Bombay High Court
Sigmarq Technologies Pvt Ltd And 2 ... vs Manugraph India Limited And 7 Others on 14 September, 2017
Author: S.C. Dharmadhikari
Bench: S.C. Dharmadhikari, Prakash D. Naik
COMAP40.16.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL APPEAL NO. 40 OF 2016
IN
NOTICE OF MOTION NO. 494 OF 2014
IN
SUIT NO. 516 OF 2013
1 Sigmarq Technologies Pvt. Ltd., having ]
its registered office at A-258, Kegal ]
Hatkanangale, Five Star MIDC, Kolhapur ]
5416216, Maharashtra ]
2 Rajesh Rangrao Ghorpade ]
(Director of Sigmarq Technologies Pvt.Ltd) ]
residing at Plot No.15, RS 918/1918, ]
Shri Bhavani Grihnirman, Devkar Panand ]
Kolhapur 416 216 Maharashtra ]
3 Pradeep Appasaheb Shirale (Director of ]
Siqmarq Technologies Pvt. Ltd.),residing at ]
Post Nagaon, Hatkanangale, District ]
Kolhapur 416216, also at A-258, Kegal ]
Hatkanangale, Five Star MIDC, Kolhapur ]
416 216, Maharashtra ] ... Appellants
Versus
1Manugrah India Limited, A company ]
incorporated and registered under the ]
Companies Act, 1956, having its registered ]
office at Sidhwa House, 1st Floor, N.A. ]
Sawant Marg, Near Colaba Fire Station, ]
Colaba, Mumbai 400 005. ]
2 Param Print Solutions Pvt. Ltd., having its ]
registered office at 917/918, Shri Bhavani ]
Gruha Nirman Sanstha, Devekar Panand, ]
Kolhapur 416 002. ]
SRP 1/106
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COMAP40.16.doc
3 Gopal Balwant Vichare (Chairman & M.D. ]
of Sigmarq Technologies Pvt. Ltd.),residing ]
at 2156 D, Shukrawar Peth, Near Jain ]
Kolhapur 416002. Also at A-258, Kegal ]
Hatkanangale, Five Star MIDC, Kolhapur ]
416 216, Maharashtra ]
4Dhanaji Ramchandra Bhalkar (Director of ]
of Sigmarq Technologies Pvt. Ltd.),residing ]
at Plot No.107, Saneguruji Vasahat, ]
Kolhapur 416 002, Also at : A-258, Kegal ]
Hatkanangale, Five Star MIDC, Kolhapur ]
416 216, Maharashtra ]
5 Sarjerao Vishnu Chandane (Director of ]
of Sigmarq Technologies Pvt. Ltd.),residing ]
at Post Belavale, Taluka Kegal, Kolhapur ]
416002, Also at : A-258, Kegal ]
Hatkanangale, Five Star MIDC, Kolhapur ]
416 216, Maharashtra ]
6 Shubhendra Madhavarao Mordekar ]
(Director of Manugraph India Limited and ]
Param Print Solutions Pvt. Ltd., residing at ]
Plot o.18, R.S. No. 917/918, Shri Bhavani ]
Gruha Nirman Sanstha, Devkar Panand, ]
Kolhapur 416 002. ]
7 Venkatesh Anantnarayan, Managing ]
Director of Param Print Solutions Pvt. Ltd. ]
residing at A521, 5th Floor, Anant Regency ]
CHS Limited, 46, M.M. Malviya Marg, ]
Opp. M.T.N.L., Mulund (West), Mumbai-80 ]
8 Milonarayan S. Mishra & Others, Unknown ]
(Director of Param Print Solutions Pvt. Ltd. ]
residing at 260/10199, Kannamwar Nagar ]
No.1, Vikhroli (PU), Mumbai - 400 033. ] ... Respondents
SRP 2/106
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COMAP40.16.doc
WITH
COMMERCIAL APPEAL NO. 41 OF 2016
IN
LEAVE PETITION NO. 11 OF 2016
IN
SUIT NO. 516 OF 2013
1 Sigmarq Technologies Pvt. Ltd., having ]
its registered office at A-258, Kegal ]
Hatkanangale, Five Star MIDC, Kolhapur ]
5416216, Maharashtra ]
2 Rajesh Rangrao Ghorpade ]
(Director of Sigmarq Technologies Pvt.Ltd) ]
residing at Plot No.15, RS 918/1918, ]
Shri Bhavani Grihnirman, Devkar Panand ]
Kolhapur 416 216 Maharashtra ]
3 Pradeep Appasaheb Shirale (Director of ]
Siqmarq Technologies Pvt. Ltd.),residing at ]
Post Nagaon, Hatkanangale, District ]
Kolhapur 416216, also at A-258, Kegal ]
Hatkanangale, Five Star MIDC, Kolhapur ]
416 216, Maharashtra ] ... Appellants
Versus
1Manugrah India Limited, A company ]
incorporated and registered under the ]
Companies Act, 1956, having its registered ]
office at Sidhwa House, 1st Floor, N.A. ]
Sawant Marg, Near Colaba Fire Station, ]
Colaba, Mumbai 400 005. ]
2 Param Print Solutions Pvt. Ltd., having its ]
registered office at 917/918, Shri Bhavani ]
Gruha Nirman Sanstha, Devekar Panand, ]
Kolhapur 416 002. ]
SRP 3/106
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COMAP40.16.doc
3 Gopal Balwant Vichare (Chairman & M.D. ]
of Sigmarq Technologies Pvt. Ltd.),residing ]
at 2156 D, Shukrawar Peth, Near Jain ]
Kolhapur 416002. Also at A-258, Kegal ]
Hatkanangale, Five Star MIDC, Kolhapur ]
416 216, Maharashtra ]
4Dhanaji Ramchandra Bhalkar (Director of ]
of Sigmarq Technologies Pvt. Ltd.),residing ]
at Plot No.107, Saneguruji Vasahat, ]
Kolhapur 416 002, Also at : A-258, Kegal ]
Hatkanangale, Five Star MIDC, Kolhapur ]
416 216, Maharashtra ]
5 Sarjerao Vishnu Chandane (Director of ]
of Sigmarq Technologies Pvt. Ltd.),residing ]
at Post Belavale, Taluka Kegal, Kolhapur ]
416002, Also at : A-258, Kegal ]
Hatkanangale, Five Star MIDC, Kolhapur ]
416 216, Maharashtra ]
6 Shubhendra Madhavarao Mordekar ]
(Director of Manugraph India Limited and ]
Param Print Solutions Pvt. Ltd., residing at ]
Plot o.18, R.S. No. 917/918, Shri Bhavani ]
Gruha Nirman Sanstha, Devkar Panand, ]
Kolhapur 416 002. ]
7 Venkatesh Anantnarayan, Managing ]
Director of Param Print Solutions Pvt. Ltd. ]
residing at A521, 5th Floor, Anant Regency ]
CHS Limited, 46, M.M. Malviya Marg, ]
Opp. M.T.N.L., Mulund (West), Mumbai-80 ]
8 Milonarayan S. Mishra & Others, Unknown ]
(Director of Param Print Solutions Pvt. Ltd. ]
residing at 260/10199, Kannamwar Nagar ]
No.1, Vikhroli (PU), Mumbai - 400 033. ] ... Respondents
WITH
COMMERCIAL APPEAL NO. 49 OF 2016
SRP 4/106
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COMAP40.16.doc
IN
LEAVE PETITION NO. 129 OF 2014
IN
SUIT NO. 632 OF 2014
Le Travenues Technology Pvt. Ltd., A ]
Company incorporated under the Companies ]
Act, 1956, having its office at H-3/157, ]
Second Floor, Vikaspuri, Delhi - 110 018,and ]
also at 3rd Floor,Bestech Centre Point,A Block ] ... Appellant
Sushant Lok Phase-I, Gurgaon - 122 002. ](Ori.Defendant)
Versus
Ezeego One Travel & Tours Ltd., A company ]
incorporated under the Companies Act, 1956 ]
and having registered office at 1st Floor, Cecil ]
Court, Lansdowne Road, Colaba, Mumbai ]
400039 & corporate office at Vaman Centre ]
Marol, Makwana Road, Off Andheri Kurla ] ... Respondent
Road, Andheri (East), Mumbai - 400059 ](Ori. Plaintiff)
Dr. Birendra Saraf with Ms. Pooja Kshirsagar, Mr. Amol Kumeria
and Mr. Chandansingh Shekhawat i/b ALMT Legal for the
Appellants in COMAP No.40 of 2016 and COMAP No.41 of 2016.
Mr. Ravi Kadam, senior counsel withi Mr. Ashish Kamat, Mr.
Rohan Kadam, Mr. Abhimanyu Kharote i/b M/s. Desai and
Diwanji for the Respondent No.1 in COMAP No.40 of 2016 and
COMAP No.41 of 2016.
Mr. Alankar Kirpekar with Mr. Muralidhar Khadilkar i/b MAG
Legal for the Appellant in COMAP No.49 of 2016.
Mr. Virag Tulzapurkar, senior counsel with Mr. H.W. Kane, Mr.
A.H. Kane, Mr. Nikhil Sharma and Mr. Aasif Navodia i/b W.S.
Kane & Co. for the Respondent in COMAP No.49 of 2016.
CORAM : S.C. DHARMADHIKARI &
PRAKASH D. NAIK, JJ.
SRP 5/106
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COMAP40.16.doc
THURSDAY, 14TH SEPTEMBER, 2017
ORAL JUDGMENT : [Per S.C. Dharmadhikari, J.]
1 This appeal by the original defendant Nos.1, 3 and 4 challenges an order passed by the learned single Judge in Notice of Motion No. 494 of 2014 in Suit No.516 of 2013. 2 By this order, which is fairly detailed, the learned single Judge disposed of a preliminary issue of jurisdiction raised by these defendants under section 9-A of the Code of Civil Procedure, 1908.
3 There are two suits filed and our order passed today in the present appeal will dispose of the applications insofar as the above, in both suits.
4 Suit No. 516 of 2013 has been instituted by one Manugraph India Limited. The appellants before us are the defendant Nos.1, 3 and 4 to this suit.
5 There is another Suit No. 632 of 2014, which is the SRP 6/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:45 ::: COMAP40.16.doc subject matter of Commercial Appeal No. 40 of 2016. 6 To our mind, the fate of Commercial Appeal Nos.40 and 49 both of 2016 shall decide Commercial Appeal No.41 of 2016 as well.
7 The learned single Judge found that in Suit No.632 of 2014, a preliminary issue was framed on 31 st March, 2016. The defendants in these suits urged that the plaintiffs have their registered office in Mumbai and they have a branch office in Delhi, where the defendants have their place of business. According to these defendants, when the cause of action has arisen within the territorial limits of plaintiffs branch office at Delhi, then, this Court would have no jurisdiction to entertain and try the said suits. It is only the Courts in Delhi which would possess such jurisdiction.
7A The appellants-original defendant Nos.1, 3 and 4 in Suit No.516 of 2013 take a substantially similar plea. There, the facts projected were that the plaintiff in this suit has its registered office in Mumbai. The defendants in that suit are based SRP 7/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:45 ::: COMAP40.16.doc in Kolhapur. The defendants allege that the plaintiffs also have an office in Kolhapur and that the site of the suit, therefore, should be Kolhapur.
7B It is such an objection which has been considered by the learned single Judge and thereafter he concluded that in the light of the discussion, the preliminary issue in both suits has to be answered in the negative. In other words, this Court would have jurisdiction to entertain and try both suits. On such a preliminary objection to the territorial jurisdiction of this Court, after hearing both sides, the learned Judge passed the following order :
"... ... ... ...
38. In this view of the matter, the preliminary issues in both the matters are answered in the negative. This Court has jurisdiction to try and entertain both the Suits.
39. The Plaintiff's Notice of Motion will accordingly be set down for hearing, since the pleading in both are complete. List both Notices of Motions in both the Suits but separately for hearing and final disposal in the week of 11th July 2016."SRP 8/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 :::
COMAP40.16.doc Thereafter, the learned Judge directed that the Notices of Motion for interim relief moved by the plaintiffs will have to be heard separately.
9 It is such an order which is under challenge before us. 10 It is common ground that the appeal is preferred under the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (Act 4 of 2016). This Act shall now be referred to as Act 4 of 2016. 11 According to the parties, the appellate power is to be found in Chapter IV titled "Appeals", particularly in section 13. 12 Mr. R.M. Kadam, learned counsel appearing for the original plaintiff-respondent No.1 in Commercial Appeal No.40 of 2016 has raised a preliminary objection to the maintainability of this appeal.
