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Structured Summary of the Opinion (G.K. Mitter, J.)

Factual and Procedural Background

This appeal arises from a decree dismissing the plaintiff's suit on the preliminary ground that the suit was not maintainable.

The first defendant, East Bengal Commercial Bank Ltd., had earlier obtained an ex parte decree in this Court dated 20-7-1948 against the plaintiff, Atul Chandra Sarkar, and the second defendant, Oriental Trading Syndicate (a partnership), on an overdraft account. The bank's original suit was filed on 21-2-1948 and was decreed ex parte; the plaintiff did not apply to set aside that decree nor did he appeal from it.

On 21-1-1949 the plaintiff instituted the present suit seeking a declaration that the decree of 20-7-1948 was void and asking for it to be set aside. The plaint alleged (among other things) an agreement dated 16-3-1946 under which the bank would lend money to the firm with the plaintiff as guarantor; that the plaintiff revoked his guarantee by written notice dated 31-5-1946; that bills subsequently deposited with the bank wiped out the firm's liability; that the summons in the prior suit was never served on the plaintiff; and that the ex parte decree was obtained fraudulently by suppression of the summons and by suppression of the fact of revocation of the guarantee. The bank denied these allegations, stating that the writ of summons in the prior suit had been duly served by affixation after three attempts and that the plaintiff had knowledge.

The suit came on for hearing before S. R. Das Gupta, J., on 13-6-1956. No issues appear to have been settled, and the trial judge dismissed the suit on the preliminary ground that it was not maintainable, holding that a suit to set aside an ex parte decree is maintainable only where there is fraudulent suppression of the summons and that mere non-service is not sufficient. The plaintiff appealed.

Legal Issues Presented

  1. Whether a suit to set aside an ex parte decree is maintainable where the plaintiff alleges that the decree was obtained by "suppression of the summons" but does not plead particulars of fraud beyond non-service.
  2. Whether the trial judge should have given the plaintiff an opportunity to amend his plaint or to substantiate averments of fraud by evidence (i.e., whether the plaintiff should have been allowed to furnish particulars or be given a chance to prove the alleged fraud).

Arguments of the Parties

Plaintiff's Arguments

  • The plaintiff sought a declaration that the earlier ex parte decree dated 20-7-1948 was void and should be set aside.
  • Alleged facts: an agreement of 16-3-1946 between the bank and the firm with the plaintiff as guarantor; various advances and collection of bills by the bank; revocation of the guarantee by the plaintiff on 31-5-1946; bills held by the bank exceeded amount then due; later deposits and collections by the bank wiped out the firm's liability.
  • Contended that the writ of summons in the prior suit was never served upon the plaintiff and that the ex parte decree was obtained fraudulently by suppression of the summons and by suppression of the fact of revocation of the guarantee.
  • On appeal, contended (inter alia) that sufficient particulars of fraud had been given in the plaint and that the trial judge should have given the plaintiff an opportunity to substantiate the averments by evidence.

