Manoharlal v. Hiralal

1. This is an application for leave to appeal to the Supreme Court from an order passed on 10th May, 1955 in Civil Misc. Appeal No. 26 of 1954 by a Division Bench of this High Court.

2. The facts of the case are that the petitioner and the respondent were partners in a concern known as 'The Diamond Industries'. The partnership was dissolved by mutual consent en terms and conditions contained in a deed of dissolution dated the 22nd August, 1945.

3. Disputes soon arose as regards the fulfilment of the terms of the dissolution and on 18th August, 1948 the petitioner instituted a suit in the 'Court of Sub-Judge at Asansole for recovering a sum of Rs. 1,18,000/.

4. On 3rd January, 1949, the respondent Hiralal filed a suit against the petitioner in the Court of the District Judge, Indore for accounts of the dissolved partnership and in the alternative for a sum of Rs. 1,90,319/0/6.

5. It is provided in the deed of dissolution that in case disputes and differences arose between the parties in regard to the rights and liabilities in respect of the dissolved partnership or in respect of questions arising under the document, they shall be decided in the Courts at Indore and nowhere else. The respondent Hiralal contended that the proceedings in the Asansole Court were instituted in breach of this term and constituted an abuse of the process of law. He therefore prayed for an order of injunction to restrain the peti­tioner from proceeding with the suit filed in the Asinsole Court.

6. The application was opposed by the petitioner but it was eventually granted and an appeal filed against it was dismissed by us.

7. The application filed by the petitioner is opposed by the respondent mainly on the ground that the order against which the petitioner intends to prefer an appeal to the Suprems Court, is not a judgment, decree or a final order within the meaning of Article 133 (1) of the Constitution and no appeal would lie to the Supreme Court against it. Article 133 (1) is to the following effect:-

'' 133 (1). An appeal shall lie to the Supreme Court from any judgment, decree or final order in a civil proceeding of a High Court in the territory of India if the High Court certifies (a) that the amount or value of tha subject-matter......etc......"

8. The question to be determined is whether the order pissed by the Division Bench of this Court on 10th May, 1955 is a judgment, decree or final order within the meaning of this Article.

9. The order passed by this Court is obviously not a decree and it was not contended that it could be construed as a decree as defined in Section 2 (2) Civil Procedure Code. It was however urged that it was a final order inasmuch as it determined that the phintiff had no right to file a suit in the Asansole Court.

10. The words 'Final Order' have been considered both by the Courts in England and by the Federal Court in India. The first important decision on this point is the decision of the Court of Appeal in England in the case of Salomon vs. Warner and others (1891), 1 Q. B. D. 735.

11. There the defendants raised a plea that the statement of claim did not disclose any cause of action. A Judge at Chambers thought that the point of law should be set down for argument and disposed of before the trial. After hearing arguments the Divisional Court ordered that the action should be dismissed with costs. Question arose whether this was a final order. It was held that the final order is one made on such an application or proceeding that for whichever side the decision is given, it will, if it stands, finally determine the matter in litigation.

12. In the aforesaid case Fry L. J. observed that an order is final when it is made upon an application or other proceeding which must, whether such application or other proceedings fail or succeed, determine the action. The order is interlocutory where it cannot be affirmed that in either event the action will be determined. Lopes L. J. also made similar observations. He said, "A judgment or order would be final within the meaning of the rules, when, whichever way it went, it would finally determine the rights of the parties.”

13. This decision of the Court of Appeal was approved by the Privy Council in Firm Ramchand vs. Firm Goverdhandas, A. I. R. 1920 Privy Council 86. In that case several suits were filed by the respondents on contracts which among other things contained an arbitration agreement. The defendants applied for stay of these suits under Section 19 of the Indian Arbitration Act of 1899. The trial Court granted the prayer and stayed the suits but in appsal the Judicial Commissioner of Sindh refused the stay of proceedings. Applications were thereupon filed under Section 109 Civil Procedure Code for leave to appeal to the Privy Council. The learned Judges of the Judicial Commissioner's Court holding that the order refusing the stay of suits was a final order, granted a certificate as provided in Section 110 Civil Procedure Code. The appeals were then taken to the Privy Council. Before Their Lordships a preliminary objection was raised that the orders refusing stay were not in fact final and appeals did not lie. The objection prevailed and it was held that:-

"An order is final if it finally disposes of the rights of the parties. The orders now under appeal do not finally dispose of those rights, but leave them to be determined by the Courts in the ordinary way.”

14. The decision of the Privy Council in Firm Ramchand vs. Firm Goverdhandas A. I. R. 1920 Privy Council 86 was again followed by the same Board in V. M. Abdul Rahman vs. D, K. Cassaim and Sons A. I. R. 1933 Privy Council 58. There the trial Court had dismissed plaintiff's suit because he had failed to furnish security demanded by the Court. The order of dismissal was however set aside in appeal and the case was remanded to the trial Court for decision on merits. An appeal was filed against this remand order by the other side after obtaining the necessary certificate from the High Court under Section 110 Civil Procedure Code. At the time of hear­ing a preliminary objection was raised by the respondents before their Lordships that the order of the appellate Court was neither a decree nor a final order and was therefore not appealable. The objection prevailed and the appeal was dismissed. Their Lordships observed:-

“It should be noted that the appellate Court in India was of opinion that the order it had made, went to the root of the suit, namely, the jurisdiction of the Court to entertain it, and it was for this reason that the order was thought to be final and the certificate granted. But this is not sufficient. The finality must be a finality in relation to the suit. If after the order, the suit is still a live suit in which the rights of the parties have still to be determined, no appeal lies against it under Section 109 (a) of the Code.''

