Dismissed

Ms Sanket Industries Limited v. Bank of India

DRT21 Jul 2022MA/42/2022

Case brief

AI extract

What is this about?

Applicants applied to recall an order and quash a previous judgment in a recovery proceeding, arguing summons were not served at their registered office. The DRT dismissed the petition, relying on Supreme Court precedent that non-service is not fatal if the parties had actual notice and sufficient time to appear.

What did the court decide?

Application to recall order and quash judgment in O.A. No.32/2018 dismissed.

21/07/2022	Ex. No.	Before Presiding Officer Dr. Rekha G. Dhakar, DRT-1, Mumbai. *Roznama inM.A. 42 of 2022* *M/S. Sanket Industries Ltd. & Ors. Vs. Bank of* *India*	Next date
		Advocate Sunil A. Humbre appeared for the applicant. Advocate A. B. Shinde appeared for the respondent bank. Today the matter is listed for orders on MA Introduction By way of the present M.A. the applicants have prayed to recall the order and judgment dated 04/03/2021 in O.A. No.32/2018 and quash and set aside the order dated 04/03/2021 and also withdraw recovery certificate No.56/2021. Facts It reveals from the record that the applicants have filed the present M.A. on 29/06/2022 and stated that the applicants came to know about the judgment dated 04/03/2021 only on 18/06/2022 when the sale proclamation dated

21/07/2022

Ex.
No.

Before Presiding Officer Dr. Rekha G. Dhakar,
DRT-1, Mumbai.
Roznama inM.A. 42 of 2022
M/S. Sanket Industries Ltd. & Ors. Vs. Bank of
India

Next
date

Advocate Sunil A. Humbre appeared for
the applicant.
Advocate A. B. Shinde appeared for the
respondent bank.
Today the matter is listed for orders on MA
Introduction
By way of the present M.A. the applicants
have prayed to recall the order and judgment
dated 04/03/2021 in O.A. No.32/2018 and
quash
and
set
aside
the
order
dated
04/03/2021 and also withdraw recovery
certificate No.56/2021.
Facts
It reveals from the record that the applicants
have filed the present M.A. on 29/06/2022 and
stated that the applicants came to know about
the judgment dated 04/03/2021 only on
18/06/2022 when the sale proclamation dated

16/06/2022 was pasted on the property of the
applicants.
The applicants have mainly raised
objections that the summons were never served upon the applicants. Arguments
During the arguments, Ld. Counsel for the
applicants has strongly stressed that the
applicant no.1 company is having a registered
office at District Jalna, Maharashtra, however, summons were never sent to the said registered office. It is also stated that the summons were
served only on one address instead of two
addresses as provided in the O.A. It is also stated that the envelope of service
of summons was returned unserved with
remark 'left' as stated by the respondent in their
affidavit, whereas bearing the same address of
applicant no. 2 & 3 ultimately returned with
remark 'not known', thus, he stated that the
final order was passed without
serving the proper summons upon the defendants.

16/06/2022 was pasted on the property of the

applicants.

The
applicants
have
mainly
raised

objections that the summons were never served
upon the applicants.
Arguments

During the arguments, Ld. Counsel for the

applicants has strongly stressed that the

applicant no.1 company is having a registered

office at District Jalna, Maharashtra, however,
summons were never sent to the said registered
office. It is also stated that the summons were

served only on one address instead of two

addresses as provided in the O.A.
It is also stated that the envelope of service

of summons was returned unserved with

remark 'left' as stated by the respondent in their

affidavit, whereas bearing the same address of

applicant no. 2 & 3 ultimately returned with

remark 'not known', thus, he stated that the

final order was passed without

serving the proper summons upon the
defendants.

He also contended that there is	no
explanation or reason provided for	the
different remarks.
Ld. Counsel for the applicants also press	the
point that on the basis of acknowledgem	ent
card, the respondent in their affidavit	has
stated that service is complete. However, also stated by the respondent that the ser	it is vice
on the applicants were not affected. Thus, t are contradictory statements of the respond	here ent
bank, therefore, he stated that the order d	ated
04/03/2021 may be recalled and	the
defendants in the OA may be provided	an
opportunity for hearing. In rebuttal, Ld. Counsel for the respond	ent
has strongly objected to the contention of	the
applicants and submits that the entire stor	y of
the applicants is an afterthought story. W	hen
the property in question was put up for sal	e in
the recovery proceeding then the applic	ants
came before this Tribunal. He stated that	the
demand notice of recovery proceeding	was
duly served upon the applicants herein	and
warrant of attachment was also pasted on	the

He also contended that there is

explanation or reason provided for

the

different remarks.

