Chiranjilal Agarwalla v. Jai Hind Investments And Industries Pvt. Ltd.

1. This suit has been filed by Chiranjilal Agarwalla and Puran Chandra Ram against the defendants Jai Hind Investments and Industries Private Ltd. and Krishna Kumar Bagla, inter alia, for a declaration that the ex parte decree obtained by the defendant No. 1 on 27th June, 1966 passed in Suit No. 1271 of 1964 is fraudulent and void and the same is not executable against the defendants, the decree is liable to be set aside, for removal of attachment, damages of Rs. 15,000, injunction, cost and other consequential reliefs. The facts of this case shortly are, that under a hire-purchase agreement dated 22nd Jan., 1962, the plaintiff No. 1 Chiranjilal Agarwalla obtain possession of a Bedford Diesel Truck bearing No. 3363815 on the engine and bearing Chassis No. J4LZP6-99920 and Police Registration No. ORB 1150. The plaintiff No. 2 was the guarantor under the said agreement. In the said suit the defendant No. 1 stated that as the entire stipulated amount under the hire-purchase agreement was not paid by the present plaintiffs, the defendant No. 1 had to file the said suit for recovery of the balance instalments as also for possession of the vehicle, in the alternative a decree for Rs. 15,000 being the market value of the said vehicle and other reliefs. The said suit was filed on 10th July, 1964 and on 15th July, 1964 an ad interim order was passed by this Hon'ble Court' appointing Shyam Sunder Agarwalla, one of the employees of the defendant No. 1 as Receiver to take possession of the said vehicle, if necessary, with police help. On 31st July, 1964 the said ad interim order was made absolute.

2. The case of the plaintiffs in this suit is first of all that there has been no service of writ of summons on them by Jai Hind Investment and by fraudulent suppression of summons and material facts the said company obtained the ex parte decree and purported to execute the said ex parte decree against the defendant No. 2 by way of Execution Case No. 30 of 1968 filed before the Subordinate Judge, Bhubaneswar and caused the notice dated 27th July, 1968 to be served upon the plaintiff No. 2, asking him to show cause as to why the said ex parte decree should not be executed against him by way of attachment of his property. It is the case of the plaintiff No. 2 that on receipt of the said notice he immediately caused searches to be made in the said Court and therefrom he came to know about the passing of the ex parte decree by this Hon'ble Court on 27th June, 1966 for Rs. 16,664 with interest and cost and also a declaration was made to the effect that the defendant No. 1 was the owner of the said vehicle. As such the said company was entitled to possession of the same. Thereupon the plaintiff No. 2 made an application in the said execution case for an order that the said ex parte decree passed by this Court was not executable against the said petitioner fust of all, on the ground as no writ of summons was served on him and secondly, because of the fact that the said suit had been settled by payment of a sum of Rs. 11,351 by the plaintiff No. 1 under a settlement arrived at in the month of June, 1964. The said application was rejected by the learned Subordinate Judge on 12th Feb., 1969 on that ground that unless the ex parte decree was set aside, no order could be made on the said application. It is the case of the plaintiff No. 1 that upon receipt of a notice by registered post from Messrs. P.D Himat-singka and Co., he immediately came to Calcutta on 30th July, 1964 and after coming to the Old Post Office Street, he met an unknown Mouhrer and by paying 8 annas to the said unknown person he came to know that his name was appearing in the daily cause list. As such he immediately went to the office of the defendant No. 1 and paid a sum of Rupees 2,000 towards balance instalments. It is the positive case of the plaintiff No. 1 that while receiving the said sum of Rs. 2,000, the defendant No. 1 never disclosed to him that any suit was filed against him by the defendant No. 1 and there has been a suppression of the said fact by the defendant No. 1. It is his further case that there was an agreement at the office of the defendant No. 1 whereby the plaintiff No. 1 agreed to settle the matter and agreed to pay the balance amount to the defendant No. 1 within a few days' time. Thereafter he came back to Jatni at Orissa. On 6th Aug., 1964, according to the plaintiff No. 1 he went to Cuttack High Court where he met the defendant No. 2, Krishna Kumar Bagla and from him he came to know that he had gone to Orissa, as authorised by the Receiver Shyamsunder Agarwalla, for the purpose of taking possession of the said vehicle. The defendant No. 1 showed him am authority letter granted by the Receiver and there it was agreed between the plaintiff No. 1 and the said Krishna Kumar Bagla that upon payment of a sum of Rupees 11,351 he would not take possession of the vehicle and would settle the matter with the plaintiffis. The plaintiff No. 1 in his evidence stated further that while such discussion for settlement was going on, Krishna Kumar Bagla telephoned at the office of the defendant No. 1 at Calcutta and received the authority to settle up the matter. It was further arranged that Krishna Kumar Bagla would visit Jatni on the following day where the said vehicle was lying in the custody of the plaintiff No. 2 at his garage and payment would be made there accordingly. Thereupon, on the following day Krishna Kumar Bagla went to Jatni. The said sum of Rs. 11,351 was paid by Chiranjilal Agarwalla in the presence of Purna Chandra Ram and a document was signed and executed by the said Krishna Kumar Bagla acknowledging the receipt of the said sum and also recording therein about the facts of the settlement of the suit and also he assured that he would on his return to Calcutta cause the said suit to be settled and/or withdrawn. At that time, it is the case of the plaintiffs, that the said Krishna Kumar Bagla handed over not only the receipt being Exhibit B but also handed over the letter of authority granted by Shyamsunder Agarwalla, the Receiver appointed in the said suit. As such the and K.K Bagla did not take possession of the said vehicle and on Sept 19, 1964 the said vehicle although was previously lying seized by the police at the time when Krishna Kumar Bagla went to take possession, it was subsequently released by them and handed over to the plaintiffs, which according to them are still being run in Orissa.

