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Chintakayala Ramayya And Others v. Mithinti Lakshmayya And Others
Factual and Procedural Background
This appeal arises from three suits (O.S. Nos. 58, 82 and 83 of 1943) in which the appellants were defendants 2 to 14 (the first defendant is not appealing). Before the suits were instituted, attachments before judgment of substantially all the debtors' properties were effected. On 21 March 1943 the defendants' vakil left for Benares; on 22 March an oral request for adjournment was said to have been made. On 25 March 1943 I.A. No. 528 (application to adjourn to 5 April) was filed and dismissed; ex parte decrees were passed in the three suits on that day.
On 2 April 1943 I.A. Nos. 568, 569 and 570 were filed praying to set aside the three ex parte decrees. On 5 July 1943 the Subordinate Judge passed an order restoring the suits to the file, but imposed conditional terms: the petitioners were to pay Rs. 100 towards costs irrespective of the result within 15 days and deposit the costs of the suits as a condition precedent before trial; the suits were posted peremptorily to 26 July 1943 and default would result in the petitions standing dismissed with costs. A decretal order to similar effect was drawn up.
The appellants say they were unable to comply with the 5 July order and sought relief in the High Court. A stay issued by the High Court reached the subordinate court some days after the 15-day period expired. On 26 July 1943 the subordinate court recorded that the defendants were absent, the plaintiffs were ready, and the defendants had not deposited the amounts ordered; it declared that, "as the direction given in the order on the said petitions is not obeyed, the order operates and the decrees passed already stand."
Legal Issues Presented
- Whether an appeal lies against the 5 July 1943 order (which restored the suits on stated conditions and provided that failure to comply would cause the petitions to stand dismissed), or whether an appeal must instead be brought against a subsequent order (26 July 1943) which recorded that the petitions had been dismissed for non-compliance.
- Whether the 5 July 1943 order was a final and comprehensive order (within the meaning of the rules on appealability, including references to O. 43, R. 1(d)), or whether it was merely a conditional or interlocutory order requiring a further final order to be appealable.
- On the merits, whether the condition imposed by the lower court (deposit of the costs of the suits as a condition precedent to restoration) was reasonable and practicable in the circumstances (notably where appellants' land had been attached before judgment), and if not, whether the appellate court should substitute a different, reasonable condition.
Arguments of the Parties
Appellant's Arguments
- Mr. Satyanarayana Rao (appearing for the appellants) argued that the present matter is not within O. 43, R. 1(d). He contended that the 5 July 1943 order, so far from being an order rejecting an application, was an order allowing the application to set aside the ex parte decrees; accordingly, if the appellants wished to appeal, they should have appealed against the order of 26 July 1943 (which, he argued, was the order dismissing the application to set aside the ex parte decrees).
- Learned counsel for the appellants also contended that the argument (that appeal lies only against the 5 July order) was fallacious because the 5 July order was complete in itself and the 26 July order did no more than record that the 5 July order had worked itself out — in other words, counsel argued that the 5 July order was the only order in relation to these applications and therefore was properly the subject of appeal.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Veakateswara Rao v. Subramaniam | Referenced by the learned Judge below as authority for awarding costs as a "panacea" when restoring suits; specific rule not elaborated in this opinion. | The 5 July judgment quoted this case when ordering costs to be awarded to respondents; the present Court noted that the learned Judge relied on that case in awarding costs. |
| Venkataswami Naidu v. Shanmugham Pillai | Interpreted the phrase "rejecting an application" under O. 43, R. 1(d) as signifying an immediate rejection and not a conditional or prospective rejection. | The Court observed the case but regarded it as of limited assistance because the precise terms of the lower court's order in that case were not set out in the report. |
| Rajagopalachari v. Thathachariar (Madhavan Nair J.) | Illustrated a situation in which a conditional order was made and the matter was later expressly posted for final disposal; the final order (expressly rejecting the application) was held to be the proper order to appeal against. | The Court distinguished that case on the ground that in Rajagopalachari both parties and the Court treated the matter as involving two orders (a conditional order and later a final order), and thus the last order was the one to be appealed from. The present Court found the present 5 July order to be different in form and effect. |
| Narayan Putapa v. Vaikunt Sabaya (Full Bench, Bombay) | Discussed the distinction between a two-order practice (mofussil) and the "single order" practice on the original side of the Bombay High Court; held that whether one or two orders are made makes no difference in principle to appealability if the order is final in effect. | The Court relied on the Full Bench's exposition to justify treating the 5 July single comprehensive order as final in effect (even if in some jurisdictions two orders are used), and therefore appealable. |
Court's Reasoning and Analysis
The court began by focusing on the character and effect of the 5 July 1943 order. The key question was whether that order was conditional and required a subsequent final order before it could be treated as rejecting applications (and hence be appealed from), or whether the 5 July order was itself final in effect.
