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PUNJAB & HARYANA HIGH COURT
H.R.Sodhi, J.
Gurdev Singh
Versus
Punjab And Pepsu Finance Co.Ltd.
First Appeal Order No. 65 of 1970,
Decided On : MAY 26, 1972
ARBITRATION - AWARD - EX PARTE DECREE - SETTING ASIDE - SERVICE OF NOTICE - SUFFICIENCY - REFUSAL TO ACCEPT REGISTERED COVER - EFFECT - LIMITATION - KNOWLEDGE OF DECREE - WHEN ACQUIRED.
Fact of the Case:
The appellant, Gurdev Singh, challenged an ex parte decree passed against him on the ground that he was not duly served with the notices and summons related to the arbitration proceedings and the subsequent court proceedings. The decree was obtained by the respondent, Punjab and Pepsu Finance Company Ltd., based on an arbitration award.
Finding of the Court:
The court found that the appellant was not duly served with the notices and summons. The service of notice by registered post, which was allegedly refused by the appellant, was not sufficient to constitute proper service. The court also found that the appellant came to know of the decree only when he received a notice for the settlement of the proclamation of sale of his land on March 18, 1968.
Issues: 1. Whether the service of notice by registered post, which was allegedly refused by the appellant, was sufficient to constitute proper service? 2. When did the appellant acquire knowledge of the decree?
Ratio Decidendi: 1. The court held that the service of notice by registered post, which was allegedly refused by the appellant, was not sufficient to constitute proper service. The court relied on the fact that the appellant denied receiving the registered letter and that no postal department official appeared to contradict him. The court also noted that the normal procedure is to deliver or tender a copy of the summons to the person sought to be served, and that the Punjab Amendment to Order 5, Rule 10 of the Code of Civil Procedure, which allows for service by registered post in the first instance, does not provide that a refusal to accept the registered cover is sufficient to establish service. 2. The court held that the appellant acquired knowledge of the decree only when he received a notice for the settlement of the proclamation of sale of his land on March 18, 1968. The court rejected the respondent's claim that the appellant had knowledge of the decree earlier, based on a notice allegedly sent by registered post and refused by the appellant in November 1967, and on the evidence of a process server who claimed to have served the appellant with summons in November 1967.
Final Decision: The court allowed the appeal, reversed the order of the trial court, and set aside the ex parte decree against the appellant with costs.
1. This is an appeal against an order of the Subordinate Judge, 1st class Ambala, who on 19th March 1970, declined the application of the appellant to set aside an ex parte decree against him both on merits as well as on the ground that the application was barred by time.
2. The decree-holder is Punjab and Pepsu Finance Company Ltd., Ambala Cantt. referred to hereinafter as the Company. Gurdev Singh is stated to have taken a truck on hire-purchase system which, for his alleged omission to pay instalments of the amount due from him, was seized by the Company. In the hire-purchase agreement dated 21st October, 1960. Exhibit DHW 3/1. it is provided that all differences arising between the parties in regard to rights, duties and obligations under the agreement shall be referred to the arbitration of Shri Brij Bhushan Gupta, Advocate. Ambala city who was to settle the same in accordance with the provisions as contained in the Indian Arbitration Act (Act 9 of 1899). First party to the agreement is the company and the second party is Gurdev Singh who is described as son of S. Tara Singh, resident of Kothi No. 45-A, Sector 22, Chandigarh. The third party is the surety, Sudagar Singh, resident of Manimajra, then within the district of Ambala. The Arbitrator issued a notice by registered post for 2nd February, 1964, to Gurdev Singh on the following address:-
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"Gurdev Singh s/o Tara Chand, resident of village Ran Singh Wala. District Bhatinda."
The notice was received back with a report of the postal department that the address was not correct. The Arbitrator on 2nd February, 1964, without making any other attempt to get service effected in the ordinary way ordered the same by publication in the English newspaper. "The Tribune", the fathers name of Gurdev Singh was given as Tara Chand. Notice by substituted service was for 1st March, 1964, and on this hearing too Gurdev Singh was absent. The Arbitrator proceeded to record ex parte evidence and he gave the award dated 29th April 1964, whereby the appellant was made jointly and severally liable with his surety in a sum of Rs. 36,587/85. The award also describes Gurdev Singh as son of Tara Chand of village Ran Singh Wala, Post Office Kotkapura, District Bhatinda.
3. The company (decree-holder) then made an application in the Civil Court at Ambala on 16th May, 1964, for the filing of the award. Notice of this application was issued to the Arbitrator for 18th July 1964, though by that time the award had been filed. Notices of this application before the filing of the award were issued to Gurdev Singh as well in which his parentage continued to be given as Tara Chand. On 28th November, 1964 it occurred to the sub ordinate Judge that he was making a mistake in issuing notice only of the application to Gurdev Singh when the award had actually been filed and that proper notice was to call upon the latter to prefer objections to the award. If so, advised and to show cause why award be not make a rule of the Court. He accordingly issued a fresh notice to Gurdev Singh to the said effect for 30th December, 1964. It was sent per registered post and received back with a report bearing no date that the same had been refused by the addressee. The order of 28th November. 1964 shows that it was directed to get service effected on Gurdev Singh in the ordinary way as well as by issue of summons through the process serving agency. There are, however, no indications as to what happened to the summons so issued. No such summons could be pointed out on the record and it cannot therefore, be ascertained as to whether any summons was issued at all. The Civil Court considered the alleged refusal to receive registered notice as sufficient service and proceeded to make an ex parte order on 4th January, 1965, making the award a rule of the Court and consequently a decree, in terms of the award, was also passed on the same date.
4. Another phase of the litigation then started. The decree holder applied for exe
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