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Balchand Meghraj Pamnani v. Basantidewi Ramswaroop
Factual and Procedural Background
This revision arises from an order dated August 10, 1971 of the trial Court which postponed decision of Issues Nos. 3, 4, 5 and 6 until the decision of the entire suit. The petitioners (defendants at trial) challenged that order by way of revision under Section 115 of the Code of Civil Procedure on the ground that Issues 4, 5 and 6 (and as contested, Issue 3) were preliminary issues which the trial Court was bound to decide first.
The substantive suit was instituted by the respondents, Basanti Devi and Babulal, for recovery of Rs. 5,000 on the allegation that this sum had been deposited with the defendants who failed to return it. The defendants resisted the suit and framed six (plus one formal) issues in the trial Court. The trial Court initially indicated in an order dated July 6, 1971 that certain issues were legal/preliminary issues and fixed July 20, 1971 for hearing argument on those preliminary issues. The hearings were adjourned on several dates. On August 10, 1971, when the matter was taken up, the defendants sought time to produce evidence on the preliminary issues; the plaintiffs opposed, contending evidence should be recorded together on all issues. The trial Court then ordered that evidence be recorded on all issues (stated as "I consider it proper to record evidence on all the issues") and fixed October 21, 1971 for recording evidence. The defendants aggrieved by that order moved the present revision.
Legal Issues Presented
- Whether the trial Court erred in postponing decision of preliminary issues (particularly Issues Nos. 4, 5 and 6) until final disposal of the suit instead of deciding them at the outset.
- Whether Issues Nos. 4 (stay pending insolvency proceedings), 5 (non-joinder of necessary parties) and 6 (maintainability under the M.P. Moneylenders Act for want of registration/certificate) are preliminary issues that must be decided before trial on the merits.
- Whether the impugned order of August 10, 1971 amounted to an arbitrary or non-judicial exercise of discretion such that this Court should interfere under Section 115 CPC.
Arguments of the Parties
Defendants / Petitioners
- Requested an opportunity to produce evidence on the issues the trial Court had earlier classified as "preliminary issues" (they sought to lead evidence specifically on those points before trial on merits).
- Raised in the written statement (as grounds for preliminary determination): (a) that the plaintiffs were not registered under the M.P. Moneylenders Act and had no valid certificate making the suit not maintainable; (b) that necessary partners/other parties had not been made parties to the suit (non-joinder); (c) that insolvency/related proceedings might require the suit to be stayed.
- Also contended (implicitly by seeking a revision) that the trial Court was bound to try and decide the preliminary issues first and its failure to do so warranted interference under Section 115 CPC.
Plaintiffs / Respondents
- Opposed the defendants' request to produce evidence on preliminary issues separately and contended that evidence should be recorded on all issues together (i.e., trial on all issues jointly).
