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Attorney(S)
  • Haresh Jagtiani, Senior Advocate instructed by Ms. Nishitha Malik with Ms. Pooja Singh and Rosita S. Parimal
  • Jimmy Avasia instructed by M.P Patel and Associates
Judges
  • A.P Shah
  • Dr. D.Y Chandrachud, JJ.
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Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • Haresh Jagtiani, Senior Advocate instructed by Ms. Nishitha Malik with Ms. Pooja Singh and Rosita S. Parimal
  • Jimmy Avasia instructed by M.P Patel and Associates
Judges
  • A.P Shah
  • Dr. D.Y Chandrachud, JJ.
Acts
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Smart Summary

Structured Summary of the Provided Legal Opinion

Factual and Procedural Background

The appellants entered into an agreement for the sale of Flat 6-C (Premkutir, Backbay Reclamation, Mumbai) on 2 October 1993. The respondent refused to register the transfer of 55 equity shares, and Article 40-A of the company's Articles of Association required ownership of the respondent's shares for occupation of a flat. The appellants therefore filed an application under section 111 of the Companies Act, 1956 before the Company Law Board, which decided in favour of the appellants by an order dated 23 February 2001.

The respondent filed an appeal under section 10-F of the Companies Act, 1956 before the learned Single Judge in April 2001. The learned Single Judge allowed the appeal by judgment dated 14 February 2003. The maintainability of a Letters Patent Appeal (an appeal to a Division Bench) from that Single Judge's order was questioned in light of the amendment to section 100-A of the Code of Civil Procedure, 1908, which came into force on 1 July 2002.

Legal Issues Presented

  1. Whether a Letters Patent Appeal (appeal to a Division Bench) is maintainable against the judgment and order of a Single Judge of the High Court where that judgment was delivered after the amended section 100-A (effective 1 July 2002) came into force.
  2. Whether the right to file an appeal is a substantive vested right (determined by the law prevailing on the date of institution of the original proceeding) and, if so, whether that vested right is protected from subsequent legislative amendment of section 100-A.
  3. Whether the amended section 100-A applies to appeals decided after 1 July 2002 even if the original proceedings were instituted before that date.
  4. Whether a special statute (here, the Companies Act, 1956, specifically section 10-F) that confers an appeal to the High Court also implicitly or expressly confers a further appeal to a Division Bench, thereby taking the case outside the operation of amended section 100-A.
  5. Whether the phrase “no further appeal shall lie” in section 100-A should be construed as barring only the party who filed the first appeal to the Single Judge from bringing a further appeal, or whether it bars any further appeal irrespective of which party seeks it.

Arguments of the Parties

Respondent's Arguments

  • The respondent contended that the judgment and order of the learned Single Judge were delivered on 14 February 2003, which is after the amended provisions of section 100-A came into force (1 July 2002), and consequently a Letters Patent Appeal is not competent or maintainable.

