Bokaro And Ramgur Ltd. v. State Of Bihar & Ors. Opposite Parties.

1. Has this court jurisdiction to vary an order, passed by consent, and relieve the appellant petitioner, from the mischief of a default clause in an order made by this Court? This is the question which we need answer in this matter.

2. In Civil Rule No. 227(m) of 1961, arising out of F.M.A No. 77 of 1961, there was an order of injunction passed by this court, restraining the State of Bihar from proceeding with Title Suit No. 45 of 1960, pending in the court of a Subordinate Judge at Hazaribagh, and from acting in violation of the terms of a previous compromise, on conditions hereinafter appearing:

“By consent of parties, this Rule is made absolute and the injunction will continue till the disposal of the appeal on the following conditions:

(1) The appellant company shall deposit in the Hazaribagh Subordinate Judge's court, in Title Suit No. 45 of 1960, Rs. 50,000/-(Rupees fifty thousand) only by the 10th May, 1962 and shall also go on depositing Rs. 30,000/-(Rupees thirty thousand) only by the 10th day of each succeeding month until disposal of the appeal, now pending in this Court,

(2) In default of payment of any of the instalments as aforesaid, the Rule shall stand discharged and the injunction order will stand vacated,

(3) There will be no order as to costs.

The above arrangement is without prejudice to the claims and contentions of the parties in the above mentioned suit No. 45 of 1960 of the Subordinate Judge's court at Hazaribagh.”

3. The above order was passed on April 9, 1962. The appellant petitioner deposited the sum of Rs. 50,000/- (Rupees fifty thousand) within the time allowed by the consent order, and thereafter also deposited several sums of Rs. 30,000/-(Rupees thirty thousand) per month, within the time fixed by the said order. Between February, 1963 to November, 1963, however, the appellant petitioner did not deposit the sum of Rs. 30,000/-(Rupees thirty thousand) per month, within the time fixed by the consent order, namely, in the months of February, March, June, July, August, September, October and November, 1963. The reason why the appellant petitioner could not put in the money, in terms of the consent order, was that due to temporary paucity of funds, occasioned by non-realisation of outstanding claims, the payment could not be duly made.

4. By not depositing the money, in terms of the consent order, the appellant petitioner invited the mischief of clause (2) of the consent order above quoted. It is in these circumstances, that the appellant petitioner applied before this Court, on February 12, 1964, praying:

(1) that the delay in making the deposits be condoned, or

(2) that the order, dated April 9, 1962, be modified by substituting the words “last day of each succeeding month” for the words “10th day of succeeding month” in clause (1) of the consent order, or

(3) that a fresh Rule with an interim injunction be issued calling upon the State of Bihar to show cause why it should not be restrained from proceeding with Title Suit No. 45 of 1960 in the court of the Subordinate Judge at Hazaribagh pending the disposal of the appeal before this Court.

5. By consent of the State of Bihar, the application was directed to be heard as a contested application, without issuing a formal Rule Nisi.

6. Mr. P.N Mitter, learned Advocate for the appellant petitioner strongly relied on the judgment of the Supreme Court in (1) Mahanth Ram Das v. Ganga Das. (A.I.R 1961 S.C 882), in which Hidayatullah, J., speaking for the Court, made the following observations:

“The application for extension of time was made before the time fixed by the High Court, for payment of deficit court-fee had actually run out. That application appears not to have been considered at all, in view of the peremptory order which had been passed earlier by the Division Bench hearing the appeal, mainly because on the date of the hearing of the petition for extension of time, the period had expired. The short question is whether the High Court, in the circumstances of the case, was powerless to enlarge the time, even though it had peremptorily fixed the period for payment. If the court had considered the application and rejected it on merits, other considerations might have arisen; but the High Court, in the order quoted, went by the letter of the original order under which time for payment had been fixed. Section 148 of the Code, in terms allows extension of time, even if the original period fixed has expired, and S. 149 is equally liberal. Afortiori, those sections could be invoked by the applicant, when the time had not actually expired. That the application was filed in the vacation, when a Division Bench was not sitting, should have, been considered in dealing with it even on July 13, 1954, when it was actually heard. The order, though passed after the expiry of the time fixed by the original judgment, would have operated from July 8, 1954. How undesirable it is to fix time peremptorily for a future happening which leaves the court power-less to deal with events that might arise in between, it is not necessary to decide in this appeal. These orders turn out, often enough to be inexpedient. Such procedural orders, though peremptory, (conditional decrees apart) are in essence, in terrorem, so that dilatory litigants might put themselves in order and avoid delay. They do not, however, completely estop a Court from taking note of events and circumstances which happen within the time fixed. For example, it cannot be said that, if the appellant had started with the full money ordered to be paid and came well in time but was set upon and robbed by thieves the day previous, he could not ask for extension of time, or that the Court was powerless to extend it. Such orders are not like the law of the Medes and the Persians. Cases are known in which Courts have moulded their practice to meet a situation such as this and to have restored a suit or proceeding even though a final order had been passed. We need cite only one such case, and that is Lachmi Narain Marwari v. Balmakund Marwari, I.L.R 4 Pat. 61 : (A.I.R 1924 P.C 198). No doubt, as observed by Lord Phillimore, we do not wish to place an impediment in the way of courts in enforcing prompt obedience and avoidence of delay, any more than did the Privy Council. But we are of opinion that in this case the Court could have exercised its powers first on July 13, 1954, when the petition filed within time was before it, and again under the exercise of its inherent powers, when the two petitions under S. 151 of the Code of Civil Procedure were filed. If the High Court had felt disposed to take action on any of these occasions, Ss. 148 and 149 would have clothed them with ample-power to do justice to a litigant for whom it entertained considerable sympathy, but to whose aid it erroneously felt unable to come.”

7. And, in the facts and circumstances of this case, asked us to exercise our inherent power under section 151 read with section 148 of the Code of Civil Procedure and to save the appellant petitioner from the mischief of clause (2) of the consent order.

8. The argument advanced by Mr. Mitter requires careful consideration. About the power of courts to extend time, fixed by decrees or orders, courts have, from time to time, expressed different opinions, some taking an extreme view, some a moderate view and some a lenient view. In the case of (2) Kshetra Mohan Ghosh v. Gour Mohan Kapali (_37 C.W.N 878) this court expressed the view that where a certain time was fixed by a decree of the court for taking some steps and it was ordered that on failure of doing so, within the time limited, the case should stand dismissed, the court had no jurisdiction to extend the time limited by the decree. The same type of view was expressed by Edgley, J., in (3) Mahammad Asraf Ali v. Nabijan Bibi* (43 C.W.N 417) in which His Lordship observed that where a sale was directed to be set aside on the decretal amount being put in, within a certain time, and in default thereof the appeal for setting aside the sale being dismissed, the Court had no jurisdiction to extend the time unless proper steps were taken for a review of the order by the party aggrieved. His Lordship expressed the categoric opinion that section 148 of the Code of Civil Procedure had no application in such a case.

9. The extreme view expressed in the two cases above referred to was modified by this Court in its subsequent decisions. In the case of (4) Ramesh Chandra Talukdar v. Pramatha Nath Sanyal (A.I.R 1936 Cal. 245) Nasim Ali and Henderson, JJ., observed that where an appellate court had ordered the plaintiff in a suit to put in additional court-fee, within a particular time, and further ordered that in default thereof the suit was to stand dismissed, the court had jurisdiction to extend the time to put in court-fees under section 149 of the Civil Procedure Code, if an application was made before the expiry of the time. This, their Lordships observed, was so because the appeal did not stand finally disposed of before the application for extension of time was made. This view was substantially reiterated by Roxburgh, J., in (5) Bajranglal Jhunjhunwalla v. Sm. Solaki Marwarini (54 C.W.N 933) where His Lordship observed that provisional orders of dismissal of suits, in default of payment of money by a particular date, were not complete final orders and the court had jurisdiction to after any such orders by extending the time under section 148 of the Code of Civil Procedure, even without formal application for review, provided the time had not expired and the actual order of dismissal had not become operative. But once the period had expired and the order of dismissal had become operative, then the provisions of section 148 of the Code of Civil Procedure notwithstanding, the Court had no jurisdiction to after the order of dismissal except by way of formal review.

