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Sundararajulu Naidu v. Narayanaswami Naidu
Factual and Procedural Background
This opinion arises from a civil revision petition in which the decree-holder sought revision of an order of the Small Cause Judge, Kumbakonam. The impugned order had dismissed the decree-holder's petition for execution on the ground that the execution petition was barred by the law of limitation. There had been an earlier execution application (E.P. No. 4095 of 1924) in respect of the same decree, and after what was recorded as service of notice the Court made an order directing execution. The present dispute concerns whether that earlier execution order could be treated, by way of constructive res judicata, as conclusively determining the executability of the decree against the judgment-debtors, thereby barring them from raising the limitation defence in the subsequent proceeding.
Legal Issues Presented
- Whether an order made on a prior execution petition (E.P. No. 4095 of 1924) after return of service can operate, by way of constructive res judicata, to preclude the judgment-debtors from contesting the executability of the decree in a subsequent execution application.
- Whether, for the rule of constructive res judicata to apply in that context, the Court must make a formal judicial declaration of the sufficiency and propriety of service in terms of O. 5, R. 19 of the Civil Procedure Code (CPC).
- Whether the Court should consider allegations of fraud in connection with returns of service and related conduct that may have been designed to defeat the bar of limitation (as raised by respondents and discussed by the Subordinate Judge).
- Whether the provisions of Order 9 (O. 9) of the CPC apply to applications for execution (raised but not decided by the Court in this opinion).
Arguments of the Parties
Petitioner's (Decree-holder's) Arguments
- There was an earlier execution application (E.P. No. 4095 of 1924) in which, after service of notice on the judgment-debtors, the Court had directed execution; therefore the executability of the decree had been dealt with and the judgment-debtors had been given opportunity to show cause.
- Because notice had been served and an order of execution made previously, the decree-holder argued that constructive res judicata should apply to the subsequent execution petition, preventing the judgment-debtors from re-litigating executability or raising the limitation defence.
Respondents' (Judgment-debtors') Arguments
- Questioned whether the rule of constructive res judicata could be invoked where the parties were not personally served and whether service in the earlier proceeding had been proper under the rules of service.
- Alleged fraud: the respondents averred in affidavit that the notice of execution in the earlier petition was not served upon them and that the decree-holders had fraudulently obtained a false return of service to prevent the judgment-debtors from becoming aware of the application (thus precluding them from raising the bar of limitation).
- Pointed to the petitioners' conduct after obtaining an order for arrest — the pleader reported that he did not require a warrant to be issued — as suspicious conduct consistent with an intention to avoid exposing the prior proceedings to challenge and to circumvent the limitation defence.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Vellayappi Chetty v. Veemppa Chetty | Used to support that an entry such as "Defendants ... absent, ex parte" by a subordinate judge could be taken to amount to a declaration of service sufficient to support ex parte action. | The Court considered the case but distinguished it: it held that when the law (O.5, R.19 CPC) requires a formal declaration of the propriety of service, the Court must pronounce on that question in a judicial manner. The mere absence of a formal declaration in the earlier order in E.P. No. 4095 of 1924 meant that constructive res judicata could not be invoked on that basis. |
Court's Reasoning and Analysis
The Court's analysis proceeded in these principal steps, based strictly on the materials and reasoning in the opinion:
- Law of constructive res judicata: The Court recognized the general principle that if a party is given a real opportunity to appear and show cause in respect of an execution application and fails to do so, an ex parte order made on that basis may be regarded, under the doctrine of constructive res judicata, as having determined issues such as the executability of the decree in favour of the decree-holder. This follows from the general principle that opportunity was afforded and not availed of by the party.
- Requirement of proper service under CPC rules: The Court emphasized the requirements as to service of process under R.2, O.48 of the CPC (noting that notices and processes should be served in the same manner as summonses — personal service if possible — and otherwise by the alternative methods provided). More specifically, O.5, R.19 CPC was invoked: that rule empowers the Court to examine the serving officer and either declare that the summons has been duly served or order such service as it thinks fit.
- Necessity of a formal judicial declaration: Interpreting O.5, R.19, the Court held that when the rule of constructive res judicata is sought to be invoked on the basis of prior service, the Court must make a formal declaration — in a judicial manner — that the service effected was sufficient and proper. The Court explained that a mere omission to make such a declaration in the record is not a mere irregularity when the constructive res judicata rule is being relied upon; rather, the formal declaration is necessary to establish that the judgment-debtors had a genuine opportunity to show cause.
- Application to the facts of E.P. No. 4095 of 1924: The earlier order contained the remark “Absent……. Arrest, defendant 2, 25th November, 1924,” and an office note noted affixture on 7th November, 1924 and statements about a defendant being gone out. The Court found no express judicial declaration that service was sufficient within the meaning of O.5, R.19. The Court rejected the petitioner's contention that the judge's ordering execution after referring to the absence of the judgment-debtors should be regarded as an implied declaration of sufficiency of service.