Bank (First Defendant)'s Arguments

  • The bank denied the allegations in the plaint, including the account of the revocation of guarantee.
  • The bank stated that the writ of summons in the former suit was duly served by affixation after three unsuccessful attempts and that the plaintiff had knowledge of the proceedings at all material times.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Tarunanganath Banerji v. Premnarayanlal Raizada, ILR 60 Cal 98; AIR 1933 Cal 274 Authority that a suit to set aside an ex parte decree is maintainable only if there was fraudulent suppression of the summons and that mere non-service is not a ground on which such a suit could be maintained. The trial judge relied on this decision; the Court treated it as supporting the proposition that mere non-service of summons does not suffice to set aside an ex parte decree.
Mahomed Golab v. Mahomed Sulliman, ILR 21 Cal 612 Decrees will not be reopened on the ground that they were obtained by means of perjured evidence; principle of finality of litigation. Cited to support the proposition that allowing challenges based on perjured evidence would destroy finality; used to reject an attack that amounts only to disputing prior evidence.
Pran Nath Roy v. Mohesh Chandra Moitra, ILR 24 Cal 546 Holding that a plaintiff could not bring a suit to set aside a decree on the bare ground that the summons was not served or that he was prevented from defending the suit. Quoted and applied as an early statement that mere non-service does not found a cause of action to set aside a decree; the Court relied on it to support dismissal.
Radha Raman Shaha v. Pran Nath Roy, ILR 28 Cal 475 Judicial Committee's confirmation that the High Court correctly viewed complaints of fraud as attacking the suit as a fraud from beginning to end, not merely the sufficiency of service. Referred to in support of the proposition that allegations must show fraud upon the whole suit, not merely non-service.
Khagendra Nath Mahata v. Pran Nath Roy, ILR 29 Cal 395 Illustration of pleading fraud as attack on the whole suit from inception (e.g., false return of service, collusive suit) and the limitations of specific procedural remedies. Used to show that where fraud alleged is of the entire proceeding (not merely service), relief may be appropriate; distinguished from mere non-service allegations.
Narsingh Das v. Mt. Bibi Rafikhan, ILR 37 Cal 197 Authority that a mere allegation of non-service of summons in the prior suit is insufficient to set aside a decree. Relied upon by the Court as supporting the rule that non-service alone cannot found a suit to set aside an ex parte decree.
Kunjabehari Chakravarty v. Krishna Dhone Majumdar, 44 Cal WN 912; AIR 1940 Cal 489 Observation that to sustain an action for setting aside a decree on the ground of fraud the fraud alleged must be actual, positive, meditated and intentional; but also that where non-service is proved and the claim itself is false, inference of deliberate suppression may arise. Quoted by the appellant's counsel; the Court considered this observation but noted later cases qualify the language and leave discretion unfettered.
Nemchand Tantia v. Kishinchand Chellaram (India) Ltd., 63 Cal WN 740; AIR 1959 Cal 776 Approved the dictum in Kunjabehari Chakravarty with qualification that the words "should ordinarily" are better omitted and that the court's discretion should not be fettered. Referred to as showing the Calcutta Courts' recent approach: the strict language should be qualified and discretion preserved.
Wallingford v. Mutual Society, (1880) 5 AC 685 General allegation of fraud, however strongly worded, is insufficient; courts should not notice vague or unsupported averments of fraud. Cited to support the proposition that general allegations of fraud are insufficient and that particulars are required.
Ganganarayan Gupta v. Tiluckram Chaudhury, ILR 15 Cal 533 Referenced as a case in which the Judicial Committee adopted dismissal where appropriate. The Court followed the course of dismissal as adopted by the Judicial Committee in that case and cited it as precedent for dismissing the appeal.

Court's Reasoning and Analysis

The Court proceeded through a sequence of legal analyses grounded in precedent and the pleading record:

  1. Threshold principle: The Court reiterated a well-established line of authority that a suit to set aside an ex parte decree may be maintainable only where there is fraudulent suppression of the summons in a manner that demonstrates actual, positive fraud affecting the proceedings as a whole; mere non-service of summons is not, by itself, a sufficient ground. The Court cited several Calcutta decisions and Judicial Committee decisions to that effect.
  2. Pleading sufficiency: The Court examined the plaint and held that the allegation of "suppression of the summons" without particulars did not amount to an averment of actionable fraud. The Court explained the semantic distinction: "to suppress" means to withhold or keep secret, which by itself equates largely to non-service; and without further particulars (such as collusion between the process server and an identifier, false return of service, deliberate misleading of the process server, or other similar specific allegations) the defendant would not have notice of the case of fraud to meet.
  3. Limits on reopening decrees: The Court emphasized that allowing attacks based merely on allegations that prior evidence was perjured would undermine finality. It cited authority to show that courts will not reopen decrees on allegations amounting only to impugning evidence.
  4. Available remedies for non-service: The Court noted that where non-service is the complaint, the plaintiff's remedies are procedural and specific: an application under Order IX Rule 13, an appeal from the ex parte decree, or an application for review under Order XLVII Rule 1 of the CPC.
  5. Discretion and amendment: Although the Court considered that it might have been preferable for the trial judge to have indicated that the plaint did not disclose a cause of action and to have given an opportunity to amend under Order VII Rule 11, the Court observed that no request to amend had been made by the plaintiff's lawyers. The Court also noted that even if leave to amend had been given, a new suit would have been barred in practical terms because seven years had elapsed between the institution of the suit (1949) and the trial in 1956.
  6. Conclusion on facts: Given the lack of pleaded particulars and the authorities cited, the Court concluded that the trial judge was correct in holding there was no sufficient averment of fraud and therefore the suit was not maintainable.

