Jaipur vs M/s Sound Track India Pvt. Ltd. E-Jaitpura Industrial Area,

Judgment

1. M/s Sound Track India Pvt. Ltd. E-Jaitpura Industrial Area, Jaipur, Office C-39, Madhav Niwas, Lajpat Marg, C- Scheme, Jaipur

2. Sh. Nawal Kishore Parwal S/o Sh. B.d. Parwal, R/o S-3, Parwal Chambers, Todarmal Marg, Banipark, Jaipur

3. Sh. Sunil Kumar Kedia S/o Sh. O.p. Kedia, R/o C-3A/1A Sawai Jai Singh Highway Jaipur ----Respondents For Petitioner(s) : Mr. Ankit Totuka For Respondent(s) : Mr. Vivek Dangi & Mr. Sundaram Sharma for Ms. Suruchi Kasliwal HON'BLE MR. JUSTICE ASHOK KUMAR JAIN 22/01/2025 Order

1. Instant S.B. Civil Revision Petition is preferred by petitioner applicant aggrieved from order dated 12.05.2016 in civil misc. application no. 29/2012 under Order IX Rule 13 read with Section 151 CPC whereby an application filed by respondent no. 3 Sunil Kumar Kedia to set aside an ex-parte judgment and award dated

15.09.2011 in suit no. 248/2007 was allowed and judgment and decree was set aside.

Learned counsel for petitioner while relying upon judgment in case of Sunil Podar & Ors. Vs. Union Bank of India [2025:RJ-JP:3737] (2 of 14) [CR-110/2016] MANU/SC/0322/2008 submitted that respondent no. 3 was aware about proceeding instituted by them but deliberately avoided to appear before the learned Additional District Judge (Fast Track) no.9, Jaipur Metropolitan, Jaipur in suit no. 248/2007. He referred the application filed by one Mr. Rajendra Prasad Parwal for settlement beween the respondents for dues against respondent no. 1 and its promoters and guarantors. He also referred the content of application dated 20.09.2011 and submitted that despite knowledge of award dated 15.09.2011 the respondent(s) instead of settling disputes has preferred to file an application under Order IX Rule 13 CPC and the trial court without going through the facts of the case has set aside award in a cursory and cryptic manner. He further referred the proceedings after institution of suit no. 248/2007 under Section 31 and 32 of the State Financial Corporation Act for recovery of dues against the respondents and submitted that several attempts were made for effecting service upon respondents but they avoided the service. He specifically referred the substituted service effected upon respondents and submitted that there was no irregularity or illegality in service method adopted by the trial court before passing a decree on 15.09.2011. At last, he submitted that the order dated 12.05.2016 is contrary to settled canons of law and passing an order without remand is contrary to legal provision.

3. Above contentions were opposed by learned counsel for respondent no.3 and he submitted that without following a procedure as prescribed under the law for effecting service upon respondent(s) an award was passed on 15.09.2011 and same was challenged by respondent no.3 and on the basis of his application [2025:RJ-JP:3737] (3 of 14) [CR-110/2016] the award was set aside. He also submitted that it is the discretion of the trial court to impose condition while setting aside ex-parte money decree under Order IX Rule 13 of CPC. He further referred Order IXX Rule 32 of General Rules (Civil), 2018 and submitted that the trial court is duty bound to comply with the mandate of law in a strict sense. He further referred judgments in cases of Neerja Realtors Private Limited Vs. Janglu (Dead) through LRs (2018) 2 SCC 649 and M/s. Mayur Crafts Pvt. Ltd. Vs. Shri Anil Kumar Bansal 2014 WLC (Raj.) UC 421 and submitted that without complying with the provision under Order V Rule 17 CPC, the trial court cannot pass an order for substituted service under Order V Rule 20 of CPC. He also referred judgment in cases of Harbhajan Singh & Anr. Vs. LRs of Gardhara Singh 2010 (4) WLC 100, Abbu Bakar & Anr. Vs. Deen Dayal & Anr. 2006 (4) WLC 494 and Shyam Lal & Ors. Vs. Ram Charan & Anr. 2001 (2) RLR 93, and submitted that without recording the reason and satisfaction about service in person, an order for substituted service is an illegal order and the trial court has committed serious error while passing the judgment and decree on the basis of substituted service. At last, he submitted that without compliance of the provision under Order V CPC, if any, decree has been passed then it is a nullity and the petitioner herein has failed to show that the compliance has been made by them.

