Madhya Pradesh High Court
Royal Infra Power Corporation Through ... vs Vats Realtech Pvt. Limited Through ... on 13 May, 2025
Author: Pranay Verma
Bench: Pranay Verma
NEUTRAL CITATION NO. 2025:MPHC-IND:12578
1 CR-1164-2024
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE PRANAY VERMA
CIVIL REVISION No. 1164 of 2024
ROYAL INFRA POWER CORPORATION THROUGH HARUN ALI
Versus
VATS REALTECH PVT. LIMITED THROUGH DIRECTOR SMT.
ARCHANA SHARMA
Appearance:
Shri Naushad Ahmed Khan - Advocate with Shri Tanishq Patel,
Advocate for the petitioner.
Shri Rishi Tiwari, Advocate for the respondent.
Reserved on :- 21.01.2025
Pronounced on :- 13.05.2025
____________________________________________________________________________
ORDER
This civil revision under Section 115 of the CPC has been preferred by
the plaintiff / petitioner being aggrieved by the order dated 29.08.2024
passed by the trial Court whereby application under Order 9 Rule 13 of the
CPC preferred by the defendant/respondent has been allowed.
02. The plaintiff had instituted an action against the defendant for
recovery of a sum of Rs.4,40,82,763/-. By order dated 16.03.2023, the trial
Court had proceeded ex-parte against the defendant and eventually by
judgment and decree dated 23.08.2023, the plaintiff's claim was decreed.
03. Thereafter, the defendant filed an application on 21.09.2023 under
Order 9 Rule 13 of the CPC for setting aside the ex-parte judgment and
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decree contending that the plaintiff was aware of his registered address but
did not mention the same in the plaint and instead mentioned the temporary
address of Indore which has been closed down quite a while back. The
summons issued on the said address was returned back unserved after which
the plaintiff got a publication made in the newspaper on the basis of which
he was proceeded against ex-parte. No notice was issued to the defendant by
registered post acknowledgement due. Under Order 5 Rule 20 of the CPC
straightaway substituted service of summons could not have been directed
without exhausting the other modes of service. The plaintiff has played fraud
upon the Court by not mentioning the correct address of the defendant and
by getting service effected upon an incorrect address and getting ex-parte
decree in his favour.
04. The application was contested by the plaintiff by filing his reply
submitting that defendant was always aware of the proceedings of the suit.
Summons of the suit was served upon the address of the defendant. He was
served by way of publication but deliberately did not appear before the
Court. The provisions of Order 5 Rule 17 and 20 of the CPC have been duly
complied with by making publication in the daily newspaper. Not only was
the publication made in Indore but was made in National Newspaper of
Ghaziabad and Meerut also. He was hence rightly proceeded against ex-parte
by the trial Court and the ex-parte decree was passed.
05. By the impugned order, the trial Court has held that summons of
the suit were duly served upon the defendant by way of publication made in
daily newspaper at Indore and in Times of India, Delhi hence it cannot be
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held that the defendant was not served. He has failed to show that he was
prevented by sufficient cause from appearing before the Court on
16.03.2023. However, in the facts of the case, it would be proper to afford
the defendant opportunity of hearing and to comply with the principles of
natural justice and to decide the suit on merits. In consequence, the
application under Order 9 Rule 13 of the CPC preferred by the defendant has
been allowed and the ex-parte judgment and decree dated 23.08.2023 has
been set aside.
06. Learned counsel for the plaintiff has submitted that the trial Court
had itself held that the defendant has failed to show that he was prevented by
sufficient cause from appearing before the Court but has illegally set aside
the ex-parte judgment and decree solely on the ground that the dispute
between the parties deserves to be decided on merits. Once it held that
summons were served upon the defendant, it had no jurisdiction to set aside
the ex-parte judgment and decree. Since it was held that the defendant has
not shown sufficient cause for his non-appearance, the application could not
have been allowed. Reliance has been placed by him on the decisions of the
Apex Court in M.P. Industries Ltd. Vs. Union of India and Others, AIR
1966 SC 671, G.P. Srivastava Vs. R.K. Raizada and Others 2000 (3) SCC
54, Parimal Vs. Veena Alias Bharti 2011 (3) SCC 545, Basawaraj and
Another Vs. Special Land Acquisition Officer 2013 (14) SCC 81, Vijay
Singh Vs. Shanti Devi and Another 2017 (8) SCC 837 , Subodh Kumar Vs.
Shamim Ahmed 2021 (15) SCC 105 and of the Delhi High Court in New
Bank of India Vs. Marvels (India) 2001 SCC online DEL 523 and Hira
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Sweets and Confectionary Pvt. Ltd. and Others Vs. Hira Confectioners 2021
SCC online DEL 1823.
07. Per contra, learned counsel for the defendant has submitted that the
trial Court though has rightly allowed the application under Order 9 Rule 13
of the CPC preferred by the defendant on the ground of providing
opportunity to him to contest the case in which there is no illegality since it
was within the jurisdiction of the trial Court which ought not to be interfered
with in a Civil Revision under Section 115 of the CPC but has further
submitted that the finding of the trial Court that the defendant has not shown
sufficient cause for his non-appearance itself is illegal hence the impugned
order does not deserve to be interfered with. Summons were issued to the
defendant at his address at Indore which were returned unserved with the
note that his company is no longer functioning from the said address.
Thereafter, without resorting to the other modes of service as provided under
Order 5 Rule 17 of the CPC, the trial Court had straightaway directed for
publication to be made in the newspapers. Such a course was wholly
impermissible but was adopted by the trial Court. In absence of compliance
with the mandatory provisions, the order of the trial Court proceeding ex-
parte against the defendant is vitiated on which ground itself the application
under Order 9 Rule 13 of the CPC preferred by the defendant deserves to be
allowed. Reliance has been placed on the decision of the Apex Court in Mrs.
Payal Ashok Kumar Jindal Vs. Captain Ashok Kumar Jindal 1992 (3) SCC
116, S.P. Chengalvaraya Naidu (Dead) By LRs. Vs. Jagannath (Dead) by
LRs. and Others 1994 (1) SCC 1, Raj Kishore Pandey Vs. State of U.P. and
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Others 2009 (2) SCC 692, Neerja Realtors Pvt. Ltd. Vs. Janglu (Dead)
through Legal Representative 2018 (2) SCC 649, Robin Thapa Vs. Rohit
Dora 2019 (7) SCC 359, Aviation Travels (P) Ltd. Vs. Bhavesha Suresh
Goradia and Others 2020 (4) SCC 680 and of this Court in Sohanlal Vs.
Manju 2010 (3) MPLJ 586, Gajraj Singh Vs. Heera Singh and Others 2023
(2) MPLJ 649 and order dated 29.11.2018 passed in M.A. No.2911 of 2010
(M/s. Indore Holding Pvt. Ltd. and Others Vs. Chimanlal and Others).
08. I have heard the learned counsel for the parties and have perused
the record.
09. Before considering the question as to whether the trial Court could
have set aside the ex-parte judgment and decree on the ground of providing
opportunity of hearing to the defendant and for complying with the
principles of natural justice upon payment of cost, it would be appropriate to
examine whether summons of the suit were duly served upon the defendant.
It is not in dispute between the parties that on the first occasion, summons
were issued to the defendant at his local address at Indore which were
returned unserved with the note that his company is no longer functioning
from the said address. Upon receiving the said summons, the trial Court on a
prayer having been made by the plaintiff in that regard directed for service of
summons upon the defendant by way of publication in newspapers at Indore
as well as New Delhi. It is hence required to be considered whether the same
was compliance with the provisions of Order 5 Rule 17 of the CPC which
are mandatory in nature. For ready reference, Order 5 Rule 17 of the CPC is
reproduced below:-
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"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 1[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 in whose presence the copy was
affixed."
10. Substituted service of summons can be directed under Order 5
Rule 20 of the CPC upon fulfillment of the necessary conditions as stated
therein. Order 5 Rule 20 of the CPC is 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 had 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."
11. Under the aforesaid provisions for ordering substituted service the
Court is required to be satisfied that there is reason to believe that defendant
is keeping out of the way for purpose of avoiding service or for any other
reason, summons cannot be served in ordinary way. While making that
order, Court has to apply its mind to requirements under Order 5 Rule 20 of
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the CPC and indicate in its order due consideration of provisions contained
therein. The Court has to record that the procedure under Order 5 Rule 17 of
CPC has been followed i.e. where the defendant is not found at address
mentioned in summons, serving officer has affixed summons on a
conspicuous part of the house. This has been held in Neerja Realtors Private
Limited (Supra) as under:-
"9. The High Court by its judgment dated 7-7-2015 [Janglu v. Neeraj
Realtors (P) Ltd., 2015 SCC OnLine Bom 6104] held that neither the report of
the bailiff nor the order of the trial court indicate that a copy of the summons
was affixed in a conspicuous place on the court house and at the house where
the defendant was known to have last resided. The High Court held that there
was a breach of the provisions of Order 5 Rule 20(1) CPC. The High Court
observed that the order of the trial court permitting substituted service was
cryptic and that the Court had not recorded its satisfaction that the defendant
was keeping out of the way to avoid service or that the summons could not be
served in the ordinary manner for any other reason. Moreover, the serving
officer had not followed the procedure stipulated in Order 5 Rule 17 where the
defendant was not found to reside at the place where he was last residing. The
Court noted that besides the service to be effected through the bailiff, the
summons were not sent to the defendant at the address furnished by the
plaintiff by registered post, with acknowledgment due. The High Court also
found that the trial Judge had ignored the provisions of Chapter III of the Civil
Manual issued by the High Court on the appellate side for guidance of the civil
courts and officers subordinate to it.
14. Evidently as the report of the bailiff indicates, he was unable to find the
defendant at the address which was mentioned in the summons. The report of
the bailiff does not indicate that the summons were affixed on a conspicuous
part of the house, at the address mentioned in the summons. There was a
breach of the provisions of Order 5 Rule 17. When the application for
substituted service was filed before the trial court under Order 5 Rule 20, a
cryptic order was passed on 2-9-2011. Order 5 Rule 20 requires the court to be
satisfied either 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. Substituted service is an
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exception to the normal mode of service. The Court must apply its mind to the
requirements of Order 5 Rule 20 and its order must indicate due consideration
of the provisions contained in it. Evidently the trial court failed to apply its
mind to the requirements of Order 5 Rule 20 and passed a mechanical order.
*-*-*
15. The submission that under Order 5 Rule 20, it was not necessary to
affix a copy of the summons at the court house and at the house where the
defendant is known to have last resided, once the court had directed service by
publication in the newspaper really begs the question. There was a clear breach
of the procedure prescribed in Order 5 Rule 17 even antecedent thereto.
Besides, the order of the Court does not indicate due application of mind to the
requirement of the satisfaction prescribed in the provision. The High Court
was, in these circumstances, justified in coming to the conclusion that the ex
parte judgment and order in the suit for specific performance was liable to be
set aside."
12. In Gajraj Singh (Supra) this Court has held that if process server
has not tried to affix notice as provided under Order 5 Rule 17 of CPC, it
should be deemed to be an illegality. It was held as under:-
"10. On due consideration of submissions and on perusal of the record, testing
the facts of the case on hand on the anvil of the aforesaid dictum of the Supreme
Court, this Court finds that so far as the service of notice on the defendant Nos. 3
and 4 is concerned, admittedly, the process server has tried to serve them through
Ex. D/7 and D/9, which clearly reveal that process server has not tried to affix the
notice as provided under Order 5, Rule 17 of CPC, which cannot be said to be an
irregularity, and in fact, it should be deemed to be an illegality, and as has been held
by the Supreme Court that in the absence of affixture of notice, the service of
summons on the defendant should be treated as non-service, this Court is of the
opinion that learned Judge of the District Appellate Court has committed no
illegality or jurisdictional error in reversing the order passed by the Civil Judge and
remanding the matter back, and thus, no interference is called for."
13. In the present case also, summons were issued to the defendant by
ordinary mode, which were returned with the note that he has shifted his
business from the address stated therein. However, the copy of the summons
was not affixed upon conspicuous part of his premises where it was sought to
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be served. Upon receiving the summons, the trial Court did not issue notice
to the defendant by registered post acknowledgement due. On an application
having been filed by the plaintiff for substituted service by way of
publication in newspaper, it directed such service. It did not apply its mind
nor recorded any satisfaction that the defendant is keeping out of the way for
avoiding service or that summons cannot be served upon him in the ordinary
way. There has hence been total non-compliance with the provisions of
Order 5 Rule 17 and 20 of the CPC in which case it has to be held that
summons of the suit were not duly served upon the defendant hence there
were sufficient cause for his non-appearance on 16.03.2023 when he was
proceeded against ex-parte.
14. The trial Court has held that out of the disputed amount of
Rs.9,07,08,007/- the defendant has already paid a sum of Rs.5,06,59,316/- to
him and the balance amount is Rs.4,40,82,763/- which is about 50% of the
total amount. The agreement between the parties is not disputed. On that
consideration, it observed that it would be justifiable to grant opportunity to
the defendant to contest the matter on merits, subject to payment of cost
since ordinarily cases should be decided on merits of the matter and not by
default. This is a discretion exercised by the trial Court and it does not appear
that while exercising the same, it has travelled beyond its jurisdiction. The
discretion exercise by the trial Court is affirmed by the decision of the Apex
Court in Robin Thapa (Supra) in which it was held as under:-
"7. Ordinarily, a litigation is based on adjudication on the merits of the
contentions of the parties. Litigation should not be terminated by default, either of
the plaintiff or the defendant. The cause of justice does require that as far as
possible, adjudication be done on merits."
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15. In similar circumstances, the Apex Court in Aviation Travels
Private Ltd. (Supra) set aside the ex-parte decree holding as under:-
"14. Though various contentions have been raised as to whether the
appellant was served or not and entered appearance in the suit, we are not
inclined to go into the merits of the contentions. In our view, an opportunity
has to be given to the appellant for contesting the suit. It is because the suit
was filed for recovery of damages of Rs 1 crore and Respondent 1 claimed
interest @ 24% p.a. By the judgment dated 7-10-2003, the Court has directed
the appellant and Respondent 2 to pay a sum of Rs 77,02,500 and Rs
42,70,772.46, total amount payable under decree is Rs 1,20,03,282.96. The
Court also directed the payment of subsequent interest @ 6% p.a. on the said
amount of Rs 77,02,500 till date of realisation.
15. As pointed out earlier, the suit claim was for damages. The damages to
the property, if any, can be ascertained only after the parties adduce the oral
and documentary evidence. We have no reason to believe that the appellant
would have benefitted by deliberately not contesting the suit as they would in
any event be saddled with interest if their conduct was to drag and prolong the
suit. Considering the nature of the claim and other facts and circumstances and
in the interest of justice, we are of a view that an opportunity has to be given to
the appellant to contest the suit subject to terms. The appellant has also in that
regard shown its bona fides by depositing Rs 60,00,000 in compliance of the
order dated 18-2-2019. By the order dated 24-1-2020, we have also directed
the appellant to deposit further sum of Rs 35,00,000 for which the appellant
sought for some more time for compliance. Considering the request, two
months' further time is granted to the appellant for deposit of the said amount."
16. This Court also in Sohanlal (Supra) has taken similar view, which
is as under:-
"10. Although the principles of natural justice could not be pressed into service at the
first instance, while adjudicating the controversy, at the touchstone of statutory provisions
of the Code of Civil Procedure, however in some of the judgments of the Supreme Court,
it has been observed that all the Courts would be having power to set aside an ex parte
order on the ground of failure of I principle of natural justice and since in the present
matter, the wife had been proceeded ex parte right from the inceptive stage of the divorce
proceedings, it could be gathered from the facts of the case that the principle of natural
justice of audi alteram partem would be violated, in case the wife is not afforded an
opportunity of hearing. Although the Legislature has not envisioned utilization of power of
setting aside an ex-parte Order under Order 9 of the Code of Civil Procedure, by applying
the principle of natural justice, however a judgment of the Supreme Court reported as
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(2003) 1 SCC 557, Canara Bank v. Debasis Das provides useful observation about the
concept of natural justice and its application to a variety of litigation and this dictum of the
Supreme Court would be beneficial for the purposes of adjudication of such matters,
where the application of the principle of natural justice would facilitate meeting the ends
of justice. The relevant paragraph 19 of this judgment of the Supreme Court is quoted
hereinbelow:
19. Concept of natural justice has undergone a great deal of change in recent years.
Rules of natural justice are not rules embodied always expressly in a statute or in
rules framed thereunder. They may be implied from the nature of the duty to be
performed under a statute, What particular rule of natural justice should be implied
and what its context should be in a given case must depend to a great extent on the
facts and circumstances of that case, the framework of the statute under which the
enquiry is held. The old distinction between a judicial act and an administrative act
has withered away. Even an administrative order which involves civil
consequences must be consistent with the rules of natural justice. The expression
"civil consequences" encompasses infraction of not merely property or personal
rights but of civil liberties, material deprivations and non-pecuniary damages. In its
wide umbrella comes everything that affects a citizen in his civil life."
17. Thus, it is apparent that summons of the suit were not served upon
the defendant as per the mandatory provisions of Order 5 Rule 17 and 20 of
the CPC hence the trial Court had illegally proceeded against him ex-parte
and had passed the ex-parte judgment and decree against him. Even
otherwise the trial Court has rightly exercised its discretion in setting aside
the ex-parte decree in view of the disputes involved between the parties and
by imposition of cost. It cannot be said that in passing the impugned order,
the trial Court has committed any illegality.
18. Thus, in view of the aforesaid discussion, the impugned order
dated 29.08.2024 passed by the trial Court is hereby affirmed as a result of
which the revision is dismissed. No costs.
(PRANAY VERMA)
JUDGE
Shilpa