Holding and Implications

Holding: The appeal is DISMISSED.

Implications:

  • The Court affirmed that an allegation of "suppression of the summons" without particulars equating to mere non-service is insufficient to maintain a suit to set aside an ex parte decree; particulars of fraudulent conduct affecting the proceedings are required.
  • Direct effect on the parties: the dismissal of the appeal leaves the trial court's dismissal intact; the respondent (the bank) will have the costs of the appeal. The liquidator is to retain his costs as between attorney and client in the first instance out of the assets in his hands.
  • The opinion does not announce a novel rule of law; it applies and follows established authorities. No broader new precedent was stated in the opinion beyond the application of existing authorities and principles set out in the judgment.

Disposition: Appeal dismissed; costs awarded to the respondent; liquidator to retain attorney-and-client costs from assets in hand.

    Atul Chandra Sarkar v. East Bengal Commercial Bank Ltd., And Another

    G.K Mitter, J.:— This is an appeal from a decree dismissing the plaintiffs suit on the preliminary ground that the suit is not maintainable.

    2. The first defendant herein, East Bengal Commercial Bank Ltd., obtained a decree in this Court against the plaintiff and the second defendant, Oriental Trading Syndicate, a partnership firm, on an overdraft account on 20-7-1948. The suit was filed on 21-2-1948 and was decreed ex parte. The plaintiff Atul Chandra Sarkar did not make an application for setting aside the said decree or prefer an appeal therefrom. He filed this suit on 21-1-1949, claiming a declaration that the said decree of 20-7-1948 was void and of no effect and asked for setting aside the same. His allegations in the plaint are:

    (a) On 16-3-1946 an agreement was entered into by and between the Bank on the one hand and the plaintiff and the second defendant (hereinafter referred to as the firm) on the other whereby the Bank was to lend to the firm the sum of Rs. 5,000/- against the securities of bills drawn or to be drawn by the firm, such loan to be guaranteed by the plaintiff.

    (b) In pursuance of this agreement various sums of money were advanced by the Bank to the firm and bills deposited by the firm were collected by the Bank and appropriated towards its dues.

    (c) On 31-5-1946 the plaintiff revoked the said guarantee by notice in writing.

    (d) On the last mentioned date a sum not exceeding Rs. 3,581/6/9p. was due by the firm to the bank and a number of bills drawn by the firm and exceeding the above mentioned sum remained with the bank for collection and appropriation.

    (e) Thereafter the firm deposited various bills with the bank which were duly collected by the bank thus wiping out the liability of the firm. In November, 1948 the bank purported to execute the decree made on 20-7-1948 and caused to be attached various properties belonging to the plaintiff.

    (f) The writ of summons was never served upon the plaintiff who had no opportunity to defend the suit filed by the bank—

    “and the said decree was obtained ex parte fraudulently by suppression of the summons and by perpetrating a fraud upon the Court by suppression of material facts, in particular by suppression of the fact as to the revocation of lie guarantee by the plaintiff as aforesaid”.