4. Heard learned counsel for petitioner and respondent no.3. Also perused the entire record along with judgments, as referred by both the parties. [2025:RJ-JP:3737] (4 of 14) [CR-110/2016]

5. The facts giving rise to the instant revision petition are that the petitioner applicant has filed a recovery application under Section 31 and 32 of the State Financial Corporation Act, 1951 to recover sum of ₹56,54,884.68/- along with interest against the respondent(s). After noticing that respondents have avoided the service of summons, learned Additional District Judge (Fast Tract no.9), Jaipur Metropolitan, Jaipur has directed service of summons upon respondent through publication in a leading daily newspaper. In compliance of order the summons were served upon respondent(s) through publication in leading hindi daily (Rajasthan Patrika). After non-appearance of respondent(s) pursuant to service of notice through publication, an ex-parte proceeding was held and after recording evidence of PW-1 Mandeep Singh and PW-2 S. Z. Naqvi and also exhibiting documents Ex. 1 to Ex. 16 an ex-parte decree for recovery of ₹56,54,884.68/- with 6% interest was passed against the respondent(s) on 15.09.2011.

6. An application under Order IX Rule 13 CPC was filed by respondent no.3 Sunil Kumar Kedia under Order IX Rule 13 read with Section 151 CPC on 01.10.2011 in October, 2012. The petitioner herein has filed reply to the application and learned Additional District Judge no.17, Jaipur Metropolitan, Jaipur has allowed the application on 12.05.2016 and set aside the judgment and decree dated 15.09.2011, in toto. The order passed by the trial court on 12.05.2016 is reproduced as under: ifj.kkeLo:i izkFkhZ@izfroknh la[;k&3 lquhy dqekj dsfM;k }kjk izLrqr ;g izkFkZuki= Lohdkj fd;k tkrk gS vkSj ikfjr fu.kZ; o fMdzh fnukafdr 15-09-11 tks cmuoku Jherh jktLFkku LVsV b.MLVªh;y MoyiesUV cuke eSllZ lkm.M Vªsd o vU; izkFkZuki= vUrxZr /kkjk 31 ,oa 32 nh LVsV QkbZusfU'k;y dkWjiksjs'ku ,DV 1951] esa ikfjr fd;k x;k gS] mls vikLr fd;k tkrk gSA izkFkZuki= layXu ewy okn jgsA [2025:RJ-JP:3737] (5 of 14) [CR-110/2016]

7. A perusal of order dated 12.05.2016 clearly indicates that the judgment and decree was challenged by filing an application under Order IX Rule 13 CPC with the prayer that after setting aside the judgment and decree dated 15.09.2011 the respondent no.3 be granted an opportunity of hearing. The order dated 12.05.2016 clearly indicates that the trial court without considering for remand in case decree is set aside, has after set aside of decree has left the party in a position that the litigation has been disposed of. Moreover, the decree is set aside as a whole and not qua respondent no. 3 whereas respondent nos. 1 and 2 have not challenged the decree dated 15.09.2011. It appears that learned Additional District Judge either without understanding provision of Order IX Rule 13 CPC has passed the order in a very hasty manner, or decided the list in negligent and careless manner.

8. Learned counsel for petitioner has referred Annexure-4 letter dated 20.09.2011 submitted by Rajendra Prasad Parwal wherein an offer was made for final settlement of all dues against the respondent(s). This letter was received in office of petitioner on 20.09.2011 and same was dealt in official process. There is no objection about falsification of this letter, therefore, looking to the fact that the offer was made on behalf of respondent(s), thus it may be presumed that the respondent(s) have willingly tried for settlement of all dues against respondent no.1 and its promoters and guarantors. Whether this letter dated

20.09.2011 was in specific knowledge of respondent no. 3 or [2025:RJ-JP:3737] (6 of 14) [CR-110/2016] not, is not a question here. If the promoter of respondent no.1, respondent no. 2 has moved an application then respondent no. 3 is also bound by the offer made by the respondent(s) against the guarantee, furnished by him.

9. In case of Sunil Podar (supra), while considering a petition relating to the recovery of debt due to banks and Financial Institutions Act, 1993, Hon’ble Supreme Court has laid down that if the Court is convinced that defendant had otherwise knowledge of proceedings and he could have appeared and answered the plaintiff claim he cannot put forward a ground of non-service of summons for setting aside an ex-parte decree passed against him by invoking Rule 13 of Order IX of the CPC. Herein, this case after passing of award on 15.09.2011, an offer was made on 20.09.2011 but the application under Order IX Rule 13 of CPC was filed in October, 2012. A copy of the application clearly indicates that from service of notice under Order XXI Rule 54 of CPC, defendant no.3 (respondent no.3 herein) said to have acquired knowledge about order dated

15.09.2011. The application under Order IX Rule 13 CPC was not filed within reasonable period from offer letter dated 20.09.2011.

