Delhi High Court - Orders
Late Suresh T Kilachand Through Lr Uday ... vs Mahendera Verma on 22 March, 2022
Author: Vipin Sanghi
Bench: Navin Chawla, Vipin Sanghi
$~6
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO(OS) 239/2019
LATE SURESH T KILACHAND THROUGH LR UDAY
KILACHAND
..... Appellant
Through: Mr.Jatin Mongia, Ms.Meghna Mishra
& Mr.Dheeraj P Deo, Advs.
versus
MAHENDERA VERMA
..... Respondent
Through: Ms.Ankita Bajpai, Adv.
CORAM:
HON'BLE THE ACTING CHIEF JUSTICE
HON'BLE MR. JUSTICE NAVIN CHAWLA
ORDER
% 22.03.2022 CM APPL. 50942/2019 (Condonation of Delay) By this application, the appellant seeks condonation of delay of 58 days in filing the present appeal. The reasons assigned by the appellant for the said delay is that the appellant/legal heir of late Shri Suresh T. Kilachand is based out of Mumbai and was suffering from chronic lumbago from August 2019 to October 2019. As part of his treatment, he was advised to undergo bed rest and was indisposed for about 60 days. In this regard, a Medical Certificate dated 30.10.2019 has been annexed with the application.
No reply to this application has been filed on record. Keeping in view the averments made in the application, we allow the same and condone the delay in filing the present appeal.
Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:25.03.2022 16:00:21FAO(OS) 239/2019 & CM APPL. 50941/2019
1. The present appeal is directed against the orders dated 18.07.2019 and 05.08.2019 passed by the learned Single Judge on the appellant's application under Order IX Rule 13 of the Code of Civil Procedure, 1908 (in short, 'CPC'), being I.A. No. 14605 of 2017, and I.A. No. 14606 of 2017 under Section 151 of the CPC seeking stay of the execution proceedings in respect of the ex-parte decree dated 10.09.2013 in CS(OS) 2220 of 2007, titled Mahendera Verma vs. Suresh T. Kilachand (since deceased).
2. The case of the appellant in the above applications was that he is one of the legal heirs of the deceased/defendant, namely late Shri Suresh T Kilachand. On the demise of the original defendant in the suit, the respondent/plaintiff moved I.A. No. 2840 of 2012 under Order XXII Rule 3 of the CPC for the substitution of the Legal Representatives (in short, 'LRs') of the defendant in the suit. On the said application, notice was issued to the LRs, including the appellant. The appellant was arrayed as LR no. (a).
3. On 07.05.2012, the learned Joint Registrar noted that steps were taken to serve the LRs, however, the report qua LR nos. (a) and (b) was still awaited. As regards to the LR nos. (c) and (d), summons had been received back un-served with the report of 'left address‟. The learned counsel for the plaintiff in the suit further stated that the LRs were residing at the given address and the fresh address, if any, would be placed on record before the next date of hearing. The plaintiff was given the liberty to summon the LRs at the fresh address as well on taking steps within four weeks from the date of the said order. Notice of the application was issued afresh returnable on 29.08.2012.
Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:25.03.2022 16:00:214. On 29.08.2012, the learned Joint Registrar noticed that the process fee was not filed by the plaintiff/respondent after removing the objections. The learned counsel for the plaintiff in the suit submitted that since steps were taken earlier also, he has preferred an application for substituted service of the LRs of the deceased defendant in the suit under Order V Rule 20 of the CPC, however, that application was not on record on that date.
5. On 31.08.2012, I.A. No. 15907 of 2012 for substituted service under Order V Rule 20 of the CPC filed by the plaintiff was listed before the learned Joint Registrar. Notice was directed to be served upon two of the LRs, namely, Shri Ajay Suresh Kilachand and Smt. Leela Kilachand, who were arrayed as LR nos. (c) and (d), by means of publication in 'The Statesman' in Delhi and Mumbai, returnable for 23.11.2012. Pertinently, substituted service was not directed against the LR nos. (a) and (b), which included the appellant. The submission of the learned counsel for the appellant is that this was so as there was no report of service on the earlier endeavor to serve the appellant, that is, LR no. (a), and the service report was still awaited.
