- (1.) THESE two appeals have been filed by the appellant-State Bank of India against Minerva Premises Co-operative Society ltd. , and R. M. Vora in the first appeal and in the second appeal against the above Society and M/s. Raju Printers challenging the order dated 29-11-1988 passed by the Judge, Co-operative Court, Bombay in the cases filed by the Respondent No, 1 against the other respondents respectively. The appeal provision under Section 97 of the M. C. S. Act of 1960 is for filing of an Appeal within 2 months from the date of decision or order. So the appeal against the decision dated 28-11-1988 could have been filed within 2 months therefrom. These two appeals are presented on 6-2-1989 and the explanation is given for the delay and condonation thereof in the appeal memo that these appellants were not aware of the judgment and awards till the respondent No. 1 made an application for execution of the said awards in the High Court as they were not p. rty to the proceedings before the trial court. Xerox copy of the judgment and order annexed to this appeal memo show that the application for copy was made on 30-11-1988 and copy was ready for delivery on 5-12-88, but it is not mentioned who had made the application. Presumably it could not be by appellants as they claimed to have come to now about the awards only after they were put for execution. Since the challenge to the award which is made by a parties who were not parties before the trial Court. 1 have to see all these aspects further. In the first appeal i. e. Appeal No. 217 of 1989 the judgment and award were in ex parts, as in the other case also where the Society obtained the order directing the respondent Mr. R. M. Vora to hand over possession of the premises No. D-26 located in Minerva estates and to hand over possession to the disputants Minerva Premises co-operative Society. The learned Judge noted that the defendant was duly and properly served with the summons, but had remained absent. On affidavits, claim was granted. In the second appeal the claim was against m/s. Raju Printers c/o R. M. Vora, the defendant in the first appeal filed by the very respondent No. 1 Minerva Premises Co-operative Society wherein also the learned Judge ordered that the defendants to hand over vacant possession of the premises namely D-24 and 25 in Minerva Estates to the plaintiffs, who filed the dispute. It is noted therein that the defendants though duly served failed and neglected to attend the Court. The challenge is also on the ground that the decrees were not validly passed because the defendants were not duly served. However, we have to examine the cases in question. We note the facts from the lower Court's record that the respondent No. 1 is a Co-operative Society registered under the M. C. S. Act, 1960 of which Mr. R. M. Vora in the First Appeal and M/s. Raju Printers in the Second Appeal are the members holding premises bearing No. D-26 in the first appeai and the other premises mentioned above in the second appeal. They were allegedly to be in arrears of ground rent, municipal taxes, maintenance charges, sinking iund. In the first appeal Rs. 42,184,24 in total from 1-10-1980 unto 1-1-1987. Notice of demand was dated 21-3-1986 with no compliance. Therefore, for non-payment they were allegedly liable for eviction from the premises. The prayers were accordingly as above for possession of the respective premises.
(2.) IN the second appeal also the arrears were for the same period and of Rs. 83,734,86, but the prayers in this dispute were only for eviction from the premises, and for possession thereof and not for the arrears. The Court noted that they were duly served, but we find that the postal envelope containing the writ of summons sent by registered post A. D. had come back as unclaimed. Then the peon of the Court made a statement on oath dated 29-12-1987 that he had gone to the address of the suit premises to serve the summons, but he could not meet anybody there, therefore, he pasted the summons on the door of the premises. There was of course an application dated 7-11-1987 for service by pasting which was granted on 10-11-1987. The service of summons was challenged by third party. Since the third party interest has been affected by the award. Order 5 Rule 10 of C. P. C. provides that service of summons shall be made by delivering or tendering copy thereof signed by a Judge or such Officer appointed for this purpose. So personal service was expected under this Rule and sub-rule (12) and makes it further clear that wherever it is practicable service shall be made on the defendant in person unless he, as an agent, empowered to accept the same. In this case there was no service of summons on the defendant. The defendant in the second appeal is a firm of which the defendant in the first appeal was one of the two partners. The other partner appears to be his brother and the address of the firm is shown as that of the defendant in the first appeai. Rule 17 lays down the procedure when the defendant refuses to accept summons or cannot be found. Here substantial evidence is that when the peon of the Court had gone to serve the summons the defendants were not found. It is not known who did not claim the envelopes sent by post as no authentic evidence was led on this aspect. Rule 17, however, contemplates that the serving Officer must point out that he has used all due and reasonable deligence to find out the defendants, who were absent from the suit premises at the time of service of summons and there was no likelyhood of he/they being found at the premises within a reasonable time and then he is permitted under this rule to affix copy of the summons at the outer door or some other conspicuous part of the house in which ordinarily he/they reside or carries/carry on business and then return the original with his report to the Court. There is no satisfactory evidence that the serving officer had used all due and reasonable deligence to find out the defendants in the matter and further he was satisfied after all efforts that there was no likelihood to find out the defendants at the premises in question. Without compliance this