3. Both the plaintiffs believed that the said suit had been settled on the said terms as agreed upon with Krishna Kumar Bagla. It is only after receipt of the notice of the said execution proceeding by the plaintiff No. 2 and it is only after reading in the newspaper ‘Samaj’ about the said execution proceeding that the plaintiff No. 1 came to know about the existence as also of the passing of the said ex parte decree whereupon the present plaintiffs filed this suit challenging the said ex parte decree as according to them it was procured by exercise of fraud upon Court and they have given various particulars of fraud, collusion and conspiracy in the plaint. According to them, because of fraudulent suppression of summons and wrongly not disclosing true facts they had obtained an ex parte decree and wrongful attachment and thereby the plaintiffs suffered damages to the extent of Rs. 15,000.

4. It is the definite case of the defendant No. 1 that there has been no suppression of summons and there has never been any settlement whatsoever between the plaintiffs and the defendant No. 1 as has been tried to be made out by the plaintiffs in this case. It is the case of the defendant No. 1 that with full knowledge of the pendency of this suit the plaintiff Chiranjilal Agarwalla came to their office and paid a sum of Rs. 2,000 on 31st July, 1964 whereupon a receipt, although written in the handwriting of Krishna Kumar Bagla but signed for and on behalf of the company by one of the directors, was granted to Chiranjilal Agarwalla for the said sum of Rs. 2,000. On the receipt itself it was written without prejudice' to indicate that the defendant No. 1 was accepting the said sum of Rs. 2,000 ‘without prejudice’ to its rights to proceed with the suit. The defendant No. 1 denied that Krishna Kumar Bagla ever went to Jatni on 7th Aug., 1864 to settle the suit. It is the positive case of the defendant No. 1 that the defendant No. 2 was sent to Cuttack by the Receiver Shyamsunder Agarwalla for the purpose of receiving or talking possession of car. As such he was not authorised to settle the suit on behalf of the Receiver or on behalf of the defendant No. 1. The defendant No. 1 emphatically denied about the telephonic conversation that is alleged to have taken place between Krishna Kumar Bagla from Jatni with the defendant No. 1 at Calcutta. The defendant No. 1 has seriously challenged the authority of the defendant No. 2 either to receive money or to settle the suit on behalf of the defendant No. 1. It is the case of the defendant No. 1 that save and except the directors of the company no employee, whatever may be his position, had any authority to receive the money or grant receipt or settle the suit on behalf of the company. The defendant No. 1 went so far as to challenge the correctness and authenticity and validity of the said agreement and also the signature of Krishna Kumar Bagla on the document dated 7th Aug., 1964. According to the defendant No. 1 it is a manufactured document and does not bear the signature or handwriting of the defendant No. 2. In fact, an affidavit has been filed by Krishna Kumar Bagla in this suit denying the said settlement and also denying his own signature on the said document dated 7th Aug., 1964. It is the case of the defendant No. 1 that they have obtained the ex parte decree after due service of writ of summons on both the defendants and also by disclosing true and correct facts before the Court. As such the decree was not obtained by exercising fraud upon this Hon'ble Court. It has denied all the particulars of fraud, collusion and conspiracy as made out by the plaintiffs in this suit.

5. According to the defendant No. 1 the notice of motion in respect of the said application for appointment of Receiver was served on both the plaintiffs herein by registered post with acknowledgment due which have been duly received by both the plaintiffs herein. It is also the case of the defendant No. 1 in the said suit being Suit No. 127 of 1964 that writ of summons was served on both the plaintiffs herein by registered post with acknowledgment due and both of them have received the writ of summons of the said suit by signing the acknowledgment receipt card. So far as the plaintiff No. 2 is concerned, the acknowledgment receipt card was duly received back by Jai Hind Investment and Industries Private Ltd. but so far as Chiranjilal Agarwalla is concerned, although according to the defendant No. 1 he was duly served with the writ of summons by registered post and he acknowledged the service of the same by signing the acknowledgment receipt card but the same was not received back by Jai Hind Investment and Industries Private Ltd., and thereupon they made enquiries with the General Post Office, Calcutta and they were notified by the G.P.O by a letter that although the acknowledgment receipt card did not come back, the said Chiranjilal Agarwalla was duly served with the writ of summons.

6. After hearing Dr. S. Das, Barrister-at-law appearing with Mr. D. Shoma for the plaintiffs and Mr. Hirak Kumar Mitter appearing with Miss Shanta Mirchandani on behalf of the defendant No. I the following issues were raised at the time of hearing of this suit. The defendant No. 2 neither filed any written statement nor contested the suit at the time of hearing.

ISSUES.

1. (a) Did the defendant No. 2 represent to the plaintiff Chiranjilal Agarwalla that he was authorised by defendant No. 1 to settle the Suit No. 1271 of 1964 with the plaintiff as alleged in paragraph 8 of the plaint?

(b) If so was defendant No. 2 actually so authorised by defendant No. 1?

2. (a) Was there any agreement between the defendant No. 2 on behalf of the defendant No. 1 and the plaintiff Chiranjilal Agarwalla that the latter would pay an agreed sum in full settlement of the claim of the defendant No. 1 and that defendant No. 1 would file terms of settlement and withdraw the suit as alleged in paragraph 8 of the plaint?