13 He invited our attention to sub-section (1) of section SRP 9/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 ::: COMAP40.16.doc 13 as also sub-section (2) thereof to contend that the order under appeal is not an appealable order. It is not a decision by which even if the appellant is aggrieved allegedly, he can, as of right, maintain an appeal. According to Mr. Kadam, the law does not enable filing of appeals by parties like the appellants-defendants unless and until the impugned judgment and order is, as contemplated by the Code of Civil Procedure, 1908, either a decree or an order. The proviso to sub-section (1) of section 13, according to Mr. Kadam, would denote that an appeal shall lie from such orders passed by a Commercial Division or a Commercial Court that are specifically enumerated under Order XLIII of the Code of Civil Procedure, as amended by the Act 4 of 2016 and section 37 of the Arbitration & Conciliation Act, 1996. However, the sub-section (1) of section 13 cannot be given a wider meaning so as to enable this Court to entertain any and every appeal.
14 He would submit that the words "decision of the Commercial Court or Commercial Division of a High Court "
appearing in sub-section (1) of section 13 would, together with the further words "from the date of judgment or order, as the SRP 10/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 ::: COMAP40.16.doc case may be", indicate that Act 4 of 2016 does not enlarge or widen either the power of appeal or the ambit and scope of the appellate power. That is circumscribed or restricted by sub-
section (2) of section 13 and sub-section (2) would indicate that there is no right of appeal created outside the Act 4 of 2016.
Therefore, other legislation or laws cannot be looked into so as to vest or create a right of appeal in a litigant like the appellants.
15 Mr. Kadam would then summarize his arguments by contending that a decision not giving any question or issue a finality or adjudicating it as such and prejudicially affects any rights of parties like the appellants could, therefore, not be termed as an order or judgment / decision enabling filing of an appeal to challenge it.
16 Mr. Kadam would submit that the Act 4 of 2016, together with its preamble and in the backdrop of its object and purpose, denotes that the commercial disputes which may be forming subject matter of a suit or proceedings in the nature of arbitration have to be disposed of expeditiously. SRP 11/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 :::
COMAP40.16.doc 17 If during the stage or course of such proceedings or suits some issues emerge and there is a ruling thereon, does not mean that such a ruling or decision can be challenged in appeal. That would mean at a interlocutory stage the proceedings or the suit would be interrupted and there will be no progress till the disposal of such appeals. In other words, the proceedings or the suit would not proceed and that would completely defeat the object and purpose of the Act. If commercial disputes involving a specified value have to be brought to an end and decided expeditiously, then, an interpretation consistent with that object and purpose be placed on section 13.
18 On the other hand, Dr. Saraf and Mr. Kirpekar appearing on behalf of the appellants in both appeals would submit that there is no merit in the arguments of Mr. Kadam. Dr. Saraf would submit that the present objection is to the jurisdiction of this Court to entertain and try the suit. The objection may be to the territorial jurisdiction, but, nonetheless such an objection, if upheld, brings an end to the suit. It brings an end to the proceedings and the suits in this Court, completely and finally. If such an objection is overruled, then, the decision in SRP 12/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 ::: COMAP40.16.doc that behalf is appealable. It is appealable because it is a decision by which the appellants are aggrieved. When the objection has not been upheld it would force them to face the trial in the suit or other proceedings. They would be forced to submit to the jurisdiction of this Court. It is precisely that which they are resisting. In the circumstances, this is not a case of any and every decision being challenged, but a decision of this Court which is a "judgment" impugned in these appeals. The finding on territorial jurisdiction of this Court has a vital bearing and it is not as if that will not prejudicially affect the rights of the appellants. Since the objection is negatived, the jurisdictional issues are concluded and finally. In the circumstances, both would contend that this is an appealable order. 19 Additionally, Mr. Kirpekar brings to our notice a Division Bench judgment of this Court in the case of Ferani Hotels Pvt. Ltd. v. Nusli Neville Wadia & Ors. in Appeal No.817 of 2010 along with Appeal No.806 of 2010 decided on 19th July, 2012. 20 He would contend that section 9-A has been inserted in the statute book, namely, the Code of Civil Procedure, 1908, by SRP 13/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 ::: COMAP40.16.doc a Maharashtra amendment. That enables the Court to rule upon an issue of jurisdiction, raised in a suit of the present nature, at a preliminary stage. The adjudication of that issue should not be postponed till the trial of the suit is the object and purpose in inserting section 9-A in the Code of Civil Procedure. Such a provision is salutary. That equally has a laudable object and purpose. The trial on the issue of jurisdiction need not be postponed and that issue should not necessarily be tried at the hearing of the suit. Order XIV of the Code of Civil Procedure and Rule 2 thereof and Section 9-A operate at different stages. Thus, a preliminary issue of jurisdiction, according to counsel, need not await trial till the suit in which it is raised is ready for hearing. The adjudication therein should be done at the earliest stage and when the Court is considering the plaintiffs application for grant of interim injunction / relief. If at that stage the issue can be considered, postponing the consideration of the interim relief application, then, such an objection or preliminary issue under section 9-A having been decided one way or the other would result in rendering of a judgment. That judgment finally adjudicates or concludes the issue of jurisdiction. It is not relevant as to what is the outcome thereof. So long as that issue SRP 14/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 ::: COMAP40.16.doc is of jurisdiction, then, that has a vital bearing on the controversy in the suit. The adjudication thereof terminates the proceedings and the suit itself one way or the other. In the circumstances, he would submit that we should not take a restricted view of the right of appeal which is created by Act 4 of 2016 and vesting in the present set of litigants.
21 Dr. Saraf, in all fairness, has brought to our notice two judgments of this Court on the point.
22 The first is rendered by a Division Bench of Hon'ble Mr. Justice A.V. Mohta and Mr. Justice G.S. Kulkarni in the case of Hubtown Limited vs. IDBI Trusteeship Service Ltd . reported in 2017 4 BCR 310 and another rendered by a Division Bench presided over by His Lordship Hon'ble Mr. Justice V.M. Kanade (as His Lordship then was) and Her Ladyship Swapna S. Joshi in the case of Smt. Sushila Singhania & Ors. vs. Bharat Hari Singhania in Commercial Appeal No.41 of 2016 together with other appeals decided on 29th March, 2017.
23 Dr. Saraf would submit that a careful perusal of these SRP 15/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 ::: COMAP40.16.doc two judgments would denote that there is a clear departure from the view taken in Hubtown which is earlier in point of time. The latter Division Bench judgment in the case of Smt. Sushila Singhania rendered by V.M. Kanade, J. records in the opening paragraph and while noting down the arguments, the reliance on Hubtown, on the point of maintainability of the appeal. However, without adverting to the findings and conclusions in Hubtown, the Division Bench proceeds to rule on the issue of maintainability of the appeal in Smt. Sushila Singhania's case. The observations are directly contrary or divergent to that of the earlier Division Bench in Hubtown. Therefore, judicial discipline, according to Dr. Saraf, demands that either we go by the earlier ruling in the case of Hubtown and uphold the right of appeal or if we are of the view that the latter judgment refers to and attempts to distinguish or departs from the view taken in Hubtown, then, an authoritative pronouncement is required at the hands of a larger Bench. Resultantly, we must refer the issue of maintainability of this appeal to a larger Bench. 24 In that Dr. Saraf would place reliance on a Division Bench judgment to which one of us (S.C. Dharmadhikari, J.) was SRP 16/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 ::: COMAP40.16.doc a party and rendered in the case of Shri Prakash Gobindram Ahuja vs. Ganesh Pandharinath Dhonde & Ors. in Appeal from Order No.256 of 2013 decided on 4th October, 2016. 25 Our attention has also been invited to two judgments of the Hon'ble Supreme Court on this point, namely, (2016) 6 SCC 391 in the case of Commissioner of Central Excise, Indore vs. Grasim Industries Limited and (1998) 4 SCC 270 in the case of Gaurav Jain and Anr. vs. Union of India. These are essentially on the point of judicial discipline and a latter Division Bench being confronted with the earlier view directly adjudicating a identical point or issue before it, then, it should resort to either referring the matter to a larger Bench if it is not in a position to agree with the view taken in the earlier judgment or it must render a definitive finding that the judgment which is ordinarily binding on it is per incuriam and, therefore, has no binding effect. 26 It can only be ignored in such an eventuality is the submission.
27 Before we proceed, we must notice as to how the issue SRP 17/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 ::: COMAP40.16.doc of maintainability of appeals under Act 4 of 2016 has been dealt with in Hubtown and Smt. Sushila Singhania. 28 In Hubtown the preliminary objection to the maintainability of the appeal was not raised by the senior counsel appearing for the respondents. The respondents had consented to hearing the appeal on merits. However, the Division Bench thought it fit to hear the counsel appearing for parties on maintainability as it was of the opinion that the said issue goes to the root of the matter. According to the Division Bench, there is a confusion prevailing and particularly in the Registry of this Court as to the transfer of pending Summary Suits (Suits filed under Order XXXVII, Code of Civil Procedure, 1908) because of the Act 4 of 2016.
29 A Summary Suit was filed by the respondent-plaintiff - IDBI in that appeal seeking a decree. During pendency of that Summary Suit, Act 4 of 2016 intervened. Thereafter, the Commercial Courts Act having been notified, the Commercial Division and Commercial Appellate Division were constituted in this Court on 4th January, 2016. The learned Judge who was SRP 18/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 ::: COMAP40.16.doc hearing the Summary Suit continued to be nominated as a Commercial Division of this Court and he was assigned to hear all Summary Suits, including the subject Summary Suit. A Summons for Judgment in that Suit was argued by parties on merits before the Commercial Division and was reserved for orders on 14th January, 2016. On 13th May, 2016, pending the final order in the Summons for Judgment, the captioned Summary Suit was formally transferred to the Commercial Division of this Court alongwith several other suits and proceedings. The order impugned in that appeal had been passed granting conditional leave to defend the suit. On 12 th July, 2016, the appeal in Hubtown's case was filed as a commercial appeal. On 29th July, 2016, the appeal was heard finally, by consent, on merits at the admission stage and the matter was closed for orders.
30 It was noted by the Division Bench that after the Act 4 of 2016 was brought into effect, it would have to address itself on the issue of maintainability of the appeal though it was not raised as a preliminary issue and though there was no objection in that regard. Thus the issue of maintainability was not directly arising SRP 19/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 ::: COMAP40.16.doc for consideration as it was not raised specifically by the parties. However, the Court noted the factual background and that the Summons for Judgment were disposed of and the aggrieved defendant was in appeal.
31 The Court, therefore, addressed the issue of jurisdiction by referring to in paragraph 5, the Act 4 of 2016 and the definitions therein. Thereafter, in the paras relied upon before us, it traced the history of the legislation, namely, Act 4 of 2016 and referred to the scheme of the Act and the arrangement of the Chapters therein.
32 In paragraph 20, the Court noted that the jurisdiction of the Commercial Appellate Division as provided in Chapter II and specifically section 13 provides that the Commercial Appellate Division of a High Court has jurisdiction to hear appeals from decisions, judgments or decrees passed by the Commercial Division of that High Court or by Commercial Courts within the local limits the jurisdiction of the High Court. In paragraphs 20 to 25 and part of 26 and paragraph 27, the Court held as under : SRP 20/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 :::
COMAP40.16.doc "20. The jurisdiction of the Commercial Appellate Division as provided in Chapter II and specifically Section 13 provides that the Commercial Appellate Division of a High Court has jurisdiction to hear Appeals from decisions, judgments, orders or decrees passed by the Commercial Division of that High Court or by Commercial Courts within the local limits of the jurisdiction of the High Court.
21. After giving due consideration to the provisions of Section 13(1) read with Section 13(2) it is apparent that it provides that Appeals will lie to the Commercial Appellate Division against the decision of the Commercial Court or Commercial Division. The words "decision", "Judgment", "Order" "decree" as such are not defined. It is defined and elaborated under the CPC. From Section 13(1) it follows that it includes "judgment" or "order" and read with Sections 8, 13(2) it includes "decree" of the Commercial Court or Commercial Division. However, it is specifically mentioned in proviso to Section 13(1) that such orders as enumerated in Order XLIII of CPC should be the order against which an Appeal against order is maintainable under Section 13. Further the proviso contemplates that an Appeal would lie against appealable order under Section 37 of the Arbitration and Conciliation Act, 1996. Section 13(2) has restricted the Appeals even for Section 13 of the Commercial Courts Act by rider that "no Appeal shall lie from any order or decree of a Commercial SRP 21/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 ::: COMAP40.16.doc Division or Commercial Court other than in accordance with the provisions of this Act.". This is also with "notwithstanding" clause under Section 13(2) whereby, it is mandated that "notwithstanding anything contained in any other law for the time being in force or Letters Patent of High Court".
