The Elphinstone Spg. And Wvg. Mills Co. Ltd. v. Messrs Sondhi Sons (Private) Ltd., Bombay High Court, Judgment, Law, casemine.com

Citation Codes

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Case Number

O.C.J Appeal No. 16 of 1959 and Suit No. 289 of 1958

Judges

H.K Chainani, C.J
Mody
Tarkunde, JJ.

Acts

ORDER 9 RULE 13 CIVIL PROCEDURE CODE

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Smart Summary

Factual and Procedural Background

This appeal arises from an ex parte decree passed on December 17, 1958, by Mr. Justice Mody in a suit filed by the plaintiffs (appellants). The suit was filed on August 19, 1958; writ of summons was served on the defendants on October 3, 1958. Multiple adjournments were granted to permit the defendants to file a written statement. On December 17, 1958, an application by the defendants for adjournment was refused, their counsel was permitted to withdraw, the plaintiffs then led evidence and a decree was passed against the defendants.

On January 9, 1959 the defendants filed a notice of motion to set aside the ex parte decree. On January 16, 1959 Mr. Justice K.K. Desai allowed that motion (making it absolute subject to conditions) and set aside the decree under (or purporting to be under) Order IX, Rule 13 of the Civil Procedure Code. The plaintiffs appealed the Desai order under Clause 15 of the Letters Patent. A preliminary objection was raised in the appeal that such an appeal was not competent because the Desai order was not a "judgment" within the meaning of Clause 15. The Division Bench hearing that appeal referred the following question to a Full Bench for authoritative decision (Full Bench composed of Chainani, C.J., Mody and Tarkunde, JJ.):

“Whether the order of a Single Judge on the Original Side of the High Court setting aside an ex parte decree under Order 9, Rule 13, of the Civil Procedure Code or purporting to be one thereunder, amounts to a judgment within the meaning of that expression occurring in Clause 15 of the Letters Patent and is appealable?”

The Full Bench heard counsel for the parties (K.S. Cooper for the appellants; S.C. Chagla for the respondents) and delivered its reasons and decision.

Legal Issues Presented

Whether an order of a Single Judge on the Original Side of the High Court setting aside an ex parte decree under Order IX, Rule 13 (or purporting to be under that rule) amounts to a "judgment" within the meaning of the word as used in Clause 15 of the Letters Patent, and therefore is appealable under that clause.

Arguments of the Parties

Plaintiffs-Appellants' Arguments (as presented in the opinion)

Mr. Mody (appearing for the plaintiffs-appellants) contended that the decree originally passed by Mr. Justice Mody was under Order XVII, Rule 3 of the Civil Procedure Code and therefore could not properly be set aside under Order IX, Rule 13; he argued that the order of Mr. Justice K.K. Desai setting aside the decree was within jurisdiction.
He further argued that where a decision by a Judge on the Original Side results in vacating a decree passed in favour of one party, that decision amounts to a "judgment" within Clause 15 of the Letters Patent, and accordingly an appeal lies. In support he relied on the decision in Behari Lal Shaha v. Jnanendra Nath Bhattacharjea.
At the Full Bench hearing, counsel for the appellants (K.S. Cooper) relied upon Chandi Charan v. Jnanendranath, where the Calcutta High Court had held that a single-judge order setting aside a decree and remanding for rehearing of an appeal was a "judgment" because it terminated the appeal and resulted in a decree being drawn up to give effect to the decision.

Defendants-Respondents' Arguments (as presented in the opinion)

