Set aside exparte decree – the suit claim was for damages. The damages to the property if any, can be ascertained only after the parties adduce the oral and documentary evidence. We have no reason to believe that the appellant would have benefitted by deliberately not contesting the suit as they would in any event be saddled with interest if their conduct was to drag and prolong the suit.

NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 1890-1891 OF 2020
(Arising out of SLP(C) Nos.5374-5375 of 2019)
AVIATION TRAVELS PVT. LTD. …Appellant
VERSUS
BHAVESHA SURESH GORADIA
AND OTHERS …Respondents
J U D G M E N T
R. BANUMATHI, J.
Leave granted.

  1. These appeals arise out of the impugned judgment dated
    09.07.2018 passed by the High Court of Judicature at Bombay in
    Appeal (Lodging) No.224 of 2018 in Notice of Motion No.580 of
    2018 in Suit No.2865 of 1994 in and by which, the High Court
    dismissed the Notice of Motion filed by the appellant and declined to
    set aside ex-parte judgment and decree dated 07.10.2003 passed
    against the appellant in Suit No.2865 of 1994 and the impugned
    order dated 26.10.2018 passed in Review Petition (Lodg.) No.20 of
    2018 whereby the review petition filed by the appellant was
    dismissed.
  2. Brief facts which led to the filing of these appeals are as
    under:- Respondent No.1 filed a suit being Suit No.2865 of 1994
    1
    before the High Court of Bombay against the appellant and
    respondents No.3 to 24 for permanent injunction and compensation
    of Rs.1 crore for trespass, nuisance and damages allegedly made
    by appellant-Defendant No.1. It is stated that respondents No.3 to 6
    are present trustees of a private trust known as “Parikh Goradia
    Trust” and respondents No.7 to 24 are beneficiaries of the said
    private trust. The appellant carries on business as travel agent and
    also inter alia of running a restaurant called “Woodlands Garden
    Cafe” i.e. respondent No.2. It was stated by respondent No.1 that
    the trust-Parikh Goradia Trust came into existence under an
    Indenture of trust dated 01.04.1976. Clause 3 of the said Indenture
    provides that the trust shall come to an end on 30.09.1985 and the
    trust fund will be divided amongst beneficiaries of the trust.
    However, despite the trust having come to an end on the stipulated
    date, the trustees thereof have failed and neglected to distribute the
    property and fund of the trust amongst the beneficiaries.
  3. By an agreement dated 06.10.1978 executed between the
    trust and the petitioner and a letter dated 06.08.1982, the trust
    agreed to sell to the appellant a part of the said property for a
    consideration of Rs.10,00,000/-. Defendant No.1A-respondent
    No.2-M/s. Woodlands Garden Cafe is a partnership firm registered
    2
    under Indian Partnership Act, 1932 by virtue of a partnership deed
    executed on 01.04.1989. The appellant executed a leave and
    licence agreement dated 10.04.1989 with respect to the said
    premises in favour of respondent No.2-M/s. Woodlands Garden
    Cafe for a period of ten years to run the restaurant therein. Since
    the year 1989, respondent No.2-M/s.Woodland Garden Cafe is in
    occupation and possession of the said premises by doing restaurant
    business thereon. Case of the first respondent is that respondent
    No.2- M/s.Woodland Garden Cafe was closed down for repairs and
    renovations in the year 1992 and in the course of these repairs, the
    appellant caused considerable damage to the property and carried
    out unauthorized and illegal construction.
  4. Respondent No.1 filed Suit No.2865 of 1994 to direct the
    appellant (defendant No.1) to pay a sum of rupees one crore to the
    trust together with interest @ 24% per annum and for permanent
    injunction restraining the appellant from carrying on repairs and
    renovations in the premises and also to ensure that no damage or
    loss or injury is caused to the said property of the trust either in the
    course of the renovation or the repairs carried out by the appellant
    and other reliefs. Vide order dated 07.10.2003, the Court noted that
    no written statement has been filed and the Court held that the first
    3
    respondent’s claim in the suit is clearly unchallenged. Vide ex-parte
    decree dated 07.10.2003, the High Court decreed the suit and
    directed the appellant and respondent No.2 to pay respondent No.1
    and the beneficiaries of the said trust a sum of Rs.77,02,500/- with
    interest thereon @ 6% per annum from the date of filing the suit till
    the date of payment or realization. By the said ex-parte decree
    dated 07.10.2003, the Court also granted relief in terms of Clause
    (b), (c) and (g) (i.e. permanent injunction, mandatory injunction and
    costs of the suit) of the prayer clause against the appellant and
    respondent No.2.
