http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 5  

PETITIONER: SHALIMAR ROPE WORKS LTD.

       Vs.

RESPONDENT: ABDUL HUSSAIN H. M. HASAN BHAI RASSIWALA AND ORS.

DATE OF JUDGMENT07/05/1980

BENCH: UNTWALIA, N.L. BENCH: UNTWALIA, N.L. SHINGAL, P.N. TULZAPURKAR, V.D.

CITATION:  1980 AIR 1163            1980 SCR  (3)1028  1980 SCC  (3) 595

ACT:      Summons, service  of-Suits by  or against  Corporation- Service of  summons how  to be effected to be valid.-Code of Civil Procedure Code, Order 29 Rule 2, Order 5 Rule 17.

HEADNOTE:      The respondent  filed a  suit at  Indore  on  24-2-1975 against the  appellant claiming  damages to  the tune of Rs. 26,000/- on  account of  the alleged  nondelivery of certain goods. Summons in the suit was sent to the registered office of the company in Calcutta and was served on Sri Navlakha on 17-3-1975 asking  the company  to appear  at Indore on 25-3- 1975. Since  the company did not appear in the Court on that date, eventually,  the exparte  decree was  passed on  22-4- 1975. The  appellant company came to know about the ex-parte decree for  the first time when its constituted attorney Sri Jhunjhunwala  received  a  notice  from  the  respondent  by registered post  demanding the  decretal dues. Thereupon Sri N. S.  Pareek, the Works Secretary of the company who is in- charge of  the legal matters was sent to Indore to ascertain as to  how the  ex-parte decree  came to  be passed.  Pareek learnt that the summons was purported to have been served on Navalakha on  17-3-75. Navalakha  did not  bring the fact of the receipt  of summons  by him  to  the  knowledge  of  any responsible officer of the company. He was neither secretary nor a  Director nor  any  other  principal  officer  of  the company authorised  to receive  summons  in  the  suit.  The company remained  in dark  and learnt  for the first time on 29-7-75 about  the passing of the ex-parte decree. The Trial Court allowed the application but the High Court in revision under S.  115 of  C.P.C. restored  the ex-parte order. Hence the appeal by special leave.      Allowing the appeal, the Court ^      HELD: 1.Rule  2 of  Order XXIX  of  C.P.C.  is  not  an exhaustive provision  providing for  all modes of service on the Company  in the  sense as to what is meant by service of summons on  the Secretary,  Director or  Principal  Officer. Service on  managing agents  who are  a corporation is valid under clause  (a) of  Rule 2  of Order  XXIX C.P.C., since a Principal Officer  in clause  (a) of Rule 2 has been held to

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 5  

include managing  agents and it can under this rule, be on a juristic person. [1031 D-E]      Jute and  Guuny Brokers  Ltd. &  Anr. v. Union of India and Ors. [1961] 3 SCR p. 20; followed.      2.Sending a  summon to  a corporation by post addressed to it at its registered office may be a good mode of service either by  itself, or  preferably, by  way of  an additional mode of  service. But  leaving the summons at the registered office of  the corporation if it is literally interpreted to say that the summons can be left anywhere uncared for in the registered office  of the  company. then  it  will  lead  to anomalous and  absurd results.  It has  to be  read  in  the background of  provision contained in Order 5 Rule 17 of the Code. In other 1029 words, if  the serving  peon or bailiff is not able to serve the summons  on the  Secretary or  any Director or any other Principal Officer  of  the  Corporation  because  either  he refuses to  sign the  summons or  is not  to be found by the serving person  even after  due diligence  then he can leave the summons at the registered office of the company and make a report  to that effect. In the instant case nothing of the kind was done. It was also not the case of the respondent in its rejoinder  filed in  the  Miscellaneous  case  that  the service of  the summons  was effected in accordance with the first part  of clause (b) of Rule 2 of Order 29 of the Code. [1032 B-D]      3. Nowhere  in the  rejoinder a  stand was taken by the respondents that  the summons was duly served on the company because it was left at the registered office of the company. The company  had no  knowledge of  the ex-parte decree, even otherwise, before 29-7-75. Hence the application under O.I.X Rule 13 of C.P.C. has been correctly allowed. [1033 C-D]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeal No. 366 of 1979.      Appeal by  Special Leave  from the  Judgment and  Order dated 28-2-1978  of the  Madhya Pradesh  High Court  (Indore Bench) in Civil Revision No. 93 of 1976.      Shanker Ghosh and S. K. Gambhir for the Appellant.      R. K. Garg and A. K. Sanghi for Respondent No. 1.      The Judgment of the Court was delivered by      UNTWALIA, J.  This appeal  by special leave is from the judgment of  the Madhya  Pradesh High  Court  reversing  the decision of  the Second Additional District Judge, Indore in Miscellaneous Judicial  Case No.  23 of  1975. The appellant company had  filed that  case under  Order 9  Rule 13 of the Code of  Civil Procedure,  hereinafter called  the Code, for setting aside  an ex-parte decree for Rs. 28,479/- passed in favour of  the respondent  firm  on  22-4-1975  against  the appellant. The  learned Additional  District Judge held that summons in  the suit  was not duly served on the company and it came  to know about the decree on 29-7-1975. Hence he set aside the  ex-parte decree.  The  respondent  firm  filed  a revision in  the High  Court under  section 115 of the Code. The High  Court allowed the revision, set aside the judgment of the  Trial Court  and upheld  the passing of the ex-parte decree. Hence this appeal.      The respondent  filed the  suit at  Indore on 24-2-1975 against the  appellant claiming  damages to  the tune of Rs. 26,000/- on  account of  the alleged non-delivery of certain goods. Summons in the suit was sent to the registered office

