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Smart Summary

Summary of Opinion (Made by The Offg. Chief Justice)

Factual and Procedural Background

These are applications for leave to appeal to the Privy Council against an order of remand made by this Court in Appeals No. 57 and 235 of 1933. The applications were brought under Section 109 Clause (a) of the Code of Civil Procedure. The central procedural question was whether the remand order made by this Court amounted to a "final order" within the meaning of that clause.

The underlying appeals arose from a suit for accounts based on a promissory note for Rs. 60,000. The plaintiff and the defendants had interests in the note in the proportions 5/17 and 12/17 respectively. The promissory note was in the possession of the defendants, who had the obligation to collect the amount due. A principal point in the litigation was the rate of interest payable under the note and the method of its calculation: the document stated only that it carried the "Rangoon nadapu rate."

At first instance the learned Subordinate Judge had applied compound interest with half-yearly rests at the Rangoon nadapu rate. This Court decided that only simple interest at the Rangoon nadapu rate should be allowed to the plaintiff. After determining the question of interest, this Court remanded the suit to the lower Court for further enquiry and disposal in the light of the Court's observations on other points. The Court's judgment contained the instruction that, after receiving the commissioner's report and hearing objections, the learned Judge should "pass a final decree for the amount ultimately found due from the defendants to the plaintiff calculating simple interest at the Rangoon nadapu rate till the date of the decree."

Among the contentions raised by the defendants in the underlying suit were that certain collections under the promissory note had been made by the plaintiff, that certain securities entrusted to the plaintiff remained with him, and that if an account were taken no money would be found due from the defendants to the plaintiff.

Legal Issues Presented

  1. Whether the remand order made by this Court (after deciding the rate and method of calculating interest) constitutes a "final order" within the meaning of Section 109 Clause (a) of the Code of Civil Procedure, thereby entitling the petitioner to leave to appeal to the Privy Council.

Arguments of the Parties

Petitioner's Arguments

  • The petitioner argued that, although the order was formally one of remand, it decided the question of interest—a principal (described by counsel as a "cardinal") point in the suit—and therefore should be treated as a "final order" within the meaning of S.109(a), justifying leave to appeal to the Privy Council.

Respondent/Defendants' Contentions (as recorded in the opinion)

  • The defendants had contended (in the underlying suit) that the plaintiff had made certain collections and retained certain securities and that, if an account were taken, no money would be found due from them to the plaintiff. (The opinion records these contentions as relevant background to the remand.)

Other Remarks Recorded by the Court

  • The learned Advocate General, appearing for the plaintiff at the hearing before this Court, did not seriously contest the Court's decision to allow only simple interest at the Rangoon nadapu rate.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Abdul Rahman v. D.K. Cassim and Sons (Privy Council) Established that "finality" must be finality in relation to the suit; if after the order the suit remains live and the rights of the parties still have to be determined, no appeal lies under S.109(a). The Court regarded this Privy Council pronouncement as laying down clearly the controlling principle to be applied and used it as the decisive test to conclude that the remand order was not a "final order."
Rahimbhoy v. Turner Case law referred to by counsel (decided with reference to the old Civil Procedure Code). These two decisions relied on by the petitioner were noted by the Court but were distinguished by the Privy Council in Abdul Rahman as being decided under the old Code; the Court did not treat them as controlling.
Saiyid Muzhar Hossein v. Bodha Bibi Case law referred to by counsel (decided with reference to the old Civil Procedure Code). As with Rahimbhoy v. Turner, this decision was referred to and distinguished by the Privy Council; the Court did not follow it as a basis for allowing leave to appeal.
Ramchand Manjimal v. Goverdhandas Vishandas Ratanchand Following English decisions, it stated the test of finality: whether the order "finally disposes of the rights of parties" and that if those rights are left to be "determined by the Courts in the ordinary way" there is no final decision. The Court relied on this reasoning (as cited by the Privy Council) to reinforce the conclusion that the remand order did not finally dispose of the parties' rights and therefore was not a "final order."

Court's Reasoning and Analysis

The Court framed the dispositive legal test by reference to the Privy Council's decision in Abdul Rahman v. D.K. Cassim and Sons. The Court quoted the Privy Council's statements that the appellate court's view that an order went "to the root of the suit" was not in itself sufficient; rather, the finality must be in relation to the suit as a whole. If, after the order, the suit remains live and the rights of the parties still have to be determined, the order is not a "final order" under S.109(a).

Applying that test to the present facts, the Court acknowledged that it had decided one issue in the appeal—the rate and method of calculating interest (directing simple interest at the Rangoon nadapu rate)—but concluded that this did not finally dispose of the rights of the parties. The suit remained a live suit to be tried in the ordinary way and further factual accounting enquiries (including the defendants' contentions about collections and retained securities) still had to be resolved by the lower Court.

The Court emphasized that its order only provided the correct method of calculating the amount due; the actual determination of the amount ultimately due required the lower Court's further enquiry and final decree after the commissioner's report and objections. The Court noted that it was possible that, after proper account-taking and calculation pursuant to the Court's directions, no amount might be found due from the defendants to the plaintiff—underscoring that the rights had not been finally determined by the remand order.

The Court explicitly relied on the Privy Council's pronouncements and on Ramchand Manjimal v. Goverdhandas Vishandas Ratanchand for the test of finality, and it declined to follow the two earlier cases cited by the petitioner which had been distinguished by the Privy Council as decided under the old Civil Procedure Code.

Holding and Implications

The applications for leave to appeal under Section 109 Clause (a) were dismissed.

Direct effects and orders made by the Court:

  • The petitioner was held not to be entitled to leave to appeal to the Privy Council under S.109(a) because the remand order did not finally dispose of the rights of the parties.
  • These applications were dismissed with costs (one set in C.M.P. No. 2608 of 1938).
  • C.M.P. No. 2610 of 1930: no costs.

Implications beyond the parties: The opinion applies and follows the test of finality as articulated by the Privy Council and by earlier precedent cited in the judgment. The opinion itself does not elaborate broader new principles beyond applying those precedents; its practical consequence was the denial of leave to appeal and dismissal of the petitions as noted above.

Source: Opinion excerpt provided. This summary is limited strictly to information contained in the provided text.

    S.A Ramanathan Chettiar Petitioner v. P.P Palaniappa Chettiar And Others S

    (Made by The Offg. Chief Justice.)

    These are applications for leave to appeal to the Privy Council against the order of remand made by this Court in Appeals No. 57 and 235 of 1933. The applications have been made under S. 109 Cl. (a) of the Code of Civil Procedure and the question which we are called upon to decide is whether in passing the remand order we passed a final order within the meaning of the term “final order” as used in Cl. (a) of the section.

    The above appeals arose out of a suit for accounts. The lower Court's decree was reversed and the suit was remanded for further enquiry. The suit was upon a promissory note for a sum of Rs. 60,000 in which the plaintiff and the defendants were interested in the proportion of 5/17: 12/17. The promissory note was in the possession of the defendants and they had the obligation to collect the amount due under it. One of the questions which arose in the case was, what was the rate of interest due under the note and how it should be calculated. The document mentioned no particular rate of interest beyond stating that it carried the ‘Rangoon nadapu rate.’ The learned Subordinate Judge determined that interest should be calculated at the Rangoon nadapu rate calculating compound interest with half yearly rests. We decided that the plaintiff should be allowed to claim only simple interest at the Rangoon nadapu rate. The point was not seriously contested before us by the learned Advocate General who appeared for the plaintiff. After deciding this question of interest we remanded the suit to the lower Court for disposal in the light of our observations on the other points involved in the case. At the end of our judgment we observed as follows:—

    “After receiving the commissioner's report the learned Judge will fix a time for objections and after due consideration of the report and the objections he will pass a final decree for the amount ultimately found due from the defendants to the plaintiff calculating simple interest at the Rangoon nadapu rate till the date of the decree.”

    It may be mentioned here that the defendants contended amongst other things that certain collections under the promissory note had been made by the plaintiff and that certain securities which were entrusted to him were still with him. They also contended that no money would be found due from them if an account was taken.

    It is now argued by the learned Counsel for the petitioner that though the order is one of remand, inasmuch as it decided the question of interest, one of the questions involved in the suit, the order would fall within the description of “final order”, because one of the main points at issue, or to use the term of the learned Advocate, one of the cardinal points at issue, had been decided by this Court. Various cases have been brought to our notice by the learned Counsel on both sides. It may be said that it is difficult to reconcile the decisions in some of the cases; but we do not propose to consider them, because in their latest pronouncement in Abdul Rahman v. D.K Cassim and Sons(1) their Lordships of the Judicial Committee have laid down clearly the principle to be applied in deciding this question. That was a case where the plaintiff after instituting the suit became insolvent and the Official Assignee who was joined as plaintiff declined to proceed with the suit in the absence of security. The trial Judge made a decree dismissing the suit. Upon appeal the learned Judges held that the cause of action was personal and did not vest in the Official Assignee but remained with the plaintiff who continued to be treated as a party on record; accordingly they set aside the decree and remanded the suit for trial. The question was whether that order came within the description of “final order”. The observations of their Lordships of the Privy Council appearing at page 65 of the report give a clear indication as to the meaning of the expression “final order”. Their Lordships say:

    “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 was 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 S. 109(a) of the Code”.

    Further on their Lordships explain the principle thus:

    “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.”

    Now, applying that test to the facts of this case it may be said that one of the issues has been decided in the case, that is, the issue as to the rate at which interest should be charged, but that does not dispose of finally the rights of the parties. The suit is still alive and has to be tried in the ordinary way. Our order gives merely the correct method of calculating the amount due from one party to the other. It may be that on calculating the interest as directed by us no amount is due from the defendants to the plaintiff. The two decisions relied upon by the learned Counsel for the petitioner, viz., Rahimbhoy v. Turner(2) and Saiyid Muzhar Hossein v. Bodha Bibi(3), were referred to by their Lordships and were distinguished by them as cases decided with reference to the old Civil Procedure Code. In support of their conclusion their Lordships refer to their own decision in Ramchand Manjimal v. Goverdhandas Vishandas Ratanchand , which laid down, following the decisions in English Courts that the test of finality is whether the order “finally disposes of the rights of parties” and that if those rights are left to be “determined by the Courts in the ordinary way” there is no final decision in the case. These observations make it quite clear that the order in the present case cannot be said to be a final order. In view of the clear pronouncement by their Lordships it is not necessary to discuss the other cases referred to by the learned Counsel. In the circumstances we hold that the petitioner is not entitled to ask this Court to grant him leave to appeal under S. 109(a).

    We dismiss these applications with costs (one set in C.M.P No. 2608 of 1938).

    C.M.P No. 2610 of 1930 no costs.

    N.R.RPetitions dismissed.

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    Comments

    S.A Ramanathan Chettiar Petitioner v. P.P Palaniappa Chettiar And Others S
    (Aug 8, 1938)