Supreme Court Sets Aside Ex-Parte Decree Due to Defective Summons: Auto Cars vs. Trimurti Cargo Movers (2018)

Date of the Judgment: 15 February 2018

Citation: (2018) INSC 124

Judges: R.K. Agrawal, J., Abhay Manohar Sapre, J.

Can a court issue an ex-parte decree if the summons served to the defendant lacks a specific date and time for their appearance? The Supreme Court of India addressed this critical procedural question in a case concerning a commercial dispute. The court examined whether the absence of a specific date and time in a summons served through publication is a sufficient ground to set aside an ex-parte decree. The bench, comprising Justices R.K. Agrawal and Abhay Manohar Sapre, delivered the judgment.

Case Background

The case originated from a civil suit filed by Trimurti Cargo Movers Pvt. Ltd. (respondent No. 1) against Auto Cars (appellant), along with two other defendants (respondent Nos. 2 and 3), in the High Court at Calcutta. The suit, C.S. No. 15 of 2014, was filed on 13 January 2014, for the recovery of ₹1,43,18,537 based on commercial dealings between the parties.

Initially, summons were sent to the defendants at their business address in Aurangabad, Maharashtra. However, these attempts at service failed. Subsequently, the plaintiff sought and was granted permission for substituted service through publication in newspapers under Order V Rule 20 of the Code of Civil Procedure, 1908 (CPC). The summons was published in the Times of India (Pune Edition) and Dainik Bhaskar (Aurangabad Edition) on 25 November 2014.

The defendants did not appear in court. Consequently, the court proceeded ex-parte and passed a decree on 9 February 2015, ordering the defendants to pay ₹1,43,18,537 along with 12% per annum interest from 1 May 2013, until payment.

Timeline

Course of Proceedings

The defendants, upon learning of the ex-parte decree, filed an application (GA No. 766/2016) on 8 March 2016, under Order IX Rule 13 of the Code of Civil Procedure, 1908, seeking to set aside the decree. They argued that the summons was not duly served because the publication was in a Pune newspaper, while their business was in Aurangabad. The Single Judge of the High Court dismissed this application on 18 August 2016, holding that the summons was duly served. The defendants then appealed to the Division Bench of the High Court, which also dismissed the appeal on 24 April 2017, affirming the Single Judge’s decision.

Legal Framework

The Supreme Court examined the case in light of several key provisions of the Code of Civil Procedure, 1908:

• Section 27, Code of Civil Procedure, 1908: This section deals with the issuance of summons to defendants. It states that when a suit has been instituted, summons may be issued to the defendant to appear and answer the claim, and it must be served in the manner prescribed on such day, not beyond thirty days from the date of the institution of the suit.

  “where a suit has been instituted, summons may be issued to the defendant to appear and answer the claim and may be served in the manner prescribed on such day”

• Order V Rule 20(3), Code of Civil Procedure, 1908: This provision addresses substituted service through publication. It states that when service is effected by publication, the court must fix the time for the appearance of the defendant.

  “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.”

• Order IX Rule 13, Code of Civil Procedure, 1908: This rule provides grounds for setting aside an ex-parte decree. One such ground is that the summons was not duly served.

• Appendix B, Process No. I & IA, Code of Civil Procedure, 1908: These are the formats for summons. Process No. I is the standard format, while No. IA is specific to Calcutta, requiring a specific “day, date, year and time” for the defendant’s appearance.

Arguments

Appellant’s (Auto Cars) Submissions:

• The primary argument of the appellant was that the summons was not duly served as per Section 27 of the Code of Civil Procedure, 1908 read with Appendix-B.
• The summons published did not specify a particular date, time, and year for their appearance.
• The appellant contended that the summons only mentioned that they should appear within 15 days of the publication, which is not in compliance with the statutory format prescribed in Appendix B.
• They argued that this defect in service was a valid ground for setting aside the ex-parte decree under Order IX Rule 13 of the Code of Civil Procedure, 1908.

Respondent’s (Trimurti Cargo Movers Pvt. Ltd.) Submissions:

• The respondent argued that there was no illegality or irregularity in the service of summons.
• They contended that the summons was published in newspapers as per the court’s order for substituted service.
• Since the defendants did not appear despite the publication, they were not entitled to seek setting aside of the decree under Order IX Rule 13 of the Code of Civil Procedure, 1908.

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for consideration:

1. Whether the summons issued to the defendants through publication, which did not mention a specific date, time, and year for their appearance, was a valid service of summons as per Section 27 of the Code of Civil Procedure, 1908 read with Appendix-B and Order V Rule 20(3) of the Code of Civil Procedure, 1908.

