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2001(1) Supreme 629
SUPREME COURT OF INDIA
(From Allahabad High Court)
Dr. A.S. Anand, CJI., R.C. Lahoti & N. Santosh Hegde, JJ.
Sri Naresh Chandra Agarwal -Appellant
versus
Bank of Baroda & Ors. -Respondents
Civil Appeal No. 1123 of 2001
(Arising out of SLP (C) No. 18523 of 1999)
Decided on 8-2-2001
Counsel for the Parties :
For the Appellant : N.D.B. Raju, Ms. Bharathi Raju and Guntur Prabhakar, Advocates.
For the Respondents : Pallav Saxena and Arun Aggarwal, Advocates.
From the facts narrated herein above, it is clear that the appellant is one of the legal heirs of deceased 8th defendant and an application to bring him on record was made. Having made such application, it was the bounden duty of the plaintiff as also that of the court to see that all the legal heirs - the proposed legal representatives (including the appellant) were duly served. It is not in dispute that at the relevant point of time when the notice of application was issued by the trial Court, the appellant was serving in Gonda District and was not in Pilibhit to which address the notice of substitution was sent. It is not even the case of the plaintiff that at the time of service of notice the appellant in fact was present in the address to which the notice was sent even on a visiting basis. Therefore, it is reasonable to presume that the appellant was not served with the notice of substitution and the endorsement made therein as to the refusal of the service cannot be attributed to any act of the appellant. When a party is sought to be impleaded in a legal proceedings service of notice on such party cannot be a mere formality but should, in fact, be a reality. In the instant case, neither the trial Court nor the High Court gave any definite finding as to the service of notice on the appellant. The mere fact that when the appellant made an application for setting aside the ex parte decree, he happened to give his permanent residential addresses which incidentally happened to be the address to which notice of sub stitution was sent by the Court will not ipso facto lead to the conclusion that the notice of substitution was in fact served on the appellant. No inquiry or attempt was made by the trial Court to find out the truth of the fact whether the notice of substitution was in fact served on the appellant. Even the plaintiff in its affidavit filed in opposition to the appellant s application did not deny the fact that the appellant was working in Gonda Distt. at the relevant time. The trial Court proceeded to reject the appellant s application on twin reasoning : that, it was a case of "irregularity in service of summons", and that, the other two brothers of the appellant having participated in the proceedings in the suit, there was no material prejudice to the appellant. This, in our opinion, was not a correct approach. Firstly, the present one is a case of non-service of notice on the appellant and not a case of mere irregularity in the service of summons. Secondly, a plea was raised in the suit that the guarantee given by the Satish Chandra Agarwal stood discharged on account of another guarantee in supersession of or in lieu of the guarantee given by late Satish Chandra Agarwal having been accepted by the petitioner. On such pleadings, issue Nos. 9 and 12 were framed but were not decided. In the peculiar facts and circumstances of this case failure to determine the issue as to the guarantee furnished by late Satish Chandra Agarwal having been discharged and consequently the liability of late Satish Chandra Agarwal and his legal heirs having come to an end did spell out prejudice to the interest of the appellant on account of opportunity to defend having not been afforded to him. Be that as it may, we are satisfied that since the appellant s share in the estate of his father is bound to be affected by the execution of the decree, the appellant ought to have been served with the notice of the application for substitution which having not been done, the application filed by him was entitled to be granted. (Paras 10 and 11)
The interest of justice requires that the application of the appellant for setting aside the decree be allowed and the suit be disposed of after hearing the appellant on merits. (Para 12)
JUDGMENT
Santosh Hegde, J.-Leave granted.
2. This appeal arises out of an application filed by the appellant under Order 9 Rule 13 read with Section 151 of the Code of Civil Procedure (CPC) before an Additional District Judge/Special Judge/Special Judge (S.C. & S.T. Act), Pilibhit, wherein the appellant had prayed for setting aside the ex-parte judgment and decree dated 9.5.1995 made in O.S.No. 107/84. The said application of the appellant came to be dismissed and an appeal filed against the said dismissal of the application also came to be dismissed by the High Court, hence, this appeal before us.
3. The case of the appellant is that the plaintiff-Bank had filed a suit against a partnership firm by name M/s. Ashok Khad Agency for the recovery of certain sums of money advanced to it by the plaintiff-Bank. It is stated in the original suit defendants 2 and 3 who are the brothers of the appellant were partners of the list defendant firm which was the debtor to the bank and along with them defendants 4 to 8 were the guarantors to the loan advanced by the Bank to the said firm. It is also stated that during the pendency of the said suit Defendant No. 8 who was the father of the appellant died, hence, an application to bring his legal representatives was made in which appellant was sought to be included as one of the legal representatives of the deceased 8th defendant. It is also alleged that the notice of the said application so far as the appellant is concerned was addressed to 91, Mohalla Dalchand, Pilibhit and the said notice issued by the Court was returned back with an endorsement as "refused". The trial Court without being satisfied as to the correctness of the service of notice, mechanically held the service as sufficient and allowed the substitution application of the plaintiff-Bank and proceeded to decree the suit ex parte.
4. When the appellant came to know of the ex parte decree he filed the above-mentioned application for setting aside the said decree on the ground that at the time when the notice of substitution was issued by the trial Court to him he was working as an officer at Balrampur Chini Mills Ltd., Bahabhan, Distt. Gonda, therefore, he could not have been served with the said notice at Pilibhit and the refusal endorsement made in the notice was obviously an incorrect endorsement. In the said application for setting aside the ex parte decree the appellant had also contended that during the life time of his father he had filed a written statement contending that he had been released by the bank as a guarantor and he had no legal obligation to discharge the loan or amounts due from the first defendant partnership firm. It was further contended by the appellant in view of the said pleadings of his father an issue No. 9 to the following effect was framed by the trial Court :
"9. Are defendants Nos. 4 to 8 never stood sureties as alleged in paras 28, 31 and 33 of the W.S.?"
and that this issue was not at all decided by the trial Court in the judgment which led to the decree. He also alleged that there was sufficient material on record to show that the bank earlier to the filing of the suit itself had discharged the original 8th defendant i.e. his father as a guarantor. He also contended that it is only after he came back to Mohalla Dalchand on a permanent basis he came to know of the ex parte decree and immediately he made necessary inquiries and found out that the application filed by the plaintiff-Bank to bring the legal representatives of his deceased father, so far as he is concerned, was addressed to an incorrect address, hence, he had no knowledge of the impleadment application and since he has inherited a portion of his father s estate same cannot be made a subject matter for satisfaction of the decree without he being heard in the suit.
5. The respondent-Bank in its affidavit filed in opposition to the application of the appellant did not dispute the fact that at the relevant point of time the appellant was wor
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