(b) If so, what is the effect thereof?

3. Did Chiranjilal Agarwalla pay a sum of Rs. 11,351 or any sum at all to defendant No. 2 as alleged in para 9 of the plaint?

4. (a) Are the defendants guilty of fraud, collusion and conspiracy as alleged In para 13 of the plaint?

(b) If so, what is the effect thereof?

5. (a) Have the plaintiffs been prejudiced or suffered loss and damages to the tune of Rs. 15,000 or at all by reason of the ex parte decree obtained by defendant No. 1 as alleged in para 15 of the plaint?

(b) if so, what is the effect thereof?

6. To what relief, if any, are the plaintiffs entitled?

7. Both the plaintiffs Chiranjilal Agarwala and Purna Chandra Ram were examined on De Bene Esse examination before the Hon'ble Mr. Justice S.C Ghose. The plaintiffs examined Mr. Purushottam Chatterjee, a handwriting expert on their behalf. The plaintiffs while giving evidence have travelled far beyond the case, as made out by them in the plaint. There has been very many material contradictions in their evidence. In fact, on the point of non-service of writ of summons although the plaintiff No. 2 admitted of receiving the notice of motion sent by Messrs. P.D Himatsingka and Co. by registered post with A/D and when confronted with the A/D card he admitted the receipt of the said notice and his own signature. But when he was shown the acknowledgment receipt card in receipt of the writ of summons he denied his signature and said that he was not aware of the filing of the suit save and except when Mr. Krishna Kumar Bagla went to Jatni for settlement of the suit and it is his further case that he never knew about the passing of the said ex parte decree save and except when the execution proceeding was started against him at the Subordinate Judge's Court at Bhubaneswar. His case is that he was the guarantor under the said agreement only for a period of two years and after the settlement of the suit on 7th Aug., 1964 he had no liability whatsoever either under the said hire-purchase agreement or under the ex parte decree which has been obtained by perpetrating fraud upon this Hon'ble Court. As such it is not binding on him. It is his case that money was paid in his presence by Chiranjilal Agarwala and Krishna Kumar Bagla signed the document dated 7th Aug., 1964 in acknowledgment of the said sum and his own signature appears as one of the attesting witnesses. In answer to Q. 31 Purna Chandra Ram stated that Krishna Kumar Bagla was sent by Shyamsunder Agarwala as his representative and he went there to seize the car as per Court's order. According to him, in his application before the executing court he through inadvertence gave the date of settlement as 24th June, 1964 instead of 7th Aug., 1964. He could not annex a copy of the letter of Mr. Krishna Kumar Bagla and also of Mr. Shyamsunder Agarwalla with the said application as according to him all these original papers were lying with the plaintiff No. 1 at Bhubaneswar. As such, he could not avail of the opportunity of bringing those documents before the learned Court. The sum and substance of the plaintiff No. 1's evidence is that he has not been served with the writ of summons in the earlier suit but he was served with a notice from Messrs. P.D Himatsingka and Co. by registered post with A/D. According to him, after receipt of the said notice he came to Calcutta and settled the suit by part payment of Rs. 2,000 on 31st July, 1964 at the office of the defendant No. 1 under the circumstances stated above. His positive case is that while making payment of Rs. 2,000 on that day the fact of pendency of the suit was suppressed from him by the defendant No. 1. His second version of the agreement is that it was arrived at the corridor of the Cuttack High Court whereupon the said Krishna Kumar Bagla went to Jatni, received the said sum of Rs. 11,351 and granted the receipt which is Ex. ‘B’ herein and also handed over to him the original authority letter which was given by Shyam Sunder Agarwala to him to take possession of the car. His positive case is that Krishna Kumar Bagla had an authority to settle as he had a talk with the defendant No. 1 over the telephone from Cuttack to settle the suit (Q. 83). According to him, earlier he entered into a contract with one Jagmohan Misra for the purpose of plying the said vehicle and at his instance the said vehicle was seized by the police. Both the said Jagmohan Misra and also Chiranjilal Agarwala approached the defendant No. 2 Krishna Kumar Bagla for getting the said seizure released and handing over the vehicle upon payment of money to Krishna Kumar Bagla. Ultimately, Krishna Kumar Bagla agreed to settle the matter with Chiranjilal Agarwala and accordingly money was paid, as a result whereof the vehicle was not seized. The seizure made by the police was lifted and the vehicle was handed over to the plaintiff No. 1 on 19th Sept., 1964, In answer to Qs. 266 and 267 he has stated that Mr. Bagla was the ‘chief employee’ of the defendant No. 1 and he had the authority not only to accept money but to settle the suit on behalf of the defendant No. 1. Although it is his case that number of receipts in respect of the instalments paid by Chiranjilal Agarwala have been given and signed by Krishna Kumar Bagla, none of the said receipts the plaintiffs could produce at the time of hearing of this suit. Curiously enough, in answer to Q. 282 he frankly admitted that he did not know whether Krishna Kumar Bagla had authority to sign on behalf of the defendant No. 1 but definitely he was the ‘chief employee’ of the said company. In answer to Q. 308, he has stated that K.K Bagla did not tender the money to his employee. It is his case that he sold off one of his trucks in the year 1963 and received a sum of Rs. 10,000 and kept the said money with him. Furthermore, he carried on the business of transporting fire woods and thereby he also procured money. At the time of cross-examination of the plaintiff's witnesses Mr. Mitter appearing for the defendant No. 1 did not admit the letter of authority given by Shyamsunder Agarwala to Krishna Kumar Bagla for taking possession of the said vehicle although at the time of argument he admitted the document being executed by Shyamsunder Agarwala.