22 Therefore, taking into consideration the overall provisions and intent of Section 13(1) and (2) which provides the specific orders against which an Appeal can be filed in such commercial matters.
The Appeal under Section 13 is maintainable, once the Suits, Petitions Applications and Appeals are transferred and treated as commercial disputes having specified value, where the learned Commercial Division Judge has taken the decision and/or passed the "judgment" and/or "order" or "decree". It is relevant to note that under Section 21 of the Commercial Courts Act, it is mandated and reinforced that the provisions of the Commercial Courts Act will prevail over the provisions of other Act. Therefore, an Appeal under Section 13 of the Commercial Courts Act is maintainable against the decision/judgment/order or decree, if it falls within the ambit of the provisions of the Commercial Courts Act. This includes that the subject matter must be commercial dispute having valuation of more than one crore and falls within the territorial and pecuniary jurisdiction of the respective Court and/or Division and/or subject to the specific provisions like SRP 22/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 ::: COMAP40.16.doc the Arbitration and Conciliation Act, read with the special statutes and the provisions so required, referred under umbrella of "commercial dispute" so defined.
23 Appeal against any final decision include the judgment so passed by the Commercial Court and/or Commercial Division the proviso to Section 13(1) will not be applicable to such decision/judgment, as the proviso refers to "orders". The reference to "orders" in the opening portion of Section 13(1) would relate to the application of the proviso to sub-section (1). However, the opening portion of sub-section (1) (words prior to the proviso) clearly use the words "decision", "judgment" and "order". Therefore, the ambit of this part of sub- section (1) is quite broader when it comes to appeals arising out of orders other than the category of orders falling under order XLIII of the CPC. Therefore, an Appeal under Section 13(1), even if there is an order, but which has a tinge or colour of judgment as laid down by the Hon'ble Supreme Court in Shah Babulal Khimji v. Jayaben D. Kania & anr and Midnapore Peoples' Co-op. Bank Ltd. (supra), the Appeal under Section 13 against such order being a "judgment" within the meaning of CPC, is maintainable. The provisions of CPC (amended and unamended) are applicable to the Commercial Courts Act's proceedings. The term "Judgment" was not even defined under the Letters Patent Act. In the summary SRP 23/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 ::: COMAP40.16.doc suit, though it is an interlocutory order of granting Defendants conditional leave to defend such summary suit, as it directly affects and loses the valuable rights of the Defendant without giving full opportunity and as transferred and as heard by the learned Commercial Division Bench/Judge, the Commercial Appeal against such "Judgment" is maintainable. Therefore, we are of the view that there is no reason to hold that the Commercial Appeal as filed is not maintainable.
"Summary Suit" and "Summary Judgment"-
24 The conceptual position of "summary suit" as contemplated under Order XXXVII of CPC and its specific provisions are governed as per the original provisions of CPC. The amended CPC, in view of Section 16 of the Commercial Courts Act inserted the provision for a "summary judgment", through Order XIII-A which is made applicable to the classes of Suits (commercial suits) which required to be decided by the Commercial Division/Court. It prescribes the procedure and stages for application for summary judgment. This also includes and provides the powers of a Commercial Judge to pass conditional order including for evidence for hearing of summary judgment. We are concerned with Order XIII-A, Rule 1(3) of CPC, whereby it is specifically provided "notwithstanding anything to the contrary, "an application" for summary judgment under this SRP 24/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 ::: COMAP40.16.doc Order shall not be made in a Suit in respect of any commercial disputes that is originally filed as a summary suit under Order XXXVII.". Therefore, once the summary suit as originally filed, prior to the commencement of the and as now transferred, being commercial dispute matter, the original procedure as provided under Order XXXVII shall be applicable to such summary suits. The parties are not entitled to prayer for summary judgment under XIII-A in view of the specific provision so referred above. This also means that the judgments and the issue so decided in summary suit shall for all purposes be governed by the CPC, even after such suits are as suits. The Commercial Division Judge is required to follow the original C.P.C. And is required to keep in mind the position in law revolving around all the facets of summary suits. The provisions of Section 13, therefore, is required to be interpreted and/or considered accordingly, when any decision is given by the Commercial Division/Court in such summary suit. The proviso to Section 13(1), will not affect the maintainability of such Appeal so filed against such order/judgment passed by the Commercial Division/Court in such summary suit.
25 The submission that Section 13 proviso has extinguished, expressly and/or by necessary intentment the Appeal against the order passed by the Commercial Judge in summary suit granting the Defendant conditional leave to defend a SRP 25/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 ::: COMAP40.16.doc summary suit is unacceptable. Section 13 itself contemplates that an Appeal is maintainable against the decision/judgment or order which has effect of "judgment", though it falls outside the purview of Order XLIII as observed above.
26. ... ... ... ... The Commercial Courts Act or special Statute, if empowers, the Appellate Division Court to deal with the Appeal against the Judgment/order passed by the Commercial Division or the Commercial Court, the bar so submitted of proviso to Section 13(1) is not applicable in each and every matter specifically when the subject matters are commercial disputes as defined under the Commercial Courts Act and are also governed by the Special Act/Statute other than the CPC. The specific provisions/ Statute/ Act will prevail as substantial rights, if are created over the provisions of Order XLIII CPC, as provided in proviso to Section 13(1) of the Commercial Courts Act.
Filing of Appeal under Section 13 of the Commercial Courts Act, cannot be occluded-
27 Section 13 Scheme itself provides Appeal against decision which includes judgment/order passed by the Commercial Division/Court. There is no provision of revision against the interlocutory order in view of bar of Section 8. Section 8 further clarifies that only Appeal against such order is available SRP 26/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 ::: COMAP40.16.doc subject to Section 13 proviso. Even the issue of jurisdiction or such challenge. Therefore, the aggrieved parties have no option but to file Appeal against the decision/order. The Appellate Court, however, may or may not entertain appeal against the order or interlocutory order, in view of proviso to Section 13(1). But filing of Appeal under Section 13, in our view, cannot be occluded. The Appeal against any decision of any Commercial Division/Court is maintainable. To entertain or not is the Appellate Court's power and the jurisdiction depends upon the facts and circumstances of the case."
33 Dr. Saraf would submit that the Division Bench, on an analysis of the provisions of Act 4 of 2016, has ruled that firstly the provisions of section 13 are required to be interpreted and/or considered accordingly and particularly bearing in mind that the Commercial Division Judge is required to follow the original Code of Civil Procedure. He is required to keep in mind the position in law revolving around all the facets of summary suits for the judgment and the issue so decided in Summary Suits shall, for all purposes, be governed by the Code of Civil Procedure even after they are transferred as commercial suits. Therefore, Dr. Saraf would submit that the submission canvassed that section 13 SRP 27/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 ::: COMAP40.16.doc proviso has extinguished expressly and/or by necessary intendment the appeal against the order passed by the Commercial Judge granting the defendant conditional leave to defend a Summary Suit is not acceptable. Section 13 itself contemplates that an appeal is maintainable against the judgment and order which has the effect of judgment though it falls outside the purview of order XLIII as observed by the Division Bench. Dr. Saraf has laid great emphasis on these conclusions and equally that the bar of the proviso to section 13(1) is not applicable in each and every matter specifically when the subject of the Act 4 of 2016 is commercial disputes as defined therein. They are also governed by the Special Act / Statute other than the Code of Civil Procedure. In such circumstances, he relied upon the above reproduced portion from paragraph 26 and the conclusion drawn in paragraph 27. Dr. Saraf would submit that this decision holds that an appeal against any decision of any Commercial Division / Court is maintainable and to entertain the appeal at all or not is the appellate court's power and jurisdiction. That depends upon the facts and circumstances of each case.
SRP 28/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 :::
COMAP40.16.doc 34 In the second judgment rendered in Smt. Sushila Singhania, the appeal arose from an order passed by a learned single Judge. What had transpired was that there was a partnership firm and during the course of business, differences arose between the partners. A deed of dissolution was executed and the firm was dissolved. A supplemental agreement was also executed. The parties agreed to partition and distribution of the immovable properties of the firm amongst themselves. 35 Since there was some dispute regarding distribution, an arbitration suit was filed by the respondent No.1 to 6 for appointment of an arbitrator under section 20 of the then Arbitration Act, 1940. The suit was initially dismissed on the ground of limitation. The matter travelled upto the Supreme Court and thereafter, the dispute was referred to a sole arbitrator for arbitration. The sole arbitrator made an award on 4 th August, 2008. He directed partition and distribution of the various immovable properties of the firm amongst the partners. The award of the learned arbitrator was challenged in a petition under section 34 of the Arbitration & Conciliation Act, 1996 and the petition challenging the said award was dismissed by this SRP 29/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 ::: COMAP40.16.doc Court. An appeal therefrom under section 37 of the Arbitration & Conciliation Act, 1996, was dismissed on 8 th March, 2013. The Award became executable as a decree.
36 Since the Award was not enforced, in the sense the distribution did not take place, an Execution Application No.2006 of 2015 under Order XXI of the Code of Civil Procedure, 1908, was filed in this Court. The respondent No.16 to the appeal also filed an Execution Application No.1913 of 2015. A Notice No.1786 of 2015 was issued under Order XXI Rule 22 of the Code of Civil Procedure to all parties in the execution application, calling upon them to show cause why the award was not executable and why warrant of possession should not be issued. All the parties filed detailed reply to the Notice. The appellant - Sushila and others opposed and resisted the execution of the award on the ground that the obligations of the groups in the award were joint, interlinked and interconnected and to be executed and complied with simultaneously. 37 From the record it appears that such an objection was turned down and an order was made to that effect. It was that SRP 30/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 ::: COMAP40.16.doc order which came to be challenged in appeal before the Division Bench.
38 A preliminary objection was raised to the maintainability of the appeal on the ground that orders which are passed in execution proceedings are not decrees of Commercial Courts and Commercial Division nor are they orders which are specifically enumerated in sub-section (1) of section 13. Therefore, the appeals are not maintainable. 39 On the other hand, the appellants argued that the right of appeal is not restricted either to decrees or orders which are specifically enumerated in the proviso, but would lie also against decisions of the Commercial Courts or Commercial Division which have the effect of attaining finality and even against such a decision, appeal would be maintainable. The argument further was that the order passed in execution proceedings is in the nature of a final order affecting substantive rights of the appellants and, therefore, these appeals are maintainable.
SRP 31/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 :::
COMAP40.16.doc 40 In dealing with such objection and ruling upon it, the Division Bench made the following observations to which our attention was specifically invited by Dr. Saraf. Those observations are to be found in paragraphs 72 to 75 and paragraphs 81 to 84 and they read as under :
"72 However, when the final Act was passed, it is apparent that the exclusion of the provisions of the Letters Patent are to be found in sub-section (2). The said sub-section (2) also starts with a non-obstante clause - notwithstanding anything contained in any other law -meaning thereby either CPC, Arbitration Act or the Letters Patent or any other law, no appeal would lie from any order or decree of a Commercial Division or a Commercial Court otherwise than in accordance with the provisions of this Act.
73 Apart from reasons which we have given hereinabove, and in addition to that while deciding the question as to whether "decision" includes "judgment" and "decree", it will have to be considered whether the word "decision" has to be used in narrow sense or in a broad sense i.e. whether the word "decision" will have to be read only as a "decree" or wider meaning has to be given viz that of "decree", "judgment" and "order" which conclusively decides rights of the parties. Though the Letters Patent Act is SRP 32/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 ::: COMAP40.16.doc not applicable as it has been expressly excluded under sub-section (2), it will be necessary to briefly see how the word "judgment" has been interpreted by the Apex Court. The word "judgment" is narrowly treated under Section 2 of the CPC. When the said question came up for consideration before the Supreme Court in Shah Babulal Khimji (supra), the Supreme Court in paras 112 and 113 of its judgment gave a wider meaning and held that those orders which conclusively decide right of parties could be held to be appealable under the Letters Patent Appeal, though the word "judgment" is narrowly construed in the CPC. The Apex Court in Shah Babulal Khimji (supra) did not give narrow meaning to the said word "judgment" and, therefore, held that the orders which conclusively decide right of parties, even if they are not appealable under Section 104 or Order XLIII, an appeal would lie under the Letters Patent.
