Calcutta High Court
Supratik Ghosh & Anr. vs M/S. Pasari Housing Development Pvt. ... on 31 January, 2000
Equivalent citations: (2000)3CALLT97(HC)
JUDGMENT D.P. Kundu, J.
1. On the Joint prayer of both the parties the appeal and the application for stay have been heard together.
2. This appeal is arising out of an order No. 2 dated 22.9.1999 passed by Shri P.S. Dutta, learned District Judge-In-Charge, Allpure in Title Suit No. 132 of 1999, in connection with Ptn. No, ED-5585/99, granting an Interim order of Injunction as prayed for till 11.1.2000 on the condition that the plaintiff/respondents should comply with the provisions of Clauses (a) and (b) of the proviso to Rule 3 of order 39 of CPC.
3. The respondents. In Title Suit No. 132 of 1999 preferred an application under section 9 of the Arbitration and conciliation Act, 1996 (hereinafter referred to as the Act of 1996). In the said application the respondents prayed for the following reliefs:
"Your petitioner, therefore, humbly prays that Your Honour may graciously be pleased to pass an order of Injunction restraining the respondents their agents, servants, assigns from taking any step or further steps in breach of as in derogation of the agreement dated 3rd September, 1993 and/or in furtherance of the purported Notice dated 20th September, 1999 and/or in any manner that would amount to interfering with the petitioner's possession, occupation and user of the premises No. 16A, Curusaday Road, Calcutta-700019, and/or in (Illegible) transferring and/or disposing of and/ or (Illegible) by third party's interest in the said property And pass such ad-interim orders in terms of prayer above.
And pass such Further or other order or orders and/or direction or directions as your Honour may deem fit and proper".
4, The main grounds of attack of the appellants in connection with the aforesaid interim order are as follows:
(i) The Interim order has been passed ex parte upon an application under section 9 of the Act of 1996, in violation of the requisite conditions precedent contained in the provisions of Order 39 Rule 3 proviso of the Code of Civil Procedure (for short CPC).
(ii) CPC would govern the proceeding under section 9 of the Act of 1996 in view of conditions laid down in section 9 Itself of the Act of 1996. Section 9 of the Act of 1996 reads as follows :
"9. Interim measures by Court--A party may. before or during arbitral proceedings or at any time after making of the arbitral award but before it is enforced in accordance with section 36, apply to a Court :--
(I) for the appointment of a guardian for a minor or person of unsound mind for the purposes of arbitral proceedings; or (II) for an Interim measure of protection in respect of any of the following matters, namely :--
(a) the preservation, Interim custody or sale of any goods which are the subject-matter of the arbitration agreement;
(b) securing the amount in dispute in arbitration;
(c) the detention, preservation or inspection of any properly or thing which is the subject matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence;
(d) interim Injunction or the appointment of a receiver;
(e) such other Interim measure of protection as may appear to the Court to be just and convenient, and the Court shall have the same power for making orders as it has for the purpose of and in relation to any proceedings before it."
5. section 2(e) of the Act of 1996 reads as follows :
"(e) "Court" means the principal Civil Court of original Jurisdiction in a district, and Includes the High Court in exercise of Its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not Include any Civil Court of a grade Inferior to such principal Civil Court, or any Court of Small Causes:"
6. It was argued that the term "Court" in section 9 of the Act of 1996 means the Principal Civil Court of Original Jurisdictlon in a district. Section 2(4) of CPC defined the term "district" as follows :
"(4) "district" means the local limits of the Jurisdiction of a principal Civil Court of Original Jurisdiction (hereinafter called a "District Court"), and Includes the local limits of the ordinary original civil Jurisdiction of a High Court;"
7. Thus in view of section 2(4) of CPC principal Civil Court of original jurisdiction which is known as District Court shall have the territorial jurisdiction over a district as defined in section 2(4) of CPC section 2(e) of the Act of 1996 when read together with section 2(4) of CPC it makes abundantly clear that, for the purpose of this case, the term "Court" as used in section 9 of the Act of 1996 is nothing but a District Court within the meaning of the provisions of CPC. It is apparent from the lines emphasised by me in section 9 of the Act of 1996 that the District Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before It. The learned Advocate for the appellants drew the attention of the Court to section 141 of CPC wherein it has been laid down that the procedure provided in CPC in regard to suit--'.....shall be followed, as far as it can be made applicable, in all proceedings in any Courts of Civil Jurisdiction". The learned Advocate for the appellants submitted that all the aforesaid provisions go to show that while dealing with an application under section 9 of the Act of 1996 a District Court is bound to act in terms of Order 39 Rule 3 of CPC.
8. The learned Advocate for the respondents argued the following points :
(1) The case under section 9 of the Act of 1996 is not at all a case under Order 39 Rule 3 of C.P.C.. According to the learned Advocate for the respondents the present case squarely comes under section 9 of the Act of 1996 and the Court is bound to act in accordance with the said Act of 1996. It has been submitted that the Trial Court rightly passed the order in term of section 9 of the Act of 1996.