Ld. Counsel for the applicants also press

the

point that on the basis of acknowledgem

ent

card, the respondent in their affidavit

has

stated that service is complete. However,
also stated by the respondent that the ser

it is
vice

on the applicants were not affected. Thus, t
are contradictory statements of the respond

here
ent

bank, therefore, he stated that the order d

ated

04/03/2021
may
be
recalled
and

the

defendants in the OA may be provided

opportunity for hearing.
In rebuttal, Ld. Counsel for the respond

ent

has strongly objected to the contention of

the

applicants and submits that the entire stor

y of

the applicants is an afterthought story. W

hen

the property in question was put up for sal

e in

the recovery proceeding then the applic

ants

came before this Tribunal. He stated that

the

demand notice of recovery proceeding

was

duly served upon the applicants herein

and

warrant of attachment was also pasted on

the

property in question. Even the applicants
refused to accept the warrant of attachment sent through Speed Post. He also stated that the respondent bank served upon the applicants sale proclamation on or about 20/05/2022,
therefore, he stated that the applicants were
having knowledge of the order dated
04/03/2021 but did not file the present
application within limitation.
He also stated that even otherwise the
service of summons in the O.A. duly been done and all the three applicants acknowledged the receipt of the summons. It is also stated that
applicants have acknowledged receipt of
summons at their residential addresses.
Further it is stated that the applicants have filed
S.A. 95/1997, 93/2017 before DRT-II, Mumbai, and in those proceeding these applicants have obtained the interim relief on the condition to
deposit the amount of Rs.32.50 Lac and the
applicants will settle the matter, however, the
applicants did not settle the matter. Therefore,
he stated that the applicants herein are not entitled for any relief.

property in question. Even the applicants

refused to accept the warrant of attachment
sent through Speed Post. He also stated that the
respondent bank served upon the applicants
sale proclamation on or about 20/05/2022,

therefore, he stated that the applicants were

having
knowledge
of
the
order
dated

04/03/2021 but did not file the present

application within limitation.

He also stated that even otherwise the

service of summons in the O.A. duly been done
and all the three applicants acknowledged the
receipt of the summons. It is also stated that

applicants have acknowledged receipt of

summons
at their residential addresses.

Further it is stated that the applicants have filed

S.A. 95/1997, 93/2017 before DRT-II, Mumbai,
and in those proceeding these applicants have
obtained the interim relief on the condition to

deposit the amount of Rs.32.50 Lac and the

applicants will settle the matter, however, the

applicants did not settle the matter. Therefore,

he stated that the applicants herein are not
entitled for any relief.

Consideration On perusal of record, it reveals that in the
O.A., two addresses of the defendants therein
/applicants herein are provided i) 232,
Building No. 2, Solitaire Corporate Park, Opp.
Hotel Mirador, Andheri Ghatkopar Link Road,
Chakala, Andheri (East) Mumbai 400093, ii)
Flat No. 101, 1st Floor, Bhumi Nutan Laxmi
Co.op. Housing Society Ltd. 8th Road, J.V.P.D.
Scheme, Vile Parle (West) Mumbai 400049 and
the respondent bank herein has attempted to
serve the notices upon both the addresses and
ultimately the service was completed on one of
the residential addresses which is duly proved
in the proceeding of the O.A.
In so far as the objection of the applicants
that applicant no.1 company is having a
registered office at District Jalna, Maharashtra,
however, summons were never sent on the said
registered office and service on the residential
address cannot be considered as the sufficient
service to the applicant no.1. However, the said
contention of the applicants is not accepted as
in para 4 of the present MA, all the applicants

Consideration
On perusal of record, it reveals that in the

O.A., two addresses of the defendants therein

/applicants herein are provided i) 232,

Building No. 2, Solitaire Corporate Park, Opp.

Hotel Mirador, Andheri Ghatkopar Link Road,

Chakala, Andheri (East) Mumbai 400093, ii)

Flat No. 101, 1st Floor, Bhumi Nutan Laxmi

Co.op. Housing Society Ltd. 8th Road, J.V.P.D.

