Holding

Service of summons on an office assistant who is not a secretary, director, or principal officer is not valid, rendering the ex‑parte decree void.

Summary

The respondent filed a suit for damages against Shalimar Rope Works Ltd. and served summons at the company's registered office in Calcutta, handing it to an office assistant, Navlakha, who was not a secretary, director, or principal officer. The company remained unaware of the summons and the subsequent ex‑parte decree until late July 1975. The trial court set aside the decree, holding the service invalid; the High Court reversed this decision under Section 115 CPC. On appeal, the Supreme Court examined Order 29 Rule 2 of the CPC, concluding that service on an unauthorized employee does not constitute valid service on a corporation, and that leaving the summons at the registered office is permissible only when due diligence under Order 5 Rule 17 has been shown, which was not done. Consequently, the Supreme Court allowed the appeal, restored the trial court's order, and directed the suit to proceed.

Issues considered

Whether service of summons on a corporation is valid when delivered to an office assistant at the registered office.
Interpretation of Order 29 Rule 2 (a) and (b) of the Code of Civil Procedure regarding service on a corporation.
Whether the High Court erred in setting aside the trial court's decision under Section 115 CPC.

Legislation cited

Code of Civil Procedure, 1908s. Order 29 Rule 2, s. Order 5 Rule 17, s. Order 9 Rule 13, s. Section 115

Subjects

service of summonscorporationex‑parte decreeCPC Order 29principal officervalidity of service

Judgment

A SHALIMAR ROPE, WORKS LTD.
v.
ABDUL HUSSAIN H. M. HASAN BHAI RASSIWALA AND ORS.
~- -
May 7, 1980

B [N. L. UNTWALIA, P. N. SHINGHAL AND V. D. TULZAPURKAR, JJ.J

Surnmons, servic~ of-Suits by of against Corporation-Service of . sum-
mons how to be effer:ted to be valid.-Code of Civil Procedi1re Code, Order 29
Rule 2, Order 5 Rule 17.

The respondent filed a suit at Indore on 24-2-1975- against the appellant
claiming damages to the tune ·of Rs. 26!000/- on· account of the. alleged non-
c delivery of certain goods. Summons in the suit was sent to the registered office
of the company in Calcutta and was served on Sr( Nav!akha on 17-3-1975
asking the company to appear at Indore on 25-3-1975. Since the company did
not appear in the Court on that date, eventually, t~ exparte decree was passed
on 22-4-1975. The appellant company came to know about the ex-parte decree
for the first time when its constituted attorney Sri Jhunjhunwala received a notice·
frorn the respondent by registered post demanding the. decretal dues. 'fhere-
1> upon 'Sri N. S. Pareek, the Works Secretary of the company who is in-charge of
the legal matters \Vas sent to Indore toi ascertain as to how the· ex-parte decree
can1e to be passed. Paree-k learnt that ·the summons was purported to have
been served on Navalakha on 17-3-75. Navalakha .did not bring the fact of
the receipt of summons by him to the knowledge of any responsible officer of
) the company. He was neither secretary nor a Director nor any other principal
officer of the company authorised to receive summorls in the suit. The com-
E pany remained in dark and. learnt for the lint time on 29-7-75 about the passing
of the ex-parte decree. The Trial Court allowed the application" but the High
Cou1t in revision under S. 115 of C.P.C. restored the ex-parte order. Hence
the appea-1 by special ]eave.

Allowing the appeal, the Court

F HELD : I. Rule 2 of Order XXIX of C.P.C. is not an exhaustive provision
providing for all modes of service on the Company in the sense .as· to what is
meant by service of summons on the Secretary, Director or Principal Officer. I

