ACTING C. J. FOR HIMSELF AND Dr. ANAND J.

1. In order to appreciate and determine the controversy in this case, it will be necessary to give briefly the sequence of events leading up to this reference. Plaintiff, Shyam Lal Dhar used the defendant, M/s Ply Board Industries, for possession of land measuring 7 kanals and 11 marlas situate at village Sampora as also for compensation and damage amounting to Rs. 7,200/-. The suit was filed on 6.4.1956 in the court of Additional District Judge, Srinagar. The defendant put in his appearance and engaged late Shri A. N. Raina at his counsel. Mr. Raina appeared and conducted the case on behalf of the defendant on several hearings till 17.10.1978 when he absented himself with the result that the court proceeded exparte against the defendant. Thereafter the case was adjourned several times but no one appeared for the defendant to have the exparte proceedings set aside. Eventually the trial court passed a decree against the defendant exparte on 23.3.1969. The plaintiff took out execution on 7.8.1969 as a result of which one station wagon belonging to the defendant was attached. Thereafter, the defendant-Company moved an application on 20.8.1969 for setting aside the exparte decree. The time allowed for making an application for setting aside the exparte decree is thirty days commencing from the date of the decree or from the date of knowledge of the decree according as the summons was duly served or not. The company sought to bring the application within time by contending that it was not duly served and as such the time would commence from 7. 8 1969, the date on which it got knowledge of the decree and, in the alternative, asked for condonation of delay under section 5 of the Limitation Act. It was stated that due to the shortages of raw material the Company had to close down its factory and office at Srinagar in January, 1966 with the result that there was a dismemberment of the staff; some members resigned and some others were transferred and as a corollary the records too including the records of this case fell into a mess. The Company had however, engaged Mr. A.N Raina to represent it but Mr. Raina withdrew from the case without notice to the Company. It was only on 7. 8. 1969, when the plaintiff took out execution, that the Company was able to know that an exparte decree had been passed against it. The Company took steps immediately to collect the information and to obtain the necessary copies which took time upto 20.8.1969 when the application for setting aside the exparte decree was filed.

2. The learned Additional District Judge repelled the contention that the application was within time. He held that once the defendant has appeared and defendant the claim, the question of service loses significance. He, however, upheld the alternative claim for extention of time and, while condoning the delay, set aside the exparte decree on merits. He held that the Company had engaged Mr. AN Raina Advocate to represent it. Mr. Raina never informed the Company about the progress of the case nor even in respect of the exparte decree. The company could not keep in touch with him because it had closed down its local office and had either discharged the employees or transferred them in consequence of lock out in the factory caused on account of the paucity of the raw material. The records of the Company including the records of this case had falled into a mess with no one to look after it and things around. In these premises, the learned Additional District Judge held that there was a sufficient ground for the non-appearance of the defendant and the subsequent delay in the filing of the application for setting aside the exparte decree. He, therefore, allowed the application on payment of Rs. 500/- as costs. The plaintiff filed a revision petition which came to be heard by one of us.

3. At the hearing of the revision petition, the question arose: Whether the defendant could be held responsible for the

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