10. In view of judgment of Hon’ble Supreme Court in case of Sunil Podar Vs. Union Bank of India (supra), the filing of application under Order IX Rule 13 of CPC is beyond reasonable period and same can be considered as filed after substantial delay. The trial court has failed to notice aforesaid circumstance. [2025:RJ-JP:3737] (7 of 14) [CR-110/2016]

11. Now, when we are considering provision of Order IX Rule 13 of CPC, then same is reproduced as under: “13. Setting aside decree ex parte against defendant.—In any case in which a decree is passed ex parte against a defendant, he may apply to the Court by which the decree was passed for an order to set it aside; and if he satisfies the Court that the summons was not duly served, or that he was prevented by any sufficient cause from appearing when the suit was called on for hearing, the Court shall make an order setting aside the decree as against him upon such terms as to costs, payment into Court or otherwise as it thinks fit, and shall appoint a day for proceeding with the suit: Provided that where the decree is of such a nature that it cannot be set aside as against such defendant only it may be set aside as against all or any of the other defendants also”

12. Now, while considering similar issue in case of ECGC Limited Formerly Export Credit Guarantee Corporation Of India Limited Vs. M/s Dave Exports Through Proprietor Sharad Dave, Civil Revision Petition No.82/2017, (order dated 14.02.2024), this Court while considering similar issue has set aside the order of the trial court to setting aside an ex- parte decree, in a case related to recovery of money filed by an institution. Though, the facts in that case are little different but principle behind allowing application under Order IX Rule 13 were discussed in detail.

13. A perusal of judgment and decree dated 15.09.2011 clearly indicates that after sufficient service an ex-parte proceeding was ordered against the respondent(s). The order [2025:RJ-JP:3737] (8 of 14) [CR-110/2016] dated 12.05.2016 and judgment and decree dated 15.09.2011 clearly indicates that the address of respondent no.3 was same and even there is no change in the address of any of respondent(s). As per order-sheet dated 27.04.2004 the notice sent for service upon respondent has returned unserved and the Court has directed a fresh service, thereafter fresh notice was issued and service at the instance and identification of petitioner (plaintiff) was directed. Ultimately, on 16.05.2008 the Court has directed for service by ordinary process, registered post and publication in main newspaper. The notice of respondent(s) were published in Rajasthan Patrika which is leading daily newspaper of Rajasthan. According to statement made by respondent no.3 the respondent no.3 is not a reader of Rajasthan Patrika. He also relied upon order-sheet and made a statement in the application that attempts were made by process server to serve him on given address and the notices were returned with the report that the addressee is out of home. Aforesaid reports indicate that the notice was issued from ordinary process and despite attempt to service through ordinary process notice could not be served upon respondent no.3. Otherwise also respondent nos. 1 and 2 have not objected upon service effected under the law.

14. Rule 20 of Order V CPC is reproduced for ready reference. “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 [2025:RJ-JP:3737] (9 of 14) [CR-110/2016] 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.”

15. Herein, the only satisfaction is whether defendant is keeping away for the purpose of avoiding service. The petition under Section 31 and 32 of the State Financial Corporation Act, 1951 was filed on 30.08.2003 and admitted facts clearly reflect that the order for publication was passed on 16.05.2008 and prior to passing of the order, the notice to respondent(s) were sent and service was not effected. A five year period is sufficient to consider that the defendant no. 3 has avoided service upon him and in such a situation an order for substituted service by publication in widely circulated daily newspaper of Rajasthan cannot be considered as an erroneous order or contrary to provision of law. Learned counsel for respondent no. 3 has [2025:RJ-JP:3737] (10 of 14) [CR-110/2016] referred Order V Rule 17 of CPC and also Rule 32 of Order IXX of General Rules (Civil), 2018.

16. We have gone through the provision.

17. Rule 17 of Order V of CPC is reproduced as under: “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 in whose presence the copy was affixed.”

18. In case when defendant refuses to accept service or cannot be found after using all due and reasonable deligence and there is no illegality of his being found at the residence within a reasonable time and there is no agent to accept service of the summons then, the service can be effected by affixing copy under the circumstances as mentioned in the Rules. Herein this [2025:RJ-JP:3737] (11 of 14) [CR-110/2016] case, if respondent no.3 was not found and he is avoiding service then, it is at the discretion of the Court to adopt process as mandated under Rule 17 of Order V but the substituted service under Rule 20 is not dependent upon condition as mentioned in Rule 17 of Order V as mentioned hereinabove. The language used by the legislature gives a parallel mechanism under Rule 17 or Rule 20 of Order V of CPC. Hon’ble Supreme Court while considering provision of Order V Rule 20 of CPC in case of Neerja Realtors Private Limited Vs. Janglu (Dead) through LRs (supra) has laid down two conditions for invocation of substituted service under Rule 20 of Order V of CPC and they are as under: (i) There is a reason to believe that defendant is keeping out of way for the purpose of avoiding service. (ii) For any other reason, the summons cannot be served in ordinary way.