Service on managing agents who are a corporation is valid under clause (a)
of Rule 2 of Order XXIX C.P.C., since a Principal Officer in clause (a) of
Rule 2 has been held to include managing agents and it can under this rule, be
i
\
on a juristic r:erson. [1031 D1..E]
G
Jute and Guurzy Brokers Ltd.i & .A.nr. v. Union of India and Ors., [1961] 3
SCR p. 20; followed.
2. Sending a summon to a corporatiori by post addressed to it at its regis-
tered office may be a good mode of service either by itself, or preferably, by
Way of an addition.n l n1ode of service. But leaving the summons at the regis-
tered office of the corporation if it is literally interpreted to say that tho sum-
H mons can be left anywhere nncared for in the registered office of the company.
then it will lead to anomalous and absurd results. It has to be read in the
background cl' provision contained in Onler 5 Rule 17 of tlie Code. In other
f

SHALIMAR ROPE WO,RKS v. ABDUL HUSSAIN (Untwalia, !.) . 1029

...ms if the serving peon or bailiff is not able to serve the summon.. on the A
~ or any Director or any other Principal Officer of the Corporation
beCanse either be refnses to sign the sullllIIOOS or is not to be found by the
llU\'ing person even after due diligence then he can leave the snmmons at the
registered office of the company and make a report to that effect. Jn the instant
cue nothing of the klrul was done. It was also not the case llf the respondent
ill i13 rejoindec filed in the Miscellaneons case that the service of the summons
was effected in accordance with the fun part of claU!e (b) ~ R.nle 2 of Order B
29 of the Code. [!()32 B-D]

3. Nowhere in_ the rejoinder a st.and was taken by the respondents that the
summons was duly served on the company because it was left at the registered
office of the company. The company had no knowledge· of the ex~parte decree,
evell otherwise, before 29-7-75. Hence the application under O.JX Rule 13 of
C.P.C. has been correctly allowed. [1033 C-DJ C
°CML APPELLATE JURISDICTION: Civil Appeal No. 366 of 1979.
Appeal by Special Leave from the Judgment and • Order dated
28-2-1978 of the Madhya Pradesh High Court (Indore Bench) in Civil
Revision No. 93 of 1976.
D
Shanker Ghosh and· S. K. Gambhir for the Appellant.
R. K. Garg and A. K. Sanghi for Respondent No. 1.
The Judgment of the Court was delivered by
UNTWALIA, J. This appeal by special leave is from the judgmenf
of the Madhya Pradesh High Court reversing the decision of the Second E
Additional District Judge, Indore in MisceHaneous Judicial Case No.
23 of 1975. The appellant company had filed that case under Order
9 Rule 13 of the Code of Civil Prooedure, hereinafter called the Code,
for setting aside an ex-parte decree for Rs. 28,479/- passed in favour
al. the respondent firm on 22-4-197 5 against the appellant. The learned
Additional District Judge held that summons in the suit was not duly F
served on the company and it came to know about the decree on
29-7-1975. Hence he set aside the ex-parte decree. The respondent
firm filed a revision in the High Court under section _115 of the Code.
The High Court allowed the revision, set aside the judgment of the
Trial Court and upheld the passing of the ex-parte decree. Hence this
appeal. G
The respondent filed the suit at Indore on 24-2-1975 against the
appellant claiming damages to the tune of Rs. 26,00()/- on account of
the alleged non-delivery of certain goods. Summons in the suit was
!ent to the registered office of the company in Calcutta and is said to
have been served on one Shri Navlakha on 17-3-1975 asking the H
oompany to appear at Indore on 25-3-1975 for settlement of issues.
Since the company did ndt appear in the Court on that date, eventually,

.!
'
1030 SUPREME COURT REPORTS [1980] 3 s.C.R.

A the ex-parte decree was pass~ on 22-4-1975. According to the case
of the appellant the company came to know about the ex-parte decree
for the first time wh~n its constituted attorney Sjlri S. K. Jhunjhunwllla
received a notice from the respondent by registered post demanding the
decretal dues. Thereupon Shri N. S. Pareek, the Works Secretary of
JI
the company who is in-charge of the legal matters was sent to Indoce
B to ascertain as to how the ex-parte decree came to be passed. Pareclc
learnt that the summons purported to have been served on Navlakha on
17-3-1975. Navlakha was a mere Office Assistant in the Sales Depart-
ment of the company. He was neither a Secretary nor a Director nor ·
any other Principal Officer ·of the company authorised to receive sum-