Scheme, Vile Parle (West) Mumbai 400049 and

the respondent bank herein has attempted to

serve the notices upon both the addresses and

ultimately the service was completed on one of

the residential addresses which is duly proved

in the proceeding of the O.A.

In so far as the objection of the applicants

that applicant no.1 company is having a

registered office at District Jalna, Maharashtra,

however, summons were never sent on the said

registered office and service on the residential

address cannot be considered as the sufficient

service to the applicant no.1. However, the said

contention of the applicants is not accepted as

in para 4 of the present MA, all the applicants

including applicant no.1 has stated that they
came to know about the judgment dated
04/03/2021, when the notice of physical
possession was being pasted on 18/06/2022 on the property in question and the property in
question as such is a residential premises
where these notices were pasted. Thus, as such
the applicant no.1 has accepted that he came to
know about the proceeding pending with the
Tribunal from the notice which has pasted on
the residential premises, now he cannot deny
the service on the ground the same has not been done on the registered office. Even otherwise
the applicant did not produce any document by which they informed the bank regarding the
registered address of the applicant no.1.
Further the demand notice as well as warrant
of attachment of the immovable property was
also sent on the same addresses. Even the
warrant of attachment in the recovery
proceeding was returned with the remark
“refused”. In these circumstances, the objection taken by the applicants herein qua the service

including applicant no.1 has stated that they

came to know about the judgment dated

04/03/2021, when the notice of physical

possession was being pasted on 18/06/2022 on
the property in question and the property in

question as such is a residential premises

where these notices were pasted. Thus, as such

the applicant no.1 has accepted that he came to

know about the proceeding pending with the

Tribunal from the notice which has pasted on

the residential premises, now he cannot deny

the service on the ground the same has not been
done on the registered office. Even otherwise

the applicant did not produce any document by
which they informed the bank regarding the

registered address of the applicant no.1.

Further the demand notice as well as warrant

of attachment of the immovable property was

also sent on the same addresses. Even the

warrant of attachment in the recovery

proceeding was returned with the remark

“refused”. In these circumstances, the objection
taken by the applicants herein qua the service

of summons in the proceeding of the O.A. is not
acceptable.
The Ld. Counsel for the respondent has
relied upon the judgment of the Hon'ble Apex
Court in the matter of Sunil Poddar & Others
Vs. Union Bank of India, wherein para 20 while
His Lordship was recording Twenty-seventh
Report of Law Commission and considered the aspect and the expression 'duly served'.
Para nos.20,21,22 & 23 of the said
Judgment are reproduced hereinbelow: “20. Original Rule 13 of Order IX of the Code thus provided that when a decree had been passed ex parte against the defendant who satisfied the Court that summons was not duly served upon him, the Court was bound to set aside the decree. It was immaterial whether the defendant had knowledge about the pendency of suit or whether he was aware as to the date of hearing and yet did not appear before the Court. The Law Commission considered that aspect and the expression duly served In its Twenty-seventh Report. the Commission stated; 1. Under Order IX, rule 13. if the court is satisfied either that the summons has not been served, or that the from defendant was prevented by sufficient cause appearing, etc.. the ex parte decree should be set aside. The two branches of the rule are distinctive and the defendant, whatever his position may be in respect of one branch, is the court that he has made good his contention in respect of the other branch.
2. Now, cases may arise where there has been a technical breach of the requirements of I due servicel, though the defendant was aware of the institution of

of summons in the proceeding of the O.A. is not

acceptable.

The Ld. Counsel for the respondent has

relied upon the judgment of the Hon'ble Apex

Court in the matter of Sunil Poddar & Others

Vs. Union Bank of India, wherein para 20 while

His Lordship was recording Twenty-seventh

Report of Law Commission and considered the
aspect and the expression 'duly served'.

Para
nos.20,21,22
&
23
of
the
said

Judgment are reproduced hereinbelow:
“20. Original Rule 13 of Order IX of the Code thus
provided that when a decree had been passed ex parte
against the defendant who satisfied the Court that
summons was not duly served upon him, the Court
was bound to set aside the decree. It was immaterial
whether the defendant had knowledge about the
pendency of suit or whether he was aware as to the
date of hearing and yet did not appear before the
Court. The Law Commission considered that aspect
and the expression duly served In its Twenty-seventh
Report. the Commission stated;
1. Under Order IX, rule 13. if the court is satisfied
either that the summons has not been served, or that
the from defendant was prevented by sufficient cause
appearing, etc.. the ex parte decree should be set aside.
The two branches of the rule are distinctive and the
defendant, whatever his position may be in respect of
one branch, is the court that he has made good his
contention in respect of the other branch.