The court reviewed prior authorities. It noted Venkataswami Naidu v. Shanmugham Pillai, which held that "rejecting an application" ordinarily signifies immediate rejection, but observed that that decision was of limited assistance because the exact terms of the order there were not recorded. The court next considered Rajagopalachari v. Thathachariar, where a conditional order was expressly followed by a later final order and where the later order was held to be the proper subject of appeal. The court then examined the Full Bench decision in Narayan Putapa v. Vaikunt Sabaya, which explained that on the original side it is common to have a single comprehensive order that provides that if conditions are not complied with the application is dismissed and the ex parte decree will stand; this form, the Full Bench said, differs in form from a two-order practice but not in principle.
Applying these principles to the facts, the court concluded that the 5 July order was "all comprehensive": it set conditions (deposit Rs. 100 and deposit costs of suits) and expressly provided the legal consequence of non-compliance ("in default of payment the petitions do stand dismissed with costs"). When the 15-day period expired without compliance, the legal result — dismissal of the petitions and revival of the ex parte decrees — occurred automatically. The 26 July notation by the subordinate court merely recorded that automatic legal consequence; it did not constitute a new or additional judicial determination of the applications. In short, the Court found that no further order was required to give effect to the 5 July disposition.
The court emphasized it would adopt a liberal construction, avoiding extreme technicality that would unfairly deprive an appellant of being heard. For these reasons the preliminary objection (that no appeal lies against the 5 July order) was rejected and the appeal against the 5 July order was held to be properly before the court.
On the merits the court examined the substantive fairness and practicability of the condition imposed by the lower court. Noting that the defendants' land had been attached before judgment, the court found the condition (deposit of the costs of the suits as a condition precedent to restoration) to be unreasonable and potentially impossible of performance. The appellate court therefore exercised its power to set aside the lower court's order and to substitute a more reasonable condition.
The substituted order required the appellants to pay Rs. 425 in total (composed of Rs. 100 in each of the three suits and Rs. 125 estimated for the costs of these appeals) within 14 days (from 2nd March as stated). The court made clear that failure to pay that sum within the time fixed would, without further order, result in dismissal of the appeal and the application to restore the suits being treated as dismissed, with the consequence that the ex parte decrees would stand.
Holding and Implications
Core Ruling: The court held that the 5 July 1943 order was a final, comprehensive order in effect and was therefore properly the subject of an appeal; the preliminary objection that no appeal lay was rejected. The court set aside the lower court's order and substituted a different order on terms it considered reasonable.
Immediate consequences for the parties:
- The lower court's 5 July 1943 order is set aside and replaced by the appellate court's order requiring the appellants to pay Rs. 425 in total (Rs. 100 in each of the three suits and Rs. 125 for estimated costs of the appeals) within 14 days from 2nd March.
- If the appellants do not pay the Rs. 425 within the prescribed time, then, without further order, the appeal will be dismissed and the application to restore the suits will be taken to have been dismissed; the existing ex parte decrees will stand.
Broader implications: The opinion applies and distinguishes existing authorities on whether conditional restoration orders constitute final orders for the purpose of appeal. The court articulated that where a single comprehensive order prescribes the consequence of non-compliance, that order may be final in effect and appealable; if parties treat matters as involving a further final order, the later order may be the proper subject of appeal. The opinion did not purport to lay down a novel, general rule but applied established principles to the specific form and effect of the 5 July order.
JUDGMENT
Mockett, J.:—In this appeal, Mr. Satyanarayana Rao has raised a preliminary point that no appeal lies. The facts are as follows:—
The appellants were defendants 2 to 14 in three suits—O.S Nos. 58, 82 and 83 of 1943. There is no appeal by the first defendant. Before suits, attachments before judgment of substantially all the debtors' properties were effected. On the 21st March 1943, the defendants' Vakil left hurriedly for Benares to be present with his son, who was stated to be sick with small-pox. On the 22nd March, it is said that an oral request was made by the third defendant for an adjournment. On the 25th March, I.A No. 528 of 1943 was filed—an application to adjourn the case to 5th April, which was dismissed; and on that day, ex parte decrees were passed in the three suits. On the 2nd April 1943, I.A Nos. 568, 569 and 570 were filed praying to set aside the three ex parte decrees. On the 5th July 1943, an order was passed. In the judgment, the learned Judge said,
“On the whole, I should think that the suits should be restored and sufficient costs should be awarded to the respondents as a panacea as was done by His Lordship in the case quoted above, Veakateswara Rao v. Subramaniam (1). I therefore order the petitioner to pay Rs. 100 for costs of the respondents irrespective of the result in the suits within 15 days from this date. They shall also deposit costs of the suits as a condition precedent before the trial of the suits which are hereby restored to file and posted peremptorily to the 26th July 1943. In default, the petitions will stand dismissed with costs.”