- Argued before this Court that the objections in the written statement (maintainability, non-joinder, stay) were frivolous and intended to protract the trial; the opinion records that such an argument was made but also states the Court did not resolve whether the objections were in fact frivolous.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| S.S. Khanna v. F.J. Dillon, AIR 1964 SC 497 | The opinion cites this case among authorities binding the Court but does not state in the text a specific rule or extract from it. | The Court noted it felt bound by this decision along with other cited authorities when deciding whether preliminary issues should be tried first. |
| Pannalal v. Ram Ratan, 1965 Jab LJ (SN) 74 | The opinion cites this case but does not articulate a distinct principle from it in the text. | Referenced as one of several decisions that the Court considered binding on the question of preliminary issues. |
| Gvarsilal v. State of M.P., 1967 MPLJ (SN) 57 | Cited in the list of authorities; the specific principle from the case is not spelled out in the opinion. | Relied on collectively with other authorities to support the approach to preliminary issues. |
| Tharpal v. Govindram, 1962 Jab LJ 403 | The opinion cites this Division Bench decision; a specific rule from it is not separately excerpted except as part of the later-quoted passage from a Division Bench (see next row). | Used as supporting authority for the view that disposing of a suit on a single preliminary issue can be appropriate when it may dispose of the entire suit. |
| Santoshchandra v. Smt. Gyansundarbai, 1970 MP LJ 363 = AIR 1971 Madh Pra 1 (Full Bench) | "Where questions of court-fee, limitation and untenability of the suit are raised in a suit it is always desirable to try them as preliminary issues and not postpone them to the stage of the final judgment." | The Court regarded this Full Bench decision as binding and followed its principle that certain issues affecting maintainability/tenability should be tried as preliminary issues. |
| Bhagwan v. Ramchand, AIR 1965 SC 1767 | "A single Judge hearing a matter who is inclined to re-consider earlier decisions of the High Court should not embark upon that enquiry sitting as a single judge but should refer the matter to a Division Bench or a larger Bench." | The Court applied this principle to explain that a single judge is bound by earlier single-judge or Division Bench decisions and should refer to a larger Bench rather than disagree; this constrained the Court from overruling earlier High Court decisions on the issue. |
| 1962 Jab LJ 403 (Division Bench of Mr. Justice Krishnan and Mr. Justice Bhargava) | "Whether or not a trial Court should dispose of a suit on a preliminary issue is a matter of convenience... Usually when a Court finds that the consideration of a single issue can lead to the complete disposal of the suit... it can be dealt with as a preliminary point without touching other issues or without recording evidence on them." | The Court relied on this passage to support the view that issues which may dispose of the suit ought to be taken up as preliminary issues for economy of public time and litigants' resources. |
Court's Reasoning and Analysis
The Court proceeded in a structured manner:
-
Characterisation of issues:
- It observed Issues 1 and 2 to relate to the merits of the suit (proof of deposit and interest).
- Issue 3 concerned admissibility of the receipt on stamping grounds and the Court noted that admissibility could be decided when the receipt was produced in evidence.
- Issues 4, 5 and 6 were identified as legal/preliminary issues: Issue 6 (maintainability under the M.P. Moneylenders Act for want of registration/certificate) goes to jurisdiction and the root of the case; Issue 4 concerns whether the suit should be stayed because of pending insolvency proceedings; Issue 5 concerns non-joinder of necessary parties.
-
Evaluation of the trial Court's conduct:
- The trial Court had earlier treated certain issues as preliminary and had fixed a date for hearing them, but on August 10, 1971, without giving reasons, ordered that evidence be recorded on all issues together and fixed a later date for evidence generally.
- The revisional Court criticised the impugned order for lack of stated reasons, noting that when an earlier order had classified issues as preliminary, the trial Court should have explained any change of view; failing that, the order appeared mechanically or arbitrarily passed and "anything but a judicial order."
-
Application of legal principles and precedent:
- The Court emphasised that certain questions—maintainability for lack of statutory registration/certificate, stay due to insolvency proceedings, and non-joinder of necessary parties—are matters which, if determined adversely to plaintiffs, would render the whole trial futile or require reopening of the trial. Thus, these matters must ordinarily be decided as preliminary issues.
- The Court stated it was bound by the Full Bench, Division Bench and single-judge decisions cited and referred to the principle that a single judge should not re-open settled points without constitution of a larger Bench (Bhagwan v. Ramchand).
- Relying on the Full Bench decision (Santoshchandra) and the Division Bench authority, the Court held that where questions affect the tenability/maintainability of a suit, it is desirable to try those as preliminary issues rather than postpone them to final judgment.
-
Disposition of contested procedural discretion:
- The Court found that when defendants sought time on August 10 to produce evidence specifically on preliminary issues, the trial Court had to exercise its discretion judicially—either to allow the request or refuse it with reasons. The impugned order neither refused the request nor explained why it was refused; indeed, it effectively accepted the request but ordered joint recording of evidence, without reasoning.
- On this basis and applying the precedent-based principles, the revisional Court concluded the trial Court erred in postponing decision on Issues 4, 5 and 6 and in failing to give reasons for its change of position.