Appellants' Arguments

  • The appellants argued that the right to file an appeal is a substantive right (not merely procedural) that vests on the date the original proceedings are instituted (they referred to the original application before the Company Law Board filed in 1999). Therefore, the appellants said, the right to appeal should be governed by the law as it stood when the original application was filed and not by the law as on the date the Single Judge delivered judgment.
  • In the alternative, the appellants argued that even if amended section 100-A applied, the expression “no further appeal shall lie” should be interpreted to bar only a further appeal by the party who had filed the first appeal before the Single Judge (here, the respondent), and should not bar the appellants from filing a Letters Patent Appeal.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Garikapati Veeraya v. N. Subbiah Choudhry & Others, AIR 1957 SC 540 Establishes that the right of appeal is a substantive, vested right accruing from the date when the lis commences; ordinarily governed by law prevailing on the date of institution; but a vested right can be taken away by subsequent enactment if expressly or by necessary intendment. The Court relied on this principle to acknowledge appellants' submission that the right to appeal is substantive, but then explained that such vested rights can be taken away by subsequent legislation (here, amended section 100-A) expressly or by necessary intendment.
Laxminarayan v. Shivlal Gujar, 2003 (1) MPLJ 10 (Full Bench) : AIR 2003 MP 49 Interprets the words “is heard and decided” in section 100-A as praesenti and holds that section 100-A (as amended) does not protect rights of appellants in suits instituted prior to 1 July 2002 when the Single Judge's decision is rendered after that date. The Court cited this Full Bench decision in support of its interpretation that section 100-A applies to appeals decided by a Single Judge after 1 July 2002 even if the original proceeding was instituted earlier.
Nasik Hing Supplying Company v. Annapurna Gruh Udyog Bhandar, 2003 (Gujarat Law Reporter 926) (Full Bench) Holds that where a first appeal is decided on or after 1 July 2002 by a Single Judge, no further appeal under Letters Patent shall lie; but a special statute that expressly confers a right of appeal to a Division Bench prevails over section 100-A. The Court relied on this Full Bench decision to support the general rule that amended section 100-A bars further appeal after 1 July 2002, while noting the exception where a special statute expressly confers a further appeal.
Municipal Corporation of Brihan Mumbai v. State Bank of India, (1999) 1 SCC 123 : AIR 1999 SC 380 Considered section 100-A (as introduced by the 1976 Amendment) and held that section 100-A bars further appeals in certain cases under special statute provisions (example involving Bombay Municipal Corporation Act). The Court referred to this Supreme Court decision as authority for the proposition that section 100-A can bar further appeals even where a special statute provides an appellate mechanism, depending on the statutory scheme; the Gujarat Full Bench had relied on this decision.
Bhatia International v. Bulk Trading S.A., (2002) 4 SCC 105 The Court noted the decision but stated that it does not advance the appellants' case (i.e., it does not assist in arguing that section 100-A is inapplicable here). The Court briefly observed that Bhatia International does not help the appellants; no substantive reliance was placed on it to alter the outcome.
Shri Chandreshwar Bhuthanath Devastan of Paroda v. Subiraj Prabhakar Naik, 2003 Vol. 105 (2) Bom. L.R 915 (Division Bench) The Division Bench held that amended section 100-A would apply to appeals that were filed and admitted before 1 July 2002 and were pending for final disposal, rendering such appeals not maintainable. The Court recorded reservations about that Division Bench view, noted that a Full Bench reference had been made, and stated the issue was not directly before them because the Single Judge's judgment in the present case was rendered after 1 July 2002.

Court's Reasoning and Analysis

The Court began its analysis by reproducing the amended wording of section 100-A (effective 1 July 2002): a non obstante provision stating that where any appeal from an original or appellate decree or order is heard and decided by a Single Judge of a High Court, no further appeal shall lie from the judgment and decree of such Single Judge.

The Court interpreted the critical phrase “is heard and decided” in section 100-A as being used in praesenti. That usage, the Court held, indicates the legislature's intent that the amendment operate with reference to the time of hearing and decision by the Single Judge: where the Single Judge hears and decides an appeal on or after 1 July 2002, the bar on further appeal applies irrespective of when the original proceeding was instituted.

The Court acknowledged the settled principle (from Garikapati) that the right of appeal is generally substantive and vests from the date of institution; however, the Court emphasized the corollary that a vested right of appeal can be taken away by a subsequent enactment either expressly or by necessary intendment. Applying that principle, the Court reasoned that the legislature's object in amending section 100-A was to reduce delay and the hierarchy of appeals; it would be unreasonable to assume Parliament intended to exempt from the amendment all cases instituted before 1 July 2002. Therefore, the necessary intendment is that section 100-A applies to appeals decided by a Single Judge on or after 1 July 2002, even if the original suit or proceeding was instituted earlier.

To reinforce this construction, the Court relied on two Full Bench decisions (Madhya Pradesh and Gujarat) which held that the amended section 100-A applies to appeals decided by a Single Judge after 1 July 2002 and rejected the contention that pre-existing suits are immune from the amendment's operation.