8. The evidence of the handwriting expert as examined by the plaintiffs is that Ex. ‘B’ being the receipt granted by Krishna Kumar Bagla on 7th Aug., 1964 is signed by Krishna Kumar Bagla and he has compared the same with the signature of Krishna Kumar Bagla appearing on an affidavit affirmed by Krishna Kumar Bagla in connection with this case on 4th May, 1969. He has compared both signatures and according to him he has given a considered opinion on 5th May, 1967. He has found a lot of similarity between the two signatures and the nature of combination of some of the letters is same in both the signatures and according to him both the signatures do not portray any signs of imitation as he has found while analysing both the signatures, the individual peculiarities of the writer present in both the documents. He was cross-examined at length by Mr. Mitter and during that he admitted in his cross-examination that in the absence of more specimen writings of Krishna Kumar Bagla he found some difficulty while examining both the signatures but still he was persistent in his evidence that in spite of the said difficulty he is confident that both the signatures were put by Krishna Kr. Bagla. It is to be noted that the first signature was given in the year 1964 and the second signature was given in the year 1969 and also under the peculiar circumstances in the sense when already a suit has been filed by the plaintiffs against the defendant No. 1 as also against the defendant No. 2; under these circumstances, it is only natural that the signature given in the affidavit would be a very cautious one and would be put in a clever manner. Any one by comparing both the signatures would come to the conclusion that they have been put by the same person although there are some variations which can be attributed to the fact that there has been a time lag between the putting of the said two signatures, the special circumstances under which the second signature was put and those discrepancies can easily be said to be of natural variations only. The nature of combinations of some of the letters is strikingly similar. While examining the said documents the handwriting expert was not told which one was the questioned and which one was the admitted document and according to me his approach of comparing the two signatures was done in a correct manner and he has given an honest opinion about the same. An application was taken out by the plaintiffs in this suit for an order directing the defendant No. 1 to disclose more specimen signatures of Krishna Kumar Bagla for the purpose of handing them over to the handwriting expert for his examination and opinion but the said order was not complied with by the defendant No. 1 on the ground that they did not have any other signature of Krishna Kumar Bagla in their office.

9. The plaintiffs examined only one witness being the Secretary of the defendant company. His evidence is that he worked with the company for 20 years as Assistant Manager and Secretary. Krishna Kumar Bagla and Shyamsundar Agarwala were mere clerks and they were not ‘chief employees’ as claimed by the plaintiffs. His evidence is that Krishna Kumar Bagla used to write out receipts, papers and documents but he bad no authority to grant receipt for any payment made to the company, far less had he authority to settle the suit on behalf of the company. Even from the receipt granted for Rs. 2,000 which was given on 31st July, 1964 it would appear that the body of the receipt was written by Krishna Kumar Bagla but it was signed by Kundanmal Saraogi, a director of the company. According to him, although he was Secretary and Assistant Manager, he had no authority to grant receipt or settle the suit. Except the directors nobody had the capacity or the authority to compromise the suit on behalf of the company. He has most emphatically denied the receipt of the sum of Rs. 11,351 on 7th Aug., 1964 or on any other date. He has denied the fact of settlement on the payment of the said sum or any other sum. According to him, Krishna Kumar Bagla used to draw a sum of Rs. 400 per month and Shyam Sundar Agarwala drew a sum of Rs. 250 per month. In cross-examination, he had admitted that Krishna Kumar Bagla was sent by the Receiver to take possession and also by the company to start execution proceedings in Bhubaneswar Court but he has positively denied the authority of Krishna Kumar Bagla to settle the suit and also of the alleged telephonic conversation. According to him, the ex parte decree was passed on 27th June, 1966 but the execution proceedings started in the year 1968. In his cross-examination Dr. Das suggested to him that the books of account of the company had not been disclosed by the defendant No. 1 otherwise from those books of account it would have been evident that such a sum of Rs. 11,351 had been paid by Krishna Kumar Bagla to the company. At that stage a prayer was made by Mr. H. Mitter that leave should be given to his client to disclose the books of account to show that in fact there is no such entry to that effect. Although Dr. Das opposed to such disclosure being made, I felt myself that in order to find out the truth and in order to come to the conclusion whether in fact such a settlement had been entered into by and between the plaintiffs and the defendant No. 1 and payment received or not, entries in the books of account would be very much relevant. As such, I permitted the defendant No. 1 to disclose the said books and after giving an opportunity to Dr. Das to take inspection of the same and to cross-examine the defendant No. 1's witness P.D Mundra on the said books. From the entries disclosed in the said books of account it would appear that there is no such credit entry of Rs. 11,351 in favour of the plaintiffs on 7th Aug., 1964 or on any later date. The last payment in respect of the said hire-purchase agreement was made on 31-7-64 for a sum of Rs. 2,000 and there is such an entry to that effect in the said books of account.