Mr. Chagla (appearing for the defendants-respondents) contended that an appeal does not lie against an order of the kind made by Mr. Justice K.K. Desai under Clause 15 of the Letters Patent because such an order is not a "judgment" within the meaning of that clause.
When the appeal was first heard, respondents raised a preliminary objection that the appeal was not competent on the ground that the Desai order setting aside an ex parte decree under Order IX, Rule 13 is not a "judgment" for the purposes of Clause 15.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Asrumati Debi v. Kumar Rupendra Deb (Supreme Court)	Noted divergence of judicial opinion on what constitutes a "judgment" under the Letters Patent; the Supreme Court refrained from comprehensively defining "judgment".	The Full Bench recorded that the Supreme Court had noticed the divergence but had not expressed a final opinion; this supported the need for the Full Bench determination.
Behari Lal Shaha v. Jnanendra Nath Bhattacharjea	Relied upon by plaintiffs' counsel to support the proposition that a decision vacating a decree can amount to a "judgment".	The Full Bench recorded reliance upon this case by Mr. Mody but did not adopt that view in its ultimate conclusion.
Manohar v. Baliram (Nagpur High Court; also cited by a member of this Court)	Authority discussing whether an order of remand by a single Judge in second appeal amounts to a "judgment" — the view expressed by one of the judges was that a remand order which does not decide the controversy is not a "judgment".	The Bench recorded that the author (one of the present Bench) had earlier expressed that remand orders may not amount to "judgment"; the decision illustrated divergence of views and was referred to as not decisive for this case.
Justice of the Peace for Calcutta v. The Oriental Gas Company (Couch C.J.)	Couch C.J.'s definition: "judgment" means a decision which affects the merits of the question between the parties by determining some right or liability; can be final, preliminary, or interlocutory.	The Full Bench adopted and applied Couch C.J.'s definition and stated that this Court has followed that definition in earlier decisions.
Sonbai (widow of Fazul Habibhai) v. Ahmedbhai Habibkai; Miya Mahomed v. Zorabi; Salemahomed v. Mahomed Taher	Instances in which this Court has followed Couch C.J.'s definition of "judgment".	The Full Bench stated it would adhere to that established practice and apply the same definition in deciding the referred question.
Maharaj Kishore Khanna v. Kiran Shaski Dasi (Calcutta High Court)	Held that no appeal lies against an order under Order IX, Rule 9 (restoring a suit) — supporting the view that certain orders restoring suits are not "judgments" for appeal purposes.	The Full Bench cited this decision as part of Calcutta High Court authority supporting that orders restoring suits or setting aside ex parte decrees do not decide the merits and therefore are not "judgments".
Baldeodas v. Shubchurndas (Calcutta High Court)	Held that an order under Order IX, Rule 13 setting aside an ex parte decree is not a "judgment" for the purpose of appeal; emphasis that the merits of the suit had not been decided.	The Full Bench relied on this decision (quoting Sanderson C.J.) to support the conclusion that setting aside an ex parte decree leaves the merits undetermined and is not a "judgment".
Tulsiram v. Sitaram	Followed the Calcutta decisions that orders restoring suits or setting aside ex parte decrees are not "judgments".	The Full Bench noted this as a further authority consistent with the view that an O. IX, r. 13 order is not a "judgment".
Chandi Charan v. Jnanendranath (Calcutta High Court)	Held that a single Judge's order setting aside a decree passed by a District Judge and remanding the case for rehearing of the appeal was a "judgment" because it terminated the appeal, vacated the decree, and a decree had been drawn up to give effect to the decision.	The Full Bench considered this decision but distinguished it from orders setting aside ex parte decrees on the Original Side, noting that Chandi Charan involved termination of an appeal and drawing up of a decree giving effect to the decision — circumstances different from an Order IX, r. 13 setting aside an ex parte decree.
Almeida v. Ramchandra Asavle	Held that no appeal lies under Clause 15 from an order setting aside an abatement under Order XXIII, Rule 9, because such an order does not affect the merits of the dispute between the parties.	The Full Bench considered this decision correct and used it by analogy to support the proposition that setting aside an abatement (or setting aside a decree) does not affect the substantive rights and therefore is not a "judgment" for appeal purposes.

Court's Reasoning and Analysis

The Full Bench proceeded in a structured way to resolve the referred question:

Adopted and reaffirmed the Couch C.J. definition of "judgment" as "a decision which affects the merits of the question between the parties by determining some right or liability" — a definition that this Court had followed in earlier cases.
Characterized an application/notice of motion to set aside a decree (Order IX, Rule 13) as a separate proceeding taken after the suit has been disposed of by the decree. The proceeding terminates when an order setting aside the decree is made; thus an order setting aside a decree may satisfy the procedural requirement of being a conclusive pronouncement on that proceeding.
Emphasized the central and dispositive question: whether an Order IX, Rule 13 order affects the merits of the question between the parties (i.e., determines rights or liabilities arising out of the suit). The Court held that it does not.
Reasoned that in proceedings to set aside a decree the only question the Court decides is whether "sufficient cause" has been shown for vacating the decree and restoring the suit; the Court is not called upon to decide the substantive questions in dispute in the suit itself. When a decree is set aside, the substantive matters remain open for fresh adjudication; the plaintiff's right to have his claim determined and the defendant's liability are left intact to be decided on the merits at trial.
Referred to and relied upon prior decisions of the Calcutta High Court (Maharaj Kishore Khanna; Baldeodas; Tulsiram) and Almeida v. Ramchandra Asavle as authorities consistent with the proposition that orders restoring suits or setting aside decrees do not determine the merits and therefore are not "judgments" within the meaning of the relevant Letters Patent clause.
Considered contrary authority (notably Chandi Charan and certain views in Manohar v. Baliram) but distinguished those decisions on the facts: Chandi Charan involved termination of an appeal and drawing up of a decree to give effect to the decision, which made that decision qualitatively different from an Order IX, Rule 13 order setting aside an ex parte decree on the Original Side. The Bench declined to treat remand orders generally as determinative in this context because remand orders can be of different characters; however, those distinctions did not affect the specific conclusion on O. IX, r. 13 orders.
Concluded that although an order setting aside a decree terminates the separate proceeding to set aside the decree, it does not decide the substantive issues between the parties and therefore does not satisfy Couch C.J.'s requirement that a "judgment" affect the merits by determining some right or liability arising in the suit.