Treatment of the Issue by the Court

Authorities

The Court considered the following authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• Section 27, Code of Civil Procedure, 1908: The Court interpreted this provision to mandate that summons must specify the exact date for the defendant’s appearance.
• Order V Rule 20(3), Code of Civil Procedure, 1908: The Court clarified that the “time” mentioned in this rule must be read in conjunction with Section 27 of the Code of Civil Procedure, 1908 and the statutory format, requiring a specific date and time.
• Order IX Rule 13, Code of Civil Procedure, 1908: The Court used this rule to justify setting aside the ex-parte decree due to the defective service of summons.
• Appendix B, Process No. I & IA, Code of Civil Procedure, 1908: The Court emphasized the importance of these formats, which require a specific “day, date, year and time” for appearance.
• Sangram Singh vs. Election Tribunal [AIR 1955 SC 425]: The Court relied on this case to underscore that procedural laws should be interpreted to facilitate justice and not hinder it.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following:

• Statutory Compliance: The Court emphasized the mandatory nature of the statutory requirements under Section 27 of the Code of Civil Procedure, 1908, read with Appendix-B Process I and IA, and Order V Rule 20(3) of the Code of Civil Procedure, 1908. The summons must specify a specific date, time, and year for the defendant’s appearance.
• Fair Opportunity: The Court underscored the importance of providing a fair opportunity to the defendant to appear and contest the suit. The absence of a specific date and time in the summons effectively deprived the defendant of this opportunity.
• Procedural Justice: The Court reiterated that procedural laws should be interpreted to facilitate justice and not to create technical hurdles that prevent a case from being decided on its merits.

Fact:Law Ratio

Logical Reasoning:

The Court rejected the argument that the 15-day notice was sufficient, emphasizing that the statutory format requires a specific date, time, and year to ensure the defendant has a clear understanding of when and where to appear. The Court also noted that the object of summons is to apprise the defendant of the case, provide a copy of the plaint, and inform them of the date, time, and place of appearance. The summons in this case failed to meet these requirements.

The court quoted Sangram Singh vs. Election Tribunal [AIR 1955 SC 425], emphasizing that procedural laws should be interpreted to facilitate justice and not to create technical hurdles that prevent a case from being decided on its merits. “A code of procedure must be regarded as such. It is procedure something designed to facilitate justice and further its ends: not a penal enactment for punishment and penalties; not a thing designed to trip people up.”

The Court further stated that “Too technical a construction of sections that leaves no room for reasonable elasticity of interpretation should therefore be guarded against (provided always that justice is done to both sides) lest the very means designed for the furtherance of justice be used to frustrate it.”

The Court also observed that “Our laws of procedure are grounded on a principle of natural justice which requires that men should not be condemned unheard, that decisions should not be reached behind their backs, that proceedings that affect their lives and property should not continue in their absence and that they should not be precluded from participating in them.”

The Court concluded that the defective summons was a valid ground for setting aside the ex-parte decree under Order IX Rule 13 of the Code of Civil Procedure, 1908.

Key Takeaways

• Importance of Statutory Compliance: Summons must strictly adhere to the prescribed format and statutory requirements, especially when serving through publication.
• Specific Date and Time: Summons must specify the exact date, time, and year for the defendant’s appearance. A general timeframe is not sufficient.
• Grounds for Setting Aside Ex-Parte Decree: Defective service of summons is a valid ground for setting aside an ex-parte decree under Order IX Rule 13 of the Code of Civil Procedure, 1908.
• Procedural Justice: Courts must ensure that procedural rules are interpreted to facilitate justice and provide a fair opportunity for all parties to be heard.

Directions

The Supreme Court gave the following directions:

• The ex-parte decree dated 09.02.2015 passed in C.S. No. 15/2014 was set aside.
• The civil suit was restored to its original file.
• The parties were directed to appear before the concerned court on 05.03.2018.
• The appellant (defendant No.1) was granted an opportunity to file a written statement.
• The Court was directed to ensure disposal of the suit on merits within a year.
• The deposit of ₹47.50 lakhs by the appellant was made subject to the final result of the suit.

Specific Amendments Analysis

There was no discussion on any specific amendment in the judgment.

Development of Law

The ratio decidendi of this case is that a summons issued for substituted service must strictly adhere to the statutory requirements of specifying a particular date, time, and year for the defendant’s appearance. Failure to do so renders the service invalid and is a ground for setting aside an ex-parte decree. This judgment reinforces the importance of procedural compliance and ensures that defendants are given a fair opportunity to be heard. There is no change in the previous position of law, rather it is an emphasis on strict compliance.

Conclusion

The Supreme Court allowed the appeal filed by Auto Cars, setting aside the ex-parte decree passed against them. The Court held that the summons published for substituted service was defective because it did not specify a particular date, time, and year for the defendants’ appearance, as required by Section 27 of the Code of Civil Procedure, 1908, read with Appendix-B and Order V Rule 20(3) of the Code of Civil Procedure, 1908. This judgment emphasizes the importance of strict compliance with procedural laws to ensure fairness and justice.