6. On 23.11.2022, the learned Joint Registrar noticed that publication had been affected qua Shri Ajay Suresh Kilachand and Smt. Leela Kilachand in 'The Statesman' and 'Nav Shakti', Mumbai, both editions dated 02.10.2012 and that despite the substituted service, there was no appearance on behalf of the said LRs. Consequently, their right to file reply or oppose the said application was closed. The learned Joint Registrar, however, went on to observe that while passing the order dated 31.08.2012, the Court fell into error by not directing the publication against all the LRs of the deceased/defendant in the suit. The learned Joint Registrar, therefore, Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:25.03.2022 16:00:21 proceeded to direct substituted service of LR nos. (a) and (b) by means of publication in 'Nav Shakti‟, Mumbai. The submission of the appellant is that the learned Joint Registrar on the said date failed to recall the reason for not directing the substituted service of LR nos. (a) and (b) on 31.08.2012, which was, that there was no report on the ordinary notice/summons issued to them.
7. The learned counsel for the appellant further submits that 'Nav Shakti' is a Marathi daily published in Mumbai and the appellant was not aware of the said publication.
8. A further submission of the appellant is that the address of the appellant furnished by the respondent in the application under Order XXII Rule 3 of the CPC was incorrect. He submits that after passing of the ex parte decree, when the respondent preferred the execution of the same, the respondent provided the correct address of the appellant which was 10th Floor, Darabshaw Lane, Opposite Axis Bank, Mukesh Chowk, Nepean Sea Road, Mumbai - 400026, whereas the address provided in the application under Order XXII Rule 3 of the CPC was 95, Nepean Sea Road, Mumbai. The learned counsel for the appellant submits that the respondent/plaintiff was all along aware of the correct address of the appellant but chose to disclose the address of the appellant as 95, Nepean Sea Road, Mumbai, where the LR(a) was not residing.
9. The learned counsel for the appellant has also drawn our attention to the impugned order dated 18.07.2019 to submit that while dealing with the application under Order IX Rule 13 of the CPC, the learned Single Judge has proceeded to examine the merits of the respondent/plaintiff's claim and the defence set up by the deceased-defendant in his written statement, and Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:25.03.2022 16:00:21 after noticing the merits, proceeded to adjourn the matter to 05.08.2019 to explore whether there are any elements of settlement which are necessary for reference to mediation. On 05.08.2019, as no settlement had been reached between the parties, the application under Order IX Rule 13 of the CPC was 'disposed of' with the clarification that it will be open to Shri Uday Kilachand, the appellant herein, to, in the execution of the decree, if any sought against him, take the plea of having not inherited any estate from the deceased-defendant to be liable under the decree. Thus, there was no examination of the aspect as to whether the appellant stood served as LR no.(a) of the deceased-defendant with the notice/summons issued by the Court.
10. In the aforesaid circumstances, the submission of the learned counsel for the appellant is that the impugned orders are liable to be set aside.
11. He further submits that even on the merits, the learned Single Judge has not examined the defence taken by the deceased-defendant in the written statement, which was to the effect that under the oral agreement to sell, the respondent/plaintiff was obliged to make part payment which had not been made in time and therefore, the defendant had to enter into distress sale of the property in question at a loss and was therefore entitled to adjustment of Rs. 20,00,000/- (Rupees twenty lakh only) paid by the respondent/plaintiff.
12. On the other hand, the learned counsel for the respondent/plaintiff submits that the appellant had been served through substituted service by publication in the Marathi daily „Nav Shakti‟. She submits that the appellant has not been able to show „sufficient cause‟ for his non-appearance and is, therefore, not entitled to any relief.
Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:25.03.2022 16:00:2113. We have considered the submissions made by the learned counsels for the parties.
14. The respondent/plaintiff, in his application under Order XXII Rule 3 of the CPC, had given the following address for the LR(a)- Uday Suresh Kilachand:
" resident of 95, Nepean Sea Road, Mumbai".
15. In the Execution petition, however, the respondent/plaintiff had given the following address for the appellant:
"Orbit Arya, 10th Floor, Darabshah Lane, Opposite Axis Bank, Mukesh Chowk, Mumbai-400006'.
16. The respondent/plaintiff has not been able to explain when and how the respondent became aware of the new address of the appellant. The appellant has contended that the appellant did not reside at the earlier given address and therefore, had no knowledge of the application filed by the respondent/plaintiff under Order XXII Rule 3 of CPC.