It was further held:-

"The effect of the order from which it is here sought to appeal was not to dispose finally of the rights of the parties. It no doubt decided an important and even a vital issue in the case but it left the suit alive, and provided for its trial, in the ordinary way."

15. These Privy Council decisions had settled the law on the subject. But there are two more decisions of the Federal Court which also take the same view. The first of these is the case of S. Kuppuswami Rao vs. The King A. I. R. 1949 Federal Court 1. It was held in that case that a final

order must be an order which finally determines the points in dispute and brings the case to an end. It was further observed : -

" To constitute a final order it is not sufficient merely to decide an important or even a vital issue in the case but the decision must not keep the matter alive and provide for its trial in the ordinary way.”

16. The other case of the Federal Court is the case of Mohammad Amin Brothers Ltd., vs. The Dominion of India A. I. R. 1950 Federal Court 77. In that case also an appeal was filed in the Federal Court after obtaining a certificate under Section 205 (1) of the Government of India Act, 1935, against an order by which certain winding up proceedings were stayed by the High Court of Calcutta. A preliminary objection was raised before the Federal Court that the order was not a final order and no appeal was competent. The objection was allowed to prevail. It was held that the test for determining the finality of the order is, whether the judgment or order finally disposed of the rights of the parties. Finality must be finality in rela­tion to the suit. The fact that the order decides an important issue or even a vital issue, is by itself not material unless the decision puts an end to the suit.

17. These authorities lay down that in order to constitute a final order it is necessary that the order should be one by which the suit or the proceeding is finally disposed of whichever way the decision went. The decision of an important or vital issue which may ultimately affect the fate of the proceeding is by itself not enough. The test to be applied is, whether the proceeding is disposed of completely and the case is not kept alive for being dealt with in the ordinary way. If after the order is passed the proceed­ing is still alive and liable to be dealt by the Court in the ordinary way, the order is not a final order.

18. It is then necessary for determining whether the order is a final order, to note what its effect will be if it was decided the other way. If the order is such as would dispose of the proceeding if decided one way, but would not have that effect if it was decided the other way, the order would not be a final order. The final order must contain a final adjudication of the matter in contest between the parties to the action.

19. In the present case these tests are not satisfied. The order of injunction passed by the trial Court and confirmed by this Court is not an order passed in the suit wii ch is pending in the Asansole Court. It also does rot have the effect of d sposing of either that suit or the present suit finally. Both the suits are alive and the dispute between the parties is neither adjudicated on merits nor finally decided. If the order had been otherwise, both the suits should have gone on. Examined from this point of view also the order against which the petitioner wants to file an appeal is not a final order. I am therefore of opinion that the order against which an appeal is proposed to be filed is not a final order within the meaning of Article 133 (1) of the Constitution.

20. Mr. Pande, learned Counsel for the petitioner then contended that if the order was not a final order, it was certainly a judgment within the meaning of Article 133 (1) and appealable as such. This contention is also without much substance.

21. The word 'judgment' read in the context in which it is used in Article 133 (1) of the Constitution also means a 'final judgment' of the Court by which the rights and the liabilities of the parties to the action are finally determined.

22. In the case of S. Kuppitswami Rao vs. The King A. I. R. 1949 Federal Court 1, a similar argument was advanced before the Federal Court which was dealing with a case under Section 205(1) "of the Government of India Act which contained a provision similar to that in Article 133 (1) of the Constitution. It was held that an interlocutory order made on a preliminary objection was not a judgment.

23. The matter has recently been considered by the High Court of Andhra in Vallury Mangaraju vs. Vallury Varahalamma, A. I. R. 1956 Andhra 47. In that case an application for a certificate under Article 133 was filed against an order by which a receiver was appointed and certain sums lying in Court were ordered to be paid over to one of the parties on certain conditions. An appeal was sought to be filed to the Supreme Court against this order and it was contended that the order was a judgment within the meaning of Article 133 (1) of the Constitution as it directly or indirectly dealt with questions relating to property of the value of Rs. 20,000 or more. The contention was repelled and it was held that the order against which the peti­tioner intended to prefer an appeal was only an interlocutory order which did not finally dispose of the rights of the parties. It was further held that the word 'judgment' in Article 133 in the context means a final judgment in the sense that it finally decides the rights of the parties.

24. The result is that the order against which the petitioner proposes to file an appeal is neither a judgment, decree nor final order within the mean­ing of Article 133 (1) and therefore not appealable.

25. The petition is therefore dismissed with costs.

Newaskar J.-I agree.