    3. By the written statement filed herein the bank denied the allegations made in the plaint and contended that the writ of summons in the former suit was duly served by affixation after three unsuccessful attempts and the plaintiff had knowledge of the same at all material times. The bank also described the story of revocation of the guarantee as untrue. The suit came on for hearing before S.R Das Gupta, J. on 13-6-1956. It appears that no issues were settled and the suit was dismissed on the preliminary ground mentioned above. By his judgment the learned Judge held that

    “it was well established that a suit to set aside an ex parte decree was only maintainable if there was a fraudulent suppression of the summons and that mere non-service of the summons was not a ground on which such a suit could be maintained”.

    4. He relied on the judgment of Roy, J. in Tarunanganath Banerji…Plaintiff; v. Premnarayanlal Raizada…Defendant., ILR 60 Cal 98 : (AIR 1933 Cal 274). The learned Judge observed that as the plaintiff had given no particulars of the fraud, namely, fraudulent suppression of the summons, the suit must fail on the averment made in the plaint. In effect, the learned Judge came to the conclusion that a mere allegation that there had been fraudulent suppression of the summons without any other particulars would not be enough to maintain a suit.

    5. The grounds of appeal taken are, inter alia:

    (1) That sufficient particulars of fraud had been given; in the plaint and

    (2) that the learned Judge should have given the plaintiff an opportunity to substantiate the averment made therein by evidence.

    6. It will be noticed that there is no allegation that the plaintiff had offered to give particulars or that he ad asked for an opportunity to amend the plaint by giving particulars. The learned advocate for the appellant was asked as to what particulars his client could give; to this the reply was that the client would have to look into the evidence adduced in the former suit and then tell the court in what manner the fraud had been perpetrated.

    7. It cannot be disputed that a decree will not be reopened on the ground that it was obtained by means of perjured evidence. If a decree is allowed to be attacked in this manner there would never be any finality to any litigation. It was so held by Petheram, C.J and Ghosh, J. in the case of Mahomed Golab v. Mahomed Sulliman, ILR 21 Cal 612.

    8. As early as 1897 this Court held in Pran Nath Roy v. Mohesh Chandra Moitra, ILR 24 Cal 546 (at p. 549) that

    “the plaintiff could not bring a suit to set aside the decree on the bare ground that the summons was not served, or that he was prevented for some good reason from defending the suit and that would be so whether he had availed himself of the remedy prescribed by S. 108”.

    9. That section corresponds to O. 9 R. 13 of the present Code. In that case the Subordinate Judge summarily dismissed the suit. The High Court held that the plaintiff's case

    “was that the suit in which the decree was obtained was a fraud in its inception and throughout and he ought to recover the property of which he had been deprived by means of fraudulent decree.” The Judges further observed

    “it is not correct to say that the only fraud alleged is in the non-service of the summons. This was part of the scheme and the means or one of the means by which the fraud was committed.”

    10. The fraud there alleged consisted in making false returns of service of summons and the processes in execution of the decree and in not giving a proper description and valuation of the property sold. The High Court reversed the judgment of the Subordinate Judge. In appeal the Judicial Committee observed that the High Court had taken a correct view of the matter. See Radha Raman Shaha v. Pran Nath Roy, ILR 28 Cal 475.

    11. A similar case Khagendra Nath Mahata v. Pran Nath Roy went up to the Judicial Committee and is reported in ILR 29 Cal 395. In this case the plaintiff averred in his plaint that the defendant had procured a person to institute a groundless suit for monies which were not due and in order to get him out of the way by a collusive suit got him declared a lunatic and by threats forced him to leave his home and stay in secrecy, that they concealed the Money Suit, got a false return of service and carried through the decree and sale of the properties behind the back of the plaintiff. The Board observed that

    “these allegations are plainly an attack not on the regularity or sufficiency of the service or the proceedings, but on the whole suit as a fraud from beginning to end”.

    12. Referring to S. 108 and S. 311, the Board observed that

    “those sections limited the attention of the tribunal to specific matters and instead of subjecting to radical enquiry the question now involved they assumed the existence of a real suit”.