74 The vexed question is whether similar meaning should be given to the word 'decision' as is found in sub-section (1) of Section 13.
75 The question which fell for consideration before the Apex Court in Tirumalachetti Rajaram vs. Tirumalachetti Radhakrishnayya Chetty and Others , was as under:
"If the appellate decree passed by the High Court makes a variation in the decision of the trial SRP 33/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 ::: COMAP40.16.doc court under appeal in favour of a party who intends to prefer an appeal against the said appellate decree, can the said decree be said to affirm the decision of the trial court or not under Article 133(1) of the Constitution?"
............
81 From the above decisions it can be seen that the words and phrases previously interpreted by the Courts have to be used in aid to interpretation of later statute. The word "decision" therefore in this context would mean a final decision in the entire suit and therefore a decree.
82 Mr. Tulzapurkar, the learned Senior Counsel appearing on behalf of the Appellants has relied upon the definition of the word "decision" given in Black's Law Dictionary (9th Edition) and has contended that "decision" would include an order which finally determines rights of the parties.
83 It is well settled that definition given by a dictionary cannot override the interpretation made by the Court in the context of its meaning as used in the statute and therefore the said submission is unacceptable. It is a settled position in law that dictionary is a secondary and external aid to interpretation of statute and cannot be relied upon when a direct meaning/definition has been in use in law and/or defined specifically in a statute. It has to be noted here that the term "decision" was a part of SRP 34/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 ::: COMAP40.16.doc the Code of Civil Procedure 1882 (Section 596) which was later incorporated in Section 110 of the CPC which is now deleted and is also used in Article 133 of the Constitution of India.
84 From the judgments referred to hereinabove, it is clear that it has been consistently held that the term "decision" appearing in three provisions means decision of the suit. The definition of "decision" and "judgment" in Black's Law Dictionary is therefore contrary to the settled law in India."
41 Dr. Saraf would also rely upon paragraph 93 to submit that the Division Bench in Smt. Sushila Singhania (supra) was of the view that heading of section 13 deals with Appeals from Decrees and the proviso carves out an exception in respect of the orders which are specifically enumerated in section 37 of the Arbitration Act against which an appeal can be filed. The word "decision" therefore, will have to be interpreted to mean a decree. 42 Dr. Saraf would submit that this view of the Division Bench in Smt. Sushila Singhania directly conflicts with that of the Division Bench in Hubtown. A preliminary issue of maintainability of appeal in Hubtown was decided and thus the SRP 35/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 ::: COMAP40.16.doc challenges were similar. However, in Hubtown, the conclusion that is reached in paragraph 93 in Smt. Sushila Singhania has been specifically not reached and thus there is a divergence in the conclusion of the two Division Benches, particularly when the judgment in Smt. Sushila Singhania's case does not refer to Hubtown beyond noting the reliance thereon while setting down the submissions of the parties. Smt. Sushila Singhania being a latter judgment, we should either ignore it for it has not explained and examined the earlier view. If we are of the view that there is a conflict or divergence in views, the matter is required to be referred to a larger Bench in terms of judicial discipline. 43 In that, we are taken through the scheme of the law of precedents and particularly what is a binding precedent and what is the judicial discipline required when binding decisions or precedents are brought to the notice of the single Judge and Division Benches of this Court and if they wish to disagree therewith. Any disagreement or difference of opinion being noted and set down thereafter should result in judicial discipline being followed, according to Dr. Saraf.
SRP 36/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 :::
COMAP40.16.doc 44 Looked at from this angle, according to him, this appeal should be held to be maintainable and taken up for consideration on merits.
45 Before we give our opinion, it would be advisable to independently go through the scheme of Act 4 of 2016. Though it is noted extensively in both the judgments above, it is better that we refer it so as to appreciate the arguments of Dr. Saraf. 46 It is an Act to provide for the constitution of Commercial Courts, Commercial Division and Commercial Appellate Division in the High Courts for adjudicating commercial disputes of specified value and for matters connected therewith or incidental thereto. Chapter I contains preliminary provisions and therein appears section 2. What we have is a Commercial Appellate Division being defined in section 2 clause (a) to mean the Commercial Appellate Division in a High Court constituted under sub-section (1) of section 5. "Commercial Court" means the Commercial Court constituted under sub-section (1) of section 3. Then comes the definition of the terms "Commercial dispute" and "Commercial Division" appearing in section 2 SRP 37/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 ::: COMAP40.16.doc clauses (c) and (d) of these definitions and they read as under :
"2. Definitions.- In this Act, unless the context otherwise requires,-
(a) .........
(c) "commercial dispute" means a dispute
arising out of--
(i) ordinary transactions of merchants,
bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents;
(ii) export or import of merchandise or
services;
(iii) issues relating to admiralty and maritime
law;
(iv) transactions relating to aircraft, aircraft
engines, aircraft equipment and helicopters, including sales, leasing and financing of the same;
(v) carriage of goods;
(vi) construction and infrastructure contracts,
including tenders;
SRP 38/106
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COMAP40.16.doc
(vii) agreements relating to immovable
property used exclusively in trade or commerce;
(viii) franchising agreements;
(ix) distribution and licensing agreements;
(x) management and consultancy agreements;
(xi) joint venture agreements;
(xii) shareholders agreements;
(xiii) subscription and investment agreements pertaining to the services industry including outsourcing services and financial services;
(xiv) mercantile agency and mercantile usage;
(xv) partnership agreements;
(xvi) technology development agreements;
(xvii) intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits;SRP 39/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:46 :::
COMAP40.16.doc (xviii) agreements for sale of goods or provision of services;
(xix) exploitation of oil and gas reserves or other natural resources including electromagnetic spectrum;
(xx) insurance and re-insurance;
(xxi) contracts of agency relating to any of the above; and (xxii) such other commercial disputes as may be notified by the Central Government.
Explanation. --A commercial dispute shall not cease to be a commercial dispute merely because---
(a) it also involves action for recovery of immovable property or for realisation of monies out of immovable property given as security or involves any other relief pertaining to immovable property;
(b) one of the contracting parties is the State or any of its agencies or instrumentalities, or a private body carrying out public functions;
(d) "Commercial Division" means the Commercial Division in a High Court constituted SRP 40/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc under sub-section (1) of section 4;"
47 Then we have the term "specified value" defined section 2 sub-section (1) clause (i). In relation to a commercial dispute it shall mean the value of the subject matter in respect of a suit as determined in accordance with section 12 which shall not be less than rupees one crore or such higher value as shall be notified by the Central Government. Sub-section (2) of section 2 clarifies that the words and expressions used and not defined in this Act, but defined in the Code of Civil Procedure, 1908, and the Indian Evidence Act, 1872, shall have the same meanings respectively assigned to them in that Code and the Act. Chapter II deals with Constitution of Commercial Courts, Commercial Divisions and Commercial Appellate Divisions. Section 3 deals with Constitution of Commercial Courts and by sub-section (1) the State Government shall, after consultation with the concerned High Court, by notification, constitute such number of commercial courts at District level, as it may deem necessary for the purpose of exercising the jurisdiction and powers conferred on those courts under the Act 4 of 2016. The proviso to section 3 sub-section (1) states that no commercial court shall be SRP 41/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc constituted for the territory over which the High Court has ordinary original civil jurisdiction.
48 Sub-section (2) of section 3 says that the State Government shall, after consultation with the concerned High Court, specify, by notification, the local limits of the area to which the jurisdiction of a commercial court shall extend and may, from time to time, increase, reduce or alter such limits. Sub-section (3) of section 3 states that the State Government shall with the concurrence of the Chief Justice of the High Court appoint one or more persons having experience in dealing with commercial disputes to be the Judge or Judges of a commercial court from amongst the cadre of higher judicial service in the State. Section 4 provides for Constitution of Commercial Division of High Court. It is apparent from sub-section (1) that in all High Courts having ordinary civil jurisdiction, the Chief Justice of the High Court may, by order, constitute Commercial Division having one or more Benches constituting of a single Judge for the purpose of exercising the jurisdiction and powers conferred on it under this Act. There again, the Chief Justice shall nominate such Judges of the High Court who have experience in dealing with commercial SRP 42/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc disputes to be Judges of the Commercial Division. 49 Section 5 provides for constitution of Commercial Appellate Division and following the Notification under sub- section (1) of section 3 or under sub-section (1) of section 4, the Chief Justice of the concerned High Court shall, by order, constitute Commercial Appellate Division having one or more Division Benches for the purpose of exercising the jurisdiction and powers conferred on it by the Act. There again, the nomination of Judges experienced in dealing with commercial disputes is contemplated by sub-section (2) of section 5. Sections 6 and 7 read as under :
"6. Jurisdiction of Commercial Court. - The Commercial Court shall have jurisdiction to try all suits and applications relating to a commercial dispute of a Specified Value arising out of the entire territory of the State over which it has been vested territorial jurisdiction.
Explanation.-- For the purposes of this section, a commercial dispute shall be considered to arise out of the entire territory of the State over which a Commercial Court has been vested jurisdiction, if the suit or application relating to such commercial SRP 43/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc dispute has been instituted as per the provisions of sections 16 to 20 of the Code of Civil Procedure, 1908 (5 of 1908).
7. Jurisdiction of Commercial Divisions of High Courts.- All suits and applications relating to commercial disputes of a Specified Value filed in a High Court having ordinary original civil jurisdiction shall be heard and disposed of by the Commercial Division of that High Court:
Provided that all suits and applications relating to commercial disputes, stipulated by an Act to lie in a court not inferior to a District Court, and filed or pending on the original side of the High Court, shall be heard and disposed of by the Commercial Division of the High Court:
Provided further that all suits and applications transferred to the High Court by virtue of sub-section (4) of section 22 of the Designs Act, 2000 or section 104 of the Patents Act, 1970 (39 of 1970) shall be heard and disposed of by the Commercial Division of the High Court in all the areas over which the High Court exercises ordinary original civil jurisdiction."
50 A perusal of these provisions would indicate as to how the commercial court shall have jurisdiction to try all suits and SRP 44/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc applications relating to a commercial dispute of a specified value arising out of the territorial jurisdiction of the State over which it has been vested territorial jurisdiction. 51 We do not refer to the Explanation to section 6, but section 7 defines the jurisdiction of Commercial Division of High Courts and there, all suits and applications relating to commercial dispute of a specified value filed in a High Court having ordinary original civil jurisdiction shall be heard and disposed of by the Commercial Division of that High Court. Broken into parts, it would mean all suits and applications relating to commercial disputes of a specified value filed in High Court having ordinary original civil jurisdiction shall be heard and disposed of by the Commercial Division of that Court. The proviso to this section 7 would indicate as to how all suits and applications relating to commercial disputes stipulated by the Act would lie in a court not inferior to a District Court and filed or pending on the original side of the High Court, shall be heard and disposed of by the Commercial Division of the High Court and further all suits and applications transferred to the High Court by virtue of certain provisions of the Act in the second proviso to SRP 45/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc section 7 shall be heard and disposed of by the Commercial Division of the High Court in all areas over which it has ordinary original civil jurisdiction.
52 Section 8 enacts a bar against a Revision Application or Petition against an interlocutory order. That section is equally important for our purpose for it rules out the maintainability of a Revision Application or Petition against any interlocutory order of a Commercial Court, including an order on the issue of jurisdiction, and any such challenge subject to the provisions of section 13, shall be raised only in an appeal against the decree of the Commercial Court.
53 The argument, therefore, is that this provision being subject to section 13, it is only a Revision Petition which will not lie and shall not be entertained against any interlocutory order of a Commercial Court, including on the jurisdiction, but this provision being subject to section 13, that does not rule out the right of maintainability of an appeal. Even if this section is as above, no construction on section 13 should be placed with the aid and assistance of section 8 of the Act 4 of 2016 so as to SRP 46/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc whittle down or dilute the right of appeal. Further, the requirement is that this section will not throw light on the maintainability of the appeal from an order of the above nature and passed by a Judge exercising power and authority as Commercial Division of a High Court. At best, a Revision Petition or application is ruled out against any interlocutory order of a Commercial Court.