Holding and Implications

Holding:

The Full Bench answered the referred question in the negative: an order of a Single Judge on the Original Side setting aside an ex parte decree under Order IX, Rule 13 (or purporting to be made under that rule) is not a "judgment" within the meaning of that expression occurring in Clause 15 of the Letters Patent and is not appealable under that clause.

Implications (direct and as stated in the opinion):

The direct effect on the parties in the reported matter is that an appeal under Clause 15 against the order of Mr. Justice K.K. Desai setting aside the ex parte decree was not competent, because that order is not a "judgment" for the purposes of Clause 15.
The Full Bench expressly addressed and decided the specific referred question; the opinion confines its reasoning to the nature of Order IX, Rule 13 orders and their relationship to the Couch C.J. definition of "judgment".
The opinion does not set out broader consequences beyond answering the referred question; it distinguishes types of orders (for example, orders that terminate appeals and result in decrees drawn up to give effect to them) that may fall on a different footing, but does not hold that all remand or appellate orders are non-appealable.

Solicitors recorded in the opinion: for the appellants — Amarchand & Mangaldas & Malvi Ranchhoddas & Co.; for the respondents — Mulla & Mulla & Craigie Blunt & Caroe.

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The Elphinstone Spg. And Wvg. Mills Co. Ltd. v. Messrs Sondhi Sons (Private) Ltd.

Mudhoxkar, A.C.J:— This is an appeal from the judgment of Mr. Justice K.K Desai setting aside an ex parte decree made by Mr. Justice Mody in a suit on December 17, 1958. Mr. Chagla, who appears for the defendants-respondents, contends that an appeal does not lie against an order of the kind made by Mr. Justice Desai under cl. 15 of the Letters Patent. Mr. Mody, who appears for the plaintiffs-appellants, contends that the decree which was passed hy Mr. Justice Mody was under O. XVII, r. 3, of the Civil Procedure Code, that consequently such a decree could not be set aside under O. IX, r. 13, of the Civil Procedure Code and that the order of Mr. Justice K.K Desai setting it aside is with jurisdiction. The question whether Mr. Justice K.K Desai acted within or beyond his jurisdiction could only be canvassed before us if the order which he ultimately made setting aside the decree amounts to a judgment within cl. 15 of the Letters Patent. Upon the question, whether an order made by a Judge in exercise of his Original jurisdiction amounts to a judgment or not within the meaning of the word occurring in cl. 15 of the Letters Patent, there is a divergence of views in India. The Supreme Court had occasion to notice this in Asrumati Itebi v. Kumar Rupendra Deb Baikot.1 Even there, their Lordships have refrained from giving a comprehensive definition of the word “judgment”. Mr. Mody's argument is that where, as here, the decision of a Judge in a proceeding on the Original Side of the High Court has the result of vacating a decree which had been passed in favour of one of the parties, it amounts to a judgment within cl. 15 of the Letters Patent. In support of his contention, he has placed reliance upon the decision in Behari Lal Shaha v. Jnanendra Nath Bhattacharjea.2 Thus, according to him, wherever an Appellate Court makes an order of remand that order amounts to a judgment and would in appropriate circumstances be appealable as a judgment. I have myself expressed the view in Manohar v. Baliram,3 that an order of remand passed by a single Judge of the High Court sitting in second appeal does not amount to a judgment within the meaning of cl. 10 of the Letters Patent of the former High Court of Nagpur. There are numerous other decisions on the point and we think that it, is desirable that it should be settled authoritatively once for all. We, therefore, refer the following question for decision by a Full Bench:—

“Whether the order of a Single Judge on the Original Side of the High Court setting aside an ex parte decree under O. IX, R. 13, of the Civil Procedure Code or purporating to be one thereunder, amounts to a judgment within the meaning of that expression occurring in Clause 15 of the Letters Patent and is appealable?”