10. The evidence of P.D Mundra regarding the particulars of the dues of the defendant No. 1 from the plaintiffs and also his evidence regarding the whereabouts of Shyamsundar Agarwala is far from satisfactory. His evidence that Krishna Kumar Bagla had no authority to settle the suit on behalf of the defendant No. 1 would be supported by Exhibit ‘B’ itself. By reading the said document it would show that he was authorised by the Receiver Shyamsundar Agarwala to take possession of the said vehicle and he was authorised to do everything in respect of taking possession of the said vehicle which would be binding on the Receiver. From the said Exhibit ‘B’ it would not appear that Krishna Kumar Bagla was authorised by the defendant No. 1 to go and take possession of the vehicle or to accept money or to settle the suit. It would also appear from the letter of authority given by Shyamsundar Agarwala that he gave the authority to Krishna Kumar Bagla as a Receiver appointed by the Hon'ble Court and not as an employee of the defendant No. 1. From these two documents the plaintiffs should have been put on guard that Krishna Kumar Bagla had authority only from the Receiver to take possession and not to settle the suit either on behalf of the Receiver or on behalf of the defendant No. 1. It would appear from the order appointing the said Shyamsundar Agarwala as Receiver over the said vehicle that he was only appointed Receiver to take possession of the vehicle if necessary with police help and to do nothing further. So any payment received by Krishna Kumar Bagla on behalf of the Receiver Shyamsundar Agarwala and also the fact of entering into a settlement of the suit would definitely be beyond the scope of appointment of the Receiver. Shyamsundar Agarwala when giving the authority to Krishna Kumar Bagla to go and take possession of the car was acting as an officer of Court and not in the capacity of an employee of the defendant No. 1. As an officer of Court be himself could not act beyond the scope of his appointment nor could he go and settle the suit on behalf of the defendant No. 1. The Receiver is not definitely an agent of the company or an agent of the party for whom or on whose behalf he was appointed a Receiver of the Court So any representation made either by Krishna Kumar Bagla or by Shyamsundar Agarwala cannot be binding on the defendant No. 1. Moreover, it would appear that the company has neither accepted the said settlement nor has ratified either the act of Krishna Kumar Bagla or the act of Shyamsundar Agarwala. The authority of Krishna Kumar Bagla obtained by telephonic conversation from Cuttack as stated by Chiranjilal Agarwala is not acceptable in view of the fact that the plaintiffs did not choose to write a letter to the defendant No. 1 stating that they had made any payment to Krishna Kumar Bagla in full and final settlement of the suit. As a result whereof the suit should be settled accordingly. No correspondence seemed to have passed by and between the plaintiff No. 1 and the defendant No. 1. I feel that it was a duty of the plaintiff No. 1 to write immiediately to the defendant No. 1 and confirm the settlement arrived at by and between the plaintiffs and the defendant No. 2.

11. Mr. P.D Mundra in answer to Q. 133 had admitted that the letter of authority which was given to Krishna Kumar Bagla, was given by Shyamsundar Agarwala as the Receiver and not by the defendant No. 1. Although the plaintiffs have tried to make out a case in evidence that after the settlement was entered into at Jatni they wrote a letter to the defendant No. 1 enclosing a copy of the receipt to Krishna Kumar Bagla, but the said part of this evidence is not acceptable in view of the fact that neither it has been disclosed in this suit nor the said letter has been pleaded anywhere in the plaint. The books of account that were disclosed by the defendant No. 1 is the party ledger books and those books were tendered and marked as Exhibit ‘4A’. According to Mr. Mundra the entries in the said books regarding the plaintiffs' account were made by Krishna Kumar Bagla. Those books have been audited by the auditors and the balance sheet has been prepared after taking into consideration of the entries in the said book. The suit was filed in the year 1964 the decree was obtained on 27th June, 1968. From this fact also it will appear that the defendant No. 1 was not in any undue haste of obtaining the ex pare decree and also of getting the said decree executed within a year of passing of the decree during which period service of notice of execution on the plaintiffs would not have arisen. Had there been any collusion and conspiracy between the defendants Nos. 1 and 2, then the conduct of the defendant No. 1 in obtaining the decree after two years of the filing of the suit in spite of the fact that the defendants in the said suit did not contest the same and also because of the fact that the defendant No. 1 did not put the decree into execution within a year would show that the defendant No. 1 had no mala fide intention or any ulterior motive as tried to be made out by the plaintiffs in this suit.

12. The evidence of the plaintiff No. 1 and plaintiff No. 2 that they have not been served with the writ of summons is not acceptable by me. By comparison of both the postal acknowledgment receipt cards so far as the plaintiff No. 2 is concerned it would show that those two cards had been signed by the plaintiff No. 2 himself. Service of writ of summons on plaintiff No. 1 although is not supported by acknowledgment receipt card duly signed by him but the report of the G.P.O would show that such a registered cover was served on the plaintiff No. 1 and he duly accepted the service of the same although the original acknowledgment receipt card is misled and could not be delivered to the defendant No. 1. Although the plaintiff No. 1 has stated that he did not know anything about the filing of the suit before 7th Aug., 1964, when Krishna Kumar Bagla went to Cuttack to take possession of the car for the first time he came to know about the same, his own case is, that pursuant to the service of the notice of motion by registered post by Messrs. P.D Himatsingka and Co. he came to Calcutta on 30th July, 1964, saw his name in the daily cause list in the Old Post Office Street area and immediately went to the office of the defendant No. 1 to settle the matter, that would not only show that he had full knowledge of the suit but also he was too eager to settle the suit. Moreover, when on 7th Aug., 1964, Krishna Kumar Bagla went to Cuttack and showed him the letter of authority granted by Shyamsundar Agarwala and also told him about the order of the Hon'ble Court appointing Shyamsundar Agarwala as Receiver in the said suit he had full knowledge of the pendency of the said suit and in fact entered into an agreement with the said Krishna Kumar Bagla by payment of Rs. 11,351. He has also come to know about the passing of the said ex parte decree from Purna Chandra Bam, the plaintiff No. 2 herein from the notice that he has received in the execution proceeding. He has also read about the said execution proceeding in the Oriya Newspaper ‘Samaj’.