10. The above mentioned modified view, which we choose to classify as the moderate view, was liberalised by Das-gupta and Guha, JJ., in the case of (6) Jyotish Chandra Sen v. Rukmini Ballav Sen (62 C.W.N 588), in which their Lordships held that default in complying with the terms as to payment of costs, made a condition precedent to the acceptance of additional written statement, would not take away from the fullness of the Court's power to enlarge time under section 148 of the Code of Civil Procedure. The liberal view was further liberalised by Guha, J., in the case of (7) Bhupendra Nath Lahiri…, v. Prabhat Kumar Biswas…, Opposite Party., (63 C.W.N 460), in which His Lordship referred to the divergence of opinion on the point but found a solution by way of treating the application as a fresh application for staying proceedings elsewhere, even though the original stay order stood dissolved by reason of default made by the petitioner in complying with the terms thereof. His Lordship further held that even though the previous order had been passed upon consent of parties and even though the other side was withholding consent to passing any further order in favour of the petitioner, that should not be treated as an insuperable bar to a favourable order being made in favour of the petitioner on equitable consideration.

11. The examination of the case law on the point will not be complete unless we refer to two other decisions of this court. In (8) Printing and Industrial Machinery Ltd. v. Swastika Press Ltd. (90 C.L.J 105) Sarkar, J. had to deal with a case in which a defendant had made an application in a pending suit, for stay of execution of a decree, on the ground that a suit by the defendant against the plaintiff (who was also the executing decree-holder) for a larger sum was pending. On that application it was ordered that the execution would remain stayed on the defendant furnishing security for the decretal amount within a fortnight and that on the defendant's failure to furnish security, within the time allowed, the application for stay of execution would stand dismissed. The defendant failed to furnish security as directed and thereafter applied for extension of time. Sarkar, J., held that the Court had jurisdiction to extend time, inasmuch as the order by reason of the default only terminated the application for stay but had no effect on the main proceeding. His Lordship further held that the order was the grant of stay and the fixing of time merely prescribed the mode in which the substantive portion of the order was to be carried out and that a court has the power to after even a final judgment in so far as it deals with procedure.

12. The other case which we need refer to, is a Division Bench decision of this Court in (9) Bhutnath Das v. Sahadeb Chandra Panja (66 C.W.N 645). In that case there had been a decree made for specific performance of a contract, on a certain sum of money being put in within a specified time. It was further decreed that if the sum of money was not deposited within the specified time, the suit would stand dismissed. The plaintiffs failed to put in the money within the time specified and thereafter made an application under section 148 read with section 151 of the Code of Civil Procedure for extension of time to put in the money. The trial court rejected the application. On an application for revision of the order, Das Gupta and Debabrata Mookerjee, JJ., held that if the court had not lost seisin of the suit then only, it might exercise its inherent jurisdiction and extend time; but if jurisdiction over the suit had already ceased to exist the scope for making any order under the inherent jurisdiction totally disappeared. In the view taken their Lordships dismissed the application.

13. After having read the case law on the point, we are of the opinion that there are three classes of cases, in which the point may arise:

(A) where an order is made for payment of deficit court fees accompanied by the further order that if the deficit court-fee be not paid, within the time allowed, the suit or the appeal would stand dismissed. In such a case, if sufficient cause, in explanation of the default, be made out courts may allow extension of time even after the period originally fixed has expired (vide 1961 S.C 882),

(B) where a decree is passed on condition that if a certain sum of money be put in within a specified time, the suit would stand decreed and in default thereof the suit would stand dismissed. In such a case after the expiry of the time limited by the decree, the Court loses seisin over the matter and cannot extend the time. (Vide 66 C.W.N 645).

(C) where an interlocutory order is made, in a pending proceeding, either staying another proceeding or granting an order of injunction, on condition that if a particular sum of money be paid, within a specified time, the stay or injunction would continue and, in default thereof, the stay order or injunction would stand vacated. In such a case, the Court having seisin of the main proceeding, may extend the time, even after default, in exercise of its power under section 151 read with section 148 of the Code of Civil Procedure or may make fresh order granting fresh stay or fresh injunction on terms (vide 63 C.W.N 460 and 90 C.L.J 105).

