The Andhra Pradesh High Court has clarified a critical aspect of Article 123 of the Limitation Act, holding that substituted service under Order V Rule 20 of the Code of Civil Procedure (CPC) does not constitute due service for the purpose of computing limitation. This judgment underscores the distinction between actual knowledge and deemed service, offering relief to litigants who discover ex parte decrees belatedly due to ineffective service methods.
Background & Facts
The Dispute
The petitioners, Vangapandu Srinivasa Rao and Vangapandu Syamala, were defendants in a suit (O.S. No. 77 of 2017) filed by the respondent, Saladi Venkata Ramana, for recovery of an amount based on a promissory note dated 07.10.2015. The petitioners were arrayed as defendants, with their address listed as Flat No. D1, Kalyani Heights, near Ravindra Bharathi Public School, Venkat Nagar, Kakinada.
Key Facts
- The respondent filed the suit on the basis of a promissory note executed by the petitioners.
- Summons sent to the address mentioned in the plaint were returned with an endorsement that the petitioners were not residing there.
- The trial court ordered substitute service by way of paper publication in Eenadu daily newspaper.
- Despite service, the petitioners did not appear, leading to an ex parte decree dated 14.02.2018.
- The petitioners claimed they shifted their residence to Bhimavaram, West Godavari District, and were unaware of the proceedings until 26.05.2019, when a relative informed them about a paper publication regarding the auction of their property.
Procedural History
- 14.02.2018: Ex parte decree passed in O.S. No. 77 of 2017.
- 09.06.2019: Petitioners filed I.A. No. 1218 of 2019 under Section 5 of the Limitation Act to condone a delay of 474 days in filing an application under Order IX Rule 13 CPC to set aside the ex parte decree.
- 26.04.2017: Conditional attachment of the petitioners’ property (Ac. 1.23 cents) ordered in I.A. No. 705 of 2017. The Amin affixed notice to the locked house and later attached the property.
- 08.05.2017: Attachment notice affixed at the Gram Panchayat Office, and a tom-tom announcement was made.
- 06.12.2022: Trial court dismissed I.A. No. 1218 of 2019, holding that the petitioners failed to explain the delay or prove their residence in Bhimavaram.
- 04.01.2023: High Court granted an interim stay on proceedings in E.P. No. 30 of 2018.
- 29.06.2026: Present judgment pronounced, setting aside the trial court’s order.
The Parties' Positions
For the Petitioners:
- The petitioners contended they were unaware of the decree until 26.05.2019 and filed the application within 30 days of gaining knowledge.
- They argued that substituted service under Order V Rule 20 CPC does not constitute due service under Article 123 of the Limitation Act, and thus, the limitation period should run from the date of knowledge, not the decree.
For the Respondent:
- The respondent argued that the petitioners failed to furnish their correct address in I.A. No. 1218 of 2019 and did not prove their residence in Bhimavaram.
- The respondent contended that the petitioners failed to explain the 474-day delay in filing the application to set aside the ex parte decree.
Relief Sought
The petitioners sought condonation of the delay and setting aside of the ex parte decree dated 14.02.2018.
The Legal Issue
The central question was whether substituted service under Order V Rule 20 CPC constitutes due service for the purpose of Article 123 of the Limitation Act, thereby triggering the limitation period from the date of the decree, or whether the limitation period should commence only from the date of the petitioners’ actual knowledge of the decree.
Arguments Presented
For the Petitioners
- Relied on Article 123 of the Limitation Act and its Explanation, which states that substituted service under Order V Rule 20 CPC shall not be deemed to be due service.
- Argued that the petitioners filed the application within 30 days of gaining knowledge of the decree, and thus, there was no delay.
- Contended that the trial court failed to consider the third column of Article 123, which provides that the limitation period runs from the date of knowledge where summons are not duly served.
For the Respondent
- Contended that the petitioners did not furnish their correct address in I.A. No. 1218 of 2019 and failed to prove their residence in Bhimavaram.