  5. The matter remained as such for quite some time. The
    appellant took Notice of Motion No.580 of 2018 dated 02.02.2018
    praying to set aside the ex-parte judgment and decree dated
    07.10.2003 and that the appellant be permitted to file written
    statement and defend the suit. It was stated that the summons of
    the original suit and the proceeding thereof were never served upon
    the appellant at its registered address and/or any other address
    where the appellant was carrying on its business and also on the
    ground that Rule 90 of the Bombay High Court (Original Side) Rules
    (for short “Bombay High Court Rules”) has not been followed.
    4
  6. Vide order dated 19.04.2018, learned Single Judge dismissed
    the Notice of Motion No.580 of 2018. The learned Single Judge
    noted that the ex-parte decree dated 07.10.2003 shows that an
    advocate was engaged on behalf of the appellant and respondent
    No.2 and the said advocate has filed vakalatnama and there is no
    question of having to thereafter serve a party personally. The High
    Court held that along with the affidavit, a Power of Attorney dated
    29.04.1993 was said to have been executed by the appellant in
    favour of one K. Shrinivas Rao and there is also a rubber
    stamp and circular common seal of the appellant in the Power of
    Attorney and the Power of Attorney is said to have been notarized in
    Mumbai and the seal of the Notary is also visible. Pointing out that
    the defendant No.1 through its Power of Attorney had engaged a
    lawyer and there was a validly executed vakalatnama by a
    constituted attorney K. Shrinivas Rao and also that writ of summons
    was in fact served on the appellant and respondent No.2 (original
    defendant No.1A) by bailiff attached to the office of Sherrif of
    Mumbai, the learned Single Judge dismissed the Notice of Motion
    No.580 of 2018.
  7. Being aggrieved, appellant preferred Appeal (Lodging) No.224
    of 2018 challenging the order declining to set aside the ex-parte
    5
    decree. The said appeal was dismissed by the Division Bench vide
    impugned judgment dated 09.07.2018. The Division Bench of the
    High Court opined that the appellant had engaged M/s. Narayanan
    & Narayanan, Advocates who placed on record of the suit a
    vakalatnama duly signed by the constituted attorney of the
    appellant. The Division Bench also noted that the record indicates
    that the advocate for the appellant represented the appellant in the
    suit on several dates including appearing at interlocutory application
    stage and engaging a senior advocate to argue on behalf of the
    appellant. The Division Bench held that appellant’s Notice of Motion
    as well as the appeal is misconceived. The appellant then filed
    Review Petition (Lodg.) No.20 of 2018 along with the Notice of
    Motion for condonation of delay of 27 days in filing the review
    petition. The said review petition also came to be dismissed vide
    impugned order dated 26.10.2018 on the ground that there was no
    error apparent on the face of the order or any other ground is made
    out to entertain the review petition.
  8. We have heard the submissions of Mr. R.F. Totala, learned
    counsel for the appellant and Mr. Shree Prakash Sinha, learned
    counsel for respondents No.1, 9 and 10 and carefully perused the
    contentions and impugned judgment and other materials on record.
    6
  9. The High Court has noted that on behalf of the appellant,
    M/s. Narayanan & Narayanan, Advocates has entered appearance
    and filed a vakalatnama duly signed by the constituted attorney of
    the appellant. The Power of Attorney dated 29.04.1993 was
    executed by the Chairman and Managing Director, Mr. Kudralli
    Subanna Nagraj of the appellant company and the same was
    executed before the Notary on 29.04.1993 and the signature of the
    executant was also identified by the advocate. The High Court
    noted that the said Power of Attorney inter alia authorized the
    attorney to accept the summons, notice and other processes issued
    to the advocate from any Court, Government or authority
    concerning the suit premises. The High Court also pointed out that
    there are several clauses in the Power of Attorney which authorize
    the constituted attorney to do acts in regard to the litigation. The
    High Court has referred to the affidavit filed by K. Shrinivas Rao in
    reply dated 20.07.1994 to the Notice of Motion No.1847 of 1994 for
    interim relief wherein, it was stated that he is a constituted attorney
    of the appellant (defendant No.1). K. Shrinivas Rao also stated that
    he was Director of appellant company till the year 1989 and at the
    time of filing the affidavit in 1994, he was a partner in respondent
    No.2-firm.
