1. Rule. Mr. A. A. Zabuawala, learned advocate waives service of notice of rule on behalf of the respondent.
2. Having regard to the controversy involved in the present case, which lies in a very narrow compass, with the consent of the learned advocates for
the parties, the matter was taken up for hearing at the admission stage.
3. By this petition under Articles 226 and 227 of the Constitution of India, the petitioners have challenged the order dated 21.1.2017 passed by the
Commercial Court, Vadodara below Exhibit-7 in Commercial Civil Suit No.157 of 2016 whereby the application filed by the petitioners for condonation
of delay in entering appearance in response to the summons issued by the court has been dismissed.
4. The facts stated briefly are that the Special Summary Suit No.49 of 2014 came to be instituted by the respondent plaintiff under Order XXXVII of
the Code of Civil Procedure, 1908 (hereinafter referred to as the “Codeâ€) in the City Civil Court at Vadodara on or about 15.5.2014. The claim in
the suit was for Rs.2,35,95,781/- with 18% interest on which the plaintiff computed court fee of Rs.75,000/-. The court issued summons on 11.8.2014
which was served on the petitioners on 26.8.2014. Since the petitioners (original defendants) had not appeared before the court within ten days from
the date of service of summons, on 19.1.2015, the petitioners filed an application for condonation of delay of 137 days in filing
appearance/vakalatnama. The reason stated for such delay was that the defendant No.4 therein viz., Mr. Paresh Vyas is an authorised person of
Unit-5 of Kiri Industries Limited, Dudhwada, Taluka Padra, District Vadodara, who also performed duties as Chief Operating Officer. The registered
office of the Kiri Industries Limited is located at 7th Floor, Hasubhai Chambers, Near Town Hall, Ellisbridge, Ahmedabad whereas the
summons/notice of the said suit was served at Unit-5 of Kiri Industries Limited, Dudhwada, Taluka Padra, District Vadodara. Therefore, the
defendants No.1 to 3 had no personal knowledge about the service of summons/notice. The defendant No.4 did not inform the other defendants about
the said suit and hence, the defendants (the petitioners herein) were not able to file appearance/vakalatnama within ten days. On 12.1.2015, the
defendant No.4 had visited the Ahmedabad office, at that time, he informed the other defendants about the suit. Thereafter, the defendant No.3
inquired about the same and came to know that due to personal reasons of the defendant No.4 he had not informed them about the said suit.
According to the defendant No.4, his mother was very sick for the last six months and so he was mentally disturbed and forgetfully he had not
informed the other defendants about the suit. Therefore, the defendants were not able to file appearance/vakalatnama.
5. In the meanwhile, it appears that upon the coming into force of the Commercial Courts Act, 2015 the suit came to be transferred to the Commercial
Court, Vadodara and was numbered as Commercial Civil Suit No.157 of 2016. The application for condonation of delay came up for hearing before
the Commercial Court. By the impugned order, the Commercial Court rejected the application.
6. Mr. A. L. Shah, learned counsel with Mr. Rituraj Meena, learned advocate for the petitioners submitted that the Commercial Court was not justified
in rejecting the application for condonation of delay when sufficient cause had been made out by the petitioners for the delay that has occasioned in
filing appearance in response to the summons issued to the petitioners. Referring to the facts stated in the memorandum of application as referred to
hereinabove, it was submitted that the delay that has occasioned in entering appearance pursuant to the summons has been sufficiently explained. In
support of such submission, the learned counsel placed reliance upon the decision of the Supreme Court in Collector Land Acquisition, Anantnag v.
Mst. Katiji, AIR 1988 SC 897, for the proposition that ordinarily a litigant does not stand to benefit by lodging an appeal late. Refusing to condone
delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is
condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. The court also held that it must be grasped
that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and
is expected to do so. It was submitted that the Commercial Court has failed to keep in mind the above principles while rejecting the application for
condonation of delay.
6.1 It was also submitted that the Commercial Court has failed to appreciate that the notice was received by the person working for the defendant
No.4 and not by the defendant No.4 himself as he was in personal difficulty. That the service of notice was not received by the defendants directly
and the person who had received the same had not informed the petitioners herein in time, the petitioners could not file their appearance before the
court in time. It was submitted that, therefore, the Commercial Court was not justified in rejecting the application for condonation of delay.
6.2 It was further submitted that apart from the above, in this case the plaint was filed on 15.5.2014, the summons was issued on 11.8.2014; and the
petitioners had filed application for condonation of delay on 19.1.2015; whereas the entire court fees had been paid by the plaintiff only on 3.2.2015. It
was submitted that in the absence of necessary court fees being paid, the summons could not have been issued to the defendants. It was submitted
that as the suit was filed without paying appropriate court fees, the matter was under office objections. Reference was made to rule 43 of the
Ahmedabad City Civil Court Rules, 1961 which bears the heading “Register of Suits†and provides that when all the office objections have been
removed and the deficit court fees paid, the plaint shall be admitted, and on admission, shall be entered in the Register of Suits. The suit shall be
numbered in accordance with the serial number of the entry in the Register and an endorsement thereof shall be made in the plaint. It was submitted
that in the absence of appropriate court fees having been paid, the suit could not have been registered and consequently, no summons ought to have
been issued.
6.3 In conclusion, it was submitted that the petition deserves to be allowed by condoning the delay caused in filing appearance pursuant to the
summons issued by the Commercial Court.
7. On behalf of the respondent (original plaintiff), Mr. A. A. Zabuawala, learned advocate, submitted that the provisions of Order XXXVII of the
Code are mandatory and accordingly, the defendant is required to put in appearance within ten days of service of summons and therefore, the question
of condoning the delay in filing appearance does not arise. It was contended that no reasonable cause has been put forth by the defendants for not
filing appearance within the prescribed period and hence the Commercial Court was wholly justified in rejecting the application for condonation of
delay.
