Supreme Court Upholds High Court Decision on Substituted Service in Specific Performance Suit: Neerja Realtors vs. Janglu (2018)

Date of the Judgment: 29 January 2018

Citation: (2018) INSC 71

Judges: Dipak Misra, CJI, A.M. Khanwilkar, J, Dr. D.Y. Chandrachud, J

Can a trial court decree a suit for specific performance ex-parte if the summons were not properly served to the defendant? The Supreme Court of India addressed this question while hearing an appeal against the decision of the High Court of Judicature at Bombay, which had set aside an ex-parte decree passed by the Civil Judge at Nagpur. The Supreme Court upheld the High Court’s decision, emphasizing the importance of strictly adhering to the procedural requirements for serving summons in civil cases. The judgment was delivered by a three-judge bench comprising of Dipak Misra, CJI, A.M. Khanwilkar, J, and Dr. D.Y. Chandrachud, J.

Case Background

On 15 July 2006, M/S Neerja Realtors Pvt Ltd (the appellant) entered into an agreement with Janglu (the original defendant) to purchase agricultural land in Mauza-Sondapar, District Nagpur, for a total consideration of Rs 13,04,391. The appellant paid Rs 3,26,000 as advance, with the balance of Rs 9,78,391 to be paid at the time of the sale deed’s execution.

On 30 June 2007, Shobha, the defendant’s daughter, filed a suit against her father and the appellant, claiming that the agreement was fraudulent. She alleged that her father was in financial distress and the appellant had taken advantage of him. She also claimed the land was ancestral property, and therefore, the agreement was not binding on her. The original defendant disclosed his residential address, and the appellant filed a written statement. This suit was dismissed on 8 July 2010, as it was found that the land belonged to the original defendant, and his daughter had no right over it.

On 5 February 2011, the appellant filed a suit for specific performance of the 2006 agreement. The Trial Court issued notice to the original defendant on 9 February 2011. The summons were returned unserved twice. On 11 April 2011, the bailiff reported that the defendant had left his residence two years earlier. The appellant then applied for substituted service under Order V Rule 20(1-A) of the Code of Civil Procedure, 1908 (CPC), which was allowed on 2 September 2011. The appellant claimed to have effected substituted service by publishing a notice in the Marathi daily, Lokmat, on 4 October 2011. As the defendant did not appear, the suit proceeded ex-parte, and was decreed on 13 June 2014. The appellant deposited the balance consideration on 17 July 2014.

The original defendant filed a first appeal before the High Court on 12 September 2014. He passed away on 21 August 2015, and his legal representatives were brought on record on 23 September 2016.

Timeline:

Course of Proceedings

The Civil Judge (Senior Division) at Nagpur decreed the suit for specific performance ex-parte. The original defendant, Janglu, then filed a first appeal before the High Court of Judicature at Bombay. The High Court allowed the appeal, setting aside the ex-parte decree. The High Court noted that the Trial Court had not followed the procedure for substituted service under Order V Rule 20 of the CPC, and that the Trial Court had not recorded its satisfaction that the defendant was avoiding service or that the summons could not be served in the ordinary way. The High Court also noted that the serving officer had not followed the procedure stipulated in Order V Rule 17 of the CPC. The High Court also observed that the Trial Court had ignored the provisions of Chapter III of the Civil Manual issued by the High Court on the Appellate side for guidance of Civil Courts.

Legal Framework

The case primarily revolves around the interpretation and application of Order V Rule 17 and Order V Rule 20 of the Code of Civil Procedure, 1908 (CPC).

Order V Rule 17 of CPC outlines the procedure when a defendant refuses to accept service or cannot be found. It states:

“17. Procedure when defendant refuses to accept service, or cannot be found. – Where the defendant or his agent or such other person as aforesaid refuses to sign the acknowledgment, or where the serving officer, after using all due and reasonable diligence, cannot find the defendant, who is absent from his residence at the time when service is sought to be effected on him at his residence and there is no likelihood of his being found at the residence within a reasonable time and there is no agent empowered to accept service of the summons on his behalf, nor any other person on whom service can be made, the serving officer shall affix a copy of the summons on the outer door or some other conspicuous part of the house in which the defendant ordinarily resides or carries on business or personally works for gain, and shall then return the original to the court from which it was issued, with a report endorsed thereon or annexed thereto stating that he has so affixed the copy, the circumstances under which he did so, and the name and address of the person (if any) by whom the house was identified and ‘whose presence the copy was affixed.”

