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2001 DIGILAW 221 (CAL)

Shiw Murat Sharma v. Allahabad Bank

2001-04-19

Bhaskar Bhattacharya

body2001
JUDGMENT Bhaskar Bhattacharya, J. This revisional application under Article 227 of the Constitution of India is at the instance of defendant No.2 in a proceeding before Debt Recovery Tribunal and is directed against Order No. 40 dated October 19, 2000 passed by the Presiding Officer, Debt Recovery Tribunal in Misc. Application No.4 of 1999 arising out of T.A. No. 254 of 1994 thereby rejecting an application for setting aside ex parte decree passed in the said proceeding. 2. In the aforesaid proceeding before the Debt Recovery Tribunal against the petitioner and opposite party Nos. 2 and 3, the petitioner was described as a guarantor while the opposite party Nos. 2 and 3 were alleged to be actual borrowers. 3. There is no dispute that the said proceeding was decreed ex parte against all the defendants including the petitioner. 4. The present petitioner however came up with an application for setting aside the said ex parte decree on the ground that no summons of the said proceeding was served upon him and on or about November 26,1998 he received a letter dated November 19, 1998 from the defendant No.3 forwarding therewith notice and Certificate No. 116 of 1998 dated June 22, 1998 informing that a certificate had been issued by the Recovery Officer of Debt Recovery Tribunal, Calcutta demanding payment of Rs. 21.82 lakhs and odd. Thereafter on enquiry through a lawyer he came to know about the ex parte decree. 5. The said application was opposed by the Bank by filing written objection thereby denying the material allegations made in the application and it was contended that there was valid service of summons upon the petitioner. 6. By the order impugned herein the Tribunal has dismissed the application for setting aside ex parte decree. 7. Being dissatisfied, the petitioner has come up with the instant application under Article 227 of the Constitution of India. 8. Before I proceed to enter into the respective contentions of the parties the following facts as it appears from the record may be taken note of. The summons of the proceeding from Tribunal was sent by registered post with acknowledgment due in the name of the petitioner but the same came back with the postal remark 'out of Calcutta-left'. Thereafter the notice was published in two local newspapers viz. The Statesman and Sanmarg but inspite of that the petitioner did not appear. The summons of the proceeding from Tribunal was sent by registered post with acknowledgment due in the name of the petitioner but the same came back with the postal remark 'out of Calcutta-left'. Thereafter the notice was published in two local newspapers viz. The Statesman and Sanmarg but inspite of that the petitioner did not appear. It may be further noted here that when the registered envelop came back with remark 'out of Calcutta-left,' there was no allegation against the petitioner that the petitioner was evading the service of summons and as such summons could not be served in the ordinary way. The Tribunal also did not record any order holding that the petitioner was avoiding service of summons, but straightway passed a direction for publication of notice through newspaper. 9. Mr. Roychowdhury, the learned counsel appearing on behalf of the petitioner submits that in the absence of any allegation made by the bank that the petitioner was deliberately avoiding service of summons and in the absence of any finding to that effect, the Tribunal below acted illegally and with material irregularity in passing a direction for publication of summons in newspaper. According to Mr. Roychowdhury in the absence of such finding no order for substituted service could be passed. 10. In support of such allegation Mr. Roychowdhury relies upon a Division Bench decision of this Court in the case of Teharoon Chand vs. Messers Surajmull Nagarmull, reported in AIR 1984 Calcutta page 82. Mr. Roychowdhury thus prays for setting aside the ex parte decree. 11. Mr. Sahoo, the learned advocate appearing on behalf of the Bank has on the other hand supported the order passed by the Tribunal below and has contended that the provision contained in Order 5 Rule 20 of the Code of Civil Procedure is not applicable to the proceeding before Tribunal. He draws attention of the provision contained in section 22 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and contends that the Tribunal is not bound by the procedure laid down by the Code of Civil Procedure but shall be guided by the principles of natural justice. Mr. He draws attention of the provision contained in section 22 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and contends that the Tribunal is not bound by the procedure laid down by the Code of Civil Procedure but shall be guided by the principles of natural justice. Mr. Sahoo further draws attention of this Court to the provisions of Rule 23(VIII) which authorises the Registrar of the Tribunal to issue fresh notices or order, a particular method of service including substituted service by publication of the notice on a defendant in the newspaper. Mr. Sahoo thus contends that the Tribunal did not commit any illegality in directing publication of notice through newspaper after the notice came back with the postal endorsement 'out of Calcutta-left'. In support of his contention that the Tribunal is not bound by the provision contained in Code of Civil Procedure Mr. Sahoo relies upon the decision of the Apex Court in the case of Allahabad Bank vs. Canara Bank and Anr., reported in 2000(4) SCC page 406. 