(2) Assuming Order 39 Rule 3 of CPC is applicable in the facts and circumstances of the present case then also in substance the requirements of Order 39 Rule 3 of CPC have been complied with.
(3) Assuming that the test laid down by Supreme Court in Chadha's case is applicable then also the same will not render the order under appeal a nullity : non-est. (4) Assuming the aforesaid three points failed then also the present Division Bench can, under the provisions relating to appeal under CPC as an Appellate Court has over all Jurisdiction to decide the matter in Issue and should decide the same.
(5) Since the Interim order of Injunction which is subject matter of the present appeal has already been extended, and since such extension has been made after hearing all the parlies, the order of extension not being a subject-matter of the challenge the extension order remains good and the original order which is the subject matter of the challenge has merged with the extension order. It has been argued that since the extension order has not been challenged the original order which is subject-matter of the challenge now cannot be touched by this Court because the original order has merged with the extension order.
9. The main point which falls for determination in this case is whether Order 39 Rule 3 of CPC has any manner of application in determination of an application under section 9 of the Act of 1996 and if not then whether the requirements of section 9 of the Act of 1996 have been complied with while issuing the Interim order under appeal.
10. After perusing section 9 of the Act of 1996, section 2(e) of the Act of 1996, section 141 of CPC and section 2(4) of CPC I am of the view that the learned Advocate for the appellants was right in arguing that Order 39 Rule 3 of CPC has full application in respect of an application under section 9 of the Act of 1996. Section 9 of the Act of 1996 clearly shows that the Court is competent to deal with an application under section 9 of the Act of 1996 shall have the same power of making orders as it has for the purpose of, and in relation to, any proceedings before it. It goes without saying that the term "Court" as mentioned in section 9 of the Act of 1996 clearly means, amongst others, principal Civil Court of original Jurisdiction in a district, as laid down in section 2(e) of the Act of 1996. Section 2(4) of CPC clearly laid down that the local limits of the jurisdiction of a principal Civil Court of original jurisdiction is termed as "district" and the said principal Civil Court of original jurisdiction is called as "District Court". Section 141 of CPC makes it abundantly clear that the procedure provided in CPC in regard to suit shall be followed as far as it can be made applicable in all proceedings in any Court of Civil Jurisdiction. A bare look at the order under challenge shows that the case under section 9 of the Act of 1996 which was instituted by the respondents was registered in the Court of District Judge-in-charge, Alipur. Therefore, in view of the discussions made hereinabove I am of the view that the Order 39 Rule 3 of CPC has full application in respect of any case under section 9 of the Act of 1996. The learned Advocate for the respondents argued that the Act of 1996 is a Special Law and CPC is nothing but a general law, therefore, the provisions contained in the Special Law shall prevail over the provisions contained in the general law. But these arguments of the learned Advocate for the respondents are fallacious because section 9 itself, without any ambiguity, laid down-- "...... and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it". The term "Court" has been defined in section 2(e) of the Act of 1996 which means the principal Civil Court of original Jurisdiction in a district. Therefore, I am of the view, that the Act of 1996 itself makes it clear that in a proceeding under section 9 of the Act of 1996 the provisions of CPC shall apply. Accordingly I hold that in any proceeding under section 9 of the Act of 1996 the provisions of CPC shall apply. It is Important to note that even the order under challenge in the appeal, the District Judge-in-charge. Alipur directed the plaintiff to comply with the provisions of Clauses (a) and (b) of the proviso to Rule (3) of Order 39 of CPC. And this part of the direction of the Court has not been challenged by the respondents. Thus it is abundantly clear and beyond any pale of doubt that the Trial Court Itself took recourse to Order 39 Rule 3 of CPC. The respondents accepted the said view of the learned Trial Court by not challenging that part of the order which directed the respondents to comply with the provisions of Clauses (a) and (b) of Proviso to Rule (3) of Order 39.
11. Having arrived at a conclusion that in a proceeding under section 9 of the Act of 1996, the provisions of CPC shall apply, now it has to be considered whether in the instant case the provisions contained in proviso to Rule (3) of Order 39 of CPC have been violated by the Trial Court and if the result is in affirmative then what is the consequence, thereof. Rule 3 of Order 39 of CPC is quoted herein below :
"3. Before granting Injunction, Court to direct notice to opposite party.--The Court shall in all cases, except where it appears that the object of granting the injunction would be defeated by the delay, before granting an injunction direct notice of the application for the same to be given to the opposite party :
Provided that, where it is proposed to grant an Injunction without giving notice of the application to the opposite party, the Court shall record the reasons for Its opinion that the object of granting the injunction would be defeated by delay, and require the applicant-
(a) to deliver to the opposite party, or to send to him by registered post, immediately after the order granting the Injunction has been made, a copy of the application for injunction together with-
(i) a copy of the affidavit filed in support of the application:
(ii) a copy of the plaint; and (iii) copies of documents on which the applicant relies, and
(b) to file, on the day on which such injunction is granted or on the day Immediately following that day, an affidavit stating that the copies aforesaid have been so delivered or sent."