54 Then follows section 9 which transfers a counter claim in a commercial dispute of specified value. There, notwithstanding anything contained in the Code of Civil Procedure, in the event that a counter claim filed in a suit before a civil court relating to a commercial dispute is of specified value, such suit shall be transferred by the civil court to the Commercial Division or Commercial Court, as the case may be, having territorial jurisdiction over such suit. Sub-section (2) of section 9 enables the Commercial Appellate Division of the High Court exercising supervisory jurisdiction over the civil court in its discretion to withdraw the suit on the application of the parties in the event sub-section (1) of section 9 is not complied with. SRP 47/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 :::
COMAP40.16.doc 55 Then, section 10 sets out the jurisdiction in respect of arbitration matters and sections 10 and 11, for our purpose, read as under :
"10. Jurisdiction in respect of arbitration matters.- Where the subject-matter of an arbitration is a commercial dispute of a Specified Value and-- (1) If such arbitration is an international commercial arbitration, all applications or appeals arising out of such arbitration under the provisions of the Arbitration and Conciliation Act, 1996 that have been filed in a High Court, shall be heard and disposed of by the Commercial Division where such Commercial Division has been constituted in such High Court.
(2) If such arbitration is other than an international commercial arbitration, all applications or appeals arising out of such arbitration under the provisions of the Arbitration and Conciliation Act, 1996 that have been filed on the original side of the High Court, shall be heard and disposed of by the Commercial Division where such Commercial Division has been constituted in such High Court.
(3) If such arbitration is other than an international commercial arbitration, all applications or appeals arising out of such arbitration under the provisions of the Arbitration and Conciliation Act, 1996 that would ordinarily lie before any principal SRP 48/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc civil court of original jurisdiction in a district (not being a High Court) shall be filed in, and heard and disposed of by the Commercial Court exercising territorial jurisdiction over such arbitration where such Commercial Court has been constituted.
11. Bar of jurisdiction of Commercial Courts and Commercial Divisions. -
Notwithstanding anything contained in this Act, a Commercial Court or a Commercial Division shall not entertain or decide any suit, application or proceedings relating to any commercial dispute in respect of which the jurisdiction of the civil court is either expressly or impliedly barred under any other law for the time being in force."
56 A reading thereof would denote that the Act also enacts provisions so as to deal with the jurisdiction in respect of arbitration matters and then creates a bar, in the sense notwithstanding anything contained in the Act 4 of 2016, a Commercial Court or Commercial Division shall not entertain or decide any suit, application or proceedings relating to any commercial dispute in respect of which the jurisdiction of the civil court is either expressly or impliedly barred under any other law for the time being in force. Then Chapter III contains section 12 SRP 49/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc and section 12 sets down by sub-section (1), the specified value of the subject matter of the commercial dispute in the suit, appeal or application and that should be determined in the manner set out in sub-section (1) clauses (a) to (e). By sub-section (2), the aggregate value of the claim and counter claim, if any, as set out in the statement of claim and counter claim, if any, in an arbitration of a commercial dispute shall be the basis for determining whether such arbitration is subject to the jurisdiction of a Commercial Division, Commercial Appellate Division or Commercial Court, as the case may be. Then, sub- section (3) of section 12 is important and reads as under :
"12. Determination of Specified Value.-
(1) .... .... ...
(3) No appeal or civil revision application under section 115 of the Code of Civil Procedure, 1908, as the case may be, shall lie from an order of a Commercial Division or Commercial Court finding that it has jurisdiction to hear a commercial dispute under this Act"
57 Then come sections 13 and 14 appearing in Chapter IV and they read thus :
"13. Appeals from decrees of Commercial Courts and Commercial Divisions. - (1) Any SRP 50/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc person aggrieved by the decision of the Commercial Court or Commercial Division of a High Court may appeal to the Commercial Appellate Division of that High Court within a period of sixty days from the date of judgment or order, as the case may be: Provided that an appeal shall lie from such orders passed by a Commercial Division or a Commercial Court that are specifically enumerated under Order XLIII of the Code of Civil Procedure, 1908 as amended by this Act and section 37 of the Arbitration and Conciliation Act, 1996. (2) Notwithstanding anything contained in any other law for the time being in force or Letters Patent of a High Court, no appeal shall lie from any order or decree of a Commercial Division or Commercial Court otherwise than in accordance with the provisions of this Act.
14. Expeditious disposal of appeals. - The Commercial Appellate Division shall endeavour to dispose of appeals filed before it within a period of six months from the date of filing of such appeal."
58 Before we refer to them in detail, what we have are the provisions of Chapter-V dealing with transfer of pending cases, but the Chapter itself is titled as "Transfer of Pending Suits". Then, what we have by Chapter VI are Amendments to the Provisions of the Code of Civil Procedure, 1908, and the SRP 51/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc provisions of the Code of Civil Procedure, in their application to any suit in respect of a commercial dispute of a specified value, stand amended in the manner as specified in the schedule. By sub-section (2) of section 16, the Commercial Division and the Commercial Court shall follow the provisions of the Code of Civil Procedure amended by this Act, namely, Act 4 of 2016 in the trial of a suit in respect of commercial dispute of a specified value and by sub-section (3) where any provision of any rule of the jurisdictional High Court or any amendment to the Code of Civil Procedure, 1908 by the State Government is in conflict with the provisions of the Code of Civil Procedure, 1908, as amended by this Act, the provisions of the Code of Civil Procedure as amended by this Act shall prevail.
59 Chapter VII contains Miscellaneous provisions enabling collection and disclosure of data by Commercial Courts, Commercial Divisions and Commercial Appellate Divisions (section 17). Power of the High Court to issue directions is conferred by section 18 and infrastructural facilities by section
19. By section 20, training and continuous education is contemplated and by the State Government in consultation with SRP 52/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc the High Court establishing necessary facilities providing for training of Judges. Section 21 gives the Act an overriding effect and reads thus :
"21. Act to have overriding effect. - Save as otherwise provided, the provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law for the time being in force other than this Act."
60 Section 22 gives power to remove difficulties and section 23 titled Repeal and savings repeals the Ordinance preceding the Act by sub-section (1) but says notwithstanding such repeal, anything done or any action taken under the said Ordinance shall be deemed to have been done or taken under the corresponding provision of this Act. The Schedule need not be referred to for our purpose.
61 Thus, there is a Commercial Court which has to be constituted at District level. Then, there is a constitution of Commercial Division of High Court and constitution of a Commercial Appellate Division following which the jurisdiction of SRP 53/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc the Commercial Court and Commercial Division of the High Court has been set out. These are, therefore, courts which are pre- existing and which have otherwise a power to try the suits and applications. After the Act 4 of 2016, they are to be constituted as Commercial Courts at District level and within the High Court having ordinary ordinary civil jurisdiction, the Act contemplates constitution of Commercial Division of High Court and Commercial Appellate Division.
62 Section 13 and the preceding provisions together with those following the same would have to be read together and harmoniously to arrive at a conclusion as to whether the right of appeal and conferred by section 13 is as wide as contended by Dr. Saraf or restricted as alleged by Mr. Kadam. 63 Before that, we must dispose of one argument and which has been heavily pressed into service by the appellants as also the respondents. Mr. Kadam would submit that sub-section (2) of section 13 is opening with a non obstante clause. The sweep of this non obstante clause is so wide that it states that overrides any other law for the time being in force or Letters SRP 54/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc Patent of a High Court. Therefore, an appeal would lie from any order or decree of a Commercial Division or a Commercial Court only within the four corners of the Act 4 of 2016 and the appellate power would not be available to impugn or challenge any and every decision even if it is styled as a judgment. Dr. Saraf would submit that despite such a non obstante clause and given its scope, the tests laid down by the Hon'ble Supreme Court in the case of Shah Babulal Khimji vs Jayaben D. Kania & Anr., AIR 1981 SC 1786 still hold the field. So long as that which is challenged is a decision amounting to a judgment and on par with that contemplated by clause 15 of the Letters Patent to be an appealable one, this Act and section 13 should be construed as not taking away a right of appeal against the same is the argument of Dr. Saraf.
64 Shah Babulal Khimji was a case which arose from this Court. In that, a Bench of three Judges of the Hon'ble Supreme Court was called upon to decide as to whether an order passed in appeal by a Division Bench of this Court and, to be precise, dismissing the appeal on the ground that it was not maintainable, which appeal arose from the order of a learned single Judge, was SRP 55/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc correct in law. In the sense the Division Bench held that the appeal is not maintainable because the impugned order was not a judgment within the meaning of clause 15 of the Letters Patent. 65 The Hon'ble Supreme Court ruled that the appeal before the Division Bench was maintainable and the Division Bench should have entertained and decided it on merits. 66 There, the plaintiff-appellant filed a suit on the original side of the Bombay High Court for specific performance of a contract and prayed for an interim relief by appointing a Receiver of the suit property and injuncting the defendant from disposing of the suit property during the pendency of the suit. This relief was sought by filing of a Notice of Motion. That Notice of Motion was dismissed by a learned single Judge. The plaintiff- appellant filed an appeal before the High Court which dismissed it as being not maintainable.
67 The High Court found that the appeal was not maintainable because the order of the learned single Judge was not a judgment as contemplated by clause 15 of the Letters SRP 56/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc Patent. The Hon'ble Supreme Court, in paragraph 5, enumerated the substantial questions of law and which were, inter alia, touching the scope, ambit and meaning of the word 'judgment' and particularly in the context of those High Courts which have ordinary original civil jurisdiction depending on valuation of the suit or the action.
68 The Supreme Court then traced the interpretation of the word 'judgment' appearing in the Letters Patent of several High Courts and after a survey of these decisions, noting the rival contentions, inter alia, that the provisions of section 104 read with Order XLIII Rule 1 of the Code of Civil Procedure do not impose any bar and thus by virtue of these provisions, the order impugned falls squarely under clauses (r) and (s) of Order XLIII Rule 1 of the Code of Civil Procedure, 1908, and, therefore, is appealable to a Division Bench. Even if the Court holds that the Letters Patent was a special law overriding the Code of Civil Procedure the power of appeal thereunder against an order is in no way inconsistent with clause 15 of the Letters Patent. Section 104 merely provides an additional remedy and confers a new jurisdiction on the High Court without at all interfering with or SRP 57/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc overriding the existing provisions of the Letters Patent. Then, there are other contentions and which are noted against the submissions of the appellant. In paragraph 15, the Hon'ble Supreme Court dealt with the first point relating to applicability of section 104 read with Order XLIII Rule 1 of the Code of Civil Procedure,1908, and thereafter concluded as under :
"20 To begin with, it is not disputed that a Trial Judge has to follow the entire procedure laid down by the Code of 1908 starting from the presentation of the plaint right up to the delivery of the judgment. The only difference in the assumption of jurisdiction by the High Court is that a suit of a particular valuation has to be instituted in the High Court rather than in the District court. Secondly, it is indisputable that any final judgment that the Trial Judge passes deciding the suit one way or the other amounts to a decree and under the provisions of the Letters Patent an appeal lies to a larger Bench which normally is a Division Bench as provided for under the Rules made by various High Courts. Thirdly, the Letters Patent itself does not define the term 'judgment' and has advisedly not used the word 'decree' in respect of any judgment that may be given by the Trial Judge. Section 5 of the Code of 1908 may be extracted thus:
"5. Application of the Code to Revenue Courts: (1) Where any Revenue Courts are governed by SRP 58/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc the provisions of this Code in those matters of procedure upon which any special enactment applicable to them is silent the State Government may, by notification in the Official Gazette, declare that any portions of those pro visions which are not expressly made applicable by this Code shall not apply to those Courts, or shall only apply to them with such modifications as the State Government may prescribe.
(2) "Revenue Court" in Sub-section (1) means a court having jurisdiction under any local law to entertain suits of other proceedings relating to the rent, revenue or profits of land used for agricultural purposes, but does not include a Civil Court having original jurisdiction under this Code to try such suits or proceedings as being suits or proceedings of a civil nature "
21 The importance of this section is that wherever the provisions of the Code of Civil Procedure are sought to be excluded by any special enactment which may be silent on the point, the State Government can by notification apply the provisions of the Code to Revenue courts. A bare perusal of this section would clearly reveal that excepting Revenue courts all other Civil courts would normally be governed by the provisions of the Code of Civil Procedure in the matter of procedure. Section 4(1) of the Code of 1908 which is a saving provision clearly SRP 59/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc provides that in the absence of any specific provision to the contrary the provisions of the Code does not limit or affect any special or local law. Thus, the test contained in s. 4 is not applicable in the instant case because even if the Letters Patent of the High Court be deemed to be a special law as contemplated by s. 4, the provisions of s. 104 do not seek to limit or affect the provisions of the Letters Patent.