- Consequences for constructive res judicata: Because there was no formal declaration that service had been properly effected, the Court held that the earlier order could not be treated as having given the judgment-debtors a real opportunity to show cause; therefore, the rule of constructive res judicata could not be invoked to bar the judgment-debtors from raising the executability or limitation defence in the subsequent execution petition.
- On allegations of fraud and inherent powers: The Court noted the Subordinate Judge's inclination to treat the earlier proceedings as tainted by fraud (the respondents' affidavit alleging false return of service and suspicious conduct by the plaintiffs). The Court accepted that there was force in the respondents' argument about probable fraud and acknowledged that courts have inherent power to prevent fraud and miscarriage of justice. However, the Court expressly rested its decision on the narrower ground of absence of a formal declaration of proper service rather than on a broader exercise of inherent jurisdiction.
- Matters not decided: The Court observed that the conflicting decisions on whether Order 9 applies to execution applications were not necessary to decide in this case and therefore left that question undetermined.
Holding and Implications
Holding: The revision petition is dismissed. The Court held that the earlier order on E.P. No. 4095 of 1924 did not contain a formal judicial declaration of the sufficiency of service as required by O.5, R.19 CPC; accordingly, the earlier order could not be treated as operating by way of constructive res judicata to preclude the judgment-debtors from contesting executability or raising the bar of limitation. The lower Court's conclusion dismissing the decree-holder's petition for execution was held to be correct.
Implications:
- Direct effect: The decree-holder's present petition for execution is dismissed with costs; the judgment-debtors remain able to contest executability and to raise limitation as a defence because the Court found that the earlier order did not fulfil the formal requirement for invoking constructive res judicata.
- Legal principle applied by the Court: The opinion emphasizes that when a party seeks to rely upon constructive res judicata based on earlier service and an ex parte order, the earlier proceeding must contain a formal judicial declaration that service was sufficient and proper under O.5, R.19 CPC. The Court expressly stated that such a formal declaration is necessary, at least in cases where constructive res judicata is invoked on the basis of prior service.
- Limitations on the decision: The Court did not decide the broader contested question about the applicability of Order 9 to execution applications; it also declined to rest its decision on the broader allegation of fraud, instead resting the dismissal on the absence of the formal declaration of service.
1. On this civil revision petition the decree-holder has applied to this Court to revise the order of the Small Cause Judge of Kumbakonam dismissing the decree-holder's petition for execution on the ground that it was barred by the law of limitation.
2. It has been argued by the learned vakil for the petitioner that there had been an execution application, before the present one, namely E.P No. 4095 of 1924 and that thereon after service of notice on the judgment-debtors an order was made by the Court directing execution of the decree. No doubt, when an application is made for execution of a decree and notice of the application is served on the judgment-debtors, they are bound to appear if for any reason they should regard themselves as entitled to contend that the decree of which execution is sought is not there or then executable.
3. The executability of the decree being one of the matters to be considered by the Court, the judgment-debtors were bound to appear and show cause why execution should not be ordered if they had any cause to show. If they fail to appear and show cause, and if on such failure an order ex parte should be made by the Court directing execution, then the question of the executability of the decree should according to the law of constructive res-judicata be regarded as having been decided by the Court in favour of the decree-holder on the general principle that an opportunity having been afforded to the judgment-debtors to show cause against it, they failed to show cause and that any ground that they might have and should have taken with regard to the executability of the decree having been failed to be taken by them should be deemed to have been decided against them. Mr. Jayarama Aiyar for the respondents has attempted to raise the question whether the rule of constructive res judicata in such a case could be resorted to when the parties are not personally served. To hold that in cases where parties are not personally served the rule would not be available would be to give premium to parting seeking to evade service of proper processes of the Court. All that is necessary under the law is that they should be properly served, served according to the rules relating to service. Under R. 2, O. 48 of the CPC, generally, all notices and processes under the Procedure Code are required to be served in the same manner in which summonses in suits have been directed to be served, that is by personal service if possible, and if that should be found not feasible, in any of the other ways indicated in the rules relating thereto. Then O. 5, R. 19, provides as follows:
Where a summons is returned under R. 17, the Court shall, if the return under that rule has not been verified by the affidavit of the serving officer, and may, if it has been so verified, examine the serving officer on oath, or cause him to be so examined by another Court, touching his proceedings, and may mike such further enquiry in the matter as it thinks fit, and shall either declare that the summons has been duly served or order such a service as it thinks fit.