12. After hearing the learned counsel for the parties and after going through the materials on record and the decisions cited by the learned counsel for the parties I find that there is no dispute with the proposition of law that the ¥ Tribunal is not bound by the provisions contained in the Code of Civil Procedure but should be guided by the principles of natural justice. In this case there is no dispute that there is neither any allegation nor any finding that the petitioner was at any point of time keeping out of the way for avoiding service of summons. The postal endorsement was that he was out of Calcutta at the relevant point of time and thus the postal peon concluded that he 'left'. Even, the bank could not produce any material before the Tribunal that he had otherwise knowledge of the proceeding. Even accepting the contention of Mr. Sahoo that the Tribunal is not guided by the provisions contained in the Code of Civil Procedure, it cannot be disputed that the Tribunal at the same time cannot follow a procedure which is opposed the principles of natural justice. The provision in the Code of Civil Procedure for substituted service requires finding by a court that the defendant was avoiding regular service. The provision in the Code of Civil Procedure for substituted service requires finding by a court that the defendant was avoiding regular service. Even section 19 (3) of the Act (as it then stood; present section 19(4) casts a duty upon the Tribunal to issue summons upon the defendant requiring it to show cause within thirty days of "service of summons" as to why the relief prayed for should not be granted. 13. The mere publication of a summons in local newspapers cannot amount to "service of summons" unless it is established that the defendant was avoiding regular service provided by law. In ordinary case, merely because the defendant was not in his house when the summons by registered post sent through Tribunal was brought to his house by postman cannot authorise a Tribunal to order publication of summons in newspaper. At least there is no such provision either in the Act or in the Rule. We must bear in mind that it is not a case of refusal by the defendant of service of summons. Under such circumstances law does not authorise the Tribunal to straightway direct publication of summons in a local newspaper. If the procedure adopted by Tribunal is accepted then an innocent defendant will be saddled with ex parte decree although the defendant at the relevant point of time may not be a resident of the address as given by the bank authority in the application and in the process the bank by not giving correct address can secure an order of publication of summons in local newspaper although the defendant is not at all residing in the said locality. I am thus of the view that the provision contained in Order 5 Rule 20 of the Code for substituted service after complying with certain formalities prescribed therein being based on the principles of natural justice and in this case before publication of summons in local newspapers the Tribunal not having followed the said provision acted contrary to the principles of natural justice. 14. I am quite conscious that Rule 23(VIII) authorises the Registrar of the Tribunal to issue summons by substituted service by advertisement in the newspapers; but in the Rules the conditions under which such substituted service can be effected have not been mentioned. Therefore, the Registrar before ordering substituted service instead of actual one should follow the principles of natural justice. I am quite conscious that Rule 23(VIII) authorises the Registrar of the Tribunal to issue summons by substituted service by advertisement in the newspapers; but in the Rules the conditions under which such substituted service can be effected have not been mentioned. Therefore, the Registrar before ordering substituted service instead of actual one should follow the principles of natural justice. Justice demands that no substituted service should be ordered unless there is allegation that the defendant was keeping out of way for avoiding regular service or that he had definite knowledge of such proceeding and the Tribunal accepts such allegation. 15. I have already indicated that no material has been placed before Tribunal showing that the petitioner had otherwise knowledge of the proceeding. 16. In such circumstances, in my view, the order impugned cannot be sustained. 17. I thus hold that there was no valid service of summons upon the defendant and the Tribunal acted against the principles of natural justice by directing the publication of summons in two local newspapers without even ascertaining whether the defendant at the relevant time was really residing in this city. Over and above, the postal endorsement itself shows that the petitioner was out of Calcutta at the relevant point of time and there is no allegation that the defendant was avoiding service. 18.1 thus set aside the order impugned and allow the application filed by the petitioner for setting aside ex parte decree. The ex parte decree is set aside so far the present petitioner is concerned. The said decree passed against other two defendants is however not interfered with. I thus allow the revisional application to the extent indicated above. 19. The Bank is directed to serve a copy of the application under section 19 of the Act upon the learned advocate for the petitioner within a week and the petitioner is directed to file written statement within a month from date before Tribunal. No fresh service of summons upon the petitioner is necessary. 20. In the facts and circumstance there will be however no order as to costs. Application allowed.