1988 PLP 1985 (CLC)

‑‑‑S. 7‑‑Civil Procedure Code (V of 1908),

0. XXXVII, Il. 4‑‑Service of summons‑‑Bailiff making two attempts to serve defendants but they were not served as they had shifted from given address‑‑Defendants thereafter had not been served through registered post but served through publication‑‑Service through publication, held, could not be treated proper service in circumstances. (d) Banking Companies (Recovery of Loans) Ordinance (XIX of 1979)‑‑ ‑‑‑S. 7‑‑Civil Procedure Code (V of 1908),

0. XXXVII, R. 4‑‑Ex parte decree, setting aside of‑‑Defendants/judgment/debtors were visited by bailiff twice but were reported to have left their place of business and residence and thus could not be served‑‑Summons were not sent by registered post but got published‑‑Service, held, was not proper‑‑Ex parte decree passed as a result of non‑appearance of defendant set aside and defendant allowed to file application under O.XXXVII, R.3, Civil Procedure Code. [p. 1988] D Mamnoon‑ul‑Hassan for Plaintiff. Khalil‑ur‑Rehman and Waheed Farooqi for Defendants. Date of hearing: 24th April, 1986. This is an application under Order XXXVII, rule 4, C.P.C. for setting aside the ex parte decree passed on 9‑8‑1984. The defendant No. 2 who is the Director of the defendant No. 1 has filed his affidavit in support of this application. It has been alleged that summons in the suit are issued simultaneously through bailiff and also by publication as required under rule 8 of the Banking Companies (Recovery of Loans) Ordinance, 1979, but they remained unserved and publication was made in Daily Mashriq, dated 19‑2‑1984. It is alleged that service affected by publication was not held to be a good service by the Additional Registrar and it was ordered that the summons be reported against the defendants Nos. 1 to

6. The summons was accordingly issued against them for 8‑5‑1984 which remained unserved. On 11‑5‑1984, on the basis of publication made in Mashriq, dated 19‑2‑1984, the Additional Registrar held the service against the defendants Nos. 1 to 6 as proper and good. It is stated that if summons would have been served properly the defendants would have appeared. It is further alleged that service is not proper as Daily Mashriq has a limited publication in Karachi, and general public usually read. Dawn and Jang. It is pleaded that the defendants have a strong and arguable case. It has been denied that late Mian Muhammad Yaqoob guaranteed the loan for defendant No. 1 and the letter of guarantee if any, would have been in connection with some other company of which the deceased was director and was signed by him in blank. The defendants have been challenging the correctness of accounts which included penal interest and was not agreed by them. In any case the statement of accounts is not correct. It is also pleaded that the documents were signed in blank and delivered to the defendants. The plaintiffs have filed counter‑affidavit stating that no special circumstance has been made out for setting aside the decree. The defendants have not denied the loan granted to defendant No. 1 and the execution of the documents including promissory note, debit balance, confirmation letter and the guarantees executed in the matter as disclosed in the plaint. It has been denied that the defendant came to know about the decree on 21‑8‑1984. According to the plaintiff service was properly effected through publication in Mashriq, dated 19‑2‑1984, which is legal in accordance with law. It was denied that the defendants had ever challenged the correctness of the statement of account or charging of the penal interest which the plaintiffs are entitled to charge according to Annexure 'X' to the plaint. Mr. Khalilur Rehman the learned counsel for the defendants contended that there was no proper service on the defendants and, therefore, no valid decree could have been passed. The suit was filed under Banking Companies (Recovery of Loans) Ordinance, 1979, and the mode of service of summons is regulated by rule

8. It provides that summons shall be issued by registered post, through the bailiff and by publication in the newspaper. Therefore, three independent modes of issuing summons to the defendants has been prescribed and each one has to be followed and complied with. In the present case the summons was issued through the bailiff, for appearance before the Additional Registrar on 6‑3‑1984 simultaneously summons was issued for publication in the newspaper and also by post. There is nothing on record to show that notice was issued by registered post. The office has, however, on query informed that although the registration charges were paid but summons were issued under postal certificate. The summons issued by post to the defendant No. 1 has been returned undelivered. on record no other postal envelopes are available. The bailiff has reported that summons was duly served on defendant No.

