Case Note & Summary
The appeal arises from a judgment and decree dated 18 October 2014 passed by the City Civil Court, Bombay in SC Suit No.7175 of 1997. The plaintiff, Dhanesh B. Jain, a proprietary concern engaged in the apparel business, filed a suit against multiple defendants including the appellant, Allcargo Logistics Ltd. (formerly Allcargo Movers (India) Pvt. Ltd.), a company incorporated under the Companies Act, 1956. The plaintiff claimed that defendant no.1 (ACE Lines) and defendant no.2 (Allcargo Container Lines Ltd.), both foreign companies, along with defendant no.3 (appellant) and defendant no.4 (M/s. Walford Meadows Ltd., the agent), were liable for loss of goods during carriage by sea. The trial court passed an ex-parte decree against the appellant on the ground that service on defendant no.4, the agent, was sufficient service on the appellant under Order 5 Rule 12 of the Code of Civil Procedure, 1908. The appellant challenged this decree, arguing that it was not duly served and had no notice of the suit. The High Court analyzed the provisions of Order 5 Rule 12 and held that service on an agent is not sufficient to bind a foreign principal unless the agent is expressly authorized to accept service. The court found that there was no evidence that defendant no.4 was authorized to accept service on behalf of the appellant. Consequently, the ex-parte decree was set aside, and the appeal was allowed. The court directed that the suit be restored to its original number and decided afresh after giving the appellant an opportunity to file a written statement and participate in the proceedings.
Headnote
A) Civil Procedure Code, 1908 - Order 5 Rule 12 - Service on Agent of Foreign Principal - Service of summons on agent of foreign principal is not sufficient to bind the foreign principal unless the agent is authorized to accept service - Held that the trial court erred in holding that service on defendant no.4 (agent) was sufficient service on defendant no.3 (foreign principal) (Paras 10-15). B) Civil Procedure Code, 1908 - Order 9 Rule 13 - Setting Aside Ex-Parte Decree - Ex-parte decree can be set aside if the defendant was not duly served and had no notice of the suit - Held that the appellant (defendant no.3) was not duly served and the ex-parte decree is liable to be set aside (Paras 16-20).
Issue of Consideration
Whether the service of summons on the agent of a foreign principal is sufficient to bind the foreign principal and whether the ex-parte decree passed against the foreign principal is liable to be set aside.
Final Decision
The appeal is allowed. The impugned judgment and decree dated 18 October 2014 is set aside. The suit is restored to its original number and shall be decided afresh after giving the appellant an opportunity to file a written statement and participate in the proceedings.
Law Points
- Service of summons on agent of foreign principal is insufficient to bind the principal
- Order 5 Rule 12 CPC
- 1908
- Ex-parte decree set aside
- Foreign principal not served