19. While considering the appeal from the order of High Court wherein the High Court has set aside ex-parte decree Hon’ble Supreme Court has considered a cryptic order passed for substituted service under Order V Rule 20 of CPC but laid down that before passing an order under Rule 20 it is necessary that procedure as prescribed under Rule 17 has to be followed.

20. A Co-ordinate Bench in case of M/s. Mayur Crafts Pvt. Ltd. Vs. Shri Anil Kumar Bansal (supra), while considering the judgment in case of Iqbal Kaur & Ors. Vs. Jagdish Prasad and Ors. 2013 (3) RLW 1995 has observed that without [2025:RJ-JP:3737] (12 of 14) [CR-110/2016] satisfaction as required under Order V Rule 20 of CPC, the order of substituted service was passed. Similar observations were made by a Co-ordinate Bench of this Court in case of Harbhajan Singh & Anr. Vs. LRs of Gardhara Singh, Abbu Bakar (supra) and Shyam Lal & Ors. (supra).

21. We have considered judgments as referred by the counsel for respondent no.3 but ultimately, it is upon the respondent no. 3 to establish that the address on which service was attempted was a wrong address or he is not residing on address as mentioned in suit no. 248/2007 which was instituted on

30.08.2003. The respondent no. 3 is residing on same address till date as no application for change of address has ever been filed. The Court proceedings recorded by the trial court and relied upon by the counsel clearly indicate that on multiple occasions, the court has directed service upon respondent no. 3 on same address and at all points of time the service was returned as unserved.

22. The procedure is handmade of justice and a party is not responsible, if any Court passes a cryptic order. After filing of original petition for recovery in 2003, now we are considering the revision petition after 22 years in a matter of recovery proceedings, then, certainly our approach is practical enough to protect public money, as large number of persons after getting loan are in habit to avoid repayment particularly when business fails or original promoter fails to return the money and the liability lies upon the guarantor. Herein as per facts of the case, [2025:RJ-JP:3737] (13 of 14) [CR-110/2016] respondent no. 3 is guarantor and after selling the property of respondent no.1 on 27.03.1999 for a price of ₹55 lakhs the recovery proceeding for remaining amount was initiated and as a guarantor, respondent no.3 is also libale to make payment.

23. Considering the facts of the case, it is apparent on record that the respondent no. 3 has never changed his address and on multiple occasions attempts were made for service upon him but notice was not served upon respondent no.3 ultimately, under Order V Rule 20 an application was moved, as financial institution is not a private body and the Government employees are not in habit to take pains to effect service. The grounds raised by the respondent no. 3 in his application under Order IX Rule 13 CPC for effecting proper service are neither convincing nor tenable.

24. Herein, substituted service was effected by publication in daily newspaper Rajasthan Patrika and the arguments of learned counsel for respondent no. 3 is that respondent no. 3 is not a reader of Rajasthan Patrika. The newspaper of Rajasthan Patrika is leading and widely circulated newspaper in Rajasthan and such a defence cannot be accepted. If a notice is affixed on last known address or a conspicuous part of building in presence of two witnesses even then same is sufficient but herein the publication was made in a widely circulated leading newspaper of Rajasthan, therefore, learned trial court without taking note of overall facts and circumstances of case has set aside the judgment and decree. [2025:RJ-JP:3737] (14 of 14) [CR-110/2016]

25. Having considered the reasons as assigned by the trial court in order dated 12.05.2016 while setting aside ex-parte decree, I am of the considered view that the reasons are not convincing and contrary to material placed on record.

26. The judgments as referred by learned counsel for respondent no. 3 are not applicable in the facts and circumstances of the case and learned Additional District Judge no. 17, Jaipur Metropolitan, Jaipur has committed a serious error while allowing application under Order 13 Rule IX read with Section 151 CPC and setting aside of award dated 15.09.2011.

27. In view of aforesaid, the instant revision petition is allowed and the order dated 12.05.2016 in misc case no. 29/2012 passed by learned Additional District Judge no.17, Jaipur Metropolitan, Jaipur is hereby set aside and application under Order IX Rule 13 CPC is hereby dismissed. As a result, the award and decree dated 15.09.2011 in civil suit no. 248/2007 passed by learned Additional District Judge (Fast Track) No.9, Jaipur Metropolitan, Jaipur is hereby restored.

28. No order as to costs.

29. Misc. application, if any, stands disposed of. (ASHOK KUMAR JAIN),J CHETNA BEHRANI /199