8. It may be noted that despite categorical averments having been made in the petition regarding court fees having been paid after the application for
condonation of delay having been filed, there is no counter affidavit, contradicting the same. The averments made in the petition shall, therefore, have
to be construed as true and correct. Moreover, the petitioners have placed on record xerox copies of court fee stamps worth Rs.75,000/- dated
3.2.2015, which clearly establish that the court fees came to be paid only on 3.2.2015.
9. Sub-rule (1) of rule 3 of Order XXXVII of the Code postulates that in a suit to which the Order applies, the plaintiff shall, together with the
summons under rule 2, serve on the defendant a copy of the plaint and annexures thereto and the defendant may, at any time within ten days of such
service, enter an appearance either in person or by pleader and, in either case, he shall file in Court an address for service of notices on him.
Therefore, sub-rule (1) of rule 3 contemplates filing of appearance within a period of ten days from date of service of summons. Admittedly, in the
present case there has been a delay of 137 days. Therefore, the petitioners filed an application for condonation of delay, setting out the grounds
referred to hereinabove. By the impugned order, the Commercial Court has rejected the application on the ground that while it was the case of the
petitioners that the summons had been served upon the defendant No.4 who did not inform them about such service, from the process server’s
report, it emerges that the summons had in fact been received on behalf of defendants No.1 to 4 by one Mr. Rajesh Kothari and not the defendant
No.4 Paresh Vyas. The Commercial Court has treated this to be a false ground taken up by the petitioners and on the ground that they have
concealed a material fact regarding service and have pressed into service a false ground has expressed the view that the petitioners have failed to
explain the delay sufficiently.
10. Having regard to the facts of the case, it is evident that the case put forth by the petitioners explaining the delay was that the defendants No.1 to 3
had no personal knowledge about the service of summons/notice. The defendant No.4 did not inform the other defendants about the suit, and hence,
the defendants were not able to file appearance/vakalatnama, and that it was only on 12.1.2015, when the defendant No.4 visited the Ahmedabad
office that he informed them about the suit whereupon they learnt about the institution of the suit. It is further the case of the petitioners that upon
inquiring from the defendant No.4, he had stated that as his mother was not keeping well, he was mentally disturbed and had forgotten to inform the
other defendants about the suit.
11. In the opinion of this court, what the process server’s report says is not in conflict with what the petitioners have stated in the application.
According to the petitioners, the defendant No.4 is the authorised person of Unit-5 of Kiri Industries Limited, Dudhwada and he was also performing
the duty of Chief Operating Officer. It is further the case of the petitioners (the defendants No.1 to 3), that the summons was served at Unit-5 of Kiri
Industries Limited, Dudhwada and, therefore, they, had no personal knowledge about the same and that the defendant No.4 did not inform them about
it and hence, they could not enter appearance. Upon inquiring from the defendant No.4, it was learnt that his mother was very ill and so he was
mentally disturbed and did not inform the defendants about the suit. It is for this reason that petitioners could not enter an appearance within the time
specified in sub-rule (1) of rule 3 of Order XXXVII of the Code. From the process server’s report, it has come out that one Rajesh Kothari had
received the summons on behalf of the petitioners. From the averments made in the application, it is nowhere the case of the petitioners that the
summons was personally received by the defendant No.4; what is stated by them is that the summons was served at Unit -5 of Kiri Industries and that
the defendant No.4 who was the authorised person of that unit failed to inform them. Thus, there is no reason for the Commercial Court to come to
the conclusion that there is concealment of material facts regarding service or that the defendants have taken a false ground. From the cause title of
the application, it is clear that Mr. Rajesh Kothari is not a defendant but a person working under the defendant No.4, whereas the defendant No.4
Paresh Vyas is the Chief Operating Officer of Kiri Industries Unit-5. Therefore, when the summons was served at Unit-5 Kiri Industries, it is
expected that the person in charge would inform the petitioners about the service of summons. He, having failed to do so, the petitioners could not
enter appearance within the prescribed time limit.
12. The Commercial Court, having based its conclusion on the findings of concealment of material facts and the defendants having taken a false
ground, which evidently are erroneous findings, it is not possible to say as to what extent the final conclusion is swayed by such findings. Under the
circumstances, the impugned order being based on incorrect findings of fact, stands vitiated and cannot be sustained. The petitioners having put forth a
plausible explanation, which finds support in the process server's report, which clearly shows that the petitioners were not served with the summons
and that some other person had received it on their behalf, this court is of the view that sufficient cause has been made out for condoning the delay
that has occasioned in entering appearance on the part of the petitioners.
13. Another relevant aspect of the matter is that the court fees had been paid by the plaintiff only on 3.2.2015, after the petitioners filed the application
for condonation of delay. In the light of rule 43 of the Ahmedabad City Civil Court Rules 1961, one fails to understand as to how summons could have
been issued to the defendants without appropriate court fees having been paid, inasmuch as in terms of the said rule, it is only after office objections
have been removed and deficit court fees paid that the plaint can be admitted.
14. In the light of the above discussion, the petition succeeds and is accordingly, allowed. The impugned order dated 21.1.2017 passed by the
Commercial Court, Vadodara below Exhibit-7 in Commercial Civil Suit No.157 of 2016 is hereby quashed and set aside. The application Exhibit-7 is
hereby allowed. The delay of 137 days caused in filing appearance/vakalatnama is hereby condoned.
15. Rule is made absolute accordingly with no order as to costs.