The decretal order on that judgment was,
“It is ordered that the petition be and the same is hereby allowed. It is further ordered that the petitioners do deposit into Court a sum of Rs. 100 towards their costs in this petition and also I.A Nos. 569, 570 and 625 to 627 of 1943 irrespective of the result of the suits and do also deposit the costs decreed on or before the 26th July 1943. It is further ordered that in default of payment the petitions do stand dismissed with costs.”
I.A Nos. 625 to 627 of 1943 related to the first defendant and we are not concerned with them in any way. There were certain further proceedings by the appellants with which we are not concerned. It is enough to say that they claim that they were quite unable to comply with the order of the 5th July and has made attempts in the High Court to improve their position. An order for stay passed by the High Court reached the lower Court after the order of 26th July was passed. On the 26th July, that is to say, some days after the expiration of fifteen days from the 5th July, and to which day the suits had been posted peremptorily by the learned Judge on the 5th July 1943, the following order was passed:—
“Defendants are called and they are absent. The plaintiffs are ready. The defendants have not deposited the amount ordered to be paid into Court by this date in I.A Nos. 568 and 625 of 1943. As the direction given in the order on the said petitions is not obeyed, the order operates and the decrees passed already stand.”
Mr. Satyanarayana Rao has argued that this is not within O. 43, R. 1(d). The appeals before us, he contends, are not against orders under R. 13 or R. 15 of O. 9, rejecting an application for an order to set aside a decree or order passed ex parte. He contends that an order of the 5th July 1943 so far from being an order rejecting an application is an order allowing the application and he contends that if the appellants desire to appeal at all, they should have appealed not against the order of the 5th July, but against the order of the 26th July, which was the order dismissing the application to set aside the ex parte decree. It has been contended by learned Counsel for the appellants that this argument is fallacious, that the order of the 5th July was complete in itself and that the order of the 26th July was not an order in relation to these applications, and did nothing more than recall what had happened with regard to the order of the 5th July viz., that it had worked itself out and that, therefore, the decrees in the suits automatically were restored to life. His words were “The decrees passed already stand.” There is no doubt that if it appears that in these applications to set aside ex parte decrees an order implies that a further order is required to dispose of the applications, it is that last order, if it rejects the application, which should be attacked in appeal.
The cases seem to us to be entirely clear. There are two decisions of the Madras High Court and one decision of a Full Bench of the Bombay High Court on the topic. The earliest case is of no great assistance. It is Venkataswami Naidu v. Shanmugham Pillai (2). The precise terms of the order passed in the lower Court are unfortunately not set out; but the learned Judges Oldfield and Bakewell JJ. held “that the expression ‘rejecting an application’ under O. 43, R. 1(d) signifies an immediate rejection and not a conditional or prospective rejection…” They went on to lay down what they thought to be the appropriate procedure. In the absence of the exact terms of the order that case is of little assistance. It must presumably have been in terms which required a second order. Madhavan Nair J. (as he then was) sitting alone in Rajagopalachari v. Thathachariar , had to deal with this position. In that case, the order was that “the ex parte decree will be set aside if in two weeks petitioner pays to plaintiff all costs of suit so far incurred unconditionally and further he puts the suit amount and interest decreed into Court in fourteen days. If he does not pay, petition will stand dismissed with costs.”
The learned Munsif noted that the petition was to be called for final disposal on the 13th September 1923. The matter came before the Court again and an order was passed finally dismissing the application to set aside the ex Parte decree. It is clear that the I.As concerned in that case were treated as open and were expressly posted for further consideration; and it appears that when they were heard, there was some discussion as to the terms. Madhavan Nair, J. rightly observes that all the parties as well as the Court treated the prior order as a conditional one. The last order was “Money not put into Court. Application rejected.” The learned Judge held that it was this last order which should be made the subject of an appeal.
The order, however, before us seems to be all comprehensive. What happened is this. The petitioners had to do certain things, viz., deposit costs into Court. If they did not do so, their petition was to stand dismissed with costs. I think that order is exactly the type of order which is passed on the original side of the Bombay High Court and to which reference is made by the Chief Justice when delivering the judgment in the Full Bench decision of five Judges in Narayan Putapa v. Vaikunt Sabaya , who dealt with this very subject. The learned Chief Justice says at page 75:
“My brothers Shah and Fawcett tell me that in the mofussil it is usual to make two orders; viz., (a) a preliminary conditional order like that of 30th May, and (b) a final order like that of 18th July. That indeed is the practice pointed out in 36 All. 77 at 79. On the original side the usual order provides that if the applicant does not comply with the conditions therein stated, then his application is to be dismissed, and the original ex parte decree to stand. In other words, on the original side we usually have one order and not two as is the case here. But whichever course is adopted, in my opinion, it makes no difference in principle.”
On 30th May 1925, the first order in that case was:
“Suit to be restored to file on the applicants or any of them furnishing adequate security for Rs. 3000 only within one month. Applicants to bear costs of this application”,
and then followed on 18th July the following order:
“As security is not furnished in spite of ample opportunity given, the application fails and suit cannot be restored to file. Application is rejected with coats.”
The learned judges held that an appeal lay against the second order. It seems to us that, as already indicated, the form of the order in this is what the learned Chief Justice described as the “single order.” When 15 days had expired and the appellants had not complied with the terms imposed, automatically their petition was dismissed with costs and automatically the suits were restored to the file and were ready for hearing by the trial Judge.
To return for a moment to the judgment, that is exactly how the learned Judge appreciated the situation. He points out that the defendants are not there, that the plaintiffs are ready, that the defendants have not complied with the condition and that as the directions have not been obeyed, the order operates and the decrees passed already stand. It seems to be nothing more than the recording of the legal position, which had arisen from the non-fulfilment of a condition precedent by the appellants. We have perused the interlocutory applications and there was merely a reference to this judgment, which seems to be nothing more than an intimation to the clerical staff as to what had happened to them. But, in my view, no further order was passed at all and the reason, as I have indicated, is that no further order was required. It must naturally be a matter of difficulty to construe such orders as this, whether they are final or whether they require a second order to complete them. I personally am glad to give a liberal construction to these matters and not by extreme technicality to shut out an appellant from being heard; for after all that is all that he asks for. It certainly seems to me that the order of 5th July concluded the matter and I do not suppose that either the Court or the parties had any other idea in their minds. I therefore hold that as the order of the 5th July was the one and only order in this case and as an appeal has been filed against it, the preliminary objection must fail.
I will now deal with the suit on the merits. This case is similar to another which has recently come before us for the grant of leave, where the rights to have a suit restored have been accompanied by conditions that would appear to be unreasonable, because they are impossible of achievement. The land of the defendants had been attached before judgment and they claim that by ordering the costs of the suit to be deposited as a condition precedent, which amount to a very large sum, they have been put on terms which they cannot possibly carry out. I therefore propose to substitute what I consider to be a reasonable order for the order which has been passed. The lower Court's order is set aside and instead the following order is passed:
The appellants will pay to the respondents the sum of Rs. 425 altogether, which sum is made up of Rs. 100 in each of the suits and the costs of these appeals which have been estimated at Rs. 125. The amount will be paid within 14 days of today, 2nd March. If the amount is not paid within that time then without any further order being passed, this appeal will stand dismissed, with the result that the application to restore the suits will be taken to have been dismissed and the decrees passed already will stand.
Bell, J.:—I agree and would only add a word on the preliminary objection raised by the respondents. Where any further direction of the Court is required with regard to the matters in issue between the parties, it cannot be said that finality in any shape or form has been reached. What more on 5th July 1943 was required from the Subordinate Judge's Court? If the last sentence of the decretal order be left out, clearly there would be something lacking, that is to say, a ruling as to the effect of any default on the part of the petitioners. But this the order provided for by saying: “It is further ordered that in default of payment the petitions do stand dismissed with costs.” Nothing further was left to be said as to the final result of the petitions. The petitions were not, in fact, considered on 26th July 1943. They were never even mentioned. The Subordinate Judge refers to his previous order with regard to the suits which had been posted for trial on that date. As the defendants were absent, the ex parte decrees already made were declared to be revived and stood.
Rajagopalachari v. Thathachariar a decision of Madhavan Nair J. (as he then was), is distinguishable on several grounds amongst which is the fact that both parties throughout treated the matter as relating to two orders. The words of the order were in that case, “the ex parte decree will be set aside if in two weeks petitioner pays……If he does not pay, petition will stand dismissed with costs.” Then it was added that the petition was to be called for final disposal on a later date. There were thus a conditional order and a final order. In the present case, there was one order which was final on the 5th July 1943.
N.R.R
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