    7
  10. Insofar vakalatnama dated 20.07.1994 filed by M/s.
    Narayanan & Narayanan, Advocates on behalf of the appellant and
    respondent No.2, contention of the appellant is that they never
    instructed the said M/s. Narayanan & Narayanan, Advocates to
    appear on behalf of the appellant in the original suit. Case of the
    appellant is that vakalatnama dated 20.07.1994 was signed by K.
    Shrinivas Rao claiming himself to be a constituted attorney of
    defendant No.1. The stand of appellant is that defendant No.1 never
    authorized the said K. Shrinivas Rao to sign vakalatnama on behalf
    of the appellant in the original suit. Insofar as the Power of Attorney
    dated 29.04.1993 is concerned, the appellant contends that it was a
    general Power of Attorney and the appellant company never passed
    any board resolution nor executed any such Power of Attorney
    authorizing K. Shrinivas Rao to sign vakalatnama on
    behalf of the appellant in the suit; the said K. Shrinivas Rao signed
    the vakalatnama for and on behalf of respondent No.2. Stand of the
    appellant is that the appellant never authorized K. Shrinivas Rao to
    appear on behalf of the appellant in the original suit No.2865 of
    1994.
  11. The High Court rejected the stand of the appellant and
    observed that page 18 of the Power of Attorney is a typed name of
    8
    the Chairman and Managing Director and there is also a rubber
    stamp and circular common seal of the appellant and the Power of
    Attorney was executed by the Chairman and Managing Director of
    the appellant company Mr. Kudralli Subanna Nagraj. The High Court
    has also pointed out that the Power of Attorney dated 29.04.1993
    has been notarized in Mumbai on 29.04.1993 and the seal of the
    Notary is also seen in the Power of Attorney.
  12. On behalf of the appellant, it was contended before the High
    Court that even assuming that the vakalatnama was filed on behalf
    of the appellant through Power of Attorney, Rule 79 of the Bombay
    High Court Rules requires personal service of the writ of summons
    on a defendant even if appearance was entered on his behalf by an
    advocate. To the said contention, the High Court opined that Rule
    79 of the Bombay High Court Rules speaks of a waiver of the
    requirement of serving the writ of summons personally, if the
    advocate undertakes in writing to accept service of that writ of
    summons and to file a vakalatnama. The High Court pointed out
    that Rule 79 contemplates a stage before the vakalatnama is in fact
    filed and once the vakalatnama is filed, there is no question of
    having to serve a party personally thereafter. The High Court
    pointed out that in Suit No.2865 of 1994, vakalatnama was filed by
    9
    the Power of Attorney in the suit itself and there is no question of
    having to thereafter serve a party personally. After referring to the
    affidavit in reply at pages 62 and 63 of the paper book, the High
    Court observed that summons was in fact served on the advocates
    for the appellant and respondent No.2 by bailiff attached to the
    office of Sherrif of Mumbai and there is an affidavit of service dated
    18.08.1999 made by the bailiff’s clerk to that effect. Observing that
    the Court has personally checked the original affidavit of the bailiff
    and the file and pointing out that there is no affidavit in rejoinder, the
    learned Single Judge has dismissed the Notice of Motion No.580 of
    2018.
  13. According to the appellant, the High Court erred in holding
    that the Power of Attorney dated 29.04.1993 is genuine. It was
    urged that the alleged Power of Attorney is said to have been
    notarized at Mumbai before Advocate Raja who was representing
    respondent No.2 in the original suit whereas, the appellant company
    is located in Bangalore. Learned counsel for respondent No.1 has
    submitted that the appellant herein surrendered and/or sold all its
    rights and interest in the property in question to respondent No.2 on
    30.04.1993 and the present appeal is a proxy litigation on behalf of
    respondent No.2. It is the contention of respondent No.1 that since
    10
    K. Shrinivas Rao duly constituted the Power of Attorney of the
    appellant has filed his reply on 20.07.1994 and the said reply was
    filed through M/s. Narayanan & Narayanan, Advocates in which the
    appellant through the Power of Attorney has stated that the
    premises in question was acquired by the appellant with the
    contribution made by respondent No.2- M/s. Woodland Garden
    Cafe and therefore, respondent No.2 also should be heard before
    any order is passed in the suit. It was submitted that based on the
    reply affidavit filed by K. Shrinivas Rao, respondent No.1 filed
    application for amendment and the amendment application was
    allowed on 26.07.1994 and respondent No.2 was impleaded as
    defendant No.1A. It is therefore, submitted that filing of vakalatnama
    on behalf of the appellant by its duly constituted Power of Attorney
    K. Shrinivas Rao and subsequent impleading of respondent No.2
    clearly shows that the appellant and respondent No.2 were duly
    served and participated in the proceedings and were aware of the
    decree dated 07.10.2003. It was contended that the appellant has
    not approached with the correct averments and in view of the
    incorrect stand taken by the appellant, the High Court rightly
    rejected the Notice of Motion refusing to set aside the ex-parte
    decree dated 07.10.2003.