t
mons in the suit. He did not bring the fact of the receipt of summOfll
c by him to the knowledge of any responsible officer of the company. Tbs
company remained in dark and, as stated above, learnt for the first time
on 29-7-1975 .about the passing of the ex-parte decree.
N. S. Pareek was the only witness examined on behalf of the appel-
lant in the .Miscellaneous case tried by the learned Additional District
D Judge. No witness was examined on behalf of the respondent. The 1
Trial Court held : -
"I hold that handing over of summons to N avlakha who
was oliy an Office Assistant working in the company and
who was not an officer duly authorised td accept summons
E dn behalf of the company did not amount to valid service
of summons on the applicant company."
It also accepted the ~ ppellant's case about the knowledge of the ex-parte
decree for the first time on 29-7-1975 and hence the application filed in
about a week's time thereafter was held to be within time.
F The High Court in its impugned judgment has held : -
"It is not ht dispute that the person who received the I

summons in the office of the Company is not a person who
is entitled to be served on behalf of the company in accor-
f
(
dance with sub-clause (a) of Rule 2 of Order 29 of
C.P.C."
G
The High Court, bowever, took the view that since Navlakha was an
employee of the company sitting in its registered office in Calcutta the
summons will be deemed to have been duly served on the company
within the meaning of the first part of clause (b) of Order 29, Rule 2
of the Code. In the opinion of the High Court since the learned Additio-
B nal District Judge did not apply his mind to the provision of law con-
tained in clause (b), it committed a material irregularity and illegality
in exercise of its jurisdjction in setting aside the ex-parte decree. r;

,.i;!l
'
lJHALIMAl\ ROPE WORKS v. ABDUL HUSSAIN (Untwalia, !.) 1031

In our opinion the High Court was clearly wrong in upsetting the A
judgment of the Trial Court. There was no error in that. judgment
much less any error of jurisdiction entitling the High Court to interfere
with it.
Order 29 of the Code is headed "Suits by or against Corporations".
Tbore are only three Rules in it. We are concerned with Rule 2 which B
reads as follows : -
"Subject to any statutory provision of process, where the
suit is against a corporation, the summons may be
served- '
·(a) on the secretary, or on any director, or other principal
officer of the corporation. or
c
(b) by leaving it.or sending it by post addressed to the
corporation at the registered office, or if there is no
registered office then at the place where the corporation
carries on business. n
Rule 2 is not an exhaustive provision providing for all modes of service D
on the company in the sense as to w~at is meant by service of summons
on the Secretary, Director or Principal Officer in lute and Gunny Bro-
kers Ltd. and another v. The Union of India and others(") it was held
that the words "Principal Officer" in clause (a) of Rule 2 would include
managing agents and it can, under this rule, be on a juristic person.
Accordingly se'i"ice on managing agents who are a corporation is valid E
under clause (a) .
The meaning of clause (b) has got to be understood in the ba~k
ground of the provisions of the Code iu Order 5 which is meant for issue
and service of summons on natural persons. Sending a summons by post
to the registered office of the company, unless the contrary is shown, F
will be presumed to be service on the company itself. But the first part
<>f clause (b) has got to be understood with reference to the other pro-
visions of the Code. In Rule 17 of Order 5 it has been provided : -
/
"Where the defendant or his agent or such other person as
aforesaid refuses to sign the acknowledgement, or where the
G
serving officer, after using all due and reasonable diligence,
cannot find the defendant, and there is no agent empowered
to accept service of the summons on his beha~. nor any other
person on whom service can be made, the serving officer shall
affix a copy of the summons on the outer door ot some otbei;
conspicuous part of the house in which the defendant ordina- H
rily resides or carries.on business or personally works for gain,
(I) [1961] 3 S.C.R. 820.

'
1032 SUPREME COURT REPORTS [1980] 3 S.C.R.

