Featured image for Supreme Court Judgment dated 29-01-2018 in case of petitioner name M/S Neerja Realtors Pvt Ltd vs Janglu (Dead) Through LR
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Legal Validity of Substituted Service and Specific Performance: Supreme Court’s Landmark Ruling

The Supreme Court of India, in its judgment in M/S Neerja Realtors Pvt Ltd vs. Janglu (Dead) Through LR, examined the legal principles surrounding specific performance of contracts and the validity of substituted service under the Code of Civil Procedure, 1908. The case revolved around an agreement for the sale of land, which became a contentious issue when the defendant failed to appear in court due to allegedly improper service of summons. The ruling of the Supreme Court provides a significant precedent on how courts should handle such disputes and underscores the importance of procedural compliance in civil litigation.

Background of the Case

The dispute originated from an agreement dated 15 July 2006 between M/S Neerja Realtors Pvt Ltd (the appellant) and the original defendant concerning agricultural land in Mauza-Sondapar, Tahsil Hingna, District Nagpur. The total consideration agreed upon was Rs. 13,04,391, with an advance payment of Rs. 3,26,000. The remaining amount was to be paid at the time of execution of the sale deed.

However, a legal hurdle emerged when the defendant’s daughter, Shobha, filed a partition suit against her father and the appellant. She claimed that the land was ancestral property and that the agreement was procured through fraud and misrepresentation. The trial court dismissed her claim, affirming that the land belonged to the original defendant and that the agreement was valid.

Filing of the Specific Performance Suit

After the partition suit was dismissed, the appellant filed a suit for specific performance on 5 February 2011. The trial court issued summons for the defendant’s appearance, but the notices were returned unserved. The bailiff’s report indicated that the defendant was no longer residing at the given address and had moved elsewhere two years prior.

Given the failed service attempts, the appellant moved an application for substituted service under Order V Rule 20 (1-A) of the CPC, which the trial court allowed on 2 September 2011. The service was carried out through publication in the Marathi daily newspaper, Lokmat. Since the defendant did not appear in court despite this notice, the trial court proceeded ex parte and decreed the suit in favor of the appellant on 13 June 2014, directing the appellant to deposit the balance consideration.

Appeal Before the High Court

Aggrieved by the ex parte decree, the defendant filed a first appeal under Section 96 of the CPC before the High Court. During the pendency of the appeal, the defendant passed away, and his legal representatives were brought on record. The High Court reviewed the case and found that the substituted service was not carried out in accordance with the law. Consequently, it set aside the ex parte decree and remanded the matter back for fresh consideration.

Key Legal Issues Before the Supreme Court

The appellant challenged the High Court’s ruling before the Supreme Court, raising the following legal issues:

  • Was the substituted service of summons carried out in compliance with the provisions of Order V Rule 20 of the CPC?
  • Did the High Court err in setting aside the trial court’s ex parte decree despite the defendant’s non-appearance?
  • Does non-compliance with procedural requirements render an ex parte decree void?

Arguments by the Appellant

The appellant contended that the High Court had misconstrued the provisions of Order V Rule 20. According to the appellant:

  • Substituted service through newspaper publication is an accepted mode of service under Order V Rule 20.
  • Once the summons was published, there was no requirement to affix a copy of the summons at the court premises or at the last known residence of the defendant.
  • The trial court’s order allowing substituted service was valid and in accordance with legal principles.

Arguments by the Respondent

The respondent argued that the High Court was correct in setting aside the ex parte decree, as the service of summons did not comply with the statutory requirements. It was contended that:

  • The bailiff’s report did not establish that proper attempts were made to serve the defendant before resorting to substituted service.
  • Order V Rule 20 mandates that the court must be satisfied that the defendant is avoiding service before allowing substituted service.
  • Since the procedure was not properly followed, the ex parte decree was vitiated.

Supreme Court’s Ruling

The Supreme Court upheld the High Court’s decision and set aside the ex parte decree. The Court emphasized the following principles:

  • Substituted service should be used only as a last resort when all reasonable efforts to serve the summons have failed.
  • Order V Rule 20 requires the court to record its satisfaction that the defendant is deliberately avoiding service before granting substituted service.
  • Failure to comply with procedural requirements vitiates the service of summons and renders an ex parte decree unsustainable.

Judicial Precedents Considered

The Court referred to several landmark judgments, including:

  • Bhanu Kumar Jain v. Archana Kumar (2005) 1 SCC 787: Affirmed that a defendant against whom an ex parte decree is passed can challenge it on the grounds of improper service.
  • Rabindra Singh v. Financial Commissioner, Punjab (2008) 7 SCC 663: Held that non-compliance with service procedures under the CPC renders a decree liable to be set aside.
  • Mahesh Yadav v. Rajeshwar Singh (2009) 2 SCC 205: Reiterated that proper service of summons is a fundamental requirement in civil litigation.

Conclusion

The Supreme Court’s ruling reinforces the importance of following due process in civil suits. The judgment serves as a reminder that courts must ensure strict compliance with procedural requirements before proceeding ex parte. This case sets a significant precedent for litigants and legal practitioners, emphasizing that the right to a fair trial cannot be undermined by procedural lapses.

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