4. This order distinctly provides for the Court declaring such service as has been effected to be good, if it should be of the opinion that the service was sufficient and proper. No doubt the rule further proceeds and requires that in the event of the Court holding the service insufficient it should order such service as to it sees fit. It has been argued by the learned vakil for the petitioner that the fact in this case, that the Court proceeded after referring to the absence of the judgment-debtore to order execution must be regarded as impliedly including a declaration to the effect; that the service was sufficient and proper. I am unable to accede to that contention. I am not sorry for my being unable to accede to the contention especially having regard to the unfortunate practice that has grown up at any rate in this presidency, of not paying sufficient attention to the service of processes. When the law requires that the Court should declare the proper service of a notice or process, the mere omission to make such a declaration is not in my opinion a mere irregularity. Whatever it may be in ordinary cases, I am satisfied that when the rule that is sought to be invoked is the rule of constructive res judicata, the rules relating to proper service of notices cannot be too strictly adhered to. In the present case on this execution application, namely E.P No. 4095 of 1924 all that the learned Judge has said in this; “Absent……. Arrest, defendant 2, 25th November, 1924,” which means, I take it, that the person should be arrested and produced before the Court on or before that date. No doubt there is an office note before this order of the Judge as follows:—“defendants affixed 7th November, 1924 as defendant 1 gone out, driving out, his wife said. There is, therefore, in my view, no declaration by the Court of the sufficiency of service of notice within the meaning of R. 19, O. 5 of the CPC. Mr. Jayarama Aiyar in this connexion referred to the case of Vellayappi Chetty v. Veemppa Chetty(1). There the learned Judges. Sadasivaaier and Tyabji, JJ., held that in a case in which the Subordinate Judge noted as follows. “Defendants 1, 2, 5 and 6 absent, ex parte” the Subordinate Judge was legally justified in making such a declaration, taking the words written by the Subordinate Judge to amount to such a declaration.
5. For my part it seems to me that when the law requires the Court to make a formal declaration about the propriety of the service, it requires the Court to pronounce upon such propriety in a judicial manner and it is obvious that the sufficiency or otherwise of the service required to be decided on by the Court should not be left merely to the office. I hold therefore that such a formal declaration of the propriety of service is really necessary, at any rate, in all cases in which on the basis of such proper service the rule of constructive res judicata is sought to be availed of. There is no such declaration in this case by the learned Judge.
6. It follows from this that the order that was made directing execution on the execution petition of the 8th October, namely E.P No. 4095 of 1924 was not an order with regard to which the respondents, judgment-debtors had really an opportunity to show cause against the executability of the decree.
7. The decision on this point is sufficient to dispose of the petition. In that view it is not necessary to decide the further question that has been raised and argued on behalf of the petitioner that with respect to applications for execution the provisions of O. 9 do not apply. The decisions with regard to that matter are conflicting, both in this Court and elsewhere, and as a determination of that question is not necessary for the purpose of this case, I do not propose say anything about it.
8. I may, however, before concluding, observe that there is considerable force in the argument put forward by Mr. Jayarama Aiyar on behalf of the respondents with regard to the probable fraud perpetrated by the petitioners for the purpose of escaping the bar by limitation. It is significant that after obtaining an order for arrest on the said execution petition they do not take any steps, but that their pleader reports to the Court that he does not require a warrant to be issued pursuant to the order for arrest. It is obvious that if the judgment-debtors had been arrested pursuant to any such order, it would have been open to them to come to Court and point out to the Court that they have been wrongfully arrested in execution of a decree which had become barred by the law of limitation. But if the order for arrest obtained by the decree-holders should be allowed to remain on record and nothing more done in respect of that application, it was apparently foreseen and provided carefully that in respect of any fresh application for execution the plea of bar by limitation on the part of the judgment-debtor may be successfully avoided or met. The learned Subordinate Judge in para, 8 of his judgment states as follows, with regard to the previous application:
Nor can it be said that the service by affixture of the notice was sufficient enough to estop them from questioning the plaintiff's right to execute the decree subsequently. In the affidavit filed by the plaintiff along with the above execution application, defendants have stated that the notice of execution was not served upon them and the plaintiff had fraudulently arranged and obtained a false return of service with the object that the defendants should not become aware of the same. The plaintiff's subsequent conduct in asking the. Court not to issue the arrest warrant also looks very suspicious.
9. Though the finding is not as clear as could be wished, I certainly am inclined to regard that as a finding, as near as may be, by the Subordinate Judge to the effect that it was by a fraud practised by the decree-holders that the proceedings of the Court were got recorded by them with a view eventually, to prevent the judgment-debtors from raising, at any rate raising successfully the bar of limitation. I am not disposed to consider the inference arrived at by the learned Subordinate Judge as either far-fetched or improbable.
10. The learned Subordinate Judge has also relied upon the inherent powers of the Court, for the purpose of treating as a nullity the order for execution passed on the previous execution petition in the circumstances. Though I should myself be prepared to hold that there is always an inherent power in every Court to see that no fraud is allowed to be perpetrated and to prevent any miscarriage of justice by reason of any fraud perpetrated by parties to proceedings, it seems to me, however, that the decision on this petition may be rested on the small and simple ground that there has been no proper declaration of service of notice of the previous application and that therefore the rule of constructive res judicata is not available to the petitioners. It is not contended before me that if that rule is not available the present petition for execution could in any other way be regarded as not barred by the law of limitation. I therefore hold that the conclusion arrived at by the lower Court was right.
11. The petition is therefore dismissed with costs.
12. Petition dismissed.
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