Madras High Court
The Union Of India (Uoi) Represented By ... vs K. Sambandan on 12 December, 1994
Equivalent citations: (1995)2MLJ223
JUDGMENT K.A. Swami, C.J.
1. This appeal is preferred under Clause 15 of the Letters Patent against the order dated 11th July, 1994 passed by the learned single Judge in C.M.P. No. 8680 of 1994 filed in A.S. No. 202 of 1993. C.M.P. No. 8680 of 1994 was a petition filed by the respondent herein for a direction to the respondents who are the appellants herein to relieve the security of immovable property offered in the year 1972 by the petitioner in the C.M.P. and hand over the documents of title deeds in respect of the properties bearing R.S. No. 363/2 (0-50-70 Hec) 367 (0-80-40 Hec) 1330/2 (0-13-20 Hec) and 1329 (0-05-40 Hec) and l/4th share in residential house situate in Poornakuppam village, Ariyankuppam Commune to enable him to take part in the public auction. On this very petition, an interim order was passed on 28.6.1994 by which the following direction was issued.
For some inconvenience and want of instructions from the party concerned, in spite of intimation sent, the learned Government Pleader for Pondicherry is not able to file the counter today as directed by this Court already. In the light of the urgency expressed by the Bar, viz., that the fresh auction in this case is going to take place in the evening of today or tomorrow, in view of the non-filing of the counter and the request of extension of time may cause, hindrance to his right to take part in the auction to be held, keeping in the just a position of this with the relevant point in dispute I feel it is desirable to grant a week's time to the Government Pleader of the State of Pondicherry to file counter-statement in this application. But, with regard to the grievance of the petitioner, Mr. Umapathy, learned Counsel for the petitioner requests, (sic.) I hereby direct the petitioner herein to take part in the public auction to be held today evening or tomorrow by the respondents and exercise his right in regard to the framed conditions and rules and his successful bid, if any, shall be accepted only on the condition that the petitioner shall furnish a Bank guarantee to the value of Rs. 20.000 within one week. This order is passed without prejudice to the rights and contention of both the parties herein. If for any reason the petitioner fails to furnish the bank guarantee as directed, his interest in the public auction, if any, shall not be ratified by the respondent. Accordingly, this order is passed for the time being.
Thereafter, CM.P. No. 8680 of 1994 was considered finally and the following order was passed:
Heard both. The learned Counsel for the Government of Pondicherry respondent filed a memo that as on today, a sum of Rs. 60,000 and odd is due and payable by the petitioner to the respondent. According to the learned Counsel for the petitioner, he has already submitted a bank guarantee to an extent of Rs. 20,000 in this regard and even so. his document worth about more than Rs. 15 lakhs is with the first respondent. In view of the said position, he is not in a position to take part in the bid to beheld tomorrow or in the future with regard to the concerned arrack shop in question. Having considered the prevailing position as on today with a view to give an opportunity to the petitioner as well as safeguard the interest of the respondent, I hereby direct the petitioner to give bank guarantee to the extent of sixty thousand rupees in favour of the respondent within a week from today and in the meanwhile the petitioner is hereby directed to take part in the public auction, to be conducted by the respondent either tomorrow or in the future with regard to the same arrack shop and if the petitioner becomes the successful bidder, his bid can be accepted only after the bank guarantee above referred is submitted and if not even if he is successful, the respondent cannot accept the same. The respondent also in hereby directed to return the title deeds of the petitioner to him immediately after furnishing the Bank-guarantee to him and that the respondent shall not be declined to do so. This order is passed today for the time being without prejudice to the rights of the respective parties herein to be agitated in the main case. If he has submitted the bank guarantee as above referred;; then his successful bid, if any, can be considered in accordance with the rules and procedure.
2. Before we consider the contentions put forth by the learned senior counsel appearing for the respondent in this appeal, we may state the grounds on which the appellants have come up in appeal. The grievance made by the appellants is that such a relief did not flow from the suit out of which the appeal has arisen and the same is pending. Even if the suit of the plaintiff were to be decreed in its entirety, Rule No. 147 of the Pondicherry Excise Rules, 1970 (hereinafter referred to as the rules) disqualified the respondent from participating in any auction conducted under the Rules, as long as he continues to be in arrears of any Government dues or excise dues or sales tax in respect of liquor sold by him, that as the respondent continues to be in arrears, even if he had not paid the decree dues passed by the civil court, no order of the nature in question could have been passed overlooking the Rules that in the light of the direction issued by this Court the appellants had no option but to permit the respondent to participate in the auction in spite of the fact that he continued to be in arrears. The fact that Sunder the direction of the court, the respondent has continued to participate in the auction and the auction was con firmed should not be used as a ground for refusing to interfere with the order under appeal, because the decision of the learned single Judge will have the effect of obliterating the provisions contained in Rule 147 of the Rules.