7. The defendant No. 1 was reported to have closed down its office and defendants Nos‑ 2 to 6 in spite of repeated visits were not available at the time of service, and the persons residing in the house had refused to' accept it. The bailiff, therefore, left a copy of the summons at their residence for their information. A copy was also pasted on Court notice board. On 6‑3‑1984 the Additional Registrar ordered that as publication has not been returned, the defendant No.l has closed its office and defendants Nos. 2 to 6 have not been served through the bailiff fresh summons be issued to them and matter was fixed on 9‑4‑1981. On ~ that date the Additional Registrar, noted that the publication has been duly received, but fresh summons, were not issued because process was not paid. Again order for fresh service was made and summons were accordingly issued to the defendants Nos. 1 to 6 which returned unserved. According to the bailiff, on the given address of the defendant No.1 no company of that name exists. The defendants Nos. 2 to 3 were not present and defendants Nos. 4, 5 and 6 have shifted from the house for the last two months and another man Muhammad Alam was residing there. It seems that the matter was taken up by the Additional Registrar on 16‑5‑1984 when he passed the order regarding service of summons. He noted that the defendants Nos. 1, 4, 5 and 6 have shifted, the defendants Nos. 2 and 3 were not available and as the summons has been duly published, the defendants are properly served and matter was fixed for final disposal as no one had appeared and filed application for leave to appear and defend. From the facts on record it seems that the Court had made attempts to serve the defendants in the prescribed manner except that the summonses were not issued by registered post A/D. Instead they were issued under postal certificate. The Banking Companies (Recovery of Loans) Ordinance provides a special procedure for service of summons. The question is whether all the three modes have to be complied with and in the absence of compliance with any one of the modes the service will be proper or not. In my view the summons should be issued in all the three prescribed modes and there should be no laxity in that regard. In C.P.C. summons could be issued through publication only in cases where the defendants were found to be avoiding the normal service through the bailiff or by post. In the Ordinance this requirement seems to have been done away with and the summons is required to be published immediately on filing the plaint. This is a completely independent mode of service and is to be issued in the noraml course like summons issued through bailiff or by post. According to Mr. Khalilur Rahman as the summons was not issued by registered A/D. the entire proceeding is vitiated and even otherwise the defendants Nos. 1 to were never served. The question arises how and when the summons issued to the defendant should be held to be properly served. This problem is being faced every day, and it would be proper to analyse the provisions of the Ordinance and its Rules. In view of Rule 8 the Court should issue summons in all the three modes. If the defendant appears on the date of hearing then even if other modes, have not been complied with, the proceeding will not be vitiated for non compliance. The object of issuing summons is to notify the defendant of the claim and once he appears in pursuance of any one mode of service he cannot object that till such time all the modes of service are complied with the service cannot be held to be proper. Where summons is served through the bailiff and the defendant does not appear, the Court should take ex parte proceedings after it has issued summons by registered post A/U. and publication in the newspaper. Likewise 'if the summons is served by registered post A/D. and the defendant does not appear ex parte proceeding should be taken only after the summons has been issued through bailiff and publication. The third situation may arise where the summons has been published in an newspaper but the summonses issued through bailiff and by registered 'post A /D. have not been served or not issued at all. 1n such circumstance mere publication of summons cannot be treated as proper and valid; service. Rule 8 prescribes mode of issuing summons but the provisions' of Ordinance or rule are silent over the effect of publication of summons. In these circumstances in view of section 3 of the Ordinance the' provisions of C.P.C. which are not inconsistent with the Ordinance can be pressed in service. In my view the summons published under Rule 8 can be held to be due and proper service if it is established that the defendant is avoiding the service thro=ugh bailiff and by post or his whereabouts are not known. In the light of this discussion it seems that in the present case the bailiff did make two attempts to serve the defendants but they were not served as they had shifted from the given address. It is not the case of the defendant No.l that it has not closed its office nor the defendants Nos. 4, 5 and 6 state that they have not shifted from the address mentioned in the plaint or that they had informed the plaintiff about their new address, or that they are residing at the same address. In these circumstances, even the summons sent by registered post could not have been served. However, as the defendants have not been served through the bailiff before holding service as proper the Additional Registrar should have ensured that the summons has been issued by registered post A/D. In these circumstances, mere publication of summons cannot be treated as proper service. Mr. Khalilur Rehman has contended that the Additional Registrar after publication in the newspaper decided to issue fresh summons through the bailiff, therefore, the publication was not held to be a proper service. This contention is misconceived. At the time the Additional Registrar issued fresh summons he was complying with Rule 8 without considering the effect: of publication. This question was considered and decided on 16‑5‑19841 when the defendants were held to be duly served. The power to set aside the decree passed in a suit filed under Order XXXVII, C.P.C. or to which this provision applies is provided under Order XXXVII, rule 4, C.P.C. Under this prevision unless special circumstances are shown the decree cannot be set aside. The defendant have left their place of business and residence, the bailiff made two attempts to serve them, the summons was published in a newspaper but 'as it was not sent by registered post on technical grounds the service has not been held to be proper. The defence set out in the application are general and vague. In these circumstances the decree is set aside on the condition that the defendants Nos. 1 to 6 shall furnish security in the sum of Rs.45,50,000 to the satisfaction of the Nazir. The amount for furnishing security has been fixed after taking into consideration the collateral mortgage under which Rs.1,50,000 have been secured. The security should be furnished within 3 weeks. The defendants Nos. 1 to 6 shall be entitled to file application under Order XXXVII, rule 3, C.P.C. within 10 days from today but notice of this application will be issued after these defendants bag furnished security.