2. The question referred to was heard by a full bench composed of Chainani, C.J and Mody and Tarkunde, JJ.

3. K.S Cooper, for the appellants. S.C Chagla, for the respondents.

4. Chainani, C.J:— On August 19, 1958, the appellants had filed a suit on the Original Side of this High Court and in this suit they claimed a certain amount as being due and payable to them by the respondents-defendants. The writ of summons was served on the defendants on October 3, 1958. Thereafter the suit was adjourned several times in order to enable the defendants to file a written statement. The suit then came up for hearing on December 17, 1958. On that date the defendants again applied for adjournment of the hearing. That application was rejected. The defendants' counsel then asked for permission to withdraw from the case and this was granted. The plaintiffs led some evidence and thereafter a decree was passed against the defendants. On January 9, 1959, the defendants took out a notice of motion for setting aside the decree passed against them. This was opposed by the plaintiffs. On January 16, 1959, Mr. Justice K.K Desai made an order, by which he made the notice of motion absolute on certain conditions. He set aside the decree passed against the defendants. Against the order made by him an appeal was filed under cl. 15 of the Letters Patent. When the appeal came up for hearing, a preliminary objection was raised that the appeal was not competent. It was contended that an order setting aside a decree is not a judgment within the meaning of cl. 15 of the Letters Patent and that, consequently, no appeal lies against such an order. The Division Bench hearing the appeal decided to refer the following question to the Full Bench:

“Whether the order of a single Judge on the Original Side of the High Court setting aside an ex parte decree under Order 9 Rule 13 of the Civil Procedure Code or purporting to be one thereunder, amounts to a judgment within the meaning of that expression occurring in clause 15 of the Letters Patent and is appealable?”

5. There has been considerable divergence of judicial opinion in regard to the meaning of the word “judgment” used in cl. 15 of the Letters Patent. The different views held on this point were noticed by the Supreme Court in Asrumati Debi v. Kumar Rupendra Deb Raikot but the Supreme Court did not express any final opinion in the matter. In the Justice of the Peade for Calcutta v. The Oriental Gas Company Couch C.J defined the word “judgment” as follows (p. 452):

“…We think that ‘judgment’ in clause 15 means a decision which affects the merits of the question between the parties by determining some right or liability. It may be either final, or preliminary or interlocutory, the difference between them being that a final judgment determines the whole cause or suit, and a preliminary or interlocutory judgment determines only a part of it, leaving other matters to be determined.”

6. As observed in Asrumati Debi v. Kumar Rupendra, at p. 1166, “the judgment must be the final pronouncement, which puts an end to the proceeding so far all the Court dealing with it is concerned.” It has also been held in several cases that an order, which is merely procedural in character or which can only be regarded as a step in the progress of a suit, is not a judgment. In this Court the definition given by Couch C.J has always been followed, see Sonbai widow of Fazul Habibhai v. Ahmedbhai Habibkai, Miya Mahomed v. Zorabi,4 and Salemahomed v. Mahomed Taher . 1957 59 Bom. L.R 1193.. We feel that we must adhere to the practice, which has been followed so far, and apply the same definition in the present case.

7. An application or a notice of motion taken out to set aside a decree passed in a suit is not a proceeding in the suit. It is not an interlocutory application made during the pendency of the suit. It is a separate proceeding, which is taken after the suit has been disposed of and has come to an end by the decree being passed. The proceeding terminates when an order setting aside the decree is made. Such an order would, therefore, satisfy one of the requirements for its being considered to be a judgment.

8. The material question, however, to be considered is whether such an order affects the merits of the question between the parties. The result of the order no doubt is that, the plaintiff is deprived of a valuable right, which had accrued to him under the decree which had been passed in his favour. It also relieves the defendant of his liability under that decree. But the order does not decide any of the matters in controversy in the suit. In a proceeding to set aside a decree, the only question which the Court is called upon to consider is whether sufficient cause has been shown for the decree being set aside and the suit being restored. In such a proceeding the Court is not required to and does not decide any question arising in the suit. When, therefore, a decree is set aside, there is no determination of the questions in controversy between the parties. All the matters are left open for a fresh adjudication. The right of the plaintiff to have his claim determined by a Court is not affected in any way. Similarly the defendant's liability in respect of such a claim is not affected, but remains to be adjudicated upon. The questions in dispute between the patties are, therefore, not determined by an order setting aside an ex parte decree. Such an order is not, therefore, in our opinion, a judgment within the meaning of cl. 15 of the Letters Patent.