Holding and Implications
Holding: The revision is allowed. The impugned order of the trial Court dated August 10, 1971 is set aside.
The Court directed that the case be remitted to the trial Court for immediate determination of Issues Nos. 4, 5 and 6 as preliminary issues before trial on the merits. The Court observed that Issue No. 3 may be left to the trial Court (noting a contention that the receipt had already been admitted and that Section 36 of the Stamp Act may not now be an obstacle). The revisional Court fixed December 14, 1971 in the trial Court for parties to appear and to produce all evidence they wish to produce, and ordered that no adjournment be granted to the defendants. Each party was directed to bear their own costs of the revision.
Implications:
- Direct effect on the parties: The trial Court must first decide three specified preliminary issues (4, 5 and 6) before proceeding to trial on the merits; the suit's further progress is therefore constrained until those determinations are made. The defendants are denied any adjournment for those proceedings (per the directions given).
- On precedent and law: The Court based its disposition on existing High Court Full Bench, Division Bench and single-judge authorities and declined to re-open or displace those authorities as a single judge. The opinion does not purport to create new legal precedent beyond applying existing authorities to the facts of the case.
1. This is a revision from an order dated August 10, 1971 whereby the trial Court has postponed the decision of Issues Nos. 3, 4, 5 and 6 till the decision of the entire suit. The grievance in this revision is that those issues are preliminary issues and the trial Court was bound to decide them first. In not doing so, the trial Court refused to exercise its jurisdiction and this Court must interfere under Section 115 of the Code of Civil Procedure.
2. The respondents Basanti Devi and Babulal have instituted this suit against the petitioners for recovery of a sum of Rs. 5,000/- on the allegation that they deposited the amount with the defendants, but they are not returning the amount. The suit is resisted by the defendants on several grounds. Six issues were framed in the trial Court, the seventh being a formal issue. They may be reproduced here:--
(1) क्या वादी फर्म की वादी की ओर से प्रतिवादी के यहां दिनांक 27-9-67 को 4000) चार हजार रूपया जमा कराया और प्रतिवादी ने इस बाबत रसीद वादी को दी? (2) क्या वादी इस रकम पर ब्याज 1) रूपया सेकड़ा मासिक से पाने का अधिकारी है? (3) क्या रसीद लिखतम वाद आधार उचित स्टाम्प पर न होने के कारण न्यायालय में साक्ष्य ग्राहय नहीं है? (4) क्या विघटित फर्म एवम उसके विरूद्ध डि. जज.
ग्वालियर के समक्ष प्रकरण क्रमांक 1/69 दिवालिया एवम प्रथम अति. डि. जज. के यहां प्रकरण क्रमांक 4/70 दिवालिया विचाराधीन होने से इस प्रकरण की कार्यवाही स्थगित किये जाने योग्य है? (5) यहकि समस्त भागीदारों को पक्षकार नहीं बनाया गया है अतः दावे में असमावेश प्रतिवादी गण की त्रुटि है? (6) क्या वादी साहूकार है और उसने साहूकारी विधानों के अन्तरगत खुद को रजि. नहीं कराया है और उक्त विधान के नियमों का पालन नहीं किया इसका प्रभाव? (7) सहायता एवम व्यय? It is obvious enough that issues 1 & 2 relate to the merits of the suit. Issue No. 3 is about the admissibility of the receipt on the basis of which the suit deposit was made. The objection was that it did not bear proper and adequate stamps. This point can certainly be raised and decided when the receipt is produced in evidence.
3. When the issues were framed the trial Court in its order dated July 6, 1971 stated that issues 3 to 5 are legal issues and should be tried as preliminary issues. I suppose the Court meant to say issues 4 to 6 and not 3 to 5, because as would be pointed out just now issue No. 6 is undoubtedly a preliminary issue. The trial Court fixed July 20, 1971 for hearing argument on the preliminary issues.