13. From all the facts as stated above it would be apparent that both the plaintiffs not only had knowledge of the existence of the suit but they were also served with the writ of summons by registered post. Moreover, they were too eager to settle the suit with the defendant No. 1. In any event, in view of the amendment of the Code of Civil Procedure by the amending Act of 1976 under O. 9, R. 13 a specific provision has been made to the effect that no court shall set aside the decree passed ex parte merely on the ground that there has been an irregularity in the service of the summons if it is satisfied that the defendants had notice of the date of hearing and had sufficient time to appear and answer the plaintiffs' claims.

14. The plaintiffs have also challenged the ex parte decree on the various grounds of fraud as set out in the plaint. But the oral evidence regarding particulars of fraud are different from the particulars as pleaded in the plaint.

15. In para 13 of the plaint the plaintiffs have challenged the ex parte decree dated 27-6-66 in the said Suit No. 1271 of 1964 not only on the ground of non-service of writ of summons but also on the ground that the said decree was procured by exercise of fraud upon court and have given particulars of fraud, collusion and conspiracy in para 13 of the plaint. The main instances of such fraud as given by the plaintiffs are collusion and conspiracy, fraudulent, suppression of service of writ of summons, the postman never tendered the writ of summons on the plaintiffs, the defendant No. 1 obtained Rs. 2,000 on 31-7-64 by suppression of the pendency of the suit. The defendant No. 1 did not give credit for the receipt of sum of Rs. 11,351, the defendants fraudulently prevented the plaintiffs from knowing that an ex parte decree had been passed until 27th June, 1968 when the said execution proceedings were started. There was collusion and conspiracy between the defendant No. 1, defendant No. 2 and Shyamsundar Agarwala and lastly, the fact of non-receipt of the service of the writ of summons was not brought to the notice of the Court at the time of obtaining the ex parte decree. It would be evident that an affidavit of service was filed in the said suit where all the facts regarding the service of writ of summons on both the plaintiffs have been stated and there has been no suppression of the mode of service from the court while obtaining the said ex parte decree. The plaintiffs have led no evidence to show that the postman concerned never tendered the writ of summons to them nor the plaintiffs did anywhere allege that there was collusion and conspiracy between the defendant No. 1 and the process server as also the postman concerned. As it is the positive case of the defendant No. 1 that they never received the sum of Rs. 11,351 nor they have entered into any settlement with the plaintiffs either directly or through Krishna Kumar Bagla, the question of bringing the fact to the notice of the court while obtaining the ex parte decree did not arise.

16. In a case reported in AIR 1960 Cal 309 (Atul Chandra Sarkar v. East Bengal Commercial Bank Ltd.) it has been held by a Division Bench of this Hon'ble Court presided over by Mr. Justice K.C Dasgupta, Chief Justice and Mr. Justice G.K Mitter that “mere non-service of summons is not enough to find a cause of action for setting aside a decree. General allegation of fraud, however strong the words in which they are stated, are insufficient even to amount to an averment of fraud of which any court ought to take notice. The expression ‘suppression of summons’ by itself does not amount to sufficient averment of fraud. By itself it means little more than not serving it, there should 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”.

17. It has also been held in that case that a decree would not be set aside on the ground that it was obtained by means of perjured evidence. If a decree is allowed to be attacked in this manner then there would be never any finality of any litigation. In another case reported in 44 Cal WN 912 at p 914 : (AIR 1940 Cal 489 at p. 492) it has been held “To us it seems that to sustain an action for setting aside a decree on the ground of fraud, the fraud alleged must be actually 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.”

18. This dictum was approved of in a case reported in 63 Cal WN 740 : (AIR 1959 Cal 776) (Nemichand Tatia v. Kishinchand Chellaram India Ltd.).

19. In a case reported in AIR 1974 Cal 393 (Sm. Swarnalata Devi v. Krishna Iron Foundry and Metal Works Pvt. Ltd.), it has been held that a decree cannot be set aside as fraudulent merely on the ground of perjured evidence. It is a well-established rule that under mandatory provisions of Order 6, Rule 4 particulars of fraud must be given as has been held by Judicial Committee in (1988) ILR 15 Cal 533 (Gunga v. Tiluck Ram) general allegations however strong are insufficient even to amount to an averment of fraud of which any court will take notice. Particulars of fraud not only should be given in the pleadings but evidence also must be led in support of such averments. From the general trend of decisions of this Hon'ble Court it would appear that even if evidence which was adduced either on affidavit or by oral testimony which although may amount to perjured evidence but that fact by itself would not be sufficient to set aside a decree.

20. So, applying the said principle, even assuming that the defendant No. 1 has tendered perjured evidence in the earlier suit as submitted by Dr. Das or that the service of the writ of summons was not done, these facts alone would not be sufficient to set aside the ex parte decree. Moreover, there has been divergence between the pleading and evidence as laid by the plaintiffs on the point of fraud and non-service of writ of summons.