A and shall then return the original to the Court from wbich it
was issued, with ·a report endorsed . thereon or annexed
thereto stating that he has so affixed the copy, the circum-
stances under which he did so, and the name and address of
the person (if any) by whom the house was identified and
in whose presence the copy was aflixed."
B
Sending summons to a corporation by post addressed to it at its
registered office may be a good mode ?f service either by itself, or pre-
ferably, by way of an additional mode of service. But leaving the
summons at the registered office of the corporation if it is literally
interpreted to say that the summons· can be left anywhere uncared for
c in. the registered office of the company, then it will lead to anomalous
and absurd results. It has to be read in the background of the provision
C9ntained in Order 5 Rule 17 of the Code. In other words, if the serving
peon or bailiff is not able to serve the summons on the Secretary or
any Director or any other Principal Officer of the Corporation because
either he refuses to sign the summons or is not to be found by the serving
D person even after due diligence then he can leave the summons at the '
registered office of the company and make a report to that effect In the
instant case nothing of the kind was done. It was not the case of the
respondent in its rejoinder filed in the Miscellaneous case that the service
of the summons as effected in accordance with the first part of clause
(b) of Rule 2 of Order 29 of the Code. Annexure A to the counter
E affidavit filed by the respondent is the petition filed by the appellant
under Order 9 Rule 13 of the Code. In paragraph 9 of the said
. petition it was stated : -
"Inspection of re.cord of this Ron'ble Court relating to the
service of the summons reveals that the bailiff of the Small
Cause Court at Calcutta seems to have delivered a copy of the
'F summons to a gentleman who is described as an office-
assfutant, on 17-3-1975 at about 12.40 P.M. No office-
assistant of the defendant No. 1 Company is empowered or
authorised to receive summons. The original summons which
has been returned by the bailiff to this Hon'ble Court, has been
signed by one Shri Nawlakha. Shri Nawlakha was concerned
G
merely with sales ·and had nothing to do with legal matters
generally or with receiving summons in particular. Service of
the summons on Shri Nawlakha cannot be regarded as due
service on the defendant No. I for the purpose of Order 9 Rule
13 C.p.C."
• fl\'
H The rejoinder of the respondent is Annexure B to the colinter \•·
affidavit. Para 9 of the rejoinder which is in reply to para 9 of the
petition reads as follows : - \
SHALIMA!t ROPE WORKS V. ABDUL HUSSAIN (U!J.IW(l/ia, J.) 1033

"In reply to para 9 i! is stated that the summons was A.
duly served as stated in this para. But it is denied that
Shri Nawlakha was concerned merely with sales and has
nothing to do with legal matters, generally or with r11eeiving
summons in particular. It is denied that service on Shri
Nawlakha cannot be regarded as due service· on thei Com-•
• pany Defendant No. 1 for the purpose of Order 9 Rule 13 R
C.P.C. Shri Nawlakha was a responsible officer who could
have intimated the receipt of the summons to his so called
bosses. Without prejudice it is submitted that the Madhya
Pradesh ~mendment in Order 9 Rule 13 C.P.C. may kindly
be persued."
c
No where in the rejoinder a stand was taken ·that the summons
was duly served on the. company because it was left at tlle registered
office of the company. Refer~nce to the Madhya Pradesh amend-
ment of Order 9 Rule 13 is immaterial as the Trial Court has pointed
out that the company had no knowledge of the ex-parte decree, even
otherwise, before 29-7-1975. No contrary finding has been record- D
ed by the High Court.
We, therefore, hold that the judgment by the Trial Court setting
aside the decree was correct. In a:ny event no error of jurisdiction
was committed by it. The High Court weht wrong in interfering with
it. We accordingly allow the appeal, set aside the judgment of the . E
High Court and restore that of the Trial Court. The suit shall now
pr~ed to disposal in accordance with the law. We may, however,
make it clear that the api>ellant under the orders of the Court had
furnished bank guarantee for the decretal ampunt. 11 has agreed to
continue the same till the disposal of the suit. We shall make no
order as to costs. Jl'
"
"'
'S.R. Appeal allowed.

7-610SCl/80