Dena Bank vs Refrigeration & Airconditioning ...
2000 Latest Caselaw 836 Del

ORDER

S.K. Agarwal, J.

1. This is an application by the plaintiff/bank praying that the defend- ant No.1 - partnership firm may be deemed to have been served on the grounds that the summons were duly served on the partners of the firm (defendants 2 and 3) who have been proceeded ex parts. Defendant Nos. 4 and 5 (the contesting defendants) have filed a reply opposing the application.

2. Brief facts are: the plaintiff bank filed the suit for recovery of Rs. 5,93,083.13/-, along with pendente lite and future interest against the defendant No.1 - a partnership firm, defendant Nos. 2 and 3 (partners of defendant, No.1) and defendant Nos. 4 and 5 legal representatives of the deceased Smt. Satta Banerjee who was a partner of defendant No.1 and also the guarantor. On 29th January, 1997 summons/notices were issued for serv- ice upon defendants by ordinary process as well as by registered AD post. On the same day local commissioner was appointed with the directions to proceed to the Factory premises and office of the defendant No.1 and to prepare the inventory of the goods lying therein. The local commissioner along with an official of the bank reached the site but both the factory and office premises were found locked. Defendant No. 5 (Abhishek Banerji) was found at B-7, Kailash Colony, New Delhi (the registered office of the firm) informed the Local Commissioner that keys of the office of the firm was not with him. Thus the commission could not be executed. On 17th March, 1997 local commissioner was authorised to break open the locks of the factory and office premises of the firm, if the defendants do not co-oper- ate, and to prepare the inventory of the goods lying there, after due notice to the parties. Consequently, on 28.3.1997 local commissioner along with officer of the plaintiff bank reached the site and Mr. S Banerji (defendant No. 2) and Mr. S Sikdar (defendant no.3), partners of defendant no.1 were present at the time of executing the commission. Inventories of goods lying at factory as well as at the office premises were prepared. The proceedings were duly signed by the defendant Nos. 2 and 3. After receipt of the local commissioner's report, on 26th May, 1997 defendant Nos. 2 and 3 were restrained from removing the goods of the partnership lying at the factory premises and at the office. Even thereafter defendants 2 and 3 did not appear in the court to contest the proceedings. Fresh summons/notice for service on had to be issued. Ultimately, defendants 2 and 3 were served for 19th March, 1998. They appeared through Advocate who sought time to file the written statement and reply. Four weeks' time was granted. The matter was ordered to be listed for hearing on 15.7.98. The registered envelope sent at the registered office of the firm (defendant no.1) at B-7, Kailash Colony, New Delhi were returned unserved with the postal endorse- ment "office closed". None was present on behalf of defendant nos. 2 and 3 on 15.7.1998 and the matter was renotified for 19.8.1998, again nobody appeared on their behalf therefore, they were proceeded ex-parte.

3. Fresh summons/notices were sent for service on defendant no.1 on number of dates. However, the same were returned unserved. The plaintiff has now filed the above application praying that defendant No.1 may be deemed to be served. The contesting defendants 4 and 5 have filed the reply opposing this application.

4. I have heard the learned counsel for the parties and have been taken through the record.

5. Learned counsel for the contesting defendants 4 and 5 has argued that service of summons on defendant No.1 as required by rule 3 of order 30 of the Code of Civil Procedure (for short CPC) has so far not been effected; that defendants 2 and 3 are deliberately not appearing and that defendant No.2 is carrying on business from his residence and that service of summons on defendant No.1, should be effected at the address of defendant No. 2 at Faridabad.

6. In order to appreciate rival contentions Rule 3 of order 30, CPC reproduced below which 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 services shall be deemed good 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 dis- solved 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.

7. Order 30 deals with suits against firms and against the persons carry- ing on business in the names other than their own. Rule 3 provides the mode of service where the persons are sued as partners in the name of their firm. It envisages that in such a case the service of summons on the firm can be made upon any one or more of the partners or at the principal place at which the partnership business is carried on. It specifically states such a service "shall be deemed to be a good service upon the firm so sued". In this case, in addition to the defendant No.1/firm, its partners have also been imp leaded as parties to the suit. They were present when the local commissioner visited the office/factory premises to prepare invento- ry. They signed inventory memos. They did not appear in the court on the date fixed. They had to be served again. They appeared through their Advo- cate, sought time to file the written statement. Thereafter, they did not file any written statement and were proceeded ex-parte. Summons sent at the registered office of the firm were returned with remark "office closed". Thus suit is not in the name of the firm alone, its partners have also been imp leaded as parties. They were duly served. They have chosen not to con- test the proceedings.

8. In Topanmal Chhotamal Vs. M/s. Kundomal Gangaram & Ors., , the Supreme Court on examination of Order 21 rule 50(1) and Order 30 rule 3 summed up the law on the subject and held as follows:-

"The gist of the said provisions may be stated thus; A decree against a firm can be executed: (i) against the property of the partnership, (ii) against any person who has appeared in the suit individually in his own name and has been served with a notice under Rule 6 or 7 of Order XXX of CPC, (iii) against a person who has admitted on the pleadings that he is or has been adjudged a partner, or (iv) against any person who has been served with notice individually as a partner but has failed to appear. The decree against the firm can be executed against the personal property of such persons."

The Supreme Court in Gajendra Narain Singh Vs. Johrimal Prahlad Rai observed that where a defendant is served as partner and he appears without protest, his appearance must deemed to be on behalf of the firm. It was held:-

"Where a person is served with summons as a partner of the de- fendant firm and he files an appearance without protest, his appearance must be deemed to be on behalf of the firm. And unless the Court permits him to withdraw the appearance initially filed, it continues to be an appearance under Rule. 6 of Order. 30 on behalf of the firm."

9. It bears repetition that summons sent by registered post for service on defendant no.1 at the given address were returned with the remark "office locked". Defendants 2 and 3 were duly served under Rule 6 Order 30 as partners of the firm. Initially when the local commissioner was appoint- ed to prepare the inventories, the factory and the office premises of the firm were found locked and the commission could not be executed. Subse- quently, when local commissioner was authorised to break open the locks defendant 2 and 3 participated in the proceedings and signed the invento- ries. Thereafter they were represented by a lawyer in the Court who took time to file the written statement. Defendants 2 and 3 were served as partners of the firm-defendant No.1. If they are avoiding to contest the proceedings, it is their choice.

10. Learned counsel for contesting defendant in support of her arguments had placed reliance on M/s. Sitaram Ramavtar Vs. M/s. Lohiya Murlidhar Meghraj, , M/s. Ganeshilal Ramkumar and Anr. Vs. Jhangiram Lilaram, and Kewalchand and Anr, Vs. Satyana- rain and Anr. . The observations made in these cases are not applicable to facts of the present case.

11. For the foregoing reasons application is allowed; defendant No.1/firm would be deemed to have been duly served. No fresh summons need be issued for service on the firm. IA stands disposed of.