21. Dr. S. Das, appearing on behalf of the plaintiffs submitted that there was a valid agreement entered into by and between the plaintiffs and the defendants and Exhibit ‘B’ being the document dated 7th Aug., 1964 was a forged document. Moreover, he submitted that the settlement that was arrived at between the plaintiffs and the defendant No. 2 was in fact made by the defendant No. 2 on behalf of the defendant No. 1. His case is that had Exhibit ‘B’ been a forged document then the defendant No. 1 would not have been reluctant in disclosing further documents containing the signature of Krishna Kumar Bagla for which an order was obtained by the plaintiffs on 27th March, 1967. According to him Mr. Mundra has admitted in his evidence that Krishna Kumar Bagla used to sign the pay slips and those documents must be with the defendant No. 1, Mr. Das has submitted that as Mr. Krishna Kumar Bagla went to Cuttack to take possession of the car and as he did not take possession of the car on that occasion, that fact would show that there must have been a settlement with Krishna Kumar Bagla, pursuant to which he refrained from taking possession of the said vehicle even knowing fully well where the said vehicle was lying. He has further submitted that as the said vehicle was lying wider a seizure made by the local police, Krishna Kumar Bagla must have thought it prudent to accept money from the plaintiffs in lieu of by getting involved in further litigation for taking possession of the said vehicle. It is his further case that although according to his clients the police released the said vehicle on 19th September, 1964 but the defendant No. 1 did not take the opportunity of getting the possession of the same from the plaintiffs. As such, it should be held that there must have been a settlement with the plaintiffs and the defendants regarding the said vehicle otherwise the defendant No. 1 in execution of the ex parte decree would have proceeded to take possession of the said vehicle. But on that part the defendant No. 1's counsel submitted that as the said vehicle was lying in dismantled condition and in pieces for repairs it was not possible for the defendant No. 1 to go and take possession of the same. Dr. Das submitted that the Receiver had authority not only to take possession of the said vehicle but also to receive money. By looking at the original order passed by the Hon'ble Court appointing Sayamsundar Agarwala as Receiver it would show that the Receiver was appointed only to take possession if necessary with police help and he was not given any further power in respect of the same. When it is desired by Court that the Receiver should have wider power than it is specifically mentioned in the order that apart from the powers as mentioned in the order appointing the Receiver, the Receiver would have all other powers as envisaged under O. 40 of the CPC. So in my opinion in this case the Receiver Shyamsundar Agarwala had only the power to go and take possession of the said vehicle and hold the same till further order being made by this Hon'ble Court He neither was given the power and/or authority to receive money or to settle the suit on behalf of the defendant No. 1. It is his further case that any act done by an agent in the course of the employment would be binding on the Master. He has argued that fraud has been committed by defendants Nos. 1 and 2 by suppressing material facts at the time of obtaining the said ex parte decree. As such, according to him the decree should be set aside and necessary orders be made as prayed for in the plaint. He had admitted at the time of his argument that he has not been able to give evidence and substantiate the case as made out in the plaint regarding the damages that have been suffered by the plaintiffs. He has further submitted that the defendant No. 2 has been implicated as a party defendant to this suit so that the matter may be tried in his presence. As such the plaintiffs did not make any prayer for any decree being passed against the defendant No. 2 personally.

“Where an act is done by an agent which is not within the scope of the agent's express or implied authority, or falls outside the power (or) apparent scope of his authority, the principal is not bound by, or liable for, that act, even if the opportunity to do it arose out of the agency and it was purported to be done on his behalf, unless he expressly adopted it by taking the benefit of it or otherwise.” (Halsbury's Laws of England, Vol. 1, 4th Edn., para 820).

22. In a case reported in (1974) 78 Cal WN 414 (Bangeswari Cotton Mills Ltd. v. Dhanraj Govindrarn) one of the points arose regarding the position of the Receiver appointed by Court. In that case it has been held by the Hon'ble Arun Kumar Mukherjee and Sisir Kumar Mukherjee JJ. that a Receiver is not an agent of the company. In fact, after the Receiver is appointed the company is no longer competent to make contracts either as principal or through an agent,

“A Receiver appointed by court is an officer of court. He is therefore not an agent for any man, but a principal as such personally liable to all such persons contracting with him unless his personal liability is excluded by the express terms of the contract subject to a correlative right to be indemnified out of the association or liabilities properly incurred.”

“What is the position of such a Receiver and Manager? He is not the agent of the company. They do not appoint him. He is not bound to obey their directions and they cannot dismiss him however much they may disapprove of the mode in which he is carrying on the business. Only the court can dismiss him or give him direction as to the mode of carrying on business, or interfere with his if he is not carrying on the business properly.

…… …… ……

He most act in pursuance of his appointment on his own responsibility and not as an agent. The company cannot be liable for he is not their agent. Therefore, any order which he may give under such circumstances must prima facie be taken to be orders given on his own responsibility and credit.”

(Lord Esher M.R)

23. In Ramnarayan Satya Pal v. Carey reported in AIR 1931 Cal 491 it has been held that persons who are contracting with a Receiver and are cognizant of his appointment must be taken to know that the Receiver is contracting as principal and not as an agent of the company.

24. “Some of the people in a company are mere servants and agents who are nothing more than hands to do the work and cannot be said to represent the mind or will. Others are directors and managers who represent the directing mind and will of the company and control what it does. The state of mind of these managers is the state of mind of the company and is treated by law as such.”

25. Applying the above principles to the facts of the present case it would be apparent that the Receiver was not an agent of the company and he cannot act beyond the scope of his appointment which specifically empowers him to take possession of the vehicle. Neither he nor Krishna Kumar Bagla who according to the above definition were mere servants. As such, neither under the order of appointment nor otherwise they could enter into any settlement by giving up the rights of the company not only to the possession of the car but also of the ownership and for a sum of Rs. 11,351 only or at all.

