The 1st referee should whistle for service when he/she is sure that the teams are ready to play and that the server is in possession of the ball. There must always be 6 players per team in play. Because the 1st referee noticed the mistake before he/she whistled for service, he/she must award a delay sanction to the team at fault. The next team to serve depends on the type of delay sanction. But if the 1st referee still whistled for service when only 5 or 7 players were on court, he/she must stop the rally immediately and replay without any sanction. If the situation is discovered after the end of the next rally, the result of this rally should be cancelled and replayed without any sanction. Casebook 2020 Page 11/60 If nobody discovered the situation, or did so after the start of the next rally, the rally played with 5 (or 7) players of a team cannot be replayed. Rules 7.3.1., 7.5, 12.3, 12.4.3 

Yes, fault, because in the moment of the service hit all players except the server must be within their own court. Consequently, it is a fault for a player on court to be in contact with the free zone in the moment of service. Rules 1.3.3, 7.4