- Argued that the petitioners failed to explain the inordinate delay of 474 days in filing the application to set aside the ex parte decree.
The Court's Analysis
The Court examined Article 123 of the Limitation Act in detail, emphasizing its Explanation, which explicitly states that substituted service under Order V Rule 20 CPC shall not be deemed to be due service. The Court observed:
"A perusal of the article would manifest that an application to set aside the decree, the limitation prescribed is thirty days. Column No.3 of Article 123 speaks about the time from which the period begins to run. As per the said column, the limitation begins from the date of the decree where the summons was duly served. Where the summons was not duly served, the knowledge of the applicant regarding the decree. Explanation to Article 123, makes it clear that substituted service under Rule 20 of Order V of CPC, shall not be deemed to be due service."
The Court noted that the petitioners were not residing at the address mentioned in the plaint and had shifted to Bhimavaram. The summons were returned unserved, and the trial court resorted to substituted service by paper publication. The Court held that the trial court erred in dismissing the application on the ground of delay, as the petitioners filed the application within 30 days of gaining knowledge of the decree.
The Court relied on the Division Bench judgment in M.A. Qader v. Mohd. Asmat Ali and the Supreme Court’s ruling in N. Balakrishnan v. M. Krishnamurthy, which emphasize that condonation of delay is a matter of judicial discretion, and the primary duty of the court is to advance substantial justice. The Court observed:
"The trial Court misdirected itself, since the witness could not state the name of the relative who informed about the paper publication. In fact, as noted supra, the return of summons by the Amin in the suit, itself, is sufficient to show that the defendants were not residing at the address shown in the plaint and hence the summons was returned."
The Court concluded that the trial court failed to consider the third column of Article 123 and its Explanation, leading to an erroneous dismissal of the application.
The Verdict
The Court set aside the order dated 06.12.2022 in I.A. No. 1218 of 2019 and allowed the application under Order IX Rule 13 CPC, subject to the following conditions:
- The petitioners must pay Rs. 5,000 to the respondent within four weeks from the date of receipt of the order.
- If the petitioners fail to pay, the impugned order in I.A. No. 1218 of 2019 shall revive without further reference.
- If the respondent refuses to receive the amount, the petitioners must deposit it before the Mandal Legal Services Committee, Kakinada and file a memo before the trial court.
- The trial court shall pass appropriate orders in the petition under Order IX Rule 13 CPC after hearing both parties and expedite the hearing of the suit in accordance with the circular issued by the High Court (R.O.C. No. 560/OP/CELL/2022, dated 23.11.2022).
The Civil Revision Petition was allowed, with no order as to costs. Pending miscellaneous petitions, if any, were closed.
What This Means For Similar Cases
Substituted Service Does Not Trigger Limitation Under Article 123
- Practitioners must argue that substituted service under Order V Rule 20 CPC does not constitute due service for the purpose of Article 123 of the Limitation Act.
- The limitation period for filing an application to set aside an ex parte decree commences only from the date of actual knowledge of the decree, not from the date of the decree itself.
- Courts must scrutinize the effectiveness of service before dismissing applications for condonation of delay.
Condonation of Delay: A Matter of Judicial Discretion
- The judgment reaffirms that condonation of delay is a matter of judicial discretion, and courts must prioritize substantial justice over technicalities.
- Length of delay is not the sole criterion; the acceptability of the explanation is paramount. Even a short delay may be uncondonable if the explanation is unsatisfactory, while a long delay may be condoned if the explanation is satisfactory.
- Superior courts may re-examine the cause shown for delay if the lower court refuses to condone it, as held in N. Balakrishnan v. M. Krishnamurthy.
Practical Implications for Litigants
- Litigants must ensure accurate addresses in pleadings to avoid disputes over service. However, if service is ineffective, they may rely on Article 123 to argue that the limitation period runs from the date of knowledge.
- Affidavits in support of condonation applications should clearly state the date of knowledge and the steps taken immediately thereafter to file the application.
- Trial courts must verify service records before dismissing applications for condonation of delay, especially where substituted service is involved.