2. Now, cases may arise where there has been a
technical breach of the requirements of I due servicel,
though the defendant was aware of the institution of

the suit. It may well be, that the defendant had knowledge of the suit in due time before the date fixed for hearing, and yet, apparently he would succeed if there is a technical flaw. This situation can arise e. g.. where the acknowledgement on the duplicate of the summons has not been signed. There may be small defects in relation to affixation, etc., under Order V, rule.
3. Where a literal conformity with the C.P.C. is wanting, the second part of column third ofarticle 164, Indian Limitation Act,1908 (nowarticle 123, Limitation Act,1963) applies. As to substituted service, see discussion in under-mentioned decision.
4. The matter was considered exhaustively by the Civil Justice Committee, which recommended a provision that a decree should not be set aside for mere irregularity. Local Amendments made by several High Courts (including Allahabad, Kerala. Madhya Pradesh, Madras and Orissa) have made a provision on the subject, though there are slight variations in the language adopted by each. Such a provision appears to be useful one, and has been adopted on the lines of the Madras Amendment.
21. The Commission again considered the question and in its Fifty-fourth Report, reiterated.
9.12. Under Order 9, rule 13, if the court is satisfied either that the summons has not been served, or that the defendant was prevented by sufficient cause from appearing, etc., the ex parte decree should be set aside. The two branches of the rule are distinctive, and the defendant, whatever his position may be in respect of one branch, is entitled to benefit of the other branch, if he satisfies the court that he has made good his contention in respect of the other branch.
9.13. In the earlier Report, several points were considered with reference to this rule, and amendments suggested on one point,-the broad object being to ensure that a decree shall not be set aside merely on theground of irregularity in service, if the

the suit. It may well be, that the defendant had
knowledge of the suit in due time before the date fixed
for hearing, and yet, apparently he would succeed if
there is a technical flaw. This situation can arise e. g..
where the acknowledgement on the duplicate of the
summons has not been signed. There may be small
defects in relation to affixation, etc., under Order V,
rule.

3. Where a literal conformity with the C.P.C. is
wanting, the second part of column third ofarticle
164, Indian Limitation Act,1908 (nowarticle 123,
Limitation Act,1963) applies. As to substituted
service, see discussion in under-mentioned decision.

4. The matter was considered exhaustively by the
Civil Justice Committee, which recommended a
provision that a decree should not be set aside for mere
irregularity. Local Amendments made by several
High Courts (including Allahabad, Kerala. Madhya
Pradesh, Madras and Orissa) have made a provision
on the subject, though there are slight variations in
the language adopted by each. Such a provision
appears to be useful one, and has been adopted on the
lines of the Madras Amendment.

21. The Commission again considered the question
and in its Fifty-fourth Report, reiterated.

9.12. Under Order 9, rule 13, if the court is satisfied
either that the summons has not been served, or that
the defendant was prevented by sufficient cause from
appearing, etc., the ex parte decree should be set aside.
The two branches of the rule are distinctive, and the
defendant, whatever his position may be in respect of
one branch, is entitled to benefit of the other branch,
if he satisfies the court that he has made good his
contention in respect of the other branch.

9.13. In the earlier Report, several points were
considered with reference to this rule, and
amendments suggested on one point,-the broad object
being to ensure that a decree shall not be set aside
merely on theground of irregularity in service, if the

defendant had knowledge of the decree. After consideration of the points discussed in the earlier Report, we have reached the same conclusion.
22. Accepting the recommendations of the Law Commission, the rule was amended by the Code of Civil Procedure (Amendment) Act. 1976. Rule 13 of Order IX with effect from February 1, 1977 now reads thus;
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:
Provided further that no Court shall set aside a decree passed ex parte merely on the ground that there has been an irregularity in the service of summons, if it is satisfied that the defendant had notice of the date of hearing and had sufficient time to appear and answer the plaintiff s claim.
Explanation - Where there has been an appeal against a decree passed ex- parte under this rule, and the appeal has been disposed of on any ground other than the ground that the appellant has withdrawn the appeal, no application shall lie under this rule for setting aside that ex parte decree (emphasis supplied)
23. It is, therefore, clear that the legal position under the amended Code is not whether the defendant was actually served with the summons in accordance with theprocedure laid down and in the mannerprescribed

defendant had knowledge of the decree. After
consideration of the points discussed in the earlier
Report, we have reached the same conclusion.