22 This now takes us to s. 104 of the Code of 1908, the relevant portion of which may be extracted thus:-
"104.(1) An appeal shall lie from the following orders, and save as otherwise expressly provided in the body of this Code or by any law for the time being in force, from no other orders:-
(a) to (f) annulled;
(ff) an order under section 35-A
(g) an order under section 95;
(h) an order under any of the provisions of this Code imposing a fine or directing the arrest or detention in the civil prison of any person except where such arrest or detention is in execution of a decree;
(1) any order made under rules from which an SRP 60/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc appeal is expressly allowed by rules:
(2) No appeal shall lie from any order passed in appeal under this section."
23 Thus by the force of S.104 all appeals as indicated in the various clauses of order 43 Rule 1 viz. (a) to (w) would lie to the appellate court. Section 105 clearly provides that no appeal shall lie from any order of a Court made in the exercise of its original or appellate jurisdiction except according to the procedure laid down by the Code. The relevant part of S. 105 (1) may be extracted thus:
"105. (1) Save as otherwise expressly provided no appeal shall lie from any order made by a Court in the exercise of its original or appellate jurisdiction; but where a decree is appealed from, any error, defect or irregularity in any order, affecting the decision of the case, may be set forth as a ground of objection in the memorandum of appeal."
24 Finally, order, 49 Rule 3 expressly exempts matters contained in clauses (1) to (6) of Rule 3 from the operation of the extraordinary original civil jurisdiction of the chartered High Courts, that is to say, the jurisdiction conferred on the High Court by the Letters Patent. The relevant portion of this provision may be extracted thus:
SRP 61/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 :::
COMAP40.16.doc "O. 49 ... ... ... ... ...
3. The following rules shall not apply to any Chartered High Court in the exercise of its ordinary or extraordinary original civil jurisdiction, namely:- (1) Rule 10 and Rule 11, clauses (b) & (c), of order VII;
(2) Rule 3 of order X;
(3) Rule 2 of order XVI;
(4) Rules 5, 6, 8, 9, 10, 11, 13, 14, 15, and 16 (so far as relates to the manner of taking evidence) of Order XVIII;
(5) Rules 1 to 8 of order XX; and (6) Rule 7 of order XXXIII (so far as relates to the making of a memorandum); and rule 35 of order XLI shall not apply to any such High Court in the exercise of its appellate jurisdiction" 25 It may be pertinent to note that although a number of rules have been exempted from the operation of the Code, order 43 Rule 1 and the clauses thereunder have not been mentioned in any of these clauses.
26 Thus, a combined reading of the various provisions of the Code of Civil Procedure referred to above lead to the irresistible conclusion that S. 104 SRP 62/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc read with order 43 Rule 1 clearly applies to the proceedings before the Trial Judge of the High Court. Unfortunately, this fact does not appear to have been noticed by any of the decisions rendered by various High Courts."
69 The Court, in paragraph 28 expressed its agreement with the appellants' senior counsel that in the instant case, section 104 read with Order XLIII Rule 1 does not, in any way, abridge, interfere with or curb the power conferred on the trial Judge by clause 15 of the Letters Patent. What they do is to give an additional remedy by way of an appeal from the orders of the trial Judge to a larger Bench. Indeed, if this is the position, then the contention of the respondent that section 104 will not apply to internal appeals in the High Court cannot be countenanced. In fact, the question of application of the Code of Civil Procedure to internal appeals in High Court does not arise at all because the Code of Civil Procedure merely provides for a forum and if Order XLIII Rule 1 applies to a trial Judge, then, the forum created by the Court would certainly include a forum within the High Court to which appeals against the judgment of a trial Judge would lie. Therefore, the Supreme Court rejected the argument that Order XLIII Rule 1 cannot apply to internal appeals of the High Court. SRP 63/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 :::
COMAP40.16.doc Then, the Hon'ble Supreme Court refers to some of the provisions of the old Code and the judgments, including the judgments of the Privy Council interpreting the same. Then, in paragraphs 32 and 33, the Court enumerates as to how section 104 provides for additional or supplementary remedy by way of an appeal. After referring to the Letters Patent of this Court, the Hon'ble Supreme Court, in paragraph 43, concludes that the judgment of the three Judges of the Hon'ble Calcutta High Court furnishes a complete answer to the arguments of the respondent that Order XLIII Rule 1 will have no application to internal appeals in the High Court under the provisions of the Letters Patent. Then, what we find is the Supreme Court turning its attention to the second limb of the argument of the appellant that even assuming that Order XLIII Rule 1 does not apply to the High Court so far as the trial Judge of the said court is concerned, there can be no doubt that the orders indicated in various clauses of Order XLIII Rule 1 possess the attributes and incidents of a final order which conclusively decide a particular issue so far as the trial Court is concerned. After noting the arguments of the appellants' senior counsel on this point, in paragraph 55, the Supreme Court referred to the decision in the case of Radhey Shyam vs. Shyam Behari Singh SRP 64/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc (1970) 2 SCC 405, and in paragraph 57 concluded that on a parity of reasoning an order refusing to appoint a Receiver or grant injunction and similar orders mentioned in various clauses of Order XLIII Rule 1 fall within the tests laid down by this Court of being a judgment.
70 The Hon'ble Supreme Court noticed the contrary view as to what could be termed as a judgment and within the meaning of clause 15 of the Letters Patent. After noticing all these views, the Hon'ble Supreme Court concludes as under :
"78 Thus after considering the arguments of counsel for the parties on the first two limbs of the questions, our conclusions are :-
(1) That there is no inconsistency between Section 104 read with Order 43 Rule 1 and the appeals under the Letters Patent and there is nothing to show that the Letters Patent in any way excludes or overrides the application of Section 104 read with Order 43 Rule 1 or to show that these provisions would not apply to internal appeals within the High Court.
(2) That even if it be assumed that order 43 Rule I does not apply to Letters Patent appeals, the principles governing these provisions would SRP 65/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc apply by process of analogy.
(3) That having regard to the nature of the orders contemplated in the various clauses of Order 43 Rule 1, there can be no doubt that these orders purport to decide valuable rights of the parties in ancillary proceedings even though the suit is kept alive and that these orders do possess the attributes or character of finality so as to be judgments within the meaning of clause 15 of the Letters Patent and hence, appealable to a larger Bench.
(4) The concept of the Letters Patent governing only the internal appeals in the High Courts and the Code of Civil Procedure having no application to such appeals is based on a serious misconception of the legal position."
71 In paragraph 79, the Supreme Court considered an equally important question as to whether despite its finding that section 104 read with Order XLIII Rule 1 applies to Letters Patent and all orders passed by a trial Judge under clauses (a) to (w) would be appealable to the Division Bench, there would still be a large number of orders passed by a trial Judge which may not be covered by Order XLIII Rule 1. The question then was under what circumstances orders passed by a trial Judge not SRP 66/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc covered by Order XLIII Rule 1 would be appealable to the Division Bench. In such cases, the import, definition and the meaning of the word 'judgment' appearing in clause 15 assumes a real significance and a new complexion because the term 'judgment' appearing in the Letters Patent does not exclude orders not falling under the various clauses of Order XLIII Rule 1. The vexed controversial question was what is the real concept and purport of the word 'judgment' used in clause 15 of the Letters Patent. The paragraphs thereafter are devoted to the consideration and examination of this question and issue and thereafter the judgments on the point have been exclusively noted, rendered by several High Courts and equally by the Hon'ble Supreme Court. The nature of the orders which have been termed as judgment are then considered and what is heavily relied upon before us are the conclusions in paragraph 113. That paragraph reads as under :
"113 Thus, under the Code of Civil Procedure, a judgment consists of the reasons and grounds for a decree passed by a court. As a judgment constitutes the reasons for the decree it follows as a matter of course that the judgment must be a formal SRP 67/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc adjudication which conclusively determines the rights of the parties with regard to all or any of the matters in controversy. The concept of a judgment as defined by the Code of Civil Procedure seems to be rather narrow and the limitations engrafted by sub- section (2) of section 2 cannot be physically imported into the definition of the word 'judgment' as used in clause 15 of the Letters Patent because the Letters Patent has advisedly not used the terms 'order' or 'decree' anywhere. The intention, therefore, of the givers of the Letters Patent was that the word 'judgment' should receive a much wider and more liberal interpretation than the word 'judgment' used in the Code of Civil Procedure. 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 SRP 68/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc 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 Section 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 SRP 69/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc a vital right of the defendant and must, therefore, be construed to be a judgment so as to be appealable to 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. There may also be interlocutory orders which are not covered by Order 43 Rule 1 but which also possess the characteristics and trappings of finality in that, the orders may adversely affect a valuable right of the party or decide an important aspect of the trial in an ancillary proceeding. Before such an order can be a judgment the adverse effect on the party concerned must be direct and immediate rather than indirect or remote.
For instance, where the Trial Judge in a suit under Order 37 of the Code of Civil Procedure refuses the defendant leave to defend the suit, the order directly affects the defendant because he loses a valuable right to defend the suit and his remedy is confined only to contest the plaintiff's case on his own evidence without being given a chance to rebut that evidence. As such an order vitally affects a valuable right of the defendant it will undoubtedly be treated as a judgment within the meaning of the Letters Patent so as to be appealable to a larger Bench. Take the converse case in a similar suit where the trial Judge SRP 70/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 ::: COMAP40.16.doc allows the defendant to defend the suit in which case although the plaintiff is adversely affected but the damage or prejudice caused to him is not direct or immediate but of a minimal nature and rather too remote because the plaintiff still possesses his full right to show that the defence is false and succeed in the suit. Thus, such an order passed by the Trial Judge would not amount to a judgment within the meaning of clause 15 of the Letters Patent but will be purely an interlocutory order. Similarly, suppose the Trial Judge passes an Order setting aside an exparte decree against the defendant, which is not appealable under any of the clauses of Order 43 Rule 1 though an order rejecting an application to set aside the decree passed exparte falls within Order 43 Rule l clause (d) and is appealable, the serious question that arises is whether or not the order first mentioned is a judgment within the meaning of Letters Patent. The fact, however, remains that the order setting aside the ex-parte decree puts the defendant to a great advantage and works serious injustice to the plaintiff because as a consequence of the order, the plaintiff has now to contest the suit and is deprived of the fruits of the decree passed in his favour. In these circumstances, therefore, the order passed by the Trial Judge setting aside the ex parte decree vitally affects the valuable rights of the plaintiff and hence amounts to an interlocutory judgment and is therefore, appealable to a larger Bench."
SRP 71/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:47 :::
COMAP40.16.doc 72 Thus, the reliance by Dr. Saraf on these paragraphs overlooks the further pertinent observation of the Hon'ble Supreme Court, namely, that a trial Judge may pass a number of orders whereby some of the various steps to be taken by the parties in pursuance of the suit may be of routine nature. While other orders may cause inconvenience to one party or the other and for illustration, an order refusing an adjournment, an order refusing to summon an additional witness or document, an order refusing to condone delay in filing documents after the first date of hearing, an order of costs to one of the parties for its default or an order exercising discretion in respect of a procedural nature against one party or the other. Such orders are purely interlocutory and cannot constitute judgments because it will always be open to the aggrieved party to make a grievance of the orders passed against the party concerned in the appeal against the final judgment passed by the trial Judge. Thus, all the interlocutory orders cannot be regarded as judgments, 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. Similarly, orders passed by the trial Judge deciding question of SRP 72/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 ::: COMAP40.16.doc admissibility or relevancy of a document also cannot be treated as judgments because the grievance on this score can be corrected by the appellate court in appeal against the final judgment.
73 In paragraph 116, the Hon'ble Supreme Court gave instances of an interlocutory order which amounts to exercise of discretion and which may yet amount to a judgment within the meaning of clause 15 of the Letters Patent. There, the illustration of an amendment being allowed or including a cause of action or relief as a result of which a vested right of limitation accrued to the defendant is taken away and rendered nugatory. Though the order is purely discretionary and interlocutory in nature, the order contains the attributes and characteristics of finality and must be treated as a judgment within the meaning of the Letters Patent. Then, in paragraph 117, the Supreme Court deals with a case of an amendment being allowed at the instance of the plaintiff to add a particular relief or take an additional ground inconsistent with the pleas taken by him, but is not barred by limitation and does not work serious injustice to the defendant who would have ample opportunity to disprove the amended plea SRP 73/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 ::: COMAP40.16.doc taken by the plaintiff at the trial. This would be a simple interlocutory order without containing any quality of finality and would, therefore, not be a judgment within the meaning of clause 15 of the Letters Patent.