12. A bare reading of Rule 3 shows that the Court shall in all cases before granting an injunction, direct notice of the application for the same to be given to the opposite party. But one exception has been made to this rule. The exception is where it appears to the Court that the object of granting the injunction would be defeated by the delay, the Court may propose to grant an Injunction without giving notice of the application to the opposite party and in such event the Court shall record the reasons for Its opinion that the object of granting the Injunction would be defeated by delay. The Court shall require the applicant to act terms of Clauses (a) and (b) of the proviso to Rule 3 of Order 39 of CPC in my opinion, under Rule 3 of Order 39 unless a matter comes under the exception clause Court has no Jurisdiction to grant or Issue interim order without serving notice of the application upon the opposite party.
13. What is the duly of the Court if it wants to take recourse to exception clause? in Chadha's case (supra) Supreme Court after elaborately considering the various aspects of the matter in paragraphs 34 and 35 of the reported decision held as follows :
"34. The Imperative nature of the proviso has to be judged in the context of Rule 3 of Order 39 of the Code. Before the proviso aforesaid was Introduced, Rule 3 said "the Court shall in all cases, except where it appears that the object of granting the injunction would be defeated by the delay, before granting an Injunction, direct notice of the application for the same to be given to the opposite-party". The proviso was Introduced to provide a condition, where Court proposes to grant an Injunction without giving notice of the application to the opposite-party, being of the opinion that the object of granting Injunction Itself shall be defeated by delay. The condition so Introduced is that the Court "shall record the reasons" why an ex parte order of Injunction was being passed in the Tacts and circumstances of a particular case. In this background, the requirement for recording the reasons for grant of ex parte Injunc tion, cannot be held to be a mere formality. This requirement is consistent with the principle, that a party to a suit, who is being restrained from exercising a right which such party claims to exercise either under a statute or under the common law, must be informed why instead of following the requirement of Rule 3, the procedure prescribed under the proviso has been followed. The party which Invokes the jurisdiction of the Court for grant of an order of restraint against a party, without affording an opportunity to him of being heard, must satisfy the Court about the gravity of the situation and Court has to consider briefly these factors in the ex parte order. We are quite conscious of the fact that there are other statutes which contain similar provisions requiring the Court or the authority concerned to record reasons before exercising power vested in them. In respect of some of such provisions it has been held that they are required to be complied with but non-compliance therewith will not vitiate the order so passed. But same cannot be said in respect of the proviso to Rule 3 of Order 39. The Parliament has prescribed a particular procedure for passing of an order of Injunction without notice to the other side, under exceptional circumstances. Such ex parte orders have far-reaching effect, as such a condition has been Imposed that Court must record reasons before passing such order. If it is held that the compliance with the proviso aforesaid is optional and not obligatory, then the introduction of the proviso .by the Parliament shall be a futile exercise and that part of Rule 3 will be a surplusage for all practical purposes. Proviso to Rule 3 of Order 39 of the Code.
attracts the principle, that if a statute requires a thing to be done in {^particular manner. It should be done in that manner or not all. This principle was approved and accepted in well-known cases of Taylor v.
Taylor and Nazir Ahmed v. Emperor. This Court has also expressed the same view in respect of procedural requirement of the Bombay Tenancy and Agricultural Lands Act in the case of Ramchandra Keshav Adle v.
Govind Jott Chavare."
"35. As such whenever a Court considers it necessary in the facts and circumstances of a particular case to pass an order of InjunctlotvwUhout notice to other side, it must record the.reasons for doing so and should Jake Into consideration, while passing an order of Injunction, all relevant factors, including as to how the object of granting Injunction itself shall be defeated if an ex parte order is not passed. But any such ex parte order should be in force up to a particular date before which the plaintiff should be required to serve the notice on the defendant concerned. In the Supreme Court Practice 1993, Vol. 1. at page 514, reference has been made to the views of the English Courts saying:
"Ex parte Injunctions are for cases of real urgency where there has been a true impossibility of giving notice of motion .........
14. An ex parte injunction should generally be until a certain day, usually the next motion day ........."
Supreme Court made it clear that the proviso was introduced in Rule 3 of Order 39 to provide a condition, where Court proposes to grant an Injunction without giving notice of the application to the opposite party, being of the opinion that the object of granting Injunction Itself shall be defeated by delay. Supreme Court held that condition so Introduced is that the Court 'shall record the reasons" why an ex parte order of the Injunction was being passed in the facts and circumstances of a particular case. The Court held that in this back-ground, the requirements of recording the reasons for grant of ex parte injunction, cannot be held to be a mere formality. The Court held that this requirement is consistent with the principle, that a party to a suit, who is being restrained from exercising a right which such party claims exercise either under a statute or under the common law, must be informed whey Instead of following the requirements of Rule 3, the procedure prescribed under the proviso has been followed. The Court held that the party which jnvokes the Jurisdiction of the Court for grant of an order of restraint against a party, without affording an opportunity to him of being heard, must satisfy the Court, about the gravity of the situation and Court has to consider briefly these factors in the ex parte order. The Court held that the parliament has prescribed a particular procedure for passing of an order of injunction without notice to the other side, under exceptional circumstances and such ex parte order may have a far-reaching effect, as such the condition has been Imposed that Court must record reasons before passing such order. The Court reiterated the golden rule of interpretation that when a particular procedure has been laid down to do a certain thing in a certain way then such thing should be done according to that procedure or not at all
15. Chadha's case (supra) was considered in Morgan Stanley Mutual Fund v. Kartick Das reported at of the Reported decision in Morgan Standley case (supra) Supreme Court laid down the factors which should weigh with the Court in the grant of ex parte injunction. The said paragraph 36 is quoted herelnbelow :
"As a principle, ex parte Injunction could be granted only under exceptional circumstances. The factors which should weigh with the Court in the grant of ex parte Injunction are-
(a) whether irreparable or serious mischief will ensure to the plaintiff;
(b) whether the refusal of ex parte injunction would involve greater injunctive than the grant of it would Involve;
(c) the Court will also consider the time at which the plaintiff first had notice of the act complained so that the making of Improper order against a party in his absence is prevented;
(d) the Court will consider whether the plaintiff had acquiesced for sometime and in such circumstances it will not grant ex parte injunction;
(e) the Court would expect a party applying for ex parte injunction to show utmost good faith in making the application;
(f) even if granted, the ex parte Injunction would be for a limited period of time;
(g) General principles like prlma facie case, balance of convenience and Irreparable loss would also be considered by the Court."
16. In view of the discussions made hereinabove I am of the view, that if the Court falls to record reasons as contemplated by proviso to Rule 3 of Order 39 of CPC then non-recording of such reasons goes to the very root of the matter, making the order Itself null and void because the Court lacks inherent Jurisdiction to pass an ex parte order without recording a reason. That is why I put stress upon the words "or not at all".
17. In M.I. Sethi v. R.P, Kapur. reported at Supreme Court observed :
"The 'Jurisdiction' is a verbal coat of many colours, Jurisdiction originally seems to have had the meaning which Lord Reld ascribed to it in Anisminic Ltd. v. Foreign Compensation Commission, (1969)2 AC 147, namely, the entitlement 'to enter upon the enquiry in question'. If there was an entitlement to enter upon an enquiry into the question, then any subsequent error could only be regarded as an error within the jurisdiction".
18. Sabyasachl Mukherjt, J., speaking for the majority view in AIR Antulay v. R.S. Nayak reported at of the reported decision observed :
"We recognise that the distinction between an error which entails absence of Jurisdiction and a error made within the Jurisdiction is very fine. So fine Indeed that it is rapidly being eroded as observed by Lord Wilberforce in Antsmtntc Ltd. v. Foreign Compensation Commission (1969)1 All ER 208 at p. 244".
19. In paragraph 13 of the reported decision rendered by Supreme Court in Sher Singh v. Joint Director, Consolidation reported at 1978 SC 1341 Supreme Court observed :
"A distinction must be drawn between the errors committed by subordinate Courts in deciding questions of law which have relation to, or are concerned with, questions of Jurisdiction of the said Courts, and errors of law which have no such relation or connection."
20. In my view, if a Court omits to record reasons as contemplated by proviso to Rule 3 of the Order 39 of CPC while granting ex parte interim order then the Court commits errors which have relation to or are concerned with questions of Jurisdiction of .the said Court because firstly, Court has been prohibited to pass an ex parte interim order, secondly, though an exception has been made yet a condition precedent has been created for exercising under such exception and such condition precedent is that the Court should and is bound to record reasons for passing ex parte Injunction. This aspect of the matter cannot be said to be or described as an error within the jurisdiction.
21. My above view is fortified by a Supreme Court decision in Official Trustee. West Bengal v. Sachtndra reported at of the reported decision in Official Trustee, West Bengal case (supra), Supreme Court, inter alia, held :
"It is clear that before a Court can be held to have jurisdiction to decide a particular matter it must not only have Jurisdiction to try the suit brought but must also have the authority to pass the orders sought for. It is not sufficient that it has some jurisdiction in relation to the subject-matter of the suit. Its Jurisdiction must include the power to hear and decide the questions as issue, the authority to hear and decide the particular controversy that has arisen between the parties......
What is relgvarit is whether he had the power to grant the relief asked for in the application made by the settler. That we thtnk is the essence of the matter. It cannot be disputed that if it is held that the learned Judge had competence to pronounce on the issue presented for his decision then the fact that he decided that issue illegally or incorrectly is wholly besides the point. See Ittyavtra Mathal v. Varkey, ".
22. At the cost of repetition I hold that until and unless principles laid down in Chadha's case (supra) and Morgen Stanley case (supra) are followed then the Court has no Jurisdiction to pass an ex parte Inlerlm order of injunction, and if a Court Ignoring the principles laid down in Chadha's case (supra) and Morgan Stanley case (supra) pass an exparte Interim order of Injunction then such ex parte Interim order of injunction would not amount to error in law but would to issuing such order in complete lack of inherent jurisdiction.
23. The learned Advocate for the respondents argued that even if it is assumed that Order 39 Rule 3 has any manner of application in the facts and circumstances of the present case then the Trial Court substantially complied with the said provision. It is well settled that when provisions are mandatory what is required is strict compliance and not substantial compliance. In my opinion Chadha's case (supra) and Morgan Stanley case (supra) clearly laid down that recording of reasons for grant of ex parte interim order is a must and mandatory. Therefore, the said provision should be strictly complied with. Question of substantial compliance does not arise at all. A careful reading of the order under challenge reveals that the Trial Court recorded three reasons for issuing the ex parte Interim order of Injunction and those three reasons are (1) there is a strong prima facie case in favour of the plaintiff, (2) guided by the decision of the Hon'ble Supreme Court (reference not disclosed) the Court was of the view that "the refusal of an interim injunction in facts and circumstances disclosed in the petition and supported by the documents annexed, would involve greater injustice than a grant of it would Involve" and (3) the grant of an interim Injunction for certain limited period will not prejudice the appellants. It is important to note that the reasons recorded in item No. 2 mentioned herelnabove almost bodily lifted the factor (b) mentioned in paragraph 36 in Morgan Stanley case (supra). The said factor (b) of paragraph 36 reads follows :
"Whether the refusal of ex parte injunction would involve greater Injustice than the grant of it would involve".
Other factors mentioned in paragraph 36 in Morgan Stanlay case (supra) have not been considered at all.
24. In view of the discussions made herelnabove I am of the view that the order under challenge in this appeal is null and void and non-est.
25. The learned Advocate for the respondents argued that since the order under challenge has already been extended and since the appellants have not challenged the said extension order the appeal has become an fractuous because the order under appeal has merged with the order of extension. The word "extension" when used in proper and usual sense in accordance with a lease it means a prolongation of the lease. See Probhas Dalut v. Btshwanatfi Banerjee reported at . According to the Black's Law Dictionary the term "extension" means enlargement of the main body, above all something similar than that to which it is attached, to lengthen or prolong. The term "extension" means to enlarge, expand lengthen, prolong or to carry out further than its original limit. I am of the view that the submission of the learned Advocate for the respondents does not stand the scrutiny of law. A null and void order which is non est cannot be got validated by an extension. Speaking differently purported extension of a null and void order which is non-est is also null and void and non-est
26. The learned Advocate for the respondents heavily relied upon the decision of Supreme Court in Sundaram Finance Ltd. v. NEPC India Ltd. reported at of the reported decision is quoted hereinbelow :
"When a party applies under section 9 of the 1996 Act, it is Implicit that it accepts that there is a final and binding arbitration agreement in existence. It is also Implicit that a dispute must have arisen which is referable to the Arbitral Tribunal. Section 9 further contemplates arbitration proceedings taking place between the parties. Mr. Subramanium is, therefore, right in submitting that when an application under section 9 is filed before the commencement of the arbitral proceedings, there has to be manifest Intention on the port of applicant to take recourse to the arbitral proceedings If, at the time when application under section 9 is filed, the proceedings have not commenced under section 21 of the 1996 Act. In order to give full effect to the words "before or during arbitral proceedings" occurring in section 9, it would not be necessary that a notice Invoking the arbitration clause must be Issued to the opposite party before an application under section 9 can be filed. The Issuance of a notice may, in a given case, be sufficient to establish the manifest intention to have the dispute referred to an Arbitral Tribunal.
But a situation, may so demand that a party may choose to apply under section 9 for an interim measure even before Issuing a notice contemplated by section 21 of the said Act. If an application is so made, the Court will first have to be satisfied that there exists a valid arbitration agreement and the applicant Intend^ to take the dispute to arbitration. Once it is so satisfied, the Court will have the Jurisdiction topass orders under section 9 giving such Interim protection as the facts and_cjrcurnstances warrant. While passing such an order and in order to ensure that effective steps are taken to commence the arbitral proceedings, the Court while exercising jurisdiction under section 9 can pass a conditional order to put the applicant to such terms as it may deem fit with a view to see that effective sleps are taken by the applicant for commencing the arbitral proceedings. What is apparent, however, is that the Court is not debarred from dealing with an application under section 9 merely because no notice has been issued under section 21 of the 1996 Act.'
27. From the order itself it does not appear that the Court was satisfied that there exists a valid arbitration agreement and the applicant intends to take the dispute to arbitration. Such satisfaction of the Court should be apparent from the order itself. Court should record Its satisfaction in the order Itself. No such satisfaction of the Court can be found out from the order under challenge. Under these circumstances the order under challenge in this appeal is also hit by the principles laid down in Sundaram Finance Ltd. case (supra).
28. The learned Advocate for the respondents also referred to and relied upon Industrial Credit and Investment Corporation of India Ltd. v. Grapco Industries Ltd. and Ors. reported at . In that case Industrial Credit and investment Corporation of India Ltd. (for short ICICI) filed an application under section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to the Act of 1993), claiming an amount of over rupees thirty-six and a half crores against respondents 1 and 2 Jointly and severally. On that very day, the Tribunal granted an order of Injunction and restrained the respondents from transferring or alienating the properties hypothecated to ICICI and further appointing a Special Officer for making an Inventory of the assets and properties hypothecated and mortgaged by the respondents in favour of ICICI. It was held by Supreme Court that when power is given to the Tribunal to make an Interim order by way of an injunction or a stay, it Inheres in it the power to grant that order even ex parte, if it is so in the interest of Justice and as per the requirements as spelt out in the judgment of the Supreme Court in Morgan Stanley case. It was further held that a Tribunal while granting an ex parte order of stay or injunction must record reasons may be brief ones, and cannot pass a stereotyped order in terms of the prayer made. It was held that thus an exparte order cannot be allowed to continue indefinitely and the continuance of an Interim order has to be decided without undue delay when the defendant puts in his appearance. In the Instant case 1 have already indicated herelnabove that under Rule 33 of Order 39 of CPC Court has power to grant ex parte injunction. 1 also indicated that principles laid down in Chadha's case (supra] and Morgan Stanley case (supra) should be followed while passing an ex parte interim order under Rule 3 of Order 39 of CPC.
29. The learned Advocate for the respondents referred to and relied upon a decision of Division Bench of this High Court in NEPC Mtoon Limited v. Magma Leasing Ltd. reported at 1999(2) Cal. It.--HC 347. In that case the Division Bench of this High Court considered some earlier decisions of different High Courts Including decisions of Supreme Court in Morgan Stanley case (supra). The Division Bench observed that in none of the cases the order passed without notice to the other side was held be to void. Paragraphs 27 and 29 of the Reported decision of NEPC Micon Ltd. case (supra) are quoted hereinbelow:
'27. In several of the decisions cited by the appellant it is also not clear whether the Court's have held that an unreasoned order is Invalid in the second sense. In AparaJttMukherJeev, Anil Kumar Mukherjee (supra) the Division Bench of the Guwahati High Court set aside the exparte order of a District Judge saying that "It cannot be sustained". A learned single Judge of this Court in Amiga Prosad v. Bejoy Krishna Chakraborty (supra) said an exparte order passed by a Munsif in violation of Order 39 Rule 3 was 'illegal'. The Division Bench of the Allahabad High Court in Royal Flying Carrier v. The General Electric Company (supra) held that because the Civil Judge had failed to record reasons for granting the exparte injunction, his order was 'not sustatnable'. Finally, a Division Bench of this Court in Bantol Tea Warehouse v. Falkata Industries (supra) set aside an exparte order of a District Judge because there had been a departure from the process prescribed under Order 39 Rule 3."
"29. Furthermore, none of the cases said that the order was void. If such an order were void appellate Court would have no option but to declare it as such and remand the matter back to the erring Court. But in some cases Including the case of Shiv Kumar Chandha v. Municipal Corporation of Delhi (supra) the appellate Court Itself decided the matter on the merits of the matter without remanding the matter back. This is also in keeping with the provisions of Order 41 Rule 33 of the code provides :
'33. The appellate Court shall have power to pass any decree and make any order which ought to have been passed or made and to pass or make such further or other decree or order as the case may require, and this power may be exercised by the Court notwithstanding that the appeal is as to part only of the decree and may be exercised in favour of all or any of the respondents or parties, although such respondents or parties may not have filed any appeal or objection and may, where there have been decrees in cross suits or where two or more decrees are passed in one suit, be exercised in respect of all or any of the decrees, although an appeal may not have been filed against such decrees :
Provided that the appellate Court shall not make any order under section 35A, in pursuance of any objection on which the Court from whose decree the appeal is preferred has omitted or refused to make such order'."
30. The learned Advocate for the appellant's referred to and relied upon paragraph 36 of Chadha's case (supra) if it is carefully noted that it will appear that the direction made therein clearly indicate that the exparte order passed by the Court was definitely set aside otherwise such an order could not be passed. Paragraph 36 is quoted herelnbelow:
"Accordingly we direct that the application for interim injunction should be considered and disposed of in the following manner:
(i) The Court should first direct the plaintiff to serve a copy of the application with a copy of the plaint along with relevant document on the counsel for the Corporation or any competent authority of the Corporation and the order should be passed'only after hearing the parties.
(ii) if the circumstances of a case so warrant where the Court is of the opinion, that the object of granting the injunction would be defeated by delay, the Court should record reasons for its opinion as required by proviso to Rule 3 of Order 39 of the Code, before passing an order for Injunction. The Court must direct that such order shall operate only for a period of two weeks, during which notice along with copy of the application, plaint and relevant documents should be served on the competent authority or the counsel for the Corporation. Affidavit of service of notice should be filed as provided by proviso to Rule 3 of Order 39 aforesaid. If the Corporation has entered appearance, may such ex parte order of Injunction should be extended only after hearing the counsel for the Corporation.
(iii) While passing an exparte order of injunction the Court shall direct the plaintiff to give an undertaking that he will not make any further construction upon the premises till the application for Injunction is finally heard and disposed of.
31. The learned Advocate for the appellants referred to and relied upon a decision of Division Bench of this High Court in Magma Leasing Ltd. v. Sanderson Industries Ltd. (C.A. No.322 of 1999. A.C.O. No. 113 of 1999), Judgment and order delivered on July 8. 1999. In that case a Division Bench of this High Court relied upon S.N. Mukherfee v. Union of India reported at and Siemens Engineering & Manufacturing Co. of India Ltd. v. Union of India reported at . It was held by the said Division Bench of this High Court, that it is a well settled principle of law that all quasi-judicial or Judicial orders must be supported by reasons. It was held that even if the proviso appended to Order 39 Rule 3 was not Inserted, the Courts are required to assign reasons in support of this order as to why an ad Interim order of Injunction should be passed.
32. In my view, reason is the soul of an order. An order without reason is a body without soul. It is now well settled in our Judicial discipline that any order passed by the Court should ordinarily be supported by the reasons because the reasons express the thought process of the Court which weighed with the Court to pass such order. Mere quoting a few words from the statute or reiteration of something from the pleading would not amount to reason. 1 am of the view that the order which is subject-matter of the present appeal did not disclose any reason why the Interim order was necessary and passed by the Court. In my opinion, an order even if it is of a Court is not supported by any reason that would render the order arbitrary, fanciful and vague. Even an order of a Court cannot be permitted to be arbitrary, fanciful or vague.
33.1 am of the view that even when an order passed by the Court is null and void that cannot be ignored or violated by the parties to the litigation. An order of the Court which is null and void and non-est also requires to be set aside by the higher Court and so long the same is not set aside by the higher Court parties cannot Ignore the order passed by a Court as null and void. But whenever an action is taken on the basis of such null and void order a party can raise his defence that such action is not maintainable because the order passed by the Court is null and void. My view is fortified wllh the views expressed by Lord Cottenham, L.C. In Chuckv. Cremer, (1846)1 Coop, tern Cott 338 (342)-
"A party who knows of an order, whether null or void, regular or Irregular, cannot be permitted to disobey it ...... It would be most dangerous to hold that the suitors, or their solicitors, could themselves judge whether an order was null or void--whether it was regular or Irregular. That they should come to the Court and not take upon themselves to determine such a question. That the course of a party knowing of an order, which was null or irregular, and who might be affected by It, was plain. He should apply to the Court that it might be discharged. As long as it existed, it must not be disobeyed".
34. The view of the Lord Cottenham as quoted herelnabove had been referred by Durga Das Basu, J., in Nancowry Trading Co. v. Union of India and Ors. reported at 72 CWN 431 at page 439. Ranganathan J., in his minority view in A.K. Antulay v. R.S. Nayak (supra) at page 1610 of AIR, also referred to the above quoted observation of Lord Cottenham, L.C.
35. In view of the discussions made hereinabove, I hold that the order under appeal is null and void and non-est Therefore. I set aside the order under appeal. The learned Advocate for the respondents argued that the Appellate Court can itself, in exercise of Its power, decide the matter and it is not necessary to remand the matter back to the Trial Court. In my opinion this submission of the learned Advocate for the respondents cannot be accepted at this very preliminary stage of the matter. I prefer to pass the following order following the principles laid down in Chadha's case (supra). The Trial Court should first direct the petitioner before it to serve a copy of the application with relevant documents on the counsel of the appellants or any competent authority of the appellants and the order should be passed only after hearing the parties. In these terms the appeal is allowed. The application is accordingly disposed of. However, there shall not be any order as to costs.
S.K. Sen, J.--I have opportunity of perusing the Judgment of my learned Brother. While agreeing with the same I like to deal with the questions Involved in the instant appeal in the manner following. It appears that some reasons and the fact have been assigned in the order under appeal. The question arises if an ex-parte order could have been passed in the manner as was done without recording that delay would defeat the purpose of Injunction as provided in terms of proviso of Order XXXIX Rule 3.
37. What is required for passing of an ex-parte order in terms of proviso under Order XXXIX Rule 3 ? it is well settled that the Court has to record reasons and that the Court must record its satisfaction that the delay would defeat the purpose of injunction. In other words, it must appear from the order itself that the extra-ordinary emergency situation has arisen and there is absolute urgency and if the ex-parte order is not passed, the purpose of passing order of injunction at the later stage would fail. The question of substantial compliance as urged by Mr. Roychoudhury therefore, does not arise in view of the fact because it is a specific mandatory provision of the statute which is to be complied with by recording the satisfaction of the Court as regards the fact that delay would defeat the very purpose of injunction. In the Instant case, such recording on the fact of it is not there in the order. The provision in the Court creates a specific bar or embergo and restricts the right of the Court to pass ex-parte order to the extent as indicated. In other words, there is a mandate by the Legislature to pass such order in the manner as prescribed. Passing of an order without recording the satisfaction of the Court that the delay would defeat the very purpose of injunction will be beyond the jurisdiction of this Court and will be an error in jurisdiction and liable to be set aside.
38. It is well settled that when power is given to do certain things in a certain manner. It has to be done in that manner only or not at all. In the case of an ex-parte injunction, the Court has been empowerd to exercise the power to grant ex-parte ad-interim order only in a particular manner as prescribed under the Code and that power has therefore to be exercised in that particular way only or not at all.
39. In Vitarelli v. Seaton, 359 US 535. 3 Led 2d 1012. 79 Sot968. Justice Frankfurter in his separate opinion (at page 1012) laid down the following principles :--
"7 An executive agency must be rigorously held to the standards by which it professes its action to be Judged. See securities & Exch. Com. v. Chencray Corp. 318 US 80, 87, 88 87 L ed 626, 632, 63 S Ct 454. Accordingly, if dismissal from employment is based on a defined procedure, even though generous beyond the requirements that bind such agency, that procedure must be scrupulously observed. See Service v. Duties, 354 US 363, 1 L ed 2d 1403, 77 S Ct 1152. This judicially evolved rule of administrative law is now firmly established and. If 1 may add, rightly so. He that takes the procedural sword shall perish with that sword. Therefore I unreservedly join in the Court's main conclusion, that the attempted dismissal of vitarelli in September 1954 was abortive and of no validity because the procedure under Department of the Interior Order No. 2738 was invoked but not observed."
40. The said principle applies with stronger force in Judicial proceedings.
41. In Chaddtia's case following the decision in the case of TayJor v. Taylor and Nazir Ahmed v. Emperor has specifically laid down the aforesaid principle.
42. It appears from the order under appeal before us that the procedure under Order XXXIX Rule 3 of the C.P.C. has been invoked but not observed. The order passed by the Court below therefore appears to be absolutely invalid order in the eye of law. There is no question of existence of an order which was passed without Jurisdiction and there is no question also of extension of the same.
43. Extension of an order Implies prolongation or expansion or lengthening of an order which is in existence in the eye of law. If the original order has no existence in the eye of law or invalid, there is no scope for such extension and the order granting extension cannot have any effect. Mr. Roychowdhury has also vigorously argued relying upon Sundorom's case reported in (1992)2 SCC p.479 that there is no scope of applicability of Order XXXIX proviso to Rule 3 in an application under section 9 of the Arbitration Act. He has submitted that the said Act of 1996 is governed by the unicitral rules of Arbitration and there cannot be any applicability of the provisions of Code of Civil Procedure, We are unable to accept the said contention since section 9 of the said Act of 1996 itself embodies that the Court shall have same powers for making orders as it has for the purpose of, and in relation to, any proceedings before it.
44. Section 9, therefore, does not preclude the applicability of Code of Civil Procedure.
45. That apart I am of the view that the said decision is not an authority in respect of passing of an ex-parte ad-interlm order of Injunction and as such cannot have any bearing in the Instant case. Since my learned Brother has elaborately dealt with all aspect of the matter, I refrain from dealing with the case in details to avoid prolixity.
Later :
Prayer for stay by Mr. Roychowdhury is opposed and is refused.
However, it is made clear that our decision is only on the question of ex-parte ad-lnterlm order and with regard to the manner and exercise of power in passing ex-parte ad-lnterlm order only and there will be no fetter on the Court below to proceed otherwise in the matter.
Urgent xerox certified copy of this judgment, if applied for, be supplied forthwith.
46. Application disposed of