, thereforee, correct to say that because a notice had not been sent of entering appearance it would mean that appearance had not been entered. All that can be said in such a situation is that though appearance had been entered on the said date, the further requirement of intimation to the plaintiff as required by Sub-rule (3) has not been complied with. Mr. Batra, the learned counsel for respondent wanted us to read this requirement of giving intimation to be mandatory on the ground that if this was not be complied with, the whole rule will become unworkable as further proceedings could not take place. We are unable to agree. The difference between the mandatory and directory provision is well known. Non compliance with the mandatory provisions will result in implied nullification for disobedience. So if the default in giving notice of the entering appearance is mandatory, it will result in total nullification making the earlier appearance also non-existant. But then it is well settled where the invalidation of the acts done in neglect of them would work serious general inconvenience and injustice in such prescription are generally understood as directory. The neglect of them may be penal but it does not affect the validity of the act done in disregard of them. Courts must also see the serious or trivial consequences that flow there from and above all, whether the object of legislation will be defeated or furthered. See 1961 S. G. 751 State of Uttar Pradesh & others v. Babu Rim Upaikyl. The fact that a provision is tlirectory doss not mean that it has not to be complied with. All that it would mean is that the consequences for non-compliance are no; as serious as would be if the same was mandatory. The directory provision of the later portion of Sub-rule (3) has to bs complied with and if it is not complied with in time the defendant may either be burdened with costs but it is very different milter to say that if notice has not been given to the plaintiff it will result in invalidating the appearance which undoubtedly has been made and amount to as if no appearance has been entered, notwithstanding that the defendant has as a matter of fact entered appearance and has given the address for service on him this omission to give notice of appearance to the plaintiff cannot nullify the appearance already made. It should also be noted that there is no provision for consequences for not complying with the requirement of later portion of Sub-rule (3) of Rule 3 of Order 37 G.P.G. namely of giving notice of appearance by the defendant. That also indicates that giving notice of appearance is a directory provision. It may also be noticed that Order 37 Rule 2(3) G. P. G. only prohibits the defendant from defending the suit unless he enter appearance. It is only on default of appearance which would resalt in the allegation in the plaint being deemed to be admitted. There is no requirement that if on the day the defendant enters appsarance he does not file in court an address for service of notices on him, or does not give notice to the plaintiff, same consequences will follow. The provision is meant no doubt to expedite the proceedings so that the plaintiff knows that the appearance has been entered, and he may take steps as provided under Order 37 Rule 3(4) onwards. But these requirements are not of such a nature that the delay or non-compliance on the very day of appearance would result in denying to the defendant even a right to defend the suit. Mr. Batra contended that as the word 'Shall' has been used in Order 37 Rule 3(3) this would make it mandatory. We are unable to agree. In Civil Revision No. 710/78 decided on 10.11.1978 one of us (Sachar, J.) has taken the view that it is not correct to hold that the consequences of not filing address under Rule 3(3) of Order 37 G. P. G. and in not serving notice is as if no appearance has been entered. The provision is directory. Its noncompliance does not mean as if no appearance has been filed.. We agree with these observations. We feel that the learned Judge was thereforee in error in holding that because of the non-compliance with the service of notice on the plaintiff on the very day was fatal. As a matter of fact Sultan Singh, J. in one of the interim orders on 27.8.1978 in suit No. 991/78 has himself held that Sub-rule (1) and (3) of Rule 3 of Order 37 G. P. G. is not mandatory, and that if a notice is not served on the counsel for the plaintiff the same could be given at any time thereafter. That, the plaintiff himself in all seriousness did not think that the appearance had not been entered by the defendant No. 1 is clear from the fact that he himself moved 1. A. 2285/79 on 20.7.1979 for issue of summons from Judgment, under Order 37 Rule 3(4), which can only be applicable if the defendant had entered an appearance. No doubt in the said application the plaintiff was cautious enough to mention that defendant No. 1 was served on 7.4.1979 and 'allegedly' entered appearance on 24.4.1979 but it was also alleged that he failed to comply with the mandatory provision of law in so far as no notice of such appearance has been given by defendant No. 1 to the plaintiff's counsel under Order 37 Rule 3 and that plaintiff's counsel never came to know of the same until 10.5.1979. The important point to notice is that though a grievance was made that the mandatory provision under Order 37 Rule 3(3) G. P. G. was not complied with prayer was made that court may be pleased to order for the issue of summons for Judgment. This moving of the application obviously was on the understanding and acceptance of the position that the defendant had entered appearance on 24.4.1979 within 20 days as required by the summons. It must thereforee be held that the appellant had entered appearance and could not be proceeded with under Order 37 Rule 2(3) C. P. C.

(6) The appellant also moved an application-1, A. 2402/79 on 10.8.1979 under Order 37 Rule 3(5) C. P. G. which the learned Judge refused. The learned Judge in refusing the application has opined that this application is premature as summons for Judgment required under Sub-rule (4) of Rule 3 of Order 37 C. P. G. has not been yet issued by the court. To this limited extent this observation was inocuous but the learned Judge fell into error in nevertheless going on to give a finding that the leave to defend the suit cannot be given on the ground that application has been filed earlier than the service of summons for Judgment, We are not able to appreciate the logic of this finding. If the summon for Judgment had not yet bein issued as found by the court it only means that the defendant will get a right to move an application for leave to defend the suit when he is served with such summons; by no process of reasoning could the application be thrown out on the ground that it had been moved earlier than required. All that should have been done by the learned Judge was to take up the leave application after the summons for Judgment had been issued and served on the defendant appellant.