14. The learned Advocate-General, who appeared for the State of Bihar, however, contended that no extension of time should be granted in the facts and circumstances of this case. In support of his contention, he relies on three English decisions, viz., (10) Whistler v. Hancock (3 Q.B.D 83), (11) King v. Davenport (4 Q.B.D 402) and (12) the Script Phonography Company Ltd. v. Gregg, (1890) 59 L.J Chancery 406. In Whistler v. Hancock (supra) in an action upon a dishonored cheque under the Bills of Exchange Act, the defendant obtained leave to appear and defend. He also obtained an order that unless the statement of claim was delivered within a week, the action must be at an end for want of prosecution. The plaintiff took out a summons to set aside the appearance. This was dismissed by the Master. After the expiry of the week, the plaintiff took out summons for further time for delivering statement of claim. Time was allowed by the Master. The order of the Master was set aside on appeal. On further appeal Cockburn, C.J, held that the action being at an end, there was no jurisdiction to make an order subsequently extending the time for delivery of the statement of claim. The same view was reiterated by Cockburn, C.J, and Mellor, J., in (11) King v. Davenport (supra) and by North, J., in (12) the Script Phonography Company Ltd. v. Gregg (supra). These case laws may be authorities for the types of cases indicated by us in classification (B) above stated and dealt with by Dasgupta and Debabrata Mookerjee, JJ., in the case of (9) Bhutnath Das (66 C.W.N 645). They are, however, no authorities for the types of cases in which the court retains seisin over the principal action, even though an interlocutory proceeding has come to an end. This is the view which was also expressed by Mackinnon and du Parcq. L.JJ, in (13) Manley Estates Ltd. v. Benedeck (1941) 1 All E.R 248).

15. The learned Advocate-General further contended that the order in Civil Rule No. 227(m) of 1961 was passed by consent and should not be varied except by consent. He made it perfectly clear that the State of Bihar would not be a consenting party to any variation of the order. Mr. P.N Mitter, learned Advocate for the appellant petitioner, sought to get out of this difficulty by placing reliance on a judgment of this Court in (14) Kandarpa Nag v. Banwari Lal Nag (33 C.L.J 244) in which Mookerjee and Fletcher JJ., observed that the circumstance that a consent decree had been passed on the basis of a compromise did not oust the jurisdiction of the court to grant relief against forfeiture of real estate and that the court must determine whether, on equitable grounds, relief would have been granted against forfeiture, if it had been called upon to enforce the agreement itself.

16. The learned Advocate-General, however, distinguished the case on the ground (1) the the case concerned an agreement of sale for real estate in which time was not the essence of the contract, unless specifically so made and (2) that in suits for specific performance of contracts to sell real estates, equity which governed the right of the parties looked not at the letter but the substance of the agreement, in order to ascertain whether the parties, notwithstanding that they had named a specific time within which the completion has to take place, really and in substance intended more than that it should take place within a reasonable time. He, therefore, contended that the aforesaid equitable principle should not be extended to this case, where the agreement was not for sale of any real estate.

17. Theoretically speaking, the learned Advocate-General may be right in his contention that the authority of the decision in (14) Kandarpa Nag's case does not in terms apply to the case that we have to decide. But this does not help him practically. We may not vary the order in Civil Rule No. 227(m) of 1961, excepting by consent. We may, nevertheless, issue a fresh injunction in this case, regard being had to the facts and circumstances pleaded. We are impressed by the fact that the appellant petitioner has deposited all sums of money up-to-date in substantial compliance with the order passed in Civil Rule No. 227(m) of 1961. The few days' delay in making deposits, on several occasions, is not such a serious omission which disentitles the appellant petitioner from all favourable considerations.

18. We uphold the objection of the learned Advocate-General that we should not vary the order in Civil Rule No. 227(m) of 1961 without his consent, but, nevertheless, we treat the present application as a fresh petition for injunction and grant substantially the same injunction afresh, which was hereto before granted in Civil Rule No. 227(m) of 1961, on the following terms:

(A) The appellant petitioner shall deposit and shall continue to deposit in Title Suit No. 45 of 1960 pending in the court of the Subordinate Judge at Hazaribagh Rs. 30,000/- (Rupees thirty thousand) by the 10th day of each succeeding month until disposal of the appeal pending in this court,

(B) In default of payment of the sums of money as in Clause (A) above, the injunction shall stand vacated,

(C) The payments will be without prejudice to the rights and contentions of the parties in Title Suit No. 45 of 1961 above mentioned.

19. This application was contested by the State of Bihar alone. We make it clear that the order of injunction shall be operative against the State of Bihar only.

20. There will be no order as to costs in this application.

S.K.B