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 5  

of the  company in  Calcutta and is said to have been served on one  Shri Navlakha  on 17-3-1975  asking the  company  to appear at  Indore on  25-3-1975 for  settlement  of  issues. Since the  company did not appear in the Court on that date, eventually, 1030 the ex-parte  decree was  passed on  22-4-1975. According to the case of the appellant the company came to know about the ex-parte decree  for the  first time  when  its  constituted attorney Shri  S. K. Jhunjhunwala received a notice from the respondent by  registered post  demanding the decretal dues. Thereupon Shri  N. S.  Pareek, the  Works Secretary  of  the company who  is in-charge  of the  legal matters was sent to Indore to ascertain as to how the ex-parte decree came to be passed. Pareek  learnt that  the summons  purported to  have been served  on Navlakha  on 17-3-1975.  Navlakha  was  mere Office Assistant  in the Sales Department of the company. He was neither  a  Secretary  nor  a  Director  nor  any  other Principal Officer  of  the  company  authorised  to  receive summons in  the suit.  He did  not bring  the  fact  of  the receipt  of   summons  by   him  to  the  knowledge  of  any responsible officer  of the company. The company remained in dark and,  as stated above, learnt for the first time on 29- 7-1975 about the passing of the ex-parte decree.      N. S. Pareek was the only witness examined on behalf of the appellant in the Miscellaneous case tried by the learned Additional District Judge. No witness was examined on behalf of the respondent. The Trial Court held:-           "I hold  that handing  over of summons to Navlakha           who was  only an  Office Assistant  working in the           company and who was not an officer duly authorised           to accept summons on behalf of the company did not           amount  to   valid  service   of  summons  on  the           applicant company."      It  also   accepted  the  appellant’s  case  about  the knowledge of the ex-parte decree for the first time on 29-7- 1975 and  hence the application filed is about a week’s time thereafter was held to be within time.      The High Court in its impugned judgment has held:-           "It is not in dispute that the person who received           the summons  in the office of the Company is not a           person who  is entitled  to be served on behalf of           the company  in accordance  with sub-clause (a) of           Rule 2 of Order 29 of C.P.C." The High  Court, however,  took the view that since Navlakha was an  employee of  the company  sitting in  its registered office in  Calcutta the  summons will be deemed to have been duly served  on the  company within the meaning of the first part of  clause (b)  of Order 29, Rule 2 of the Code. In the opinion of  the High  Court  since  the  learned  Additional District Judge  did not  apply his  mind to the provision of law  contained  in  clause  (b),  it  committed  a  material irregularity and  illegality in exercise of its jurisdiction in setting aside the ex-parte decree. 1031      In our  opinion the  High Court  was clearly  wrong  in upsetting the  judgment of  the Trial  Court. There  was  no error in  that judgment  much less any error of jurisdiction entitling the High Court to interfere with it.      Order 29  of the  Code is  headed "Suits  by or against Corporations". There  are only  three Rules  in it.  We  are concerned with Rule 2 which reads as follows:-              "Subject to any statutory provision of process,           where the  suit  is  against  a  corporation,  the           summons may be served-