    11
  14. Though various contentions have been raised as to whether
    appellant was served or not and entered appearance in the suit, we
    are not inclined to go into the merits of the contentions. In our view,
    an opportunity has to be given to the appellant for contesting the
    suit. It is because the suit was filed for recovery of damages of Rs.1
    crore and respondent No.1 claimed interest @ 24% per annum. By
    the judgment dated 07.10.2003, the Court has directed the
    appellant and respondent No.2 to pay a sum of Rs.77,02,500/- and
    Rs.42,70,772.46, total amount payable under decree is
    Rs.1,20,03,282.96. The Court also directed the payment of
    subsequent interest @ 6% per annum on the said amount of
    Rs.77,02,500/- till date of reliasation.
  15. As pointed out earlier, the suit claim was for damages. The
    damages to the property if any, can be ascertained only after the
    parties adduce the oral and documentary evidence. We have no
    reason to believe that the appellant would have benefitted by
    deliberately not contesting the suit as they would in any event be
    saddled with interest if their conduct was to drag and prolong the
    suit. Considering the nature of the claim and other facts and
    circumstances and in the interest of justice, we are of a view that an
    opportunity has to be given to the appellant to contest the suit
    12
    subject to terms. The appellant has also in that regard shown its
    bona fide by depositing Rs.60,00,000/- in compliance of the order
    dated 18.02.2019. By the order dated 24.01.2020, we have also
    directed the appellant to deposit further sum of Rs.35,00,000/- for
    which the appellant sought for some more time for compliance.
    Considering the request, two months further time is granted to the
    appellant for deposit of the said amount.
  16. Insofar as the amount of Rs.60,00,000/- deposited by the
    appellant, by our order dated 24.01.2020, we have permitted
    respondent No.1-plaintiff to withdraw the said amount. Since there
    are number of other beneficiaries of the trust viz. respondents No.7
    to 24, the amount has to be disbursed to the trustees/beneficiaries
    as per their entitlement. It is open to respondent No.1 and other
    trustees/beneficiaries of the trust to file appropriate application
    before the High Court for disbursement of the amount (pending
    disposal of the suit) and the High Court shall consider and pass
    appropriate order as per the entitlement of the respective parties.
    The disbursement of the said amount will be subject to the outcome
    of said suit. Permission for withdrawal of the amount of
    Rs.60,00,000/- by respondent No.1 and other trustees/beneficiaries
    is without prejudice to the contention of both the parties in the suit.
    13
  17. In the result, the impugned judgment dated 09.07.2018
    passed by the High Court of Judicature at Bombay in Appeal
    (Lodging) No.224 of 2018 in Notice of Motion No.580 of 2018 in Suit
    No.2865 of 1994 and the impugned order dated 26.10.2018 passed
    in Review Petition (Lodg.) No.20 of 2018 are set aside and these
    appeals are allowed. The Suit No.2865 of 1994 is ordered to be
    restored. The appellant and respondent No.2 shall file their written
    statement within four weeks from today and learned Single Judge of
    the High Court shall afford sufficient opportunity to both the parties
    to adduce evidence and dispose the said suit in accordance with
    law.
  18. Insofar as direction for deposit of Rs.35,00,000/-, two months
    further time is granted to the appellant for deposit of the said
    amount and on such deposit, the same shall be invested in a
    nationalized Bank for a period of six months with a provision of auto
    renewal. Deposit of Rs.35,00,000/- would be subject to the outcome
    of the suit. No costs.
    ..…………………….J.
    [R. BANUMATHI]
    ..…………………….J.
    [A.S. BOPANNA]
    New Delhi;
    March 02, 2020.
    14