Order V Rule 20 of CPC deals with substituted service, which is an alternative method of serving summons when the defendant cannot be served in the ordinary manner. It requires the Court to be satisfied that the defendant is avoiding service or that the summons cannot be served in the ordinary way.

Additionally, the High Court referred to Chapter III of the Civil Manual issued by the High Court on the Appellate side for the guidance of civil courts. Paragraphs 33 to 36 of this chapter provide guidelines on the service of summons, emphasizing the importance of following the procedures laid down in the CPC and ensuring that the defendant is informed of the proceedings in due time.

Arguments

Appellant’s Submissions:

• The appellant argued that the High Court had misinterpreted Order V Rule 20 of the CPC.
• The appellant contended that Order V Rule 20 provides an option to either affix the notice at the court premises and the defendant’s home or to use another mode, such as publication in a newspaper.
• The appellant claimed that since the summons was published in the newspaper on 4 October 2011, there was no further requirement to affix the summons at the court premises or the defendant’s house.
• The appellant argued that the Trial Court’s order was not cryptic, and the bailiff’s report indicated that the original defendant was not residing at the address provided, justifying the return of the summons.

Respondent’s Submissions:

• The respondent argued that the High Court’s findings were supported by the record and were in accordance with the law.
• The respondent emphasized that the procedure prescribed in Order V Rule 17 of the CPC was not followed by the serving officer.
• The respondent highlighted that the Trial Court’s order permitting substituted service was cryptic and did not indicate that the Court had applied its mind to the requirements of Order V Rule 20.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame specific issues but addressed the following points:

• Whether the High Court was correct in setting aside the ex-parte decree passed by the Trial Court.
• Whether the procedure for substituted service under Order V Rule 20 of the CPC was correctly followed.
• Whether there was a breach of the provisions of Order V Rule 17 of the CPC.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court considered the following authorities:

• Bhanu Kumar Jain v. Archana Kumar [2005] 1 SCC 787 – The Supreme Court referred to this case to highlight the grounds on which an appeal against an ex-parte decree can be filed. The Court noted that an appeal against an ex-parte decree can be filed if the materials on record do not entail a decree in favor of the plaintiff or if the suit could not have been posted for ex-parte hearing.
• Rabindra Singh v. Financial Commissioner, Cooperation, Punjab [2008] 7 SCC 663 – This case was cited to reiterate the principles laid down in Bhanu Kumar Jain regarding the remedies available to a defendant against an ex-parte decree.
• Mahesh Yadav v. Rajeshwar Singh [2009] 2 SCC 205 – This case further supported the principles established in Bhanu Kumar Jain and Rabindra Singh.
• Order V Rule 17 of the Code of Civil Procedure, 1908 – The Court examined this provision to determine if the bailiff had followed the correct procedure when the defendant could not be found at his residence.
• Order V Rule 20 of the Code of Civil Procedure, 1908 – The Court analyzed this provision to determine if the Trial Court had correctly applied the rules for substituted service.
• Chapter III of the Civil Manual issued by the High Court on its appellate side for the guidance of civil courts and officers subordinate to it – The Court considered the guidelines provided in this manual regarding the service of summons.

Judgment

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

How each authority was viewed by the Court?

• Bhanu Kumar Jain v. Archana Kumar [2005] 1 SCC 787: The Supreme Court used this case to support its decision by stating that an appeal against an ex-parte decree is maintainable if the suit could not have been posted for ex-parte hearing.
• Rabindra Singh v. Financial Commissioner, Cooperation, Punjab [2008] 7 SCC 663 and Mahesh Yadav v. Rajeshwar Singh [2009] 2 SCC 205: These cases were followed to reiterate the principles laid down in Bhanu Kumar Jain regarding the remedies available to a defendant against an ex-parte decree.
• Order V Rule 17 of the Code of Civil Procedure, 1908: The Court held that there was a clear breach of this provision, as the bailiff did not affix a copy of the summons at the defendant’s residence.
• Order V Rule 20 of the Code of Civil Procedure, 1908: The Court found that the Trial Court had not applied its mind to the requirements of this provision when allowing substituted service.
• Chapter III of the Civil Manual issued by the High Court on its appellate side: The Court noted that the Trial Court had ignored the guidelines in this manual regarding the service of summons.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the procedural lapses in the service of summons. The Court emphasized the importance of adhering to the rules laid down in the Code of Civil Procedure, 1908, particularly Order V Rule 17 and Order V Rule 20. The Court was concerned that the Trial Court had passed a mechanical order for substituted service without ensuring that the defendant had been properly notified of the suit. The Court also noted that the Trial Court had not followed the guidelines provided in the Civil Manual issued by the High Court. The Court’s reasoning highlighted the need for strict compliance with procedural rules to ensure fairness and justice in legal proceedings.

Fact:Law Ratio

Logical Reasoning:

Key Takeaways

• Strict adherence to the procedures laid down in the Code of Civil Procedure, 1908, is essential for the valid service of summons.
• Substituted service should only be allowed when the court is satisfied that the defendant is avoiding service or that the summons cannot be served in the ordinary way.
• Trial courts must apply their minds to the requirements of Order V Rule 20 of the CPC before allowing substituted service.
• Serving officers must follow the procedure stipulated in Order V Rule 17 of the CPC when the defendant cannot be found at their residence.
• Ex-parte decrees can be set aside if the procedural requirements for service of summons are not followed.

Directions

The Supreme Court did not issue any specific directions, but upheld the High Court’s decision to set aside the ex-parte decree.

Development of Law

The ratio decidendi of this case is that the procedure for substituted service must be strictly followed, and the court must apply its mind to the requirements of Order V Rule 20 of the Code of Civil Procedure, 1908. This judgment reinforces the importance of due process in civil proceedings and ensures that defendants are properly notified of suits filed against them. There is no change in the previous position of law, but this judgment clarifies the procedure to be followed by the subordinate courts.

Conclusion

The Supreme Court dismissed the appeal, upholding the High Court’s decision to set aside the ex-parte decree. The Court emphasized the importance of strictly following the procedural rules for serving summons, particularly Order V Rule 17 and Order V Rule 20 of the Code of Civil Procedure, 1908. The judgment reinforces the principle that substituted service is an exception to the normal mode of service and should only be allowed when the court is satisfied that the defendant is avoiding service or cannot be served in the ordinary way. This case serves as a reminder to trial courts to ensure that all procedural requirements are met to ensure the fairness and validity of legal proceedings.

Category:

Parent Category: Code of Civil Procedure, 1908

Child Categories:

• Order V, Code of Civil Procedure, 1908
• Order V Rule 17, Code of Civil Procedure, 1908
• Order V Rule 20, Code of Civil Procedure, 1908
• Substituted Service
• Ex-parte Decree
• Specific Performance

FAQ

Q: What is substituted service of summons?

A: Substituted service is an alternative method of serving summons when the defendant cannot be served in the ordinary manner. It can include publication in a newspaper or affixing the summons at a conspicuous place.

Q: When can a court allow substituted service?

A: A court can allow substituted service when it is satisfied that the defendant is avoiding service or that the summons cannot be served in the ordinary way.

Q: What is the procedure when a defendant cannot be found at their residence?

A: When a defendant cannot be found at their residence, the serving officer must affix a copy of the summons on the outer door or some other conspicuous part of the house and then return the original to the court with a report.

Q: What happens if the court does not follow the correct procedure for serving summons?

A: If the court does not follow the correct procedure for serving summons, any ex-parte decree passed may be set aside on appeal.

Q: What is an ex-parte decree?

A: An ex-parte decree is a decree passed by a court in the absence of the defendant.