3. On the contrary. Shri Chinnaswamy, learned senior counsel appearing for the respondent contended that die appeal under Clause 15 of the Letters Patent is not maintainable because there is no judgment within the meaning of Clause 15 of the Letters Patent, as the order is an interlocutory nature, therefore the appeal is not maintainable. It is also further contended that as the appellants have not preferred any appeal against the order dated 20.6.1994 and as (he auction has been held and it has been confirmed in favour of the respondent, the appellants must be held to have waived the right of appeal; even if it were to be held that the letters patent appeal is maintainable, that at any rate having confirmed the auction, the appellant are estopped from challenging the auction and the respondent having commenced to vendarrack after investing very heavy sum, the appellants are estopped from challenging the order passed by the learned single Indge.
4. Having regard to these contentions, the following points arise for consideration:
(a) Whether the letters patent appeal is maintainable?
(b) Whether the appellants can be held to have waived their right to appeal?
(c) Whether the appellants are estopped from challenging the order under appeal?
5. Point (a): It may be pointed out here that the order dated 11.7.1994 is nothing but a continuation of the order dated 20th June, 1994. Both the orders have been passed on the same C.M.P. No. 8680 of 1994. The order dated 20th June, 1994 was passed pending final disposal of C.M.P. No. 8680 of 1994 whereas the order under appeal is the final order on that C.M.P. Therefore the contention that there was no appeal preferred against the order dated 20th June, 1994 has no basis and cannot at all be appreciated.
6. Coming to the order under appeal, we will consider whether it can be held to be a judgment. The controversy between the parties in the C.M.R. is as to whether the petitioner in the C.M.P. in spite of excise arrears could be permitted to participate in the auction. Once he is permitted or permission is refused either way, the rights of both parties will be affected: If the permission is granted the right to enforce Rule 147 of the Rules and also prevent such of the persons who are in excise arrears, is taken away or affected. Similarly if the permission is refused, the right claimed by the petitioner in the C.M.P. to participate in the auction would be affected: Therefore, the order under appeal decides the rights of the parties and there by it affects the substantive rights of the parties. Consequently the order of the nature in question squarely falls within the first category of judgment as laid down in Shah Babulal Khimji v. Jayaben D. Kama , as it disposes of the C.M.P. finally and adjudicate the rights of the parties to participate in the auction. Even if it is for a moment considered that as the order is passed on a C.M.P. not in the main appeal, therefore, it will fall in the category of interlocutory order, even then it affects the valuable rights of the parties and cause serious injustice to the appellant concerned, as observed in paragraph 115 of the aforesaid judgment after considering all the aspects of the matter thus.
Thus in other words every interlocutory order cannot be regarded as a judgment but only those orders would be judgments which decide matters of moment or affect vital and valuable rights of the parties and which work serious injustice to the party concerned.
[Italics supplied] As already pointed out, the order decides the right of the petitioner in the C.M.P. to participate in the auction and permits him to participate in the auction and that at the same time, it directs the respondent in the C.M.P.' who are the appellants herein to permit the petitioner in the C.M.P. to participate in the auction and such a direction is contrary to Rule 147 of the Rules. Therefore point (a) is answered in the affirmative.
7. Point (b): It is not possible to hold that when an appeal is filed in accordance with law and it is pursued, the appellants must be held to have waived the right of appeal merely on the ground that pursuant to the direction of this Court, the appellants have permitted the respondent to participate in the auction and considered his bid offered in the auction. Such a view would be nothing but denying the statutory right of appeal. In support of the contention that the appellants must be deemed to have waived their right, learned senior counsel placed reliance on a decision of the Supreme Court in K.G. Dora v. O. Arnama Naidu . Reliance was placed on paragraph 59 of the judgment which reads thus:
Be that as it may, the bar to an appeal against a consent decree in Sub-section (3) of Section 96 of the Code is based on the broad principle of estoppel. It presupposes that the parties to an action can expressly or by implication waive or forgo their right of appeal by any lawful agreement or compromise, or even-by conduct. Therefore, as soon as the parties made the agreement to abide by the determination in the appeal (A.S. 668) and induced the court to pass a decree in terms of that agreement, the principle of estoppel underlying Section 96(3) becomes operative and the decree to the extent it was in terms of that agreement, became final and binding between the parties. And, if was effective in creating an estoppel between the parties as a judgment on contest. Thus, the determination in A.S. 668 that Kadakalla was not an estate became as much binding on the respondent, as on the parties in that appeal.
