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Case Number

First Appeal No. 281 of 1969, against the decision of S.K Desai, Judge, City Civil Court, Bombay, in Summary Suit No. 8471 of 1968

Judges

Joshi
Mukhi, JJ.

Acts

provisions of s. 9 of the Bombay City Civil Court Act of 1948 the City Civil Court
s. 9 of the Bombay City Civil Court Act of 1948
s. 9 of the Bombay City Civil Court Act, 1948

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Smart Summary

Structured Summary of the Opinion (Mukhi, J.)

Factual and Procedural Background

The matter arises from a conditional order granting the defendants leave to defend a summary suit upon deposit of Rs. 7,500, and from the dismissal of a chamber summons. Mr. Khare (appearing for the appellants) contended before the High Court that the learned trial Judge who made the conditional order should have given reasons for making such an order. The Court noted that this specific point was not taken at any earlier stage of the proceedings and was not mentioned in the appeal memorandum, which contained only a general ground that the decree against the appellants was bad in law and not based on justice and equity. The High Court nevertheless addressed the point as an important question of law, reviewed relevant authorities and statutory provisions, and ultimately dismissed the appeal.

Legal Issues Presented

Whether a Judge of the Bombay City Civil Court is required, in all cases, to give reasons when granting or refusing leave to defend (including when making a conditional order) under Order XXXVII, Civil Procedure Code as amended by the High Court.
Whether the absence of recorded reasons for a conditional order granting leave to defend renders that order invalid or liable to be set aside.
What is the effect of s. 9 of the Bombay City Civil Court Act, 1948 in determining whether the City Civil Court must follow the High Court practice of giving reasons in non-appealable matters.
Whether observations in decisions of the Supreme Court and other High Courts (as cited) impose a mandatory rule that subordinate courts must always record reasons for orders granting or refusing leave to defend.

Arguments of the Parties

Appellant's Arguments (Mr. Khare)

The learned trial Judge should have given reasons for making a conditional order granting leave to defend on deposit of Rs. 7,500.
Authorities (including a judgment of this Court in Waman/Woman Vasudeo v. Pratapmal and observations in Milkhiram (India) P. Ltd. v. Chamanlal Bros) were relied upon to support the contention that reasons must be recorded when leave to defend is conditioned.

The opinion does not set out detailed contrary arguments advanced by the respondent within the text provided.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Waman/Woman Vasudeo v. Pratapmal (1960 62 Bom. L.R 592; [1960] A.I.R. Bom. 520)	Held that the Court below had discretion to grant unconditional or conditional leave to defend, and stated that the order should, on its face, show that the court had applied its mind — implying that reasons should be given so the superior court can consider the exercise of discretion.	The High Court examined this decision but noted it arose in the context of an order by the City Civil Court and that s.9 of the Bombay City Civil Court Act had not been drawn to the attention of the single Judge in that case; the Court declined to interpret Waman Vasudeo as imposing an absolute requirement that City Civil Court judges must give reasons in every case.
Amrit Banaspati Co. v. Engineer & Co. (1961 63 Bom. L.R 568)	Considered whether a City Civil Court judge is bound to give reasons when deciding on conditional or unconditional leave to defend; referred to s.9 of the Bombay City Civil Court Act.	The High Court relied on this authority to hold that a City Civil Court judge is not required in all cases to give reasons, though it is desirable in complicated cases; interference in revision will follow if the trial judge failed to appreciate issues or acted arbitrarily.
Milkhiram (India) P. Ltd. v. Chamanlal Bros. ([1965] A.I.R S.C 1698; 68 Bom. L.R 36)	Contains observations regarding reasons being given in orders, including orders of the High Court on its Original Side; the decision was referenced to suggest reasons might be required.	The Court held that Milkhiram does not lay down a rule that City Civil Courts must in all cases give reasons; the Supreme Court itself noted the normal rule should not be made inflexible. The Bombay High Court therefore read Milkhiram as not mandating an absolute requirement for subordinate courts.
Vijakumar v. Pari Nareshchandra Firm ([1968] A.I.R Guj. 247)	Considered whether Milkhiram's observations import an obligation on subordinate courts to give reasons for orders subject to revision; concluded they did not.	The Bombay High Court drew support from this Gujarat High Court decision to the effect that there is no principle of law compelling subordinate courts to give reasons in orders not appealable but subject to revisional jurisdiction, and that conditional leave orders are not void for want of reasons.
United Industries v. Dalwadi & Co. ([1969] A.I.R Guj. 18)	Addressed the scope of Bhagat Raja and whether it affected decisions about recording reasons in courts' orders.	The Bombay High Court cited this decision for the proposition that Bhagat Raja dealt with tribunals (Central Government as tribunal) and did not lay down a principle applicable to courts of law requiring recorded reasons; thus it does not compel City Civil Courts always to record reasons.
Bhagat Raja v. Union Of India & Others ([1967] A.I.R S.C 1606)	Dealt with Central Government acting as a tribunal; discussed the requirement of reasons in the context of tribunals exercising judicial or quasi-judicial powers.	The High Court noted Bhagat Raja was confined to tribunals and therefore did not establish a rule applicable to ordinary courts of law that all orders must be supported by recorded reasons.