74 Therefore, the instances cited as illustrations, were termed as not exhaustive tests. These are then multiplied by reference to several orders which could be passed and thereafter, the Hon'ble Supreme Court concludes that the term 'judgment' as interpreted and the tests laid down for its interpretation would bring an end to the controversy.
75 Thus, the supporting or concurring judgments in this case may be elaborating or amplifying the essential conclusions further, but what we find is that in all these concurring views what has been enumerated is that an exhaustive or comprehensive definition of 'judgment' as contemplated in clause 15 of the Letters Patent cannot be properly given and it will be wise to remember that in the Letters Patent itself there is no definition of the word 'judgment'.
SRP 74/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 :::
COMAP40.16.doc 76 Dr. Saraf has argued before us that this judgment of the Hon'ble Supreme Court would continue to bind us irrespective of the language of sub-section (2) of section 13 whereas, by sub- section (1) of section 13, according to Mr. Kadam, what could be appealable is exhaustively set out. Mr. Kadam would submit that any person aggrieved by the decision of the Commercial Court or Commercial Division of a High Court may appeal to the Commercial Appellate Division of that High Court from the date of the judgment or order, as the case may be, and the proviso says that an appeal shall lie from such orders passed by a Commercial Division or a Commercial Court that are specifically enumerated under Order XLIII of the Code of Civil Procedure as amended by Act 4 of 2016 and 37 of the Arbitration & Conciliation Act, 1996. If, according to Mr. Kadam, we apply and follow what is enumerated in Shah Babual Khimji and import the tests applied and evolved for interpreting the word 'judgment', that would mean we ignore sub-section (2) of section 13 completely and introduce a right of appeal as provided in the Letters Patent of a High Court but that cannot be taken into consideration at all for the purposes of deciding as to whether the present appeal is maintainable. According to Mr. Kadam, the non obstante clause SRP 75/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 ::: COMAP40.16.doc in sub-section (2) would denote that no appeal shall lie from any order or decree of a Commercial Division or Commercial Court otherwise than in accordance with the provisions of this Act 4 of 2016.
77 Since Mr. Kadam has referred to the Code of Civil Procedure, we would have to refer to some of its provisions. 78 Mr. Kadam would submit that the word 'decree' is defined therein and this definition cannot be ignored for this very word has been inserted in section 13. He would submit that the word 'decree' is defined to mean not only the formal expression of an adjudication, but which so far as regards the Courts expressing it conclusively determines the rights of the parties with regard to all or any of the matters and controversy in the suit and may be either preliminary or final. It shall be deemed to include in the later part, the rejection of a plaint and the determination of any question within section 144, but shall not include any adjudication from which an appeal lies as appeal from an order or any order of dismissal for default. Hence, so long as a decision is not partaking the character of a "decree" or "order" as SRP 76/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 ::: COMAP40.16.doc defined in section 2, clause (14) of Code of Civil Procedure not restricted only to the formal expression of any decision of a civil court, but that which is not a decree, then, these definitions have a great bearing, along with section 2(9) of the Code of Civil Procedure, which defines 'judgment' to mean the statement given by the Judge on the grounds of decree or order, on the issue before us. Dr. Saraf, however, would submit that the word decree as defined includes preliminary or final and as far as a preliminary decree is concerned, he would rely on section 97 and to submit that where any party aggrieved by a preliminary decree passed after the commencement of the Code of Civil Procedure does not appeal from such decree, he shall be precluded from disputing its correctness in any appeal which may be preferred from the final decree.
79 Dr. Saraf has gone as far as contending that the impugned order is in the nature of a preliminary decree and on the point of jurisdiction. What this argument overlooks is whether it conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit. The argument further is that because this is a ruling on jurisdiction of SRP 77/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 ::: COMAP40.16.doc the Court insofar as the defendants / appellants are concerned, that concludes the matter in controversy inasmuch as they would have to submit to the territorial jurisdiction of this Court. 80 Even after Shah Babulal Khimji and whether every order passed is a judgment or not, in a reported decision in the case of Employer in Relation to Management of Central Mine Panning and Design Institute Ltd. vs. Union of India & anr. , a two Judge Bench of the Hon'ble Supreme Court had to deal with somewhat identical issue. That decision reported in AIR 2001 SC 883 notes clause 10 of the Letters Patent of the Patna High Court which is identically worded to clause 15 of the Letters Patent of the Bombay High Court and some other High Courts and in paragraphs 10, 11, 12, 13 and 14 of this judgment the Hon'ble Court analyses the same as under :
"10 The above analysis of Clause 15 of the Letters Patent will equally apply to Clause 10 of the Letters Patent of Patna. It follows that an appeal shall lie to a larger Bench of the High Court of Judicature at Patna from a judgment of one judge of the said High Court or one judge of any Division Court pursuant to Article 225 of the Constitution of India. The following SRP 78/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 ::: COMAP40.16.doc categories of judgment are excluded from the appealable judgments under the first limb of Clause 10 of the Letters Patent:
(i) a judgment passed in exercise of appellate jurisdiction in respect of a decree or order made in exercise of appellate jurisdiction by a court subject to superintendence of the said High Court in other words no letters patent appeal lies to the High Court from a judgment of one judge of the High Court passed in second appeal;
(ii) an order made by one judge of the High Court in exercise of revisional jurisdiction; and
(iii) a sentence or order passed or made in exercise of power under the provisions of Section 107 of Government of India Act, 1915 (now Article 227 of the Constitution of India) or in exercise of criminal jurisdiction.
11 From the above discussion, it is clear that from all judgments except those falling under the excluded categories, an appeal lies to the same High Court.
12 The next question which needs to be considered is, what does the expression 'judgment' mean? That expression is not defined in Letters Patent. It is now well-settled that definition of SRP 79/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 ::: COMAP40.16.doc 'judgment' in Section 2(9) of Code of Civil Procedure, has no application to Letters Patent. That expression was interpreted by different High Courts of India for purposes of Letters Patent. In Asrumati Debi Vs. Kumar Rupendra Deb Raikot, 1953 SCR 1159 : (AIR 1953 SC 198) a four-Judge Bench of this Court considered the pronouncements of the High Court of Calcutta in Justices of the Peace for Calcutta Vs. Oriental Gas Co. (1872) 8 Beng. LR. 433, the High Court of Rangoon in Dayabhai Vs. Murugappa Chettiar (1935) ILR. 13 Rang. 457 : (AIR 1935 Rangoon 267), the High Court of Madras in Tuljaram Vs. Alagappa (1912) ILR. 35 Mad. 1, the High Court at Bombay in Sonebai Vs. Ahmedbhai (1872) 9 Bom. HCR 398 (FB) as also the High Court at Nagpur, the High Court at Allahabad and Lahore High Court and observed as follows:
"In view of this wide divergence of judicial opinion, it may be necessary for this Court at some time or other to examine carefully the principles upon which the different views mentioned above purport to be based and attempt to determine with as much definiteness as possible the true meaning and scope of the word 'judgment' as it occurs in clause 15 of the Letters Patent of the Calcutta High Court and in the corresponding clauses of the Letters Patent of the other High Courts."SRP 80/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 :::
COMAP40.16.doc 13 Such an exercise was undertaken by a three- Judge Bench of this Court in Shah Babulal Khimji Vs. Jayaben D. Kania 1981 (4) SCC 8 : (AIR 1981 SC 1786), Fazal Ali, J. speaking for himself and Varadarajan, J. after analysing the views of different High Courts, referred to above, observed as follows:
"The intention, therefore, of the givers of the Letters Patent was that the word 'judgment' should receive a much wider and more liberal interpretation than the word 'judgment' used in the Code of Civil Procedure. 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."
It was pointed out that 'judgment' could be of three kinds:
(1) A final judgment. - in this category falls a judgment by which suit or action brought by the plaintiff is dismissed or decreed in part or full;
(2) A preliminary judgment.- this category is sub-divided into two classes:SRP 81/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 :::
COMAP40.16.doc
(a) where the Trial Judge by an order dismisses the suit, without going into the merits of the suit, only on a preliminary objection raised by the defendant/respondent on the ground of maintainability;
(b) where maintainability of the suit is objected on the ground of bar of jurisdiction, e.g., res judicata, a manifest defect in the suit, absence of notice under Section 80 and the like; and (3) Intermediary or interlocutory judgment.- in this category fall orders referred to in clauses (a) to (w) of Order 43 Rule 1 and also such other orders which possess the characteristic and trappings of finality and may adversely affect a valuable right of the party or decide an important aspect of the trial in an ancillary proceeding.
Elucidating the third category, it is observed:
"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."
14 In the instant case, we are concerned with the last mentioned category. From the above SRP 82/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 ::: COMAP40.16.doc discussion, it follows that to determine the question whether an interlocutory order passed by one judge of a High Court falls within the meaning of 'judgment' for purposes of Letters Patent the test is : whether the order is a final determination affecting vital and valuable rights and obligations of the parties concerned. This has to be ascertained on the facts of each case."