4. The case could not be taken up on the 20th July or 22nd July or the 3rd August. When it was taken up on August 10, 1971, learned counsel for the defendants asked for an opportunity to produce evidence on those issues. This was opposed by the learned counsel for the plaintiffs. They contended that evidence should be recorded on all the issues together. On this, the learned trial Judge passed the following order:--
मैं वह उचित समझता हू कि सभी वाद पत्र लिये जाय
-- (I consider it proper to record evidence on all the issues).
He then fixed October 21, 1971 for evidence of the parties on all the issues. The defendants are aggrieved by this order.
5. It will be seen from the impugned order that the learned trial Judge did not give any reason for the order which he made. This was particularly necessary when in the earlier order he had called them "legal issues" and held that they should be tried as "preliminary issues". The trial Court did not say in the impugned order that on a reconsideration, it did not consider them to be preliminary issues. It did not apply its mind how the trial of the suit would be affected if any of the issues were decided by it at the conclusion of the trial in favour of the defendants. It must be said that the impugned order was mechanically arbitrarily passed. It is anything but a judicial order.
6. Issue Number 6 arises from the following objection taken in the written statement:--
‘‘यह कि वादीगण ने अपने को मध्यप्रदेश मनीलेण्डर एक्ट के अन्तर्गत रजिस्टर्ड नहीं कराया है। उनके पास उक्त विधान के अनुकूल कोई वेलिड सटर्िफिकेट भी नहीं है। अतः वादीगण ने उक्त विधान के नियमों का पालन नहीं किया है। अतः उनका वाद न्यायालय में विचार योग्य नहीं हैं।’’ The objection is that the suit is not maintainable. Whether this objection is right or wrong is not for me to consider today. If the objection is right and the Court holds that the suit is not maintainable, the whole trial will be futile. The objection goes to the root of the case and is undoubtedly a question of jurisdiction of the Court to try the suit. The objection is that the suit for want of a certificate is not maintainable. This issue has necessarily to be decided as a preliminary issue because the trial of the suit cannot proceed unless the Court holds that the suit is maintainable. Under issue No. 4 the Court had to decide whether the suit must be staved pending the decision of the insolvency proceedings which are pending. This objection may be right or wrong. It is not to be considered by me today. This, was to be tried by the trial Court as a preliminary issue. Learned Counsel for the plaintiffs tries to argue that as there has been no order of adjudication. The trial Court should have decided issue No. 4 against the plaintiff if found the plaintiffs to be right in their contention. What I say is that issue No. 4 is undoubtedly a preliminary issue. Decision on this issue cannot be postponed till the decision of the entire suit.
7. Issue No. 5 is about defendant's objection as to non-joinder of necessary parties. Paragraph 14 of the written statement is in these words:--
‘‘यह कि भागीदारों को पक्षकार नहीं बनाया गया है जो कि प्रकरण में आवश्यक पक्षकार है। प्रकरण बनाने जोइन्डर आफ नेसेसरी पाटर्ी का दोश है। इस कारण वादी का वाद निरस्त किये जाने योग्य है।’’ Also see paragraph 2 of the written statement. Now the question whether the suit suffers from non-joinder of necessary parties can certainly not be postponed because if in the final judgment it is held that the objection of the defendants is right then the plaintiffs will have to be given an opportunity to join those persons who have been left out and then the entire trial would necessarily be reopened. This again would mean unnecessary harassment and expense to the parties.
8. The above discussion leads to the only result that the trial Court was bound to decide issues 4, 5 and 6 as preliminary issues before trying the suit on merits. In the present case when on August 10, 1961 the defendants wanted time to produce evidence on these issues, the trial Court had to exercise its discretion judicially and either to allow the request or reject it. But the trial Court did not say either that the evidence was not necessary, nor that the defendants had no right to produce evidence. In fact, by the impugned order the learned trial Judge accepted the defendant's request to produce evidence although it directed that evidence on these issues would also be produced along with the evidence on the other issues.