Court's Reasoning and Analysis

The Court proceeded through the following analytical steps (as recorded in the opinion):

Admissibility and timing of the point: The Court first observed that Mr. Khare's contention about absence of reasons was not raised earlier in the proceedings nor mentioned in the appeal memorandum; the ground actually advanced in the appeal was general and did not encompass the precise point now raised.
Review of precedent: The Court reviewed Waman/Woman Vasudeo v. Pratapmal where a single Judge indicated that reasons should appear on the face of the order to enable revision. The Court quoted the passage that emphasized the necessity of reasons so that the superior court can determine whether the lower court applied its mind.
Statutory context — s. 9 of the Bombay City Civil Court Act, 1948: The Court emphasized s. 9, which states that the City Court shall be dealt with according to the law administered by the High Court in its ordinary original civil jurisdiction. The Court observed that on the Original Side non-appealable matters a Judge often does not give reasons and the appellate court does not require him to do so; applying this practice to the City Civil Court suggests that lack of reasons does not per se render an order illegal.
Consideration of Amrit Banaspati and related authorities: The Court relied on Amrit Banaspati, which held a City Civil Court judge is not required to give reasons in every case although it is desirable in complicated cases; interference by the High Court in revision is justified where the City Civil Court judge has not appreciated the issues or his order is arbitrary or capricious.
Interpretation of Supreme Court observations in Milkhiram: The Court examined the Supreme Court's observations and concluded they did not lay down a rigid rule that City Civil Courts must always give reasons. The Court noted the Supreme Court itself cautioned against making the normal rule inflexible.
Support from other High Courts: The Court surveyed Gujarat High Court decisions (Vijakumar and United Industries) which similarly rejected an absolute requirement that subordinate courts always record reasons for orders that are not appealable but are revisable, and emphasized that Bhagat Raja concerned tribunals and not ordinary courts.
Practical guidance and exceptions: The Court accepted that while reasons are not mandatory in every case, it is desirable and appropriate for judges to give brief indications of the basis of their conclusions in complicated cases or where points of law/fact are involved, and especially when leave is refused (because refusal leads to a decree).
Conclusion on the present order: Applying the above analysis to the conditional order dated February 6, 1968, the Court found that its validity could not be challenged solely on the ground that the trial Judge did not record reasons. Accordingly, Mr. Khare's contention was rejected.

Holding and Implications

APPEAL DISMISSED

Holding (core ruling)

The High Court held that the Bombay City Civil Court is not required in all cases to record reasons when granting or refusing leave to defend, including when making conditional orders under Order XXXVII, CPC as amended by the High Court. The conditional order made on February 6, 1968 was not invalidated on the ground that reasons were not recorded, and the contention raised by Mr. Khare was rejected.

Implications

Direct effect: The appellant's challenge based solely on the absence of recorded reasons was rejected and the appeal was dismissed.
Practice guidance: Although reasons are not mandatory in every case, it is desirable that judges give brief reasons or indicate the substance of the defence or the paragraphs of affidavits relied upon in complicated cases, and particularly when leave to defend is refused (since refusal results in a decree).
Precedential scope: The Court did not purport to lay down a new inflexible rule; rather it reconciled earlier authorities and statutory context (s. 9 Bombay City Civil Court Act) to hold that absence of reasons is not an automatic ground for setting aside orders of the City Civil Court. The opinion limits the requirement for recorded reasons to circumstances where justice or the nature of the matters before the court makes it necessary.

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Bombay Enamel Works v. Purshottam S. Somaiya

Mukhi, J.:— [His Lordship, after dealing with facts and circumstances of the case in relation to the passing of conditional order granting leave to defend and dismissal of chamber summons, proceeded.] This brings us to the contention of Mr. Khare that the learned trial Judge who made the conditional order granting leave to defend on deposit of Rs. 7,500 should have given reasons for having made a conditional order. We may point out that this point was never taken at any stage of these proceedings. In the appeal before us the appeal memo does not even indirectly refer to this point. There is a general ground that the decree passed against the appellants is clearly bad in law and is not based on the principle of justice and equity. But even this point would not encompass the point now sought to be taken by Mr. Khare.