From the aforesaid observations of the Supreme Court it is clear that those observations related to an appeal filed against the consent decree As Section 96(3) it self bars such an appeal it has been held that when the parties agree for a certain decree to be passed, they must also be deemed to have agreed to waive the right of appeal, because the statute bars an appeal against the consent decree. That being so, the proposition laid down therein cannot be applied to the facts of the case. Hence, point (b) is answered in the negative.
8. Point (c): Relying on a decision of the Supreme Court in Vij Resins Private Limited v. State of J and K. , it was contended that having regard to the fact that the auction has been confirmed, the appellants must be estopped from challenging the order. In the aforesaid judgment, reliance was placed on paragraph 26 which is as follows:
Petitioners in Writ Petition No. 794 of 1986 had claimed that pursuant to the arrangement entered into between them and the State following the invitation by the State they had invested Rs. 1.60 crore in the shape of plant and machinery and 63 lakhs of rupees by way of land and buildings. The petitioner in the other two cases staled that investments had been made by them as well. The petitioners were invited to set up industries by assuring them supply of the raw material. They changed their position on the basis of representations made by the State and when the factories were ready and they were in a position a utilise the raw material, the impugned Act came into force to obliterate their rights and enabled the state to get out of the commitments. We are inclined to agree with the submissions made on behalf of the petitioners that the circumstances gave rise to a fact situation of estoppel. It is true that there is no estoppel against the legislature and the vires of the Act cannot be tested by invoking the plea but so far as the State Government is concerned the rule of estoppel does apply and the precedents of the court are clear. It is unnecessary to go into that aspect of the matter as in our considered opinion the impugned Act suffers from the vice of taking away rights to property without providing for compensation at all and is bit by Article 31(2) of the Constitution.
The question of promissory estoppel does not arise in this case: The appellants had not made any promise to the respondent herein for doing a certain thing and pursuant to that promise or representation, the respondent also cannot be held to have changed his position. It may be pointed out that there is no whisper of any such contention any where Even otherwise, this is a case wherein the respondent himself sought for a-direction to permit him to participate in the auction and it was opposed too by the appellants and the court issued a direction. In such a case, the question of applying the rule of promissory estoppel and thereby estopping the appellants from pursuing the remedy of appeal does not arise. Hence, point (c) is answered in the negative.
9. We may also point out here that apart from the fact that the direction issued by the learned single Judge is quite opposed to Rule 147(i)(iii) of the Rules, as it disqualified the respondent from submitting a tender, as already pointed out the very relief did not arise out of the proceedings before the learned single Judge. A.S. No. 202 of 1985 is an appeal preferred by the appellants herein against the decree passed by the Additional Sub Judge, Pondicherry in O.S. No. 324 of 1970. That was a suit filed by the respondent herein for a declaration that he is not in excise arrears as claimed by the defendants therein, viz., the Government of Pondicherry and its Officers. The defendants resisted the suit and ultimately, the trial Court decreed the suit of the plaintiff to the extent of Rs. 21,200 and in respect of the remaining amount, it was held that the plaintiff was liable to pay. Aggrieved by that decree, it is the defendants who have come up in Appeal Suit No. 202 of 1983 and not the plaintiff therein. Consequently, the declaratory decree passed by the trial court that the plaintiff is due to pay a sum of Rs. 8,000 and odd, has become final and that amount he has not paid. In such a case the question as to whether the plaintiff/petitioner, in C.M.P. No. 8680 of 1994 who is the respondent in the appeal, should be allowed to participate in the auction, does not arise at all. This is an appeal under the Code of Civil Procedure, 1908 and not a petition under Article 226 of the Constitution to issue such a direction. Therefore, looked at from any point of view we find it very difficult to agree with the order passed by the learned single Judge.
10. For the reasons stated above, the appeal is allowed. The order dated 11.7.1994 is the continuation of the order dated 28th June, 1994. Accordingly both the orders are set aside. No order as to costs. The C.M.P. is also disposed of accordingly.