26. In a case reported in (1911) 1 Ch D 195 it has been held that “Receiver is not an agent of the parties and they cannot control him.”

27. A Receiver is not an agent of the party for and on whose behalf he is appointed by Court but the Receiver is an officer of Court. In this respect reference may be made to a case reported in (1974) 78 Cal WN 414.

28. In view of the facts stated and also in view of the law applicable in this case, I am of the opinion that Krishna Kumar Bagla went to Cuttack for the purpose of taking possession of the vehicle and on that occasion he was sent and he went as the representative of the Receiver Shyamsundar Agarwala only to take possession of the car. He went there as a representative of the Receiver on that occasion and definitely not as an agent of the defendant No. 1, otherwise he would have been also fortified with the letter of authority from the defendant No. 1. It would be obvious from the plain reading of the letter given by Shyamsundar Agarwala to Krishna Kumar Bagla that he was given the authority to take possession of the car and do nothing further. The Receiver has specifically stated that whatever actions would be taken by Krishna Kumar Bagla regarding taking possession of the car would be binding on the Receiver and be treated as if they have been done by the Receiver. The Receiver himself did not give him the authority in the said letter to receive money or to settle the suit. I am of the opinion that Krishna Kumar Bagla while he was in Cuttack to take possession of the car must have entered into some sort of agreement or arrangement with the plaintiffs otherwise the plaintiffs would not have with them the receipt dated 7th Aug., 1964 as also the letter of authority given by Shyamsundar Agarwala. Krishna Kumar Bagla must have received the money after which he has given out the said receipt duly signed by him. I accept that part of the evidence as given by the plaintiffs in this suit and also I accept the evidence of the handwriting expert and I hold that there has been an agreement by and between the plaintiffs and the defendant No. 2 as a result whereof the said document dated 7th Aug., 1964 being Exhibit ‘B’ came into existence. Krishna Kumar Bagla put his signature at the bottom of the document as also on the right hand corner of the said document. If it was a case of forgery, putting one signature at the bottom of the writing on Exhibit ‘B’ would have been enough and the forgerer would not have taken the double risk of forging Krishna Kumar Bagla's signature again on the right hand corner at the top of the document. In the said document the name of father of Krishna Kumar Bagla has been given and also various legal terms and phrases have been used.

29. Considering the above facts, I hold that the said document is not a forged or a manufactured one. Unless payment was made to Krishna Kumar Bagla, he would not have given the receipt nor would he have parted with the letter of authority given by Shyamsundar Agarwala. In the said document Krishna Kumar Bagla states himself that he was the authorised agent of the Receiver Shyamsundar Agarwala but nowhere he has stated that he has signed the said document as an agent of the defendant No. 1 or that he has been authorised by the defendant No. 1 either to accept money or to give up possession or surrender ownership of the said vehicle to the plaintiffs. Why should defendant No. 1 give up his right of ownership? If it was the intention of the plaintiffs to manufacture a document which would not only absolve them of the liability under the said agreement but also that would be binding on the defendant No. 1, what prevented them from including one line in the said document to the effect that Krishna Kumar Bagla was also authorised by the defendant No. 1 to receive money and also to settle the suit. This also goes to show that the document must be a genuine one and executed by Krishna Kumar Bagla himself in the presence of two witnesses. But definitely the said agreement cannot be held to have been entered into by and between the plaintiffs and the defendant No. 1.

30. I answer issues Nos. 1 (a) and (b) in the negative.

31. So far as Issues Nos. 2 (a) and (b) are concerned, I hold that the agreement that has been entered into by and between the plaintiffs and the defendant No. 2 was not on behalf of the defendant No. 1. As such, the said agreement entered into by and between the plaintiffs and the defendant No. 2 is not binding on the defendant No. 1.

32. I answer Issue No. 3 in the affirmative,

33. I am neither satisfied nor convinced with the evidence given by the plaintiffs regarding fraud, collusion and conspiracy, as alleged in para 13 of the plaint. Accordingly, I answer issues Nos. 4 (a) and 4 (b) in the negative.

34. The plaintiffs have failed to give any evidence regarding loss and damages suffered by them either for Rs. 15,000 or for any other sum at all. As such, I answer Issue No. 5 (a) in the negative and answering Issue No. 5 (b) does not arise.

35. So far as Issue No. 6 is concerned, the plaintiffs in the plaint claim for a declaration to the effect that the decree obtained on 27th June, 1966 in Suit No. 1271 of 1964 is fraudulent and void and the same is not executable and liable to be set aside.

36. I have earlier in my judgment stated the facts and evidence given by the plaintiffs and considered the evidential value thereof and I am not satisfied with that part of the plaintiffs' case.

37. In view of the facts and the legal position as stated above, I am not passing any decree in favour of the plaintiffs. Although I have come to the conclusion that the plaintiff's made a payment of Rs. 11,361 to Krishna Kumar Bagla but that was not received by Krishna Kumar Bagla not as an agent of the defendant No. 1 and definitely beyond the scope of authority given by the Receiver. The plaintiffs should have claimed a personal decree for the said sum of Rs. 11,351 but in view of no prayers being made to that effect I dismiss the suit of the plaintiffs against both the defendants with costs.

38. There will be a stay of operation of this order till one week after the long vacation.

39. Certified for two counsel.

40. Suit dismissed.