9. In support of his contention learned counsel for the petitioners has cited before me a large number of decided cases, some of which may be mentioned here. They are: S.S. Khanna v. F.J. Dillon AIR 1964 SC 497 Pannalal v. Ram Ratan, 1965 Jab LJ (SN) 74, Gvarsilal v. State of M. P. 1967 MPLJ (SN) 57. Tharpal v. Govindram, 1962 Jab LJ 403 and Santoshchandra v. Smt. Gyansundarbai, 1970 MP LJ 363 = (AIR 1971 Madh Pra 1 (FB).
10. I find myself bound by these decisions, not only of the Full Bench and the Division Bench, but also of the two Single Bench decisions of Mr. Justice Pande. A judge sitting singly cannot dissent from a decision of another Single Judge. The only course open to him is to refer the matter to a larger Bench. See Bhagwan v. Ramchand AIR 1965 SC 1767 where their Lordships have laid down as follows--
"It is hardly necessary to emphasise that considerations of judicial propriety and decorum require that if a learned single Judge hearing a matter is inclined to take the view that the earlier decisions of the High Court whether of a Division Bench or of a single Judge, need to be re-considered, he should not embark upon that enquiry sitting as a single judge but should refer the matter to a Division Bench or, in a proper case, place the relevant papers before the Chief Justice to enable him to constitute a larger Bench to examine the question."
In fact, I myself, during the course of the hearing became inclined to refer the matter to a larger Bench because Shri G.G. Mangal, learned counsel for the respondents produced before me the decision of a learned Single Judge in Civil Revn. No. 322 of 1971 (Madh. Pra.). In that case it has been held on rather similar facts and in similar circumstances, that issues relating to the stay of the suit because of insolvency proceedings and the issue relating to the plaintiff being a money-lender are not preliminary issues and it was not necessary to decide them as such. I do not know in what words and in what form the defendant took objection in that case as to the maintainability of the suit and also regarding the stay of the suit. If the objections in the written statement were in the words that I have quoted above his Lordship's attention to them ought to have been invited by the learned counsel for the defendants, who appeared in that case. I was bound to follow the order passed by the learned Single Judge or to refer this case to a larger Bench on that particular point. If I did not have before me the full Bench decision in 1970 MPLJ 363 = (AIR 1971 Madh Pra 1 FB) (supra) where it has been laid down as follows:--
"Where questions of court-fee, limitation and untenability of the suit are raised in a suit it is always desirable to try them as preliminary issues and not postpone them to the stage of the final judgment."
Or the Division Bench decision of Mr. Justice Krishnan and Mr. Justice Bhargava in 1962 Jab LJ 403 where it is observed as under:--
"Whether or not a trial Court should dispose of a suit on a preliminary issue is a matter of convenience and not of principles. Still it is important as it involves public time and money of the litigants. Usually when a Court finds that the consideration of a single issue can lead to the complete disposal of the suit or other proceedings it can be dealt with as a preliminary point without touching other issues or without recording evidence on them."
In view of these binding principles which apply to the present case. I cannot refer the matter to a larger Bench unless I found myself unable to follow those decisions. I respectfully agree with that view.
11. Learned counsel for the respondents strenuously argued that in the present case the objection raised by the defendants as to the maintainability of the suit, non-joinder of parties and stay of suit are frivolous and are aimed at protracting the trial. He may be right or may not be right. The very nature of issues 4, 5 and 6 demands that they must be decided as preliminary issues.
12. This revision is allowed. The order of the trial Court dated August 10. 1971 is set aside. The case shall 20 back to the trial Court for first deciding issues 4, 5 and 6 as preliminary issues. I found that in the trial Court December 14, 1971 is fixed. The parties shall appear on that date and shall produce all evidence that they want to produce. No adjournment will be granted to the defendants. I leave it to the trial Court to deal with issue No. 3 as a preliminary issue because it is contended before me by Shri Mansal that that issue no more survives in view of the fact that the receipt has already been admitted in evidence, and Section 36 of the Stamp Act will not now come in the way. I direct that the parties shall bear their own costs of this revision.
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