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.

2. 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.  

3. 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

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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.  

4. 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

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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.  

5. 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

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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.

6. 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.

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7. 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.

8. Being aggrieved, appellant preferred Appeal (Lodging) No.224

of 2018 challenging the order declining to set  aside the ex-parte

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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.

9. 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.

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10. 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.

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11. 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.

12. The  High  Court  rejected  the  stand  of  the  appellant  and

observed that page 18 of the Power of Attorney is a typed name of

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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.  

13. 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

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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.  

14. 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

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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.

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15. 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.  

16. 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

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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.

17. 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.

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18. 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.  

19. 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.

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