    13. In Narsingh Das v. Mt. Bibi Rafikhan, ILR 37 Cal 197 where the plaintiff merely alleged non-service of summons in the prior suit the court held that this could not be done and relied on the observations of the Judicial Committee in the cases reported in ILR 28 Cal 475 and ILR 29 Cal 395 mentioned above in support of their conclusion.

    14. The learned Advocate for the appellant relied on the following observation of a Division Bench in Kunjabehari Chakravarty v. Krishna Dhone Majumdar, 44 Cal WN 912 : (AIR 1940 Cal 489):

    “To us it seems that to sustain an action for setting aside a decree on the ground of fraud the fraud alleged must be actual positive fraud, a meditated and intentional contrivance to keep the parties and the court in ignorance of the real facts of the case and obtaining that decree by that contrivance * * * But when the fact of non-service of summons is proved by the plaintiff in the later action, and the claim on which a decree was passed is proved to be a false one, the court may and should ordinarily infer deliberate and hence fraudulent suppression, for the last mentioned circumstance supplies the motive for the suppression and indicates that the suppression is itself fraudulent”.

    15. The above case and specially the latter part of the observations set forth came up for consideration in the recent case of Nemchand Tantia v. Kishinchand Chellaram (India) Ltd., 63 Cal WN 740 : (AIR 1959 Cal 776) where the above dictum was approved of with the qualification that the words “should ordinarily” were better omitted and the discretion of the court left unfettered.

    16. The above clearly shows that this court has consistently held that mere non-service of summons is not enough to found a cause of action for setting aside a decree. Where mere non-service is the complaint, the remedies available are (i) an application under O. IX R. 13, (ii) an appeal from the ex parte decree and (iii) an application for review under O. 47 R. 1 of the CPC.

    17. In this case the learned trial Judge held that no particulars having been given, the allegation of fraud could not be taken notice of. It has always been held that general allegations of fraud, however strong the words in which they are stated, are insufficient even in amount to an averment of fraud of which any court ought to take notice, Wallingford v. Mutual Society, (1880) 5 AC 685 at p. 697. In my opinion the expression “suppression of summons” by it sell does not amount to a sufficient averment of fraud. “To suppress” means “to keep secret”, “not to reveal”, “to withhold”. Suppression of summons, therefore, means keeping the summons secret or not revealing it or withholding it. By itself it means little more than not serving it. If in this case the learned Judge had allowed the issue to be raised in the general form “was the writ of summons suppressed?” the defendant would have no idea as to the particular case of fraud the plaintiff was going to make. Something more would be necessary; there would have to be an averment that there was collusion between the process server and the identifier or that there was a deliberate misleading of the process server or other similar allegations.

    18. In my opinion the learned Judge was right in holding that there was no sufficient averment of fraud and if the case was only one of non-service of summons, as the learned Judge held it to be, the suit was not maintainable. It would certainly have been better if he had indicated that the plaint did not disclose a cause of action and unless the plaint was amended by supplying proper particulars he would have to reject the same under O. 7 R. 11 of the CPC. The learned Judge does not seem to have adopted this course. In fairness to him it must be said that there appears no request on the part of the plaintiffs lawyers for an opportunity to cure the lacuna in the plaint. But even if the learned Judge had returned the plaint, another suit could not have been filed because 7 years had elapsed in between the institution of the suit in 1949 and the trial of it in 1956.

    19. The appeal should, therefore, be dismissed a course which was adopted by the Judicial Committee in the case of Ganganarayan Gupta v. Tiluckram Cbaudhury, ILR 15 Cal 533. The respondent will have the costs of the appeal.

    20. The liquidator will retain his costs as between attorney and client in the first instance out of the assets in his hands.

    Das Gupta, C.J:— I agree.

    AD/D.H.Z

    21. Appeal dismissed.

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    Atul Chandra Sarkar v. East Bengal Commercial Bank Ltd., And Another
    (Aug 14, 1959)