17. We further note that the process adopted by the learned Joint Registrar for recording satisfaction of service of summons/notices on the appellant is flawed. The order dated 07.05.2012 passed by the learned Joint Registrar records as under:
"Steps were taken. However, the report qua the LR nos. (a) & (b) is still awaited. As regards the LR nos.(c) & (d), summons have been received back unserved with the report of left address. Counsel for plaintiff submits that as per his information, the LRs are residing at the said address and fresh address, if any, would be placed on record before, the next date.
Plaintiff would be at liberty to summon the LRs at the fresh addresses as well on taking steps within four weeks from today.
Notice of the IA be served afresh upon LRs of deceased defendant on plaintiff taking steps within a Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:25.03.2022 16:00:21 week from today, returnable for 29th August, 2012."
18. A reading of the above order would show that the service report qua the appellant, being LR no. (a), was awaited. It was only with respect to the LR nos. (c) and (d) that the summons had been received back unserved with the report 'left address‟. A fresh notice was therefore directed to be issued to the LR's of the deceased defendant in the suit.
19. On 29.08.2012, the learned Joint Registrar passed the following order:
" PF was not being filed after removal of
objections.
Counsel for the plaintiff submits that since
steps were taken earlier also, they preferred an application under Order 5 Rule 20 CPC.
The application is yet not on record.
List the matter on 14"' September, 2012 for further proceedings."
20. Clearly, no steps had been taken by the respondent/plaintiff to the effect service of fresh notice on the appellant/LR no. (a), as the process fee had not been filed after the removal of objections.
21. On 31.08.2012, the learned Joint Registrar passed an order directing notice of the application to be served on LR nos. (c) and (d), namely Sh. Ajay Suresh Kilachand and Smt. Leena Kilachand, by means of publication. For appellant/LR no. (a), no order for substituted service was passed presumably because till that date, there was no material before the learned Joint Registrar to record a satisfaction that the appellant/LR no. (a) is keeping out of the way for the purpose of avoiding service or that the summons cannot be served upon him in the ordinary way.
22. On 23.11.2012, however, the learned Joint Registrar passed the following order:
Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:25.03.2022 16:00:21"Publication has been effected qua Mr. Ajay Kilachand and Smt. Leena Kilachand in Statesman and 'Nav Shakti', Mumbai, both edition dated 02.10.2012. However, no one has come present on behalf of said despite waiting till 4.00 p.m. The right of the said LRs to oppose the IA or to file any reply stands closed.
It transpires that while passing the order dated 31.08,2012, this court fell into error by not directing the publication against all the LRs of deceased defendant.
Learned counsel for the plaintiff has pointed out that by means of application' under Order 5 Rule 20 CPC, two of the LRs of the deceased defendant were sought to be served, however, as their names were not mentioned in the order dated 31.08.2012, the publication could not be effected in respect of remaining of the LRs.
Learned counsel for the plaintiff seeks liberty to serve the remaining LRs by means of publication in the local newspaper.
Plaintiff would be at liberty to serve the unserved LRs namely Uday Suresh Kilachand and Mr. Sanjay Suresh Kilachand by means of publication in 'Nav Shakti', Mumbai, on steps being taken within two weeks from today.
Summons, as well, be routed through Ld. District Judge, Mumbai.
List this matter for completion of service on
23.01.2013."
23. A reading of the above order would show that the learned Joint Registrar considered it to be an error in the order dated 31.08.2012 not to have directed substituted service of appellant/LR no. (a). This itself is an error committed by the learned Joint Registrar as he seems to have lost track of the fact that till that date, there was no material before him to record a satisfaction that the appellant/LR no. (a) is keeping out of the way for the purpose of avoiding service or that the summons cannot be served in the ordinary way on him. In fact, even on 23.11.2012 no such satisfaction is Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:25.03.2022 16:00:21 recorded by the learned Joint Registrar.
24. Order V Rule 20 of the CPC reads as under:
"20. Substituted service.--(1) Where the Court is satisfied that there is reason to believe that the defendant is keeping out of the way for the purpose of avoiding service, or that for any other reason the summons cannot be served in the ordinary way, the Court shall order the summons to be served by affixing a copy thereof in some conspicuous place in the Court-house, and also upon some conspicuous part of the house (if any) in which the defendant is known to have last resided or carried on business or personally worked for gain, or in such other manner as the Court thinks fit.
(1A) Where the Court acting under sub-rule (1) orders service by an advertisement in a newspaper, the newspaper shall be a daily newspaper circulating in the locality in which the defendant is last known to have actually and voluntarily resided, carried on business or personally worked for gain.