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 5  

         (a)  on the  secretary, or  on  any  director,  or                other principal  officer of  the corporation,                or           (b)  by leaving it or sending it by post addressed                to the  corporation at the registered office,                or if  there is  no registered office then at                the place  where the  corporation carries  on                business." Rule 2  is not  an exhaustive  provision providing  for  all modes of  service on  the company in the sense as to what is meant by  service of  summons on  the Secretary, Director or Principal Officer in Jute and Gunny Brokers Ltd. and another v. The  Union of India and others it was held that the words "Principal Officer"  in clause  (a) of  Rule 2 would include managing agents  and it  can,  under  this  rule,  be  on  a juristic person.  Accordingly service on managing agents who are a corporation is valid under clause (a).      The meaning  of clause  (b) has got to be understood in the background  of the  provisions of  the Code  in Order  5 which is  meant for  issue and service of summons on natural persons. Sending  a summons by post to the registered office of the  company, unless  the  contrary  is  shown,  will  be presumed to  be service on the company itself. But the first part of  clause (b)  has got to be understood with reference to the  other provisions  of the Code. In Rule 17 of Order 5 it has been provided:-           "Where the  defendant or  his agent  or such other      person   as    aforesaid   refuses    to    sign    the      acknowledgement, or  where the  serving officer,  after      using all due and reasonable diligence, cannot find the      defendant, 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, 1032      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."      Sending summons  to a  corporation by post addressed to it at  its registered  office may  be a good mode of service either by  itself, or  preferably, by  way of  an additional mode of  service. But  leaving the summons at the registered office of  the corporation if it is literally interpreted to say that the summons can be left anywhere uncared for in the registered office  of the  company, then  it  will  lead  to anomalous and  absurd results.  It has  to be  read  in  the background of  the provision contained in Order 5 Rule 17 of the Code.  In other words, if the serving peon or bailiff is not able  to serve  the summons  on  the  Secretary  or  any Director or  any other  Principal Officer of the Corporation because either  he refuses  to sign the summons or is not to be found by the serving person even after due diligence then he can  leave the  summons at  the registered  office of the company and  make a  report to  that effect.  In the instant case nothing  of the  kind was  done. It was not the case of the respondent  in its  rejoinder filed in the Miscellaneous case  that  the  service  of  the  summons  as  effected  in accordance with  the first  part of  clause (b) of Rule 2 of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 5  

Order 29  of the  Code. Annexure  A to the counter affidavit filed by  the  respondent  is  the  petition  filed  by  the appellant under  Order 9 Rule 13 of the Code. In paragraph 9 of the said petition it was stated:-           "Inspection  of   record  of  this  Hon’ble  Court      relating to the service of the summons reveals that the      bailiff of  the Small  Cause Court at Calcutta seems to      have delivered a copy of the summons to a gentleman who      is described  as an  office assistant,  on 17-3-1975 at      about 12.40  P.M. No  office assistant of the defendant      No. 1  Company is  empowered or  authorised to  receive      summons. The  original summons  which has been returned      by the  bailiff to  this Hon’ble Court, has been signed      by one  Shri  Nawlakha.  Shri  Nawlakha  was  concerned      merely with  sales and  had nothing  to do  with  legal      matters  generally   or  with   receiving  summons   in      particular. Service  of the  summons on  Shri  Nawlakha      cannot be  regarded as due service on the defendant No.      1 for the purpose of Order 9 Rule 13 C.P.C."      The rejoinder  of the  respondent is  Annexure B to the counter affidavit. Para 9 of the rejoinder which is in reply to para 9 of the petition reads as follows:- 1033           "In reply  to para 9 it is stated that the summons      was duly  served as  stated in  this para.  But  it  is      denied that  Shri Nawlakha  was concerned  merely  with      sales  and  has  nothing  to  do  with  legal  matters,      generally or  with receiving  summons in particular. It      is denied  that service  on  Shri  Nawlakha  cannot  be      regarded as  due service on the Company Defendant No. 1      for the purpose of Order 9 Rule 13 C.P.C. Shri Nawlakha      was a  responsible officer who could have intimated the      receipt of the summons to his so called bosses. Without      prejudice it  is  submitted  that  the  Madhya  Pradesh      amendment in  Order 9  Rule 13  C.P.C.  may  kindly  be      perused."      No where  in the  rejoinder a  stand was taken that the summons was  duly served  on the company because it was left at the  registered office  of the  company. Reference to the Madhya Pradesh amendment of Order 9 Rule 13 is immaterial as the Trial  Court has  pointed out  that the  company had  no knowledge of the ex-parte decree, even otherwise, before 29- 7-1975. No  contrary finding  has been  recorded by the High Court.      We, therefore,  hold that  the judgment  by  the  Trial Court setting  aside the decree was correct. In any event no error of  jurisdiction was  committed by  it. The High Court went wrong  in interfering with it. We accordingly allow the appeal, set aside the judgment of the High Court and restore that of  the Trial  Court. The  suit shall  now  proceed  to disposal in  accordance with  the law. We may, however, make it clear  that the  appellant under  the orders of the Court had furnished bank guarantee for the decretal amount. It has agreed to  continue the  same till the disposal of the suit. We shall make no order as to costs. S.R.      Appeal allowed. 1034