22. Accepting the recommendations of the Law
Commission, the rule was amended by the Code of
Civil Procedure (Amendment) Act. 1976. Rule 13 of
Order IX with effect from February 1, 1977 now
reads thus;

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:

Provided further that no Court shall set aside a
decree passed ex parte merely on the ground that
there has been an irregularity in the service of
summons, if it is satisfied that the defendant had
notice of the date of hearing and had sufficient time to
appear and answer the plaintiff s claim.

Explanation - Where there has been an appeal
against a decree passed ex- parte under this rule, and
the appeal has been disposed of on any ground other
than the ground that the appellant has withdrawn the
appeal, no application shall lie under this rule for
setting aside that ex parte decree (emphasis supplied)

23. It is, therefore, clear that the legal position under
the amended Code is not whether the defendant was
actually served with the summons in accordance with
theprocedure laid down and in the mannerprescribed

in Order V of the Code, but whether (i) he had notice of the date of hearing of the suit; and (ii) whether he had sufficient time to appear and answer the claim of the plaintiff. Once these two conditions are satisfied, an ex parte decree cannot be set aside even if it is established that there was irregularity in service of summons. If the Court is convinced that the defendant had otherwise knowledge of the proceedings and he could have appeared and answered the plaintiff's claim, he cannot put forward a ground of non service of summons for setting aside ex parte decree passed against him by invoking Rule 13 of Order IX of the Code. Since the said provision applies to Debt Recovery Tribunals and Appellate Tribunals under the Act in view of Section 22(2)(g) of the Act, both the Tribunals were right in observing that the ground raised by the appellants could not be upheld. It is not even contended by the appellants that though they had knowledge of the proceedings before the DRT, they had no sufficient time to appear and answer the claim of the plaintiff-bank and on that ground, ex parte order deserves to be set aside.” (emphasis provided) Thus, inview of the dictum of the Hon’ble
Supreme Court since the parties had notice of
the date of hearing with sufficient time to
appear then other things are immaterial. Similarly in the present matter the applicants
were duly served the notices and thus they
were aware of the pendency of the matter
therefore non serving of notices on the office premises have no fatal consequences.

in Order V of the Code, but whether (i) he had notice
of the date of hearing of the suit; and (ii) whether he
had sufficient time to appear and answer the claim of
the plaintiff. Once these two conditions are satisfied,
an ex parte decree cannot be set aside even if it is
established that there was irregularity in service of
summons. If the Court is convinced that the
defendant
had
otherwise
knowledge
of
the
proceedings and he could have appeared and
answered the plaintiff's claim, he cannot put forward
a ground of non service of summons for setting aside
ex parte decree passed against him by invoking Rule
13 of Order IX of the Code. Since the said provision
applies to Debt Recovery Tribunals and Appellate
Tribunals under the Act in view of Section 22(2)(g)
of the Act, both the Tribunals were right in observing
that the ground raised by the appellants could not be
upheld. It is not even contended by the appellants that
though they had knowledge of the proceedings before
the DRT, they had no sufficient time to appear and
answer the claim of the plaintiff-bank and on that
ground, ex parte order deserves to be set aside.”

(emphasis provided)
Thus, inview of the dictum of the Hon’ble

Supreme Court since the parties had notice of

the date of hearing with sufficient time to

appear then other things are immaterial.
Similarly in the present matter the applicants

were duly served the notices and thus they

were aware of the pendency of the matter

therefore non serving of notices on the office
premises have no fatal consequences.

For the foregoing reasons I do not find any
merit in the present M.A. and thus, the same is
hereby dismissed with no order on cost.
File be closed and confined to record. Sd/- P.O. DRT-I

For the foregoing reasons I do not find any

merit in the present M.A. and thus, the same is

hereby dismissed with no order on cost.

File be closed and confined to record.
Sd/-
P.O.
DRT-I

Ms Sanket Industries Limited v. Bank of India

Case brief

What is this about?

What did the court decide?

Ms Sanket Industries Limited v. Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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