contemplated situation the service of summons in the matter cannot be considered as sufficient service. Rule 19 of Order 5 makes it further mandatory to examine the serving Officer when the summonses are returned under Rule 17 if the return is not verified by affidavit and the Court may make further enquiry in the matter as it thinks fit and then declare that the summons has been duly served or order service of summons further. There is a very scratchy declaration made by the peon that the defendants were not found at the time of service, but there is total absence of the circumstances and facts that he had made due enquiry to find out and the time of return or no return of the defendants at the premises. It is said that third party cannot challenge the proper service of summons which is again not correct because when the third party which claims that by judgment and award its interest is materially affected or prejudiced without making them as a party, such party gets a right to file an appeal with the leave of the court as contemplated under Section 96 of C. P C. Commentary on this topic by Mulla, 14th Edition, Volum I, page 576 under caption "who may appeal" is in support of this aspect of the matter and we find further that when the appeal is preferred under Section 97 of the M. C. S. Act the provisions about the procedure and powers which further made clear under explanation to Section 149 stating that the Co-operative Appellate Court hearing an appeal under this Act i. e. M. C. S. Act shall exercise all the powers conferred upon the Appellate Court by Section 97 and Order 41 in the 1st Schedule of the C. P. C. Therefore, this Court will have the power to grant leave to file the appeal by a person whose interest has been affected by judgment and award without being a party to the dispute as contemplated in C. P. C. The next point which is to be made clear in this matter is that since the appeal could be preferred against the said judgments and awards the appellants would have the right to challenge legality of the judgments and award on all grounds including the ground of improper service of writ of summons. Therefore, Mr. Kamath was right in challenging the same.
(3.) THE case simplicitor of the Minerva Premises Housing Society was for eviction of the defendants only from the Galas on the ground of non-payment of its dues and this was endorsed by the awards dated 29-11-1988. The appellant has pointed out that these respondents No. 2 in the appeals had approached this appellant for loan, one for a cash credit facility limit of Rs. 3,60,000/- and second one Rs. 4,30,000/- cash credit bill discount limit. It was some time prior to October, 1979. It was given to M/s. Raju printers, by the appellants Branch at Matunga. On. 8-10-1979 these two partners of the respondent No. 2 executed documents of security against these loans as letters of pledge, hypothecation of book debts, assets and moveables and the pledge of other moveable goods. On 1-9-1982 they gave the revival letters. These are the supporting evidence to show that the respondent No. 2 in both the appeals were indebted to the appellants and the loans were advanced against the securities of these very properties because on 6-10-1976 the title deeds were deposited with this appellant bank making the equitable mortgages which were pertaining to these disputed premises i e. Unit No D-26 in the plaintiff Minerva Premises Co-operative Society and Unit NOS. 24 and 25 which were originally Acme Industrial Estate and now Minerva Premises Co-operative Society. They were initially as Galas d-2, D-5 and D-6 respectively. The amount due in these accounts being loans against the respondent No. 2 were Rs. 8 lakhs and odd amount by the end of December, 1981. From 7-1-1983 the respondents, plaintiffs i. e. Minerva Premises Co-operative Society was informed by the appellants of the equitable mortgages by deposit of title deeds with them of these premises by the Respondents M/s. Raju Printers and pointed out that any measures taken by them to dispose of or sell the flat should become valid only if approved by the appellants in writing or an order to that effect is received from the Court of law, and, therefore, the plaintiff Society was requested to take note of the situation and restrain from permitting the owners of the galas to sell and dispose of the same. Copy of this letter with acknowledgement is produced at Exhibit 'b' of the appeal memo So it seems that equitable mortgage was since prior to the loan facilities granted in the month of October 1979 to these persons. So it was brought to the notice of the respondent No. 1 Society that there was such a charge in the form of equitable mortgage 01 the appellants over these properties. Not only this, but the appellants have filed a suit against the respondent No. 2 in both the appeals, bearing Suit No 703 of 1983 in the High Court at Bombay wherein the State Bank of India and the respondent No. 2 obtained consent decree on 13-1-1986 by which they admitted the claim of Rs. 9,64,634,81 with interest on it from 31-3 1983 payable by the respo dents to the appellants, and set out the terras of repayment and to be paid off by sale of Gala nos. D-2, D 5 and D 6 and others and after the payments as set out therein the bank would release the charge created by virtue of equitable mortgage on receiving payment by sale of the Gala which are under dispute. The bank did not wait there, but they informed the respondent No 1 on 17-11-1988 i. e. prior to the judgment and awards in ex parte obtained by it against the respondent No. 2 in the appeals that, they had obtained consent decree against the respondent No. 2 and others and those premises were under mortgage with them and their charge over that property was confirmed. Now v ith such a record the respondent has resisted the claims of the bank now when they say that the respondent No. 1 was not entitled to obtain such a decree affecting their interest over these premises and more so when there is Court Receiver appointed on 12-12-1988 on account of the consent decree dated 13-1-1986 and with this knowledge the Society obtained the decree for possession.;