(7) We, thereforee, cannot, up-held the finding of the learned Judge that the appellant had not entered appearance and thereforee the allegations in the plaint were deemed to be admitted and that as a result the plaintiff was entitled to a decree in his favor. At one stage Mr. Batra had also urged that the learned Judge had not only found that no appearance was entered by the defendant but had also rejected the application for leave to defend the suit on merits. We cannot so read the order. The learned Judge has observed that application for leave to defend was premature and not maintainable. In that view there was no question of the learned Judge having expressed any view on the merits of the application for leave to defend. The order of the learned Judge, passing decree against the appellant is thereforee set aside.

(8) So far as the defendant No. 2 is concerned no doubt there is much greater bungling as Mr. Batra for the plaintiff pointed out that inspire of the service having been affected on 11.4.1979 no appearance was entered till 22.5.1979. It appears that the summons were left at the registered address of the defendant No. 2. An application was moved being 2455/79 on 19.7.1979 in which it was alleged that the intimation of the suit was brought to the notice of the defendant No. 2 by defendant No. 1 and that it was for this reason that defendant No. 2 could not take steps to enter appearance. It was also prayed that the delay in complying with the provisions of the Code of Civil Procedure and non filing of the address form within time was neither deliberate nor intentional and there was sufficient cause for delay to be condoned in entering appearance and praying for grant of period of 10 days to the defendant No. 2 for entering appearance in the above case. The learned Judge has commented with quite some justification that though under Order 37 Rule 3 Sub-rule (7) if sufficient cause is shown for non-appearance or in applying for leave to defend the suit the delay may be excused, but until the defendant enters appearance the court obviously cannot excuse any delay and no time can be given to them to enter appearance. It appears to us that there was possibly some serious mix up because when the application was filed on 19.7.1979, when stand was taken by defendant No. 2 that it should be given time to enter appearnce. Clearly when defendant No'. 2 applied on 19.7.1979, that itself was entering appearance. As it was late, the court could excuse the delay under Order 37 Rule 3(7) G. P. G. As a matter of fact when the application was filed that was the time when appearance was entered by the defendant though this was, beyond the time prescribed. Evidently what was required was that the defendant No. 2 having put in appearance on 19.7.1979 what it had to seek from the court was the condensation of delay in appearance late. Evidently the sort of prayer that was made in the application for asking for more time to put in appearance seems to have been made because of a misunderstanding of the position in law. If the defendant No. 2 was the only contesting defendant there would have to be shown a greater jurisdiction to condone the delay because though service was not effected on an officer of the company, service effected by leaving the summons at the Reception, at the registered address of the defendant No. 2 was good service under Order 29 of the Code of Civil Procedure. What has however, presuaded us to condone the delay in putting in appearance and also for tiling the application for leave to defend is really the suit is against defendant No. 1 appellant. In. the plaint the defendant No. '2. are said to have placed orders with the plaintiff for and on behalf of defendant No. 1 appellant. The defendant No I are also accepted to be the owners and were responsible for making the payments. Even the signing of contract by defendant No. 2 is said to be on behalf of defendant No. 1. In these circumstances it appears to us that defendant No. 2 was possibly made a party more out of abundant caution. Plaintiff's decree, if any, evidently would have to be passed against defendant No. 1, in these circumstances it would be very harsh and unjust if the decree which has now been passed against the appellant and defendant No. 2 was allowed to stay against defendant No. 2 when as indicated above we are allowing the appeal and setting aside the decree against the appellant and allowing the appellant to participate in the proceedings of the suit. No doubt the defendant No. 2 has not filed the appeal but this court has power under Order 41 Rule 33 of the Code of Civil Procedure which empowers the Appellate Court to pass any order in favor of any or all the respondents, although such respondents may not have filed any appeal or objection. In the circumstances of the case we are inclined to exercise our power under Order 41 Rule 33 and set aside the decree against the defendant No. 2 also.

(9) The position, thereforee, that would emerge is that the appellant had entered appearance within time. His non-compliance with the service of notice on plaintiff was not a non-compliance with the mandatory provision and the decree, thereforee, could not be passed on the ground that Order 37 Rule 2(3) was attracted. No doubt the defendant No. 2 has put in appearance late when he filed the application but in the circumstances we exercise our power under Order 37 Rule 3(7) C. P. C. and condone the delay in entering appearance. We would, as a result allow the appeal and set aside the Judgment and decree passed by the learnd single Judge against the appellant and respondent No. 2. We feel that no useful purpose will be served by directing the appellant and respondent No. 2 to serve a notice of their appearance on the plaintiff. The parties are fighting litigation before us and the notice of appearance may now be thereforee taken to be properly served on the plaintiff.

(10) The plaintiff had also put in an application under Order 37 Rule 4 C. P. G. The court took no action because it took the view that as no appearance has been entered by the appellant or respondent No. 2 no action was called for on the application moved by the plaintiff. As we havheld that appearance must be now deemed to have been entered by appellant and respondent No. 2 the application filed, by the plaintiff under Order 37 Rule 4 C. P. G. can now be proceeded with. The appellant has already put in an application for leave to defend the suit. We feel that it is needless to ask for more formalities to be done into and that application which has been filed by the appellant be treated as an application for leave to defend filed by him. Defendant No. 2 however, has not filed any application, this he may do so within 10 days from today. The matter will now be remitted back to the learned single Judge for disposal in accordance with law and merits of the case.

(11) The parties are directed to appear before the Deputy Registrar on 15.5.1980. As the conduct of the appellants has not been very commendable they will not be entitled to any costs.


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