9. This is also the view, which had been taken by the Calcutta High Court in several cases. In Maharaj Kishore Khanna v. Kiran Shaski Dasi,6 it was held, following an earlier unreported decision of that Court, that no appeal lies against an order made under O. IX, r. 9, Civil Procedure Code restoring a suit. The same view was taken in regard to an order made under O. IX, r. 13, setting aside an ex parte decree in Baldeodas v. Shubchurndas . [1926] A.I.R Cal. 327.. In his judgment in this case Sanderson, C.J observed (p. 328):

“The result of the learned Judge's order is that the merits of the questions between the parties in the suit have not been decided. On the contrary the result is that the suit has been restored and the matters in dispute and the question whether the defendants are liable for the amount claimed have yet to be decided.”

10. Both these decisions were followed in Tulsiram v. Sitaram . [1959] A.I.R Cal. 389..

11. No decision has been cited before us, in which a contrary view has been taken that ah order setting aside a decree either under O. IX, r. 9, or under O. IX, r. 13, is a “judgment”. Mr. Cooper on behalf of the plaintiffs has relied on the decision of the Calcutta High Court in Chandi Charan v. Jnanendranath,9 in which it was held that an order made by a single Judge setting aside a decree passed by a District Judge and remanding the case for rehearing of the appeal on merits, was a judgment, as “the effect of the decision was to terminate the appeal in the Court and also to vacate the decree made by the District Judge” and also because “a decree had been drawn up in the High Court to give effect to this decision.” Mr. Cooper relied on the observations in the judgment in this case that the expression “some right or liability” in the definition of Couch C.J is not restricted to the right in controversy in the suit itself. If these observations are read along with the rest of the judgment, it would be clear that what the learned Judges wanted to convey was that if the right in controversy in appeal is decided and the appeal terminates with a decree being drawn up to give effect to the decision in appeal, the decision in appeal would be a judgment within the meaning of the Letters Patent. Such a decision, which terminates the appeal and results in a decree being passed, stands on quite a different footing from an order setting aside an ex parte decree. A somewhat different view in regard to an order of remand was taken by the Nagpur High Court in Manohar v. Baliram,10 in which the decision of the majority of the Judges was that when a remand order by a single Judge of the High Court sitting in second appeal merely remits an issue for trial or orders, some evidence to be taken but does not decide the controversy either wholly or partially, the remand order cannot be treated as a judgment within the meaning of cl. 10 of the Letters Patent of the Nagnur High Court; but where the Court sets aside a decree and making a binding order on the merits of the controversy remits the case for trial according to its decision, the order must be treated as a judgment within the meaning of the clause. It is not necessary for as in this case to express any opinion as to whether an order of remand is a judgment, for such an order is of quite a different nature than an order setting aside an ex parte decree either under O. IX, r. 9, or under O. IX, r. 13. In Almeida v. Ramchandra Asavle,11 it was decided that no anneal lies under cl. 15 of the Letters Patent from an order setting aside an abatement of a suit under O. XXTI, r. 9, Civil Procedure Code, because such an order does not affect the merits of the dispute between the parties. That view is, in our opinion, correct. We may, however, add that we do not agree with the other reason given in that case, viz., that an anomaly would arise, if an order setting aside an abatement made by a Judge on the Original Side is held to be appealable, even, though such an order, if made by any other Court, would not be appealable under O. XLIII, r. 1. There are several orders referred to in this rule, which are appealable, but against which no appeal would lie, if they were made by a Judge on the Original Side. Similarly, an appeal lies against certain interim orders made by a Judge on the Original Side, but which are not appealable under the Code.

12. Various other authorities have been cited before us in regard to the manner in which the above definition of Couch C.J has been applied in different cases. These cases are not easy to reconcile. No useful purpose will be served by our attempting to do so, nor is this necessary for the purpose of deciding the question, which has been referred to us. We do not, therefore, consider it necessary to refer to these cases.

13. In our opinion, therefore, an order setting aside a decree under O. IX, r. 13 is not a judgment within the meaning of cl. 15 of the Letters Patent.

14. It does not make any difference whether the order was made under this rule or purports to have been made under this rule. The reply to the question referred to the Full Bench will, therefore, be in the negative.

Solicitors for the appellants: Amarchand & Mangaldas & Malvi Ranchhoddas & Co.

Solicitors for the respondents: Mulla & Mulla & Craigie Blunt & Caroe.

The Elphinstone Spg. And Wvg. Mills Co. Ltd. v. Messrs Sondhi Sons (Private) Ltd.

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Plaintiffs-Appellants' Arguments (as presented in the opinion)

Defendants-Respondents' Arguments (as presented in the opinion)

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

The Elphinstone Spg. And Wvg. Mills Co. Ltd. v. Messrs Sondhi Sons (Private) Ltd.

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