Gujarat High Court
M/S Aireff Detox Inc vs Modern Terry Towels Limited on 9 July, 2015
Author: Akil Kureshi
Bench: Akil Kureshi
C/AO/408/2013 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
APPEAL FROM ORDER NO. 408 of 2013
With
CIVIL APPLICATION NO. 11180 of 2013
In
APPEAL FROM ORDER NO. 408 of 2013
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M/S AIREFF DETOX INC....Appellant(s)
Versus
MODERN TERRY TOWELS LIMITED....Respondent(s)
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Appearance:
MR JIGAR M PATEL, ADVOCATE for the Appellant(s) No. 1
MS. KITTY S MEHTA, ADVOCATE for the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
Date : 09/07/2015
ORAL ORDER
1. Heard learned Advocates for the parties for final disposal of the Appeal.
2. This Appeal from Order is filed by the Original Defendant - Firm - M/s Aireff Detox Inc. challenging an order dated 5.9.2013 passed by the learned Principal Senior Civil Judge, Ahmedabad (Rural) below Restoration Application No. 26 of 2002.
Brief facts are as under:
3. The Appellant was the Original Defendant. The present Opponent had filed Special Civil Suit No. 172 of 2000 seeking recovery of an Page 1 of 9 C/AO/408/2013 ORDER amount of Rs.32,43,181/- from the Defendant by way of damages. The case of the Plaintiff was that the Defendant was awarded the contract for installation of Effluent Treatment Plant ("ETP") and entire agreed sum was paid to the Defendant. However, the ETP did not function properly. On account of such defects in the installation of the ETP, the Plaintiff preferred the said suit for recovery of the entire amount paid to the Defendant for installation of the ETP.
4. It appears that the summons of the suit was issued by the trial court. The same was received by one Mrs. Libiya Cresto in the office premises, where the Defendant Firm as well as one M/s Aireff Detox Inc. Limited, a Company incorporated under the Companies Act had their office. Since, the Defendant did not put up any appearance despite service of summons in the manner mentioned above, the Plaintiff requested the court to proceed ex parte. After recording the Plaintiff's evidence, which remained unchallenged, the trial court passed its judgment and decree dated 7.12.2001. The court allowed the suit and decreed that the Defendant shall pay the sum of Rs.32,43,181/- along with interest @ 9% from the date of filing of the suit till realization of the decreetal amount.
5. For long time thereafter, the Defendant did not take any steps to Page 2 of 9 C/AO/408/2013 ORDER challenge the decree or setting aside of the ex parte decree. According to the Defendant, the Firm was not aware about filing of the suit and the summons was not properly served either on the partners or the Firm. The partnership firm therefore could not put up any defence. It is only when the Plaintiff - Judgment debtor instituted execution proceedings of which the notice was served on the Defendant, the Defendant learnt about passing of the decree by the trial court. The Defendant thereupon moved the said application for setting aside the ex parte decree and restoration of the suit for fresh trial. In such application, it was contended that the Defendant had satisfactorily commissioned the ETP according to the specifications and need of the plant, the Defendant had carried out similar work for group of companies without any complaints, the Defendant has supplied more than 250 ETPs across the Country and has not received any complaint from any of the customers. It was further contended that the summons of the suit was not properly served on the Defendant in terms of Order 30 Rule 3 read with Rule 5 thereof of the Code of Civil Procedure ("CPC"). It was pointed out that M/s Aireff Detox Inc. had its Corporate Office at Thane and Mrs. Libiya Cresto was an employee of the said Company and not the employee of the Partnership Firm. Any acceptance of summons by Mrs. Libiya Page 3 of 9 C/AO/408/2013 ORDER Cresto would not be a sufficient notice of the summons on the Defendant Firm.
6. The trial court considered the application and objections of the Plaintiff and the evidence produced by both the sides in such further proceedings and passed the impugned order holding that Order 30 Rule 3 CPC would not apply. In any case, there was a service to Mrs. Libiya Cresto through Registered Post AD. Inter alia on such ground, the application came to be dismissed. Hence, this Appeal from Order.
7. Having thus heard learned Counsels for the parties and having perused the documents on record, it would emerge that Order 30 Rule 3 of CPC pertains to Suits by or against the Firms and the persons carrying on business in names other than their own. Sub Rule (1) thereto pertains to suing of partners in name of firm. Sub Rule (3) pertains to service of summons of the civil court and reads as under:
"3. Service. - Where persons are sued as partners in the name of their firm, the summons shall be served either -
(a) upon any one or more of the partners, or
(b) at the principal place at which the partnership business is carried on within India upon any person having, at the time of service, the control or management of the partnership business there, as the Court may direct; and such service shall be deemed good Page 4 of 9 C/AO/408/2013 ORDER service upon the firm so sued, whether all or any of the partners are within or without India.
Provided that, in the case of a partnership which has been dissolved to the knowledge of the plaintiff before the institution of the suit, the summons shall be served upon every person within India whom it is sought to make liable."
Sub Rule (5) pertains to Notice in what capacity served and reads as under:
"Where a summons is issued to a firm and is served in the manner provided by rule 3, every person upon whom it is served shall be informed by notice in writing given at the time of such service, whether he is served as a partner or as a person having the control or management of the partnership business, or in both characters, and, in default of such notice, the person served shall be deemed to be served as a partner."
From the language of Sub Rule (3) it would emerge that where persons are sued as partners in the name of their firm, the mode of service of summons would be either upon any one or more of the partners or at the principal place at which the partnership business is carried on within India upon any person having, at the time of service, the control or management of the partnership business. It is further provided that such service shall be deemed good service upon the firm so sued, whether all or any of the partners are within or without India. It can thus be seen that if the service of summons is not effected on any of the partners of the firm, it would be necessary to ensure that the same is served at the principal place at Page 5 of 9 C/AO/408/2013 ORDER which the partnership business is carried on and upon any person having, at the time of service, the control or management of the partnership business.
8. In this case, when it is pointed out that Mrs. Libiya Cresto was not the employee of the firm but that of the Company, there had to be something further to show that she was in control or management of the partnership business. Merely because she received Registered Post AD would not mean that the service of notice was complete on the partnership firm as envisaged under Order 30 Rule 3 of CPC. The Applicant - present Appellant had brought evidence on record to suggest that Mrs. Libiya Cresto was not an employee of the firm.
9. In addition to these considerations, I cannot lose sight of the fact that the entire decree of sizable sum of Rs.32,43,181/- is drawn ex parte. It appears that the Defendant firm has a regular business of erecting and commissioning EFTs. The effect of rejecting this appeal would amount to sustaining the ex parte decree. Of course the Plaintiff had led evidence. However, such evidence was bound to remain unchallenged. Under the circumstances, I would like to interfere and give an opportunity to the Defendant to put its defence in the suit.
10. The decision cited by the learned Counsel for the Applicant in the Page 6 of 9 C/AO/408/2013 ORDER case of P Sen (Engineering) Pvt. Limited v. Delite Builders P Limited reported in AIR 1993 (Cal) 28 however stand on a different footing. It was the case where the court considered whether in every case pertaining to Order 30 Rule 3 of CPC, the summons must be accepted by the partner himself. It was observed that in a given case, in presence of the partner, the summons may be tendered by the court bailiff under instructions audibly given by the partner to accept the same, in such a case it cannot be stated that there was no service of summons on the partner. Apparently, such facts do not arise in the present case.
11.Having said that, one cannot lose sight of the fact that the suit was filed way back in the year 2001. The decree was also passed sometime in December 2001. Mrs. Libiya Cresto may not be an employee of the firm, and therefore, technically, the service on her, satisfied the requirement of Order 30 Rule 3 of CPC, nevertheless she was an employee of the Company and occupied the said premises of the office of the Partnership firm. Any opportunity therefore to the appellant to defend itself cannot be unconditional.
12.Appeal from Order is therefore disposed of along with Civil Application with the following directions:
(i) The impugned order dated 5.9.2013 passed in Restoration Application No. 26 of 2002 is set aside.Page 7 of 9 C/AO/408/2013 ORDER
(b) The judgment and decree dated 7.12.2001 passed in Special Civil Suit No. 172 of 2000 is set aside. The proceedings are remanded back to the trial court for fresh consideration and decision in accordance with law, however, subject to following conditions:
(a) The Appellant - Judgment Debtor shall deposit 50% of the principal decreetal sum without interest before the trial court latest by 15.8.2015.
(b) Upon such deposit, it will be open for the Plaintiff to withdraw the same after offering bank guarantee for a matching sum and it will be ensured that it will be valid till disposal of the suit.
(c) Such deposit by the Defendant and withdrawal by the Plaintiff will be subject to outcome of the suit. In case if the suit is dismissed, the Plaintiff shall refund the same along with such interest that the court may direct.
(d) The Defendant shall file a written statement latest by 14.8.2015.
(e) The trial court shall make an attempt to give an expeditious disposal of the suit. Both sides shall cooperate. Page 8 of 9 C/AO/408/2013 ORDER
(AKIL KURESHI, J.) JNW Page 9 of 9