81 Thus, the Hon'ble Supreme Court concludes that the word 'judgment' is not defined in the Letters Patent and the definition of 'judgment' in section 2(9) of the Code of Civil Procedure has no application to the Letters Patent. Thereafter, it refers to Shah Babulal Khimji and lays down the relevant test. Thus, to determine the question whether an interlocutory order passed by one Judge of High Court falls within the meaning of judgment for purposes of Letters Patent must be determined by the test whether that order is a final determination affecting vital and valuable rights and obligations of the parties and which causes serious injustice to the parties concerned. However, this has to been ascertained on the facts of each case. 82 Precisely this is what the Division Bench in Hubtown SRP 83/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 ::: COMAP40.16.doc also held. It may have not referred to the very provisions, but eventually the reference to the same was in the context of consideration of issue of maintainability of the appeal. The issue arose from the order under appeal in that case. The order under appeal in that case was that of a conditional leave to defend a summary suit. In the very scheme of Order XXXVII such an order is contemplated. So long as there is a leave to defend, the summary suit cannot be defended and such leave can be conditional or unconditional. If that leave is granted conditionally so long as these conditions are not complied with, there is no right to defend. The suit then cannot be defended by the defendant. If these conditions were styled as onerous or excessive or the discretion in imposition of the same is labelled as arbitrary or capricious taking away a valuable right, then, the appeal is held to be maintainable. That is irrespective of whether section 13 and the decision contemplated as far as sub-section (1) is concerned together with its proviso circumscribes or restricts the right of appeal and by sub-section (2) exhausts it. Therefore, assuming that the non obstante clause is there, what the Division Bench holds is that the decision to be appealable or not must meet the test of being a judgment and the word 'judgment' must be SRP 84/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 ::: COMAP40.16.doc construed in the light of the further test laid down in the Supreme Court judgment. Hence, if there is an adjudication conclusively determining the rights of the parties to all or any of the matters in controversy in the suit, whether the order is deciding matters of moment which works serious injustice to the party concerned was left to be decided on a case to case basis. In Smt. Sushila Singhania, however, the Division Bench had to rule upon the maintainability of the appeal and which appeal challenged an order during the course of the execution proceedings. By their very nature, the proceedings were of execution and the award of the arbitrator could have been executed in terms of the Arbitration & Conciliation Act, 1996, as if it were a decree of the court. The scheme of the Code of Civil Procedure and the adjudication of rights contemplated thereby was, therefore, extremely relevant for deciding the maintainability of the appeal. The right to appeal could not be claimed and that is how it was claimed even in matters of execution or enforcement of the award of the arbitrator as if it were a decree of a civil court. It is in the backdrop of all this that the Court ruled that the appeal would not be maintainable and held it to be incompetent. SRP 85/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 :::
COMAP40.16.doc 83 We do not think that we must answer the larger question posed for our consideration and particularly whether there is any conflict in the two views. Even if one were to assume that Dr. Saraf can rely upon the view taken in Hubtown's case and also some of the provisions of the Code of Civil Procedure like section 97, what we feel is that the impugned order does not conclude the issue of jurisdiction, in the sense it is not to the detriment of the defendants. If the court holds that it has territorial jurisdiction to entertain and try the suit it may as well proceed to dismiss it on merits. If the suit is decreed, then, against such a final decree an appeal is always competent and maintainable within the meaning of sub-section (1) of section 13. In such an appeal, the ground of this Court's territorial jurisdiction can very well be raised. The salutary purpose and which is served by ensuring expeditious disposal of commercial suits can be harmonized, therefore, in the facts and circumstances of the present case by holding that the order under challenge is not of a conclusive nature going by the tests laid down above. What we have seen and for that purpose is even in the Code of Civil Procedure, a provision like section 105 has been enacted. That follows section 104 which enumerates the SRP 86/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 ::: COMAP40.16.doc order from which the appeal lies and in section 105, which opens with the words "Save as otherwise expressly provided, no appeal shall lie from any order made by a court in the exercise of its original or appellate jurisdiction, but where a decree is appealed from, any error, defect or irregularity in any order, affecting the decision of the case, may be set forth as a ground of objection in the memorandum of appeal. Then, by sub-section (2) it says that where any party aggrieved by an order of remand from which an appeal lies does not appeal therefrom, he shall thereafter be precluded from disputing its correctness. Outlining the ambit and scope of his power, a judgment of the Hon'ble Supreme Court in the case of Shiv Shakti Cooperative Housing Society vs. Swaraj Developer reported in AIR 2003 SC 2434 notes that it relates to appealable as well as non appealable orders. The section contemplates two things (1) regular appeal from decree and (2) the provision relating to grant of objection relating to interim order. Thus, in an appeal in terms of section 96 having regard to section 105, it is also permissible for an appellant to raise a contention as regards correctness or otherwise of an interlocutory order passed in the suit subject to the conditions laid down therein. In paragraph 31 of this judgment, the Hon'ble SRP 87/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 ::: COMAP40.16.doc Supreme Court held thus :
"31. In Section 2, the expressions 'decree' and 'order' have been defined in clauses (2) and (14) respectively. It is to be noted that it matters little that the judgment is styled as an "order". If, in fact, it fulfills the conditions of the definition under Section 2(2), it is a decree and becomes appealable. Orders that are not appealable are, generally speaking, those which are procussual i.e. interlocutory or incidental orders regulating proceedings but not deciding any of the matters of controversy in the suit. Order 43 deals with the "appeals from orders". These appeals lie under Section 104 of the Code. The said Section deals with appeals from orders and specifies the orders from which appeals can lie. Sub-sec. (2) of S. 104 says that no appeal shall lie from any order passed in appeal under the said Section. Section 104 and Order 43 Rule I contain a full list of appealable orders. An order which amounts to a decree within S. 2(2) does not fall within S. 104 and the only applicable section is section 96. Clauses (a) to (f) of S. 104 were omitted by Arbitration Act 1940. Section 105 relates to other orders. It, inter alia, relates to any order i.e. so appealable as well as non-appelable orders. It is in the nature of a prohibition stipulating that save as otherwise expressly provided, no appeal shall lie from any order made by a Court in exercise of original or appellate jurisdiction; but where a decree is appealed SRP 88/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 ::: COMAP40.16.doc from, any error, defect or irregularity in any order, affecting the decision of the case, may be set forth as a ground of objection in the memorandum of appeal. Sub-sec. (2) deals with case of remand. This section, in fact, contemplates two things i.e. (1) regular appeal from decree; and (2) the provision relating to grant of objection relating to interim order. Order 43 Rule 1 is an integral part of S. 104."
84 Even otherwise, in the larger interest of judicial discipline and certainty, we have carefully perused the two judgments, one in Hubtown and another in Smt. Sushila Singhania.
85 As we have already held above, Hubtown was an appeal arising from an order passed by the learned single Judge granting conditional leave to defend a Summary Suit. The Hon'ble Division Bench deciding Hubtown also had before it a judgment of the Hon'ble Supreme Court in the case of Midnapore Peoples' Co-op. Bank Ltd. & Ors. vs. Chunilal Nanda & Ors. reported in AIR 2006 SC 2190. After referring to the Act 4 of 2016, and particularly Summary Suits and unamended Code of Civil Procedure, 1908, the Court proceeded to consider the SRP 89/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 ::: COMAP40.16.doc scheme of Commercial Courts Act in paragraphs 15, 16 and 17. Then, in paragraph 20, the Division Bench in Hubtown analysed section 13 and concluded that appeals will lie to Commercial Appellate Division against the decision of the Commercial Court or Commercial Division. With greatest respect, though the Division Bench referred to section 13(1) of the Act 4 of 2016, that provides for an appeal to the Commercial Appellate Division of the High Court against the decision of the Commercial Court or Commercial Division of a High Court by any person aggrieved. That is how the Division Bench in Hubtown concluded that these words, namely, 'decision', 'judgment', 'order', 'decree' as such are not defined. Some of them are defined and elaborated in the Code of Civil Procedure, 1908. The observations in paragraph 21 would indicate that the Division Bench held that the language of section 13(1) is such that it includes judgment or order and read with sections 8, 13(2), it includes decree of the Commercial Court or Commercial Division. Then, in the proviso below sub-section (1) of section 13, it is stated that an appeal shall lie from such orders passed by a Commercial Division or Commercial Court that are specifically enumerated under Order XLIII of the Code of Civil Procedure, 1908, as amended by the Act 4 of 2016 and SRP 90/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 ::: COMAP40.16.doc section 37 of the Arbitration & Conciliation Act, 1996. Thus, it is apparent that the difference between the language in sub-section (1) and that of the proviso was very much present to the mind of both Division Benches deciding Hubtown and Smt. Sushila Singhania. Their understanding of section 13(2) was that other than the Act 4 of 2016, insofar as the matters covered by that enactment are concerned, no appeal shall lie from any order or decree of a Commercial Division or a Commercial Court, otherwise than in accordance with the provisions of Act 4 of 2016. The Division Bench in Hubtown, therefore, concluded that where the Commercial Division has taken a decision and/or passed the judgment and/or order or decree, an appeal will lie. That is how paragraph 22 in Hubtown reads. In paragraph 23, the Division Bench says that appeal against any final decision, including judgment by the Commercial Court and/or Commercial Division will not invite the proviso as the proviso refers to orders. The reference to orders in the opening portion of sub-section (1) of section 13 would relate to the application of the proviso to sub- section (1). However, the opening portion of sub-section (1) (words prior to the proviso) uses the words 'decision', 'judgment' and 'order'. This part of the provision is quite broad when it SRP 91/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 ::: COMAP40.16.doc comes to appeal arising out of the orders other than the categories of orders falling under Order XLIII of the Code of Civil Procedure, 1908. Thus, so long as it is an order, but which has a tinge or colour of judgment, then, an appeal under section 13(1) would be maintainable. The provisions of the Code of Civil Procedure (amended and unamended) are applicable to Commercial Courts Act proceedings. The term 'judgment' was not defined even in the Letters Patent. Therefore, even if it is an interlocutory order of granting defendants conditional leave to defend a Summary Suit as it directly affects and loses the valuable right of the defendant without giving full opportunity, that order is appealable. It is a judgment.
86 In Smt. Sushila Singhania the Division Bench framed the questions for consideration in paragraph 23 and in questions 2, 3 and 4, the issue of maintainability of appeals under section 13 of the Act 4 of 2016 was summed up. The discussion in that regard starts from paragraph 30 and the Division Bench concludes that there is no separate provision of appeal against execution of an Award passed in Arbitration proceedings and, therefore, the word 'decision' will have to be dealt with SRP 92/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 ::: COMAP40.16.doc accordingly. That is because in section 37 of the Arbitration & Conciliation Act, 1996, which sets out that orders against the appeals can be filed, it was noticed that no appeal has been provided against an order passed in execution proceedings. Then, the Division Bench proceeded to consider the doctrine of precedents and from paragraph 53, it discussed the ambit and scope of an appeal which can be filed under section 13(1) from the orders which are passed in proceedings for execution of an award. That is how section 13 was interpreted and it was held that the proviso to sub-section (1) of section 13 cannot be said to be an additional enactment providing for an appeal against the orders, but it restricts the orders against which appeals can be filed. The interpretation sought to be placed by the appellants on the provision was rejected because it was held that it would be contrary to section 37 of the Arbitration & Conciliation Act, 1996 and to the provisions of the Commercial Courts Act. That is how the provision came to be interpreted. The Court, therefore, rejected the argument that it is not possible to read something more in the word 'decision' to mean that it also includes orders which are not otherwise appealable. It is in that context the Hon'ble Division Bench in Smt. Sushila Singhania concluded that SRP 93/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 ::: COMAP40.16.doc restricted meaning has to be assigned to the word 'judgment' appearing in section 13 (1) and it will not be possible to expand the meaning of this word as has been done in the Letters Patent by virtue of the judgment of the Hon'ble Supreme Court in Shah Babulal Khimji (supra). However, all the observations made from paragraphs 56 onwards relate to the facts and when the arbitral proceedings had concluded, the Award was brought for execution, the orders passed in such proceedings were held not to be appealable in the light of the specific provisions of section 37 of the Arbitration & Conciliation Act, 1996, which is referred to in sub-section (1) of section 13 proviso. Hence, the aid and assistance of Letters Patent was not allowed to be taken. More so, when it is overridden by sub- section (1) of section 13. Our conclusion is supported by the observations in paragraph 70 of Smt. Sushila Singhania. We have also perused the further paragraphs, namely, paragraphs 72 and
73. The word 'decision' will have to be read only as a decree or wider meaning has to be given to that term or word was then considered and then, certain Supreme Court judgments are referred in paragraphs 73, 75, 76 and 77. The Hon'ble Division Bench then concluded that the word 'decision' in this context SRP 94/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 ::: COMAP40.16.doc would mean a final decision in the entire suit and, therefore, a decree. The construction as proposed by the appellant in that case based on the dictionary meaning of this word was expressly rejected. Finally, in paragraph 93, it was concluded that the word 'decision', therefore, will have to be interpreted to mean a decree. 87 Then, the answers to each of the questions framed, in paragraph 102, have also been perused by us. 88 In whichever way one looks at this issue, we are not able to agree with Dr. Saraf that there is any divergence or difference in the opinion on what is appealable, irrespective of the nomenclature under section 13(1) of the Act 4 of 2016 for what both judgments hold, according to us, are that the term 'decision' cannot be interpreted to mean any and every order by styling it as a judgment. It is that decision, which satisfies the tests referred by us above and which tests can also be culled out from the definition of the term 'decree' as appearing in section 2(2) of the Code of Civil Procedure, which would be appealable. Thus, decree means the formal expression of an adjudication but sub- section (2) of section 2 does not stop here and says further that SRP 95/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 ::: COMAP40.16.doc which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any the matters in controversy in the suit and may be either preliminary or final, it shall be deemed to include what falls in the latter part of this definition and exclude what is excluded by clauses (a) and
(b) of sub-section (2) of section 2. Then, the definition ends with an explanation and says that a decree is preliminary when further proceedings have to be taken before the suit can be completely disposed of. It is final when such adjudication completely disposes of the suit and it may be partly preliminary and partly final. That which is not a decree is an order and it is apparent from the definition of this word appearing in section 2 sub-section (14) of the Code of Civil Procedure. Therefore, we do not think that there is a difference or divergence in the opinion of the two Division Benches on the right of appeal, its maintainability or the ambit and scope of that power as enumerated in section 13(1) of the Act 4 of 2016. Our conclusions are also reinforced by the decisions of the Hon'ble Supreme Court of India on the ambit and scope of the word "appeal" and the power in relation thereto. Suffice it to say that all these judgments have not been noticed by either the counsel SRP 96/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 ::: COMAP40.16.doc appearing before us or the Hon'ble Division Benches deciding "Hubtown" and "Sushila"'.
89 In the case of Mithailal Dalsangar Singh & Ors. vs. Annabai Devram Kini & Ors. (2003) 10 SCC 691 : AIR 2003 SC 4244, the Hon'ble Supreme Court though considering the expression 'judgment' appearing in clause 15 of the Letters Patent made some pertinent observations. Paragraphs 12, 13, 14, 15 and 16 of this judgment read as under :
"12 We are also of the opinion that the Letters Patent appeal against the order setting aside the abatement of the suit was not maintainable. What is a 'judgment' within the meaning of Letters Patent came up for the consideration of this court in Shah Babu Lal Khimji vs. Behan D. Kangro AIR 1981 SC 1786. It was held that a decision by a trial judge on a controversy which affects valuable rