Calcutta High Court
Hindustan Motors Ltd vs National Insurance Co. Ltd on 25 February, 2009
Author: Surinder Singh Nijjar
Bench: Surinder Singh Nijjar, Indira Banerjee, Aniruddha Bose
APD No. 669 of 2003
CS No. 577 of 1987
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
ORIGINAL SIDE
HINDUSTAN MOTORS LTD.
Versus
NATIONAL INSURANCE CO. LTD.
For appellant : Mr. Anindya Mitra, Sr. Advocate with
Mr. Abhrajit Mitra, Mr. R.N. Jhunjhunwalla,
Mr. Sakya Sen and Mr. J.B. Parda, Advocates.
For Respondent : Mr. Soumen Sen with Mr. S.K. Das and
Ms. Bagchi, Advocates.
BEFORE:
The Hon'ble CHIEF JUSTICE SURINDER SINGH NIJJAR
AND
The Hon'ble JUSTICE INDIRA BANERJEE
AND
The Hon'ble JUSTICE ANIRUDDHA BOSE
Date : 25th February, 2009.
The Court : We have heard the learned counsel for the parties. We have
perused the order of reference. A perusal of the reference order would tend to
show that the Division Bench considered the entire matter on merits. The Division
Bench also specifically took note of the submissions made by the learned counsel
for the parties. The Division Bench also expressed its opinion on the legal issues
that have been raised by the writ petitioner as well as the respondent. Ultimately
the Division Bench examined the propriety of the judgment of the learned Single
Judge which was in appeal and, thereafter, observed as follows:
"Considering the above, we feel that the appeal should be allowed. However,
the appellant must be penalized for their latches and the defendant should
be compensated with costs which is assessed by us at Rupees fifty thousand."
After thus expressing a final opinion the Division Bench proceeded to record
as follows:
"We, however, feel that the matter should be referred to a larger Bench as
the judgment and order of the learned Single Judge was followed by two other
Division Bench decisions in which His Lordship was a party being APO no. 16
of 2008 [Steel Authority of India vs. M. M. Company Ltd. & Anr.] dated
February 20, 2008 and Srikant Mantri & Ors. Vs. Radheshyam Chotia & Ors
(supra).
Let this appeal be placed before the Hon'ble Chief Justice for constitution
of a larger Bench to decide whether the defendant had acquired any valuable
right due to delayed service of the writ of summons and whether the Court in
the given circumstances was entitled to condone such delay."
Mr. Anindya Mitra, learned senior counsel with Mr. Abhrajit Mitra, submits
that the appeal having been allowed by the Division Bench the reference was
clearly incompetent. On the other hand, Mr. Soumen Sen, learned Counsel appearing
on behalf of the respondent submits that the opinions expressed by the Division
Bench are only prima-facie and have been recorded for the purposes of making a
reference. They cannot be treated as a final expression of opinion.
We have considered the submissions made by the learned counsel for the
parties.
We are of the considered opinion that there is merit in the submissions
made by Mr. Anindya Mitra, learned senior counsel. As noticed above, the Division
Bench has considered the entire factual aspects as well as the legal issues
involved in the entire appeal. The Division Bench has even considered the
propriety of the judgment rendered by the learned Single Judge. Thereafter, in
the closing stage of the judgment the Division Bench clearly observed that the
appeal should be allowed. Not only this, the Division Bench proceeded to hold the
appellant responsible for the latches and imposed costs assessed at Rs. 50,000/-.
This apart, after making the reference as noticed by us above, the Division Bench
clearly states, "The appeal is, however, disposed of at our end on the above
terms".
We may notice here some of the observations made by the Division Bench,
which would clearly indicate that the Division Bench has decided the entire issue
involved in the Appeal. The Division Bench observes as follows:
"Mr. Sen heavily relied on the decisions of the learned Single Judge in the
case of State Bank of India vs. Tarit Appliances Private Limited & Ors.
(supra). The said decision was based upon the Allahabad High Court judgment
which was overruled by the Apex Court referred to above. Mr. Sen relied on
the Supreme Court decision in the case of Salil Dutta (supra). In the said
case the Ejectment suit filed by the plaintiff came up for hearing after
seven years of institution. Before the final hearing the defendant filed
two interlocutory applications. Those two applications were directed to be
heard at the time of final hearing. The defendant took a plea that he was
not present as his advocate advised him that he need not be present at the
hearing as before the final hearing those two pending applications would
have to be disposed of. When the matter came up for hearing neither the
advocate nor the client appeared before the Court and suffered ex parte
decree. In this back drop, the Apex Court observed that it would not be
fair to shift the blame on the advocate solely. The Apex Court observed
that by engaging advocate litigant could not claim absolute immu8nity from
the latches on their part. The Apex Court after considering the situation
involved in the said observed, "putting the entire blame upon the advocate and
trying to make it out as if they were totally unaware of the nature or significance of the
proceedings is a theory which cannot be accepted and ought not to have been accepted".
Relying upon this decision Mr. Sen contended that the plea of advocate's
latches could not give immunity to the plaintiff from their latches. We are
unable to accept such contention. In the present case, the suit was filed
in 1987. The parties initially tried for an out of court settlement.
However, the appellant could not demonstrate any such evidence after one or
two years of institution. The writ petition was filed in 1992 when the
appellant made a composite grievance including their claim made in the suit.
In 2001 when the writ petition was heard the learned Judge observed that the
claim would be considered in the civil suit. Hence, the stand of the
appellant in their writ petition that they would withdraw the suit in case
the writ petition was considered by the court in its entirety became
insignificant. It could thus not be said that the appellant was not in the
know that the steps were not being taken by their advocate in the suit.
From the applications for extension of the returnable date it would be clear
that such fact would be evident. Hence, we are of the view that it was not
a case of latches. It was a strategy and/or a decision taken by the
appellant that they would not take any step in the suit as according to them
the suit had became infructuous (Emphasis Supplied). The respondent also
did not take any step for dismissal of the suit earlier. They were all
along aware of the pendency of the suit, at least from 1992 when the writ
petition was filed. When the learned Single Judge observed in His
Lordship's judgment that the claim would be considered in the civil suit the
respondent did not make any grievance against that part of the order. On a
plain reading of the judgment and order of the writ court it appears that
the learned Judge rather gave implied liberty to the plaintiff/appellant to
proceed with their claim made in their writ petition in the pending suit.
Hence, in our view, the latches, if any, prior to 2001 stood waived; firstly
because of the implied liberty granted by His Lordship; secondly because of
the respondents not taking any contemporaneous step either for dismissal of
the suit or for cancellation of the liberty so granted by His Lordship. The
learned Single Judge, however, did not approach the problem from this
angle." (Emphasis Supplied).
Thereafter the Division Bench proceeds to analyse the judgment of the
Learned Single Judge under appeal. Ultimately, relying on judgments of the
Supreme Court, in the case of Salem Advocate Bar Association, Tamil Nadu vs. Union
of India [AIR 2003 SC 189] and Uday Shankar Triyar vs. Ram Kalewar Prasad Singh &
Anr. [AIR 2006 SC 269, the Division Bench frames the Question of law, and proceeds
to answer the same, in the following words:
"Question now remains, if the Court can dismiss a suit for latches on the
part of the plaintiff in taking steps in the suit, can the Court Condone
such latches being satisfied with the cause which prevented the plaintiff
from taking any such steps? Our answer would be 'yes' (Emphasis Supplied).
In this regard let us consider the latest Apex Court decision in the case of
Salem Bar Association (supra). In the said case the Apex Court considered
the provision of Order 7 Rule 11 Clause (e) and (r). Such provision was
incorporated enabling the Court to reject a plaint when it fails to comply
with the provisions of Order 7 Rule 9. The Apex Court observed that such
was the enabling provision and the Court should ordinarily give an
opportunity for rectifying such defect meaning thereby, for procedural
latches the Court should not dismiss the suit as a matter of course without
giving an opportunity for curing the defect. In a recent decision of the
Apex Court in the case of Uday Shankar Triyar (supra) the Apex Court
considered the provision of Order 41 Rule 1 which obligates the appellant's
advocate to sign the Memorandum. The Apex Court observed that "non-
compliance did not entail automatic rejection without giving an opportunity
to rectify such defect".
Considering the Apex Court decisions referred to above we are of the view
that when the Court has power to dismiss the suit for procedural
irregularity the Court should have equal power to condone such delay by
giving opportunity to the plaintiff for curing such defect. The basic
concept, in our view, is that procedural latches should not take away the
substantive right of a litigant, be it his own lathes or be it latches on
the part of his advocate."
Having thus based its conclusions on the judgments of the Supreme Court, the
Division Bench was bound to follow the same. That seems to have been the course
adopted. At that stage the appeal stood allowed. This is evident from the
imposition of costs on the appellant. The reference seems to be an after thought.
.
The procedure adopted by the Division Bench seems to be contrary to the observations of the Supreme Court in the case of Lala Shri Bhagwan wherein the Chief Justice Gajendra Gadkar has observed as follows:
"it is hardly necessary to emphasise that considerations of judicial propriety and decorum require that if a learned Single Judge hearing mater 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 reconsidered, 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 papers before the Chief Justice to enable him to constitute a larger Bench to examine the question. That is the proper and traditional way to deal with such matter and it is founded on healthy principles of judicial decorum and propriety. It is to be regretted that the learned Judge departed from the traditional way in the present case and chose to examine the question himself."
These observations would clearly tend to show that the Division Bench in making a reference to a Full Bench is required only to express its prima facie/tentative opinion as to why it would not be possible to follow the earlier Division Benches. The reference has to be at a stage when, a Bench is of coordinate strength, is inclined to take the view that the earlier decision needs to be reconsidered. It is not permissible to express a final opinion; take a decision on the appeal; and thereafter make a reference to the Larger Bench.
Once the Bench expresses the final opinion, it would have to be characterized as a judgment. This view of ours will find support in the ratio of law in the case of Shah Babulal Khimji vs. Jayaben [AIR 1981 SC 1786] wherein the Supreme Court considered and laid down the tests to determine whether an order of the Trial Judge could be treated as a judgment. We may with advantage quote here some of the observations of the Supreme Court in para 113 of the judgment, as follows:
"113. ... ... At the same time, it cannot be said that any order passed by a trial Judge would amount to a judgment; otherwise there will be no end to the number of orders which would be appealable under the Letters Patent. It seems to us that the word 'judgment' has undoubtedly a concept of finality in a broader and not a narrower sense. In other words, a judgment can be of three kinds :-
(1) a final judgment - A judgment which decides all the questions or issues in controversy so far as the trial Judge is concerned and leaves, nothing else to be decided. This would mean that by virtue of the judgment, the suit or action brought by the plaintiff is dismissed or decreed in part or in full. Such an order passed by the trial Judge indisputably and unquestionably is a judgment within the meaning of the Letters Patent and even amounts to a decree so that an appeal would lie from such a judgment to a Division Bench.
(2) A preliminary judgment - This kind of a judgment may take two forms - (a) where the trial Judge by an order dismisses the suit without going into the merits of the suit but only on a preliminary objection raised by the defendant or the party opposing on the ground that the suit is not maintainable. Here also as the suit is finally decided one way or the other, the order passed by the trial Judge would be a judgment finally deciding the cause so far as the trial Judge is concerned and, therefore, appealable to the larger Bench. (b) Another shape which a preliminary judgment may take is that where the trial Judge passes an order after hearing the preliminary objections raised by the defendant relating to maintainability of the suit, e.g., bar of jurisdiction, res judicata, a manifest defect in the suit, absence of notice under Sec. 80 and the like, and these objections are decided by the trial Judge against the defendant, the suit is not terminated but continues and has to be tried on merits but the order of the trial Judge rejecting the objections doubtless adversely affects a valuable right of the defendant who, if his objections are valid, is entitled to get the suit dismissed on preliminary grounds. Thus, such an order even though it keeps the suit alive, undoubtedly decides an important aspect of the trial which affects a vital right of the defendant and must, therefore, be construed to be a judgment so as to be appealable to a larger Bench.
(3) Intermediary or interlocutory judgment - Most of the interlocutory orders which contain the quality of finality are clearly specified in clauses (a) to (w) of Order 43, Rule 1 and have already been held by us to be judgments within the meaning of the Letters Patent and, therefore, appealable. ... ... ...."
The aforesaid observations of the Supreme Court have been reiterated by the Supreme Court in the case of Liverpool & London S.P. & I. Association Ltd. vs. M.V.Sea Success I & Anr. [(2004) 9 SCC 512] in the following words:
"125. What would be a judgment is stated in Shah Babulal Khimji [(1872) 8 Beng LR 433 : 17 Suth WR 364] as under : (SCC p. 45, paras 80-81) "80. ... 'We think that "judgment" in clause 15 means a decision which affects the merits of the question between the parties by determining some right or liability. It may be either final, or preliminary, or interlocutory, the difference between them being that a final judgment determines the whole cause or suit, and a preliminary or interlocutory judgment determines only a part of it, leaving other matters to be determined.'
81. An analysis of the observations of the Chief Justice would reveal that the following tests were laid down by him in order to decide whether or not an order passed by the trial Judge would be a judgment :
(1) a decision which affects the merits of the question between the parties;
(2) by determining some right or liability;
(3) the order determining the right or liability may be final, preliminary or interlocutory, but the determination must be final or one which decides even a part of the controversy finally leaving other matters to be decided later."
This ratio has been reiterated by the Supreme Court in the case of Sanjay Singh & Anr Vs. U.P.Public Service Commission & Anr. (2007) 3 SCC 720 in the following words:
"9. In regard to decisions of civil courts in suits governed by the Civil Procedure Code or appeals therefrom, the term "judgment" refers to the grounds of a decree or order, "decree" refers to the formal expression of an adjudication in a suit and "order" refers to formal expression of any decision of a civil court which is not a decree. In regard to the decisions of the High Court and the Supreme Court in writ jurisdiction,, the term "judgment" is normally used to refer to the "Judgment and order", that is the grounds for the decision and the formal expression of the decision........"
"10. The contention of the Commission also overlooks the fundamental difference between challenge to the final order forming part of the judgment and challenge to the ratio decidendi of the judgment. Broadly speaking, every judgment of superior courts has three segments, namely, (i) the facts and the point at issue; (ii) the reasons for the decision; and (iii) the final order containing the decision. ...."
In our opinion, a bare perusal of the extracts of the reference order reproduced above, clearly shows that the Division Bench has marshalled the relevant facts; delineated the legal issues and thereafter stated the conclusion. Thus, clearly the Division Bench has delivered a judgment on the merits of the appeal.
In such circumstances, we are constrained to observe that the present reference is incompetent.
We, however, hasten to add that we have not considered the issues raised by the parties before the Division Bench on merits. Undoubtedly, the same would be raised by the parties in appropriate proceedings. We, therefore, make it clear that the observations made by us hereinabove have been made only for the purpose of disposal of the reference.
There will be no order as to costs.
Urgent Photostat certified copy of this order be made available to the parties, if applied for, upon compliance of usual formalities.
(SURINDER SINGH NIJJAR, C.J.) (INDIRA BANERJEE, J.) (ANIRUDDHA BOSE, J.) .