The Court then considered the exception suggested by the Gujarat Full Bench: where a special statute expressly confers a right of appeal to a Division Bench against the judgment of a Single Judge, section 100-A's non obstante clause does not operate to cut down that express substantive right. Applying that principle to the present case, the Court examined section 10-F of the Companies Act, 1956: while the Companies Act confers a right of appeal to the High Court under section 10-F against decisions of the Company Law Board, the Court found there is no express provision in the Companies Act conferring a further appeal to a Division Bench against the decision of a learned Single Judge. Consequently, the special statute exception does not apply here.

The Court rejected the appellants' narrower construction of “no further appeal shall lie” — i.e., that it should bar only a further appeal by the party who filed the first appeal to the Single Judge. The Court found no textual basis for restricting the statutory phrase in that manner and refused to construe section 100-A artificially. The plain meaning of the statute, the Court held, bars any further appeal where a Single Judge has heard and decided an appeal from an original or appellate decree on or after 1 July 2002.

The Court observed that the decision in Bhatia International (2002) does not assist the appellants' position. The Court also noted but did not follow a Division Bench decision of this Court (Shri Chandreshwar...) that held section 100-A would apply even to appeals admitted before 1 July 2002; the Court expressed reservations about that view and observed the question had been referred to a Full Bench, but the point was not necessary to decide in the present case because the Single Judge's decision was rendered after 1 July 2002.

Holding and Implications

APPEAL DISMISSED.

Holding (direct effect): The Letters Patent Appeal (appeal to a Division Bench) against the judgment of the learned Single Judge dated 14 February 2003 is not maintainable and is dismissed because the Single Judge's decision was rendered after the amended section 100-A (effective 1 July 2002) came into force, and the Companies Act, 1956 does not expressly confer a further right of appeal to a Division Bench against such a Single Judge's decision.

Implications:

  • The decision gives effect to the Court's interpretation that amended section 100-A bars further appeals to a Division Bench where an appeal from an original or appellate decree is heard and decided by a Single Judge on or after 1 July 2002.
  • A special statute will displace section 100-A only if it expressly confers a right of appeal to a Division Bench against the judgment of a Single Judge; the Companies Act was found not to contain such an express provision in the present context (section 10-F confers an appeal to the High Court but not further to a Division Bench by express provision).
  • The Court did not decide the broader question whether appeals already admitted before 1 July 2002 are barred by section 100-A; it expressly refrained from expressing a final opinion on that wider issue and noted that it has been referred to a Full Bench for determination.
  • No novel precedent beyond the conclusions drawn in this opinion is purportedly established for appeals decided by Single Judges on or after 1 July 2002; the decision applies the amended section 100-A to the facts at hand and dismisses the present appeal on that ground.

Disposition

The appeal was dismissed.

Show full summary ...

    Bhenoy G. Dembla And Another v. M/S Prem Kutir P. Ltd. .

    Dr. D.Y Chandrachud, J.:— On 14th February, 2003 Justice D.K Deshmukh allowed an appeal filed by the respondent under section 10-F of the Companies Act, 1956 against an order of the Company Law Board. The maintainability of a Letters Patent Appeal against the order of the learned Single Judge has been questioned having regard to the amendment to section 100-A of the Code of Civil Procedure, 1908.

    2. The appellants filed an application under section 111 of the Companies Act, 1956 against the refusal of the respondent to register the transfer of certain shares in their names. The appellants had entered into an agreement for the sale of Flat 6-C in a building known as Premkutir, at Backbay Reclamation in Mumbai on 2nd October, 1993. The respondent having refused to accede to the transfer of 55 equity shares and in view of the provisions of Article 40-A of the Articles of Association of the company which stipulate that the ownership of shares of the respondent is essential for the occupation of a flat, the appellants moved an application before the Company Law Board under section 111 of the Act. The Company Law Board held in favour of the appellants by its order dated 23rd February, 2001. In April 2001, an appeal was filed before the learned Single Judge by the respondent under section 10-F of the Companies Act, 1956. The appeal was allowed by an order dated 14th February, 2003.

    3. The amended provisions of section 100-A of the Code of Civil Procedure came into force on 1st July, 2002. section 100-a as amended provides as follows:

    “100A. No further appeal in certain cases. — Notwithstanding anything contained in any Letters Patent for any High Court or in any other instrument having the force of law or in any other law for the time being in force, where any appeal from an original or appellate decree or order is heard and decided by a single Judge of a High Court, no further appeal shall lie from the judgment and decree of such single Judge.”

