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Analytical Summary of the Opinion — Maclean, C.J.

Factual and Procedural Background

The opinion concerns an appeal from an order of Mr. Justice Stanley dated 4 July 1901 refusing to stay the operation of his earlier order of 1 July 1901. The 1 July order declared in favour of the Will of Luckminarain Bogla (set up by the present Respondent), granted probate of that Will to the Respondent as sole executor, discharged the Receiver appointed in the suit, and ordered the Appellant to pay a substantial portion of the litigation costs.

On 3 July the Appellant (the adopted mother of the testator) presented a petition to stay the issuance of probate, the discharge of the Receiver, and execution for costs pending an appeal to this Court; a rule was granted that day limited to the first two objects. Mr. Justice Stanley heard that rule on 4 July and discharged it with costs. The Appellant then filed an appeal to this Court. The application for stay of execution as to costs was not pressed.

The core dispute is the validity of the Will. The estate at issue is large (about 33 lakhs of rupees). Under the Will the Respondent, as residuary legatee, would take roughly 23 lakhs; if the Will were invalid, the Appellant (as adopted mother and heiress) would inherit. Mr. Justice Stanley tried the matter over 33 days and found in favour of the Will; the Appellant has since presented an appeal.

Legal Issues Presented

  1. Whether an appeal lies to this Court from Mr. Justice Stanley's order of 4 July 1901 under section 15 of the Letters Patent (i.e., whether that order is a "judgment" within the meaning of the section).
  2. Whether the case falls within section 545 of the Code of Civil Procedure (i.e., whether the order is one which can be stayed or executed and therefore is amenable to the stay power under that section).
  3. Whether this Court should intervene to stay the operation of the lower court's order, given that the lower court exercised judicial discretion—the question of appellate restraint versus intervention in matters of discretion.
  4. Whether, on the merits and on the facts, a stay is necessary to prevent the appeal from becoming infructuous (i.e., whether there is a real danger that handing the estate to the Respondent would render a successful appeal useless).
  5. If a stay is appropriate, on what terms it should be granted (e.g., security, expedition of appeal, interim relief for costs or business continuation).

Arguments of the Parties

Respondent's Arguments

  • No appeal lies to this Court from Mr. Justice Stanley's order of 4 July (contention that the order is not a "judgment" within sec. 15 of the Letters Patent).
  • The case does not fall within section 545 of the Code of Civil Procedure (it was argued that there is nothing to execute).
  • The matter concerned the exercise of judicial discretion by the Judge below, and this Court should not interfere with the Judge's discretionary decision.
  • On the merits, no case has been shown that, if the appeal were successful, it would be rendered infructuous by the Respondent removing assets; there is said to be no real danger of such removal.
  • The Respondent argued that the Respondent would suffer substantial and irreparable loss if kept out of the estate, because of the nature of the assets and the cessation of business activities (banking, money-lending, and contracting for military stores).

Appellant's Arguments

  • The Appellant sought a stay of the order directing the issue of probate and the discharge of the Receiver pending appeal—she lodged a petition and obtained a rule limited to those two objects.
  • The Appellant contended that, if the probate were handed over and the Receiver discharged, the Respondent might realize and remove assets (including money, securities, jewels), and thus render any successful appeal a barren victory—i.e., the appeal would be infructuous.
  • The Appellant represented the appeal as bonâ fide and sought preservation of the estate pending the appeal.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
The Justices of the Peace for Calcutta v. The Oriental Gas Co. Definition of "judgment" used to determine whether an order is appealable under the Letters Patent. The Court adopted and relied on the definition as still authoritative, and held that the 4 July order fell within that definition because it decided an important question (immediate control of the estate) that could render an appeal infructuous.
Hurrish Chunder Chowdhry v. Kali Sunderi Debi Observation of the Privy Council regarding the scope of what may constitute a judgment or appealable order. The Court found the 4 July order consistent with the Privy Council's observations in that case and used it to support appealability.
Srimanta Raja Yarlagadda Durga Prasada Nayadu v. Srimanta Raja Yailagadda Mallikarjuna Prasada Jyayadu Authority said to be directly in point on appealability/stay questions. The Court stated this case was directly in point but explicitly disagreed with its view and declined to follow it for reasons explained (particularly in light of the Calcutta decision).
Mohabir Prasad Singh v. Adhikari Kunwar Interpreted by earlier judges; discussed in relation to giving security for costs and staying execution. The Court said Mohabir Prasad Singh was essentially a question about security for costs (not directly about staying execution) and used that observation to critique the reliance placed upon it in the Srimanta Raja decision.
Polini v. Grey Principle that courts have jurisdiction to preserve a fund pending appeal to prevent a successful appeal from being nugatory; interim protection of property pending litigation. The Court applied the underlying principle from Polini v. Grey to justify preserving the estate pending appeal (i.e., not handing out probate and not discharging the Receiver) subject to terms.
Wilson v. Church Used alongside Polini v. Grey as authority for the principle of preserving property pending appeal. The Court followed the same general principle and cited Wilson v. Church in support of granting an interim protective order.
Maharani Inder Kumari v. Maharani Jaipal Kumari Recognition by the Judicial Committee of the Privy Council of the principle of preserving funds pending appeal. The Court cited this Privy Council recognition to reinforce the applicability of the preservation principle.
Mohesh Chandra Dhal v. Sutrughan Dhal Privy Council recognition of the same preservation principle. The Court cited the case to support the established principle that property should be preserved pending successful prosecution of an appeal.

Court's Reasoning and Analysis

The Court proceeded through the issues in sequence, explaining the legal reasoning for each:

  1. Appealability under sec. 15 (Letters Patent)

    The Court rejected a narrow construction of the term "judgment." Although the first order of 1 July decided the validity of the Will, a new state of circumstances arose by reason of the appeal and the further question whether the Respondent should have immediate control of the estate pending appeal. Mr. Justice Stanley's 4 July order exercised judicial discretion on that further and important question and therefore, in the Court's view, fell within the Calcutta definition of "judgment" and thus was appealable under sec. 15. The Court considered that construing "judgment" so narrowly as to exclude such interlocutory orders would render the section ineffective.

  2. Application of section 545 (CPC) and concept of "execution"

    The Court held that the 1 July order, taken as a whole, involved matters for execution—particularly costs and practical steps required to clothe the Respondent with the character of executor (payment of stamp fees on probate and handing out probate). Thus the order could fall within sec. 545. Even if it did not, the Court emphasized an inherent power of a court to stay the drawing up or operation of its own orders when justice required it.

  3. Interference with the lower court's discretion

    The Court acknowledged that appellate interference with the exercise of judicial discretion by the court below should be cautious. Nevertheless, an appellate court can and sometimes must interfere. The Court observed that the Judge below appeared to have weighed primarily the potential loss to the Respondent from a stay, without sufficiently addressing the risk that the Appellant's successful appeal could be rendered futile. That omission meant interference by this Court was justified.

  4. Assessment of merits and risk of an infructuous appeal

    Weighing the factual position, the Court noted features adverse to the Respondent's claim to immediate control: the Respondent was the gomasta/manager of the testator, a Marwari and apparently a subject of the Bikaneer Raj rather than a British subject, was admittedly insolvent, and had been alleged to have disposed of the testator's money, securities and jewels (a denial by him was recorded). The Appellant asserted that the Respondent, if put in control of the estate, would quickly realize assets and possibly remove them, frustrating any effective relief on a successful appeal. The Respondent's countervailing claim—loss from being kept out of the estate and suspension of business—was acknowledged but the Court found the Appellant's fears to be well-founded overall and that there was a real danger of the appeal becoming infructuous unless execution were stayed.

  5. Invocation of established principle and formulation of appropriate relief

    The Court relied on the established English principle (as in Polini v. Grey and Wilson v. Church) and its recognition by the Privy Council (Maharani Inder Kumari; Mohesh Chandra Dhal) that where an appeal is bonâ fide and there is a real danger that the successful appellant's rights will be rendered meaningless if the fund is paid out, the court has jurisdiction to make interim orders to preserve the fund. Applying that principle, the Court concluded that probate should not be handed out and the Receiver should not be discharged, but that this relief should be granted subject to specific terms to protect all parties' interests.

  6. Terms imposed to balance interests

    The Court required the Appellant to undertake to expedite the appeal with all reasonable despatch and to furnish security for any damages which may accrue to the estate by reason of the stay (an offer of such security had been made). The Respondent was given liberty to apply to the Court below for payment out of the estate of reasonable sums in respect of costs already incurred and costs of the pending appeal, and to seek liberty to carry on the testator's business (subject to the Court below's view on terms and security). The Respondent also had liberty to apply to this Court if the appeal was not duly expedited or for advancing the hearing of the appeal when ready.

  7. Costs

    Although ordinarily the Appellant (who seeks a stay) might be ordered to pay costs for coming to the Court for a favour, the Court considered the contest between the parties and concluded it would be inequitable to apply that rule here. Therefore the costs of this application were ordered to be costs in the appeal.

Holding and Implications

APPEAL ALLOWED.

Direct effects and operative consequences (as set out by the Court):

  • Probate shall not be handed out to the Respondent pending the appeal.
  • The Receiver shall not be discharged pending the appeal.
  • The Appellant must:
    • Undertake to expedite the appeal with all reasonable despatch, and
    • Provide security for any damages which may accrue to the estate by reason of the stay (the Appellant had offered such security).
  • The Respondent is granted liberty to apply to the Court below for an order that the Receiver pay him such sum from the estate as that Court may deem reasonable in respect of costs already incurred and the costs of the pending appeal, on such terms (including security) as the Court below may direct.
  • The Respondent may apply to the Court below for liberty for the Receiver to carry on the testator's business if the Receiver has been ordered not to do so.
  • The Respondent may apply to this Court if the appeal is not duly expedited and may seek advancing of the hearing when ready.
  • The costs of this application in this Court were directed to be "costs in the appeal" (i.e., not ordered against the Appellant personally at this stage).

The Court expressly relied on established authority for the principle that courts may preserve property pending appeal where necessary to prevent a successful appeal from being rendered useless, and fashioned a conditional stay to preserve the parties' rights without granting unconditional possession to the Respondent.

    Mussamut Brij Coomaree v. Ramrick Dass

    Maclean, C.J:— This is an appeal from an order of Mr. Justice Stanley, dated the 4th July 1901, refusing to stay proceedings under his order of the 1st July 1901. By that order, after declaring in favour of the Will of one Luckminarain Bogla, set up by the present Respondent, the Court ordered that Probate of such Will be granted to the present Respondent as sole executor, and that the Receiver appointed in the suit be discharged, and ordered the present Appellant to pay to the Respondent a large portion of the costs of the litigation.

    On the 3rd July the present Appellant, who was the adoptire mother of the testator, presented her petition asking that the order directing the issue of the probate, the discharge of the Receiver and execution for costs might be stayed pending an appeal to this Court, and a rule was granted on that day limited to the first two objects. That rule was heard by Mr. Justice Stanley on the 4th July and discharged with costs. Hence the present appeal. The application for stay of execution as to the costs was, I understand, not pressed. The question in dispute between the parties is as to the validity of the above Will, and the amount involved in the dispute is very large, about 33 lacs of rupees.

    Under the Will the Respondent as residuary Legatee takes a very large interest estimated at 23 lacs. If the Will be found invalid, the Appellant, the adoptive mother of the testator, takes the estate as her adopted son's heiress. Mr. Justice Stanley, after a trial which lasted 33 days, found in favour of the Will, and an appeal from his decision has been presented and is pending by the present Appellant, the mother. When Mr. Justice Stanley made his order of the 4th July no appeal was pending, but one has since been filed A Receiver was appointed on the 26th Marph 1901.

    Various objections are raised by the present Respondent, the successful party in the Court below, to any stay of proceedings being granted. It is urged on his behalf (1) that no appeal lies to this Court from Mr. Justice Stanley's order of July 4th, (2) that the case does not fall within sec. 545 of the Code of Civil Procedure, (3) that the matter was one for the exercise of the judicial discretion of the Court below, and that this Court ought not to interfere with his decision in exercise of that discretion, (4) that on the merits no case has been made, out for the intervention of the Court, that no case has been shown that if the appeal, be successful, it will be infructuous by reason of the Respondent removing the assets out of the jurisdiction of this Court, that there is no danger of such a result, and that, having regard to the nature of the assets, a going banking and money-lending business as also that of a contractor for the supply of military stores, the continuance of the Receiver and the refusal to hand out the probate will inflict substantial loss on the Respondent. I will deal with these objections seriatim.

    I entertain no doubt but that an appeal lies. The appeal, if at all, can only lie under sec. 15 of the Letters Patent of 1865, and it is contended for the Respondent that the order of July 4th is not a “judgment” within the meaning of that section. We have been referred to many cases upon this point and to the definition of a “judgment” given by Sir Richard Couch in the well-known and often cited case of The Justices of the Peace for Calcutta v. The Oriental Gas Co.. That definition is now of some antiquity and is rapidly becoming, if it has not already become, almost classical. I have concurred and I still concur in that definition, but I do not say that it is exhaustive. It is perfectly true that the first order, that of July 1st, decided as between the parties, the question of the validity of the Will, and, as consequent, the discharge of the Receiver. But a new state of circumstances has arisen by reason of the appeal, as also a new and further question, whether, under such circumstances, the Respondent ought to be given the immediate control of this large estate. Upon this new and important question, Mr. Justice Stanley has exercised his judicial discretion, and has come to a decision of great importance, which, if it remain, may possibly render a successful appeal absolutely iufructuous. If the view urged by the Respondent be well-founded, viz., that it was the first order which decided the rights and liabilities of the parties, and that the order of July 4th virtually decided nothing as to such rights and liabilities, then it is difficult to appreciate how any order preliminary or interlocutory, could ever be the subject of an appeal under the section. But, obviously, this is not what Sir Richard Couch meant. In my opinion the order of July 4th has decided the very important question, very important in this particular case, that notwithstanding the appeal—for although such appeal had not actually been filed when Mr. Justice Stanley's judgment was delivered, it proceeds upon the footing that one was about to be filed immediately—the Respondent was entitled to the immediate control of the estate, a decision which, if the appeal be successful, would) as I have already said, possibly render it absolutely infructuous, and the case to my mind falls within the definition of a judgment given by Sir Richard Coucb, and is consistent with the observation of the Privy Council in the case of Hurrish Chunder Chowdhry v. Kali Sunderi Debi. I am but little disposed to place a narrow construction upon the expression “judgment” in sec. 15 of the Charter. I do not think it is necessary to refer to the other cases cited: none of them are directly in point.

    Since the case was argued we have been referred to the case of Srimanta Raja Yarlagadda Durga Prasada Nayadu v. Srimanta Raja Yailagadda Mallikarjuna Prasada Jyayadu which is directly in point. With all deference to the learned Judges who decided that case, I am unable to concur in their view and for the reasons I have stated above. It seems to me that the Judges have not quite apprehended the true effect of the Calcutta decision in Mohabir Prasad Singh v. Adhikari Kunwar which was in substance a question as to giving security for costs, not of staying execution, though that no doubt was the form the application took.

    I now pass to point No. 2. It is stated the case does not fall within sec. 545 of the Code: it is said there is nothing to execute. It is quite clear, that, as regards costs, there is a very substantial matter for execution and therefore the order of July 1st taken as a whole would be one where execution would or might be necessary. It is true that no stay as regards execution for costs is asked for now: but that cannot affect the question whether the order, as a whole, is not one where execution might be necessary. Be that, however, as it may be, I think that when there still remains something substantial to be done under a decree, before it can become thoroughly effectual, that decree has to be “executed” within the meaning of sec. 545. The order of July 1st, as it stood, would avail the Respondent but little for all practical purposes: two things have to be done under it, in order to finally clothe him with the character of executor: he has to pay the stamp fees on probate, and the Court has to hand out to him the probate itself. What is this if it is not carrying out, that is, executing the order? In my opinion the case falls within the section but even if it did not, I think there is an inherent power in the Court to stay under proper circumstances, the drawing up of its own orders, or to suspend their operation if the necessities of justice so require. In my opinion Mr. Justice Stanley had power to deal with the matter, and that does not appear to have been contested before him. There is nothing in the proceedings in the Court below to suggest that any objection was taken on this head.

    Then it is said that as the Judge below has exercised his judicial discretion in the matter, this Court ought not to interfere. I am entirely in accord with the view that an Appellate Court ought to be extremely chary of interfering in matters dependant upon the exercise of the judicial discretion of the Court below, but, of course, it can interfere and sometimes has to interfere. I do not know that this point is of much practical importance, for now that the appeal has been filed the Appellant could make a new and substantive application under sec. 545 as in fact she has now done. But, apart from this, the judgment of the lower Court seems to intimate that, whilst the learned Judge himself would not take the responsibility of staying execution of the’ decree, he was desirous that the opinion of this Court should be taken in the matter, and he suspended the operation of his order of July 1st for a fortnight for that purpose. But, in my opinion, upon the question of interfering with the discretion of the Court below, the judgment is fairly open to the criticism that, in exercising that discretion, the learned Judge has thought only of the loss, by staying execution, to the Respondent, and has not considered the danger of the Appellant losing the fruits of her appeal, if successful. This, to my mind, is a most important feature in the case, and ought to have been well and carefully weighed. Whilst giving, then, all due consideration to the views of the Court below, I do not think there is anything to prevent our interfering in the matter, if we think the facts warrant such interference.

    Lastly as to the merits. No doubt the Respondent has got a decree in his favour, based, it is said, upon a strongly expressed judgment. He is entitled to rely upon this and to throw the onus on the Appellant of satisfying us, why he should be deprived of the immediate fruits of his victory. But the position of the Respondent is not, for present purposes, a very strong one. He was the gomasta of the testator, apparently his managing man: he is a Marwari, and, so far as I can learn, not a British subject, but a subject of the Bikaneer Raj, and moreover, he is admittedly insolvent, and has no meaus with which to discharge the insolvency proceedings, save out of the estate, the subject-matter of this litigation. There is evidence too, that, immediately after the testator's death, he took the earliest opportunity of disposing of the testator's money securities and jewels and other property, though this is denied by him. But apart from his interest in the testator's estate, it is clear that the Respondent is a person of no means, and in embarrassed circumstances, and the Appellant says that if he is allowed to get hold of this estate, he will probably realize everything he can, and as quickly as he can, and then go off to Bikaneer, and that, if she is successful, her victory will be purely a barren one. On the other hand the Respondent says that, after a long trial, the Will has been found to be valid, that the bulk of the estate is consequently his; that it is very hard that he should be kept out of his money, and that, as the testator's businesses are not being carried on, he is suffering very great, and, as he says, irreparable loss. We must look at both sides of the question.

    I am satisfied, on the whole that, having regard to the position of the Respondent, the Appellant has good ground for her fears, and that there is a danger that, unless execution be stayed, her appeal which is undoubtedly a bonâ fide one, if successful, is likely to be infructuous. There can be no doubt that substantial loss may result to the Appellant unless an order is made staying execution. Then what ought we to do under these circumstances 1 In my opinion we ought to see that the property is preserved pending the litigation, and that we may safely follow the principle laid down in the English Courts in such cases as Polini v. Grey and Wilson v. Church, a principle which is fully recognized by the Judicial Committee of the Privy Council in the cases of Maharani Inder Kumari v. Maharani Jaipal Kumari and Mohesh Chandra Dhal v. Sutrughan Dhal. It is perfectly true that the facts of these particular cases were different from those in the present, but the underlying principle is the same. In Polini v. Grey Sir George Jessel said “the Plaintiffs fail in the Court of first instance and in the Court of second instance, but are about, bonâ fide, to prosecute an appeal to the Court of ultimate resort. The Plaintiffs allege that appeal will be nugatory if the fund is paid out to the Defendants, and that if the Plaintiffs should ultimately succeed in the House of Lords, that success will be useless to them unless an interim order is made for preserving the fund. I say they so contend and, assuming that contention to be correct in fact, the question is, whether this Court has jurisdiction to prevent such a consequence. It appears to me on principle that the Court ought to possess that jurisdiction, because the principle which underlies all orders for the preservation of property pending litigation is this, that the successful party in the litigation, that is, the ultimately successful party is to reap the fruits of that litigation, and not obtain merely a barren success,” and at p. 445 the learned Judge continues: “The Court having arrived at the conclusion that the appeal is bonâ fide, that she intends to prosecute it with a view to determine her rights, and to get a final decision on those rights, and the Court, I assume (for I do not know the facts) being satisfied that there would be danger if it were not to interfere for the interim protection of the fund, of its not being forthcoming if she succeeded in the House of Lords, the question is, is it not the duty of this Court to say that the fund ought to be preserved for the successful party?” And Lord Justice Cotton expresses in effect the same view.

    In my opinion, then, the probate ought not to be handed out to the Respondent, nor ought the Receiver to be discharged. But this must be done on terms. The Appellant must undertake to expedite the appeal with all reasonable despatch, and she must give, as she has offered, security for any damages which may accrue to the testator's estate by reason of this stay. The Respondent will have liberty to apply to the Court below that the Receiver may be ordered to pay him out of the estate such sum as that Court may deem reasonable in respect of the costs he has already incurred in the litigation, as also those of the pending appeal, and upon such terms as to security, or otherwise, as it may think proper, and also to apply to the Court if he so desire, that the Receiver may be at liberty to carry on the testator's business which apparently he has been ordered by the Court not to do. He may also have liberty to apply to this Court, if the appeal be not duly expedited, and also as to advancing the hearing of the appeal when it is ready for hearing. As regards the costs of this appeal,.though ordinarily the Appellant should pay them as he comes to the Court for a favour, as every point has been so hotly contested by the Respondent who has failed throughout, it would be inequitable to apply that rule in the present case, and the costs will be costs in the appeal.

    Banerjee, J.:— I am entirely of the same opinion.

    Hill, J.:— I am also of the same opinion.

    K.S.B
    Appeal allowed.

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    Comments

    Mussamut Brij Coomaree v. Ramrick Dass
    (Jul 23, 1901)