(2) Effect of substituted service.--Service substituted by order of the Court shall be as effectual as if it has been made on the defendant personally.
(3) Where service substituted, time for appearance to be fixed.--Where service is substituted by order of the Court, the Court shall fix such time for the appearance of the defendant as the case may require."
25. A reading of the above provision would clearly show that before directing substituted service, the Court has to record satisfaction that there are reasons to believe that the defendant is keeping out of the way for the purpose of avoiding service, or that for any other reason summons cannot be served on the defendant in the ordinary way. The Supreme Court in its judgment dated 29.01.2018 passed in Civil Appeal No.71 of 2018, titled M/s Neerja Realtors Pvt Ltd. V. Janglu (Dead) thr. LR, has held that substituted service is an exception to the normal mode of service; the Court must apply Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:25.03.2022 16:00:21 its mind to the requirement of Order V Rule 20 of the CPC and its order must indicate due consideration of the provisions contained in it, in absence whereof, the ex-parte judgment and order in the suit would be liable to be set aside.
26. In the present case as well, the learned Joint Registrar has clearly erred in directing the service of notice on the application under Order XXII Rule 3 of the CPC on the appellant/LR no. (a) without recording his satisfaction on the pre-requisite as set out under Order V Rule 20 of the CPC. This being the position, no benefit of such presumed service can be given to the respondent/plaintiff nor it can be used to deny an opportunity to the appellant to defend the suit on merit.
27. In view of the above, in our opinion, the appellant had been able to make out sufficient cause for his non-appearance in the suit as the summons were not duly served upon him and consequently, the ex-parte decree dated 10.09.2013 is liable to be set aside.
28. We may further note that the learned Single Judge in the impugned order dated 18.07.2019, instead of applying the principles applicable to an application under Order IX Rule 13 of the CPC, has proceeded to consider the suit on merits. The learned Single Judge inter-alia observed that as the original defendant had not taken a defence of having suffered a loss on account of alleged breach of the Agreement of Sale of immovable property, the plaintiff in the suit would be entitled to a decree of refund of the earnest money deposited by him with the defendant under the said Agreement of Sale.
29. The learned counsel for the appellant has, however, drawn our attention to paragraph 11 of the reply on merits in the written statement filed Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:25.03.2022 16:00:21 by the original defendant, which reads as under:
"11) It is further submitted that as the Plaintiff defaulted in paying the assured amount of earnest / advance money by February end 2007 and further failed to come forward and offer the remaining sale amount by May 06, 2007, the defendant who was in urgent need of money went for a distress sale that fetched him an amount of Rs.3,25,00,000 (Rupees Three Crores & Twenty Five Lakhs) only and in the process suffered a loss of Rs.75,00,000/- (Rupees Seventy Five Lakhs). After deducting Rs. 20,00,000/-
correctly forfeited by the defendant, the net loss suffered by the defendant amounted to Rs. 55,00,000/- (Rupees Fifty Five Lakhs) which the Plaintiff is bound to pay to the defendant with interest @ 18% p.a. thereon calculated on Rs. 30,00,000/-(Rupees Thirty Lakhs) from March 1, 2007 to May 06, 2007, and on Rs. 55,00,000/- (Rupees Fifty Five Lakhs) from May 7, 2007."
30. Clearly therefore, the original defendant had also contended in the written statement that he had suffered a loss due to the alleged breach of the Agreement of Sale by the plaintiff in the suit. The observation of the learned Single Judge on this aspect, therefore, does not appear to be correct. In any case, as we have set aside the ex-parte decree and restored the suit, any observation made by the learned Single Judge in the impugned orders dated 18.07.2019 and/or 05.08.2019 would not bind the Court hearing the suit on merits.
31. In view of the above, the impugned orders 18.07.2019 and 05.08.2019 are set aside. Consequently, the ex-parte decree dated 10.09.2013 in CS(OS) 2220 of 2007 is set aside and the suit is restored back to its original number. The same is directed to be listed before the learned Joint Registrar on 18th May, 2022 for further proceedings.
Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:25.03.2022 16:00:2132. There shall be no order as to cost.
VIPIN SANGHI, ACJ NAVIN CHAWLA, J MARCH 22, 2022/rv/Arya/AB Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:25.03.2022 16:00:21