    4. Counsel appearing on behalf of the respondent while objecting to the maintainability of the appeal urges that inasmuch as the judgment and order of the learned Single Judge has been delivered on 14th February, 2003, after the amended provisions of section 100-a were brought into force, the Letters Patent Appeal is clearly not competent. On the other hand, on behalf of the appellants it has been urged that the right to file an appeal is not a matter of procedure, but of substance and that the filing of the application before the Company Law Board carried with it a concomitant vested right to institute proceedings in appeal on the basis of the law as it stood when the original application was filed before the Company Law Board in 1999. In the alternative, it has been urged that even if it is held that the amended provisions of section 100-a would govern a case such as a present, since the judgment and order of the learned Single Judge was delivered after 1st July, 2002, nevertheless those provisions will only operate to bar a further appeal by the respondent and not by the appellants, since it was the respondent who had filed the appeal under section 10-F against the order of the Company Law Board.

    5. The right of appeal it is well settled, is a matter of substance and not of procedure. The right to institute an appeal vests on the date when the original proceedings are instituted. In Garikapati Veeraya v. N. Subbiah Choudhry & Others, AIR 1957 SC 540, a Constitution Bench of the Supreme Court laid down principles of law which have since been followed by the Supreme Court in several cases. The Supreme Court held in Garikapatis case that the right of appeal is not merely a matter of procedure, but is a matter of a substantive right. The Institution of a suit carries with it the implication that all rights of appeal are preserved to the parties thereto till the rest of the career of the suit. Consequently, it was held that the right of appeal is a vested right which accrues and exists from the date when the lis commences and although it may be actually exercised when an adverse judgment is pronounced, such a right is to be governed by the law which prevails on the date of the institution of the suit and not on the law that prevails on the date of the decision or on the date of the filing of the appeal. However, it is equally a matter of settled principle that the vested right of appeal can be taken away by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise.

    6. Section 100-A of the Code of Civil Procedure was initially inserted by an Amendment Act of 1976. The Statement of Objects and Reasons indicated that Letters Patent Appeals lie in certain cases against the decision of a Single Judge in a second appeal. Such an appeal in effect amounted to a third appeal. Consequently, “for the purpose of minimising delay in the finality of adjudication”, the legislature considered that “it is not desirable to allow more than two appeals”. Therefore, section 100-A was inserted to provide that there should be no further appeal against a decision of a single Judge in a second appeal. Section 100-A as it was introduced with effect from 1st February, 1977 provided that no further appeal shall lie from a judgment, decision or order of a Single Judge of a High Court, where an appeal from an appellate decree or order is heard and decided by the single Judge. The provision contained a non obstante clause so that it had effect notwithstanding anything contained in the Letters Patent of any High Court or in any other instrument having the force of law or in any other law for the time being in force.

    7. The Code of Civil Procedure (Amendment) Act, 1999 was introduced in order to give effect to the recommendations of the Justice Malimath Committee. The Statement of Objects and Reasons records that the Committee examined the issue of further appeals against a judgment of a single Judge exercising even a first appellate jurisdiction. The Committee recommended that no further appeal in this regard should lie. The Committee had also recommended that there should be an abolition of appeals to a Division Bench against a decision and order rendered by a single Judge of the High Court in proceedings under Articles 226 and 227 of the Constitution. Thereafter in view of the representations received from Bar Associations in the country, the provision for the abolition of Letters Patent Appeals came to be confined to appeals against judgments of a Single Judge of a High Court exercising appellate jurisdiction, whether that appeal was against an original or appellate decree or order.

    8. The object of the provisions of section 100-a, as amended, is to reduce the delay in litigation. One of the reasons for delay is perceived by the Parliament as the hierarchy of appeals and it is envisaged that a sense of finality would be imparted to adjudication by a reduction in the number of appeals. Section 100-A came into force with effect from 1st July 2002. section 100-a, it must be noted, uses the words “where any appeal from an original or appellate decree or order is heard and decided by a single Judge of a High Court”. The use of the word “is” would make it abundantly clear that what the legislature intended was that no further appeal should be maintainable where any appeal from an original or appellate decree or order is heard and decided after 1st July, 2002 by a single Judge of a High Court. Therefore, the necessary intendment of section 100-A is that even if a suit or other proceeding has been instituted in a Court of competent jurisdiction prior to 1st July, 2002, the exercise of the appellate remedy against a decision of a Single Judge rendered after that date must necessarily be brought in conformity with the amended provisions of section 100-a. In other words, where the appeal from an original or appellate decree is decided by a single Judge of a High Court after 1st July, 2002, no further appeal would be maintainable. To hold otherwise would run contrary to the plain intendment as well as the object and underlying purpose of section 100-A. Undoubtedly, the general principle of law is that an appeal is a matter not of procedure but of substantive right. However, the right to file an appeal which accrues on the institution of a lis can be taken away either by express words or by necessary intendment. There can be no gainsaying the fact that in introducing the amended provisions of section 100-a, the legislature was concerned as much with the existing backlog of cases as the accretion to the backlog that would accrue by the institution of fresh cases after the amended provisions were brought into force. Consequently, it would be unreasonable to attribute to the legislature the intendment that while seeking to bring into effect a provision which was intended to cure the delays of litigation, the legislature would have intended to exempt from its purview all cases which had been filed prior to the date on which the amendment was brought into force. Therefore, the necessary intendment of section 100-A is that its provisions will apply even if a suit was instituted prior to 1st July, 2002 so long as the judgment and order of a learned Single Judge of the High Court in appeal against an original or appellate decree has been rendered on and after the date on which the amendment was brought into force.

    9. In taking this view, we are supported by two Full Bench decisions of the Madhya Pradesh and Gujarat High Courts. In Laxminarayan v. Shivlal Gujar, 2003 (1) MPLJ 10 (FB) : AIR 2003 MP 49, a Full Bench of the Madhya Pradesh High Court has held that the words “is heard and decided” are “used absolutely in praesenti” and that apart from this, the words “no Further appeal shall lie” are also to be conjointly read with the words “is heard and decided”. The Madhya Pradesh High Court has specifically rejected the contention that section 100-A as amended would protect the right of appellants which existed in respect of suits instituted prior to 1st July, 2002.

    10. The judgment of the Full Bench of the Gujarat High Court in Nasik Hing Supplying Company v. Annapurna Gruh Udyog Bhandar, 2003 (2) Vol. 44 Gujarat Law Reporter 926 is of some significance to the issue involved in the present case because it specifically deals with a right of appeal which was expressly conferred under a special law, in that case, the Trade and Merchandise Act, 1958. In section 109(2) of the Act an appeal to the High Court against an order or decision of the Registrar under the Act or rules framed thereunder is provided. By sub-section (4) of section 109 every appeal is to be heard and decided by a single Judge of the High Court. Sub-section (5) of section 109 provides that where an appeal is heard by a Single Judge, a further appeal shall lie to a Bench of the High Court. The Full Bench of the Gujarat High Court held that as a matter of general principle where a first appeal is decided on or after 1st July, 2002 by a Single Judge from an original or appellate decree or order, no further appeal under the Letters patent shall lie before a Division Bench of the High Court. However, the Court held that the non obstante clause with which section 100-A begins is not in derogation of the express provisions of a special law conferring a substantive right of appeal against the decision of a single Judge of the High Court before a Division Bench of the same Court. In fact, it was noted that section 4(1) as well as sections 96, 100, 104 and 105 of the Civil Procedure Code preserve a substantive right of appeal conferred by a special law. Hence, inasmuch as the Trade and Merchandise Act, 1958 is a special law and Sub-section (5) of section 109 expressly confers a right of appeal against an order of a single Judge of the High Court to a Division Bench, that right has not been taken away by the amended provisions of section 100-a.

    11. In taking this view, the Full Bench of the Gujarat High Court inter alia relied upon the decision of the Supreme Court in Municipal Corporation of Brihan Mumbai v. State Bank of India, (1999) 1 SCC 123 : AIR 1999 SC 380. Under section 217(1) of the Bombay Municipal Corporation Act, 1888 an appeal against a rateable value or tax fixed or charged lies before the Chief Judge of the Small Causes Court. Against the appellate order of the Chief Judge of the Small Causes Court, an appeal is provided for to the High Court under section 218-D. A Bench of three Learned Judges of the Supreme Court held that under the Bombay Municipal Corporation Act, no further appeal has been provided against the judgment of a learned single Judge of the High Court, deciding the second appeal under section 218-D of the Act against an appellate order of the Chief Judge of the Small Causes Court passed under section 217. Section 100-A of the Civil Procedure Code as introduced by the Amendment Act of 1976 came up for consideration before the Supreme Court and it was held specifically to bar further appeal in such cases.

    12. The principle of law which emerges is that unless a special statute expressly confers and recognizes a right of appeal before the Division Bench against the judgment and order of a single judge of the High Court in the exercise of the appellate jurisdiction, no such appeal would lie upon the enforcement of the amended provisions of section 100-a against a judgment of the Single Judge rendered on and from 1st July, 2002. In other words, where the decision of the Single Judge in the exercise of the appellate jurisdiction, against an original or appellate decree is rendered on and after 1st July, 2002 no further appeal, would lie unless the special statute in question expressly recognizes a further right of appeal to the Division Bench.

    13. In the present case, the Companies Act, 1956 confers a right of appeal to the High Court under section 10-F against a decision rendered by the Company Law Board. There is no express conferment of a right of a further appeal to the Division Bench against the decision of a learned Single Judge. That being the position, an appeal to the Division Bench is clearly not maintainable against the decision of the Single Judge rendered after 1st July, 2002.

    14. Counsel appearing on behalf of the appellants urged that even if the provisions of section 100-a are held to be attracted, the expression “no further appeal shall lie” must be interpreted to mean a further appeal at the behest of the party which had filed the first appeal before the learned single judge. Hence, the submission that was urged was that an appeal by the appellants herein is maintainable since the appeal before the learned single Judge against the decision of the Company Law Board was filed not by the appellants, but by the respondent. We find absolutely no merit in the contention. The expression “further appeal” has not been used in the restrictive sense to circumscribe a further appeal only by a party which had initially filed an appeal before the learned Single Judge of the High Court. Section 100-A cannot be restricted in its ambit by any such process of artificial construction. The plain words of the statute must be given effect to. Those words mean what they say - where an appeal is heard and decided by a single Judge from an original or appellate decree, no further appeal shall lie. The learned single Judge delivered judgment on 14th February, 2003 which was after the date of the enforcement of the amended provisions of section 100-a on 1st July, 2002. The appeal is not maintainable.

    15. This is not really a provision regarding the ouster of jurisdiction. The decision of the Supreme Court in Bhatia International v. Bulk Trading S.A, (2002) 4 SCC 105 does not advance the case of the appellants.

    16. Before concluding the judgment, we must advert to the judgment of a Division Bench of this Court in Shri Chandreshwar Bhuthanath Devastan of Paroda v. Subiraj Prabhakar Naik, 2003 Vol. 105 (2) Bom. L.R 915. The Division Bench has held there that the amended provisions of section 100-a would apply also to appeals which have been filed and were admitted before 1st July, 2002 and are pending for final disposal and that even such appeals would be rendered as not being maintainable. We have reservations about the correctness of the view expressed by the Division Bench. However, we are informed that a reference has been made to a Full Bench in the course of which the Court will decide upon the correctness of the view expressed by the Division Bench. This issue does not arise in the present case since the judgment of the learned single Judge was rendered on 14th February, 2003 which was after the date on which the amended provisions were brought into force. We do not express any final opinion on the wider issue of the position of appeals which were admitted prior to 1st July, 2002, beyond what we have already said, since the matter is awaiting determination before the Full Bench.

    17. In the present case, the appeal is not maintainable and is accordingly dismissed on that ground.

    Appeal dismissed.
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    Comments

    Bhenoy G. Dembla And Another v. M/S Prem Kutir P. Ltd. .
    (Jun 30, 2003)