2. It is really not necessary therefore for us to consider this point but we may deal with it in so far as it is an important point of law. Mr. Khare referred to a judgment of this Court in Woman Vasudeo v. Pratapmal . 1960 62 Bom. L.R 592, S.C [1960] A.I.R Bom. 520., where a single Judge of this High Court (Mudholkar, J. as he then was) held that it was undoubtedly within the discretion of the Court below to decide whether the defendants should be given unconditional leave to defend or whether the leave should be made conditional upon depositing a certain amount of money in the Court.

3. The learned Judge then observed (p. 593):

“…but the order of the Court is open to revision by this Court. In order to enable this Court to consider whether the Court below had applied its mind to the various matters raised before it while making an order of this kind, it is essential that the order, on the face of it, must show that the Court had done so. This is only possible if the Court gives its reasons for passing the particular order.”

4. The learned Judge then went on to state that while it was true that the Court below had been given discretion to grant or not to grant leave to defend a summary suit the superior Court would not lightly interfere with the exercise of such discretion. However, in order to enable the superior Court to discharge its duty it must know the reasons which led the Court below to exercise its discretion in a particular manner.

5. It is now necessary to refer to another judgment of this High Court in Amrit Banaspati Co. v. Engineer & Co. . 1961 63 Bom. L.R 568. where another single Judge of this Court (Patel, J.) dealt with the same question i.e whether the Bombay City Civil Court was bound to give reasons in support of the discretion exercised by it on the question whether unconditional or conditional leave to defend be given. The learned single Judge referred to s. 9 of the Bombay City Civil Court Act, 1948 which reads as follows:

“Save as otherwise provided in this Act all questions which arise in suits or other proceedings under this Act in the City Court shall be dealt with and determined according to the law for the time being administered by the High Court in the exercise of its ordinary original civil jurisdiction.”

6. The learned Judge pointed out that on the Original Side of this Court in non-appealable matters a Judge does not give reasons and the appellate Court does not require him to do so and that following this practice if a Judge of the City Civil Court does not give reasons in non-appealable orders it cannot be said that such an order is illegal. The Court also pointed out that in Waman Vasudeo v. Pratapmal the attention of the learned Judge in that case had not been invited to s. 9 of the Bombay City Civil Court Act of 1948 and that it was difficult to read the judgment in Waman Vasudeo v. Pratapmal to mean that the City Civil Court Judge must, in every case, give reasons. Reference was then made to the fact that the learned Judge (Mudholkar, J.) in Waman Vasudeo v. Pratapmal had only said that “where a court deals with a matter of this kind it is desirable that it should set out in its order the substance of the defence made by the defendant and then give its reasons for its conclusion that the defence discloses a triable issue or that it does not disclose one.”

7. The High Court therefore in Amrit Banaspati's case held that a Judge of the City Civil Court was not required to give reasons in such matters but that it was desirable that in complicated cases the Judge should give an indication of what he thinks about the defences sought to be set up, and that this may be done by giving a reference to the paragraphs in the affidavits and the Judge's conclusion briefly. It was also held that each case must depend on its own facts and the High Court would interfere in revision if it was satisfied that the learned Judge of the City Civil Court had not really appreciated the points of issue or that his order was arbitrary or capricious, and there was consequential failure of justice.

8. It was then suggested by Mr. Khare that there are certain observations in the judgment of the Supreme Court in Milkhiram (India) P. Ltd. v. Chamanlal Bros. . [1965] A.I.R S.C 1698, S.C 68 Bom. L.R 36., that so far as the City Civil Court is concerned reasons must be given, when deciding the question of leave to defend.

9. Now in this Supreme Court case a reference was made to Waman Vasudeo v. Pratapmal (supra) and the decision of the Bombay High Court in that case was distinguished on the ground that the decision of the Bombay High Court was given while dealing with an order made by the City Civil Court, whereas the order before the Supreme Court was an order passed by the High Court of Bombay on its Original Side.

10. We are unable to see how this decision of the Supreme Court lays down the rule that the City Civil Court must in all cases give reasons in support of the discretion exercised by it. On the contrary the Supreme Court made the following significant observation “while laying down the normal rule it does not appear to have been intended to make it inflexible.”

(Emphasis suplied).

11. It is to be noticed that by reason of the provisions of s. 9 of the Bombay City Civil Court Act of 1948 the City Civil Court follows the procedure adopted by this High Court in the exercise of its Ordinary Original Civil Jurisdiction. It is a procedure and practice which appears to have worked well and we do not find any reasons for departing from it.

12. It is useful to refer to two judgments of the Gujarat High Court where similar questions were considered. In Vijakumar v. Pari Nareshchandra Firm . [1968] A.I.R Guj. 247. reference was made to certain observations in Milkhiram's case (supra) and it was argued that these observations seemed to suggest that if an order were made by a Judge of the subordinate Court and the order was appealable or subject to revision the obligation to give reasons in support of the order would be imported by necessary implication. Bhagwati, J. (as he then was) held that the observations of the Supreme Court in Milkhiram's case could not be read as laying down any such proposition. Bhagwati, J. noted that the decision of the Bombay High Court in Waman Vasudeo v. Pratapmal (supra) had been cited, but the Supreme Court distinguished that decision by pointing out that the matter before the Supreme Court related to an order made by a single Judge of the Bombay High Court and that in any event it was not necessary for the Supreme Court to consider the validity of the decision in Waman Vasudeo v. Pratapmal or the correctness of the observations made in that decision.

13. After holding that the observations of the Supreme Court in Milkhiram's case could not be relied upon as constituting a decision of the Supreme Court that where a subordinate Court makes an order, which is amenable to appeal or revision, the order must give reasons, the Gujarat High Court then went on to observe as follows (p. 249):

“…We do not think there is any principle of law which requires that where a subordinate Court makes an order which is not appealable but is subject to the revisional jurisdiction of the High Court under section 115, it must give reasons in support of the order. Having regard to the severely restricted ambit of the revisional jurisdiction of the High Court under section 115, there does not appear to be any necessity or reason for introducing such principle. We are, therefore, of the view that it is not necessary that an order granting or refusing leave to defend a suit filed under the summary procedure must contain the reasons in support of the order. The order passed by the learned Judge granting conditional leave to defend the suit could not, therefore, be held to be bad on the ground that it did not set out the reasons which prevailed with the learned Judge in making the order.”

14. In another matter coming before another Division Bench of the Gujarat High Court to which Bhagwati, C.J (as he then was) was a party (United Industries v. Dalwadi & Co. . [1969] A.I.R Guj. 18.), a contention was taken that the decision of the Supreme Court in Bhagat Raja v. Union Of India & Others . [1967] A.I.R S.C 1606. had impliedly over-ruled the decision of the Gujarat High Court in Vijakumar v. Pari Nareshchandra Firm. The Gujarat High Court repelled that contention and pointed out that the decision of the Supreme Court in Bhagat Raja's case dealt with the Central Government acting as a tribunal and it was therefore confined to tribunals exercising judicial or quasi-judicial powers and reference to Courts of law was avoided. Bhagwati, C.J also said that (p. 21):

“…The question whether an order made by a Court of law is required to be supported by a judgment setting out reasons would be governed by the Code of Civil Procedure. So far as an order granting or refusing leave to defend in a summary suit is concerned, there is no provision in the Code of Civil Procedure which requires that such an order must contain reasons for making of the order.”

15. In the light of the above discussion and confining ourselves to the Bombay City Civil Court we are of the view that it is not required of the Bombay City Civil Court in all cases to give reasons when granting leave to defend, refusing it or making a conditional order under O. XXXVII, Civil Procedure Code, as amended by this High Court. And it would not be correct to suggest that if reasons are not given the order would be liable to be set aside on that ground alone.

16. If the matter before the City Civil Court is a complicated one or points of law or fact are of a somewhat involved nature then it would be indeed desirable and appropriate that reasons for making the order be briefly stated so that the superior Courts which may have occasion to deal with the matter may at least be informed as to what was in the mind of the Judge when he made the order.

17. In particular when leave is being refused (so that a decree is to follow) it would be even more necessary in the interest of justice, and because he is passing a drastic order, for the trial Judge to indicate briefly what the defences are and why they are being considered useless or worthless.

18. It requires to be stated that points to be considered by the High Court in a revision application are not necessarily disclosed by any reasons that may be recorded by the trial Judge in granting or refusing leave to defend. But it cannot be denied that whatever may be the grounds urged by a party in support of a revision application the High Court would always be in a better position to deal with those grounds if the views of the Judge of the City Civil Court making the order under challenge are available to it.

19. In this view of the matter the validity of the conditional order made on February 6, 1968 cannot be challenged on this ground, and the contention raised by Mr. Khare must be rejected. [Rest of the judgment is not material to this Report.]

20. Appeal dismissed.

Bombay Enamel Works v. Purshottam S. Somaiya

Structured Summary of the Opinion (Mukhi, J.)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant's Arguments (Mr. Khare)

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Holding (core ruling)

Implications

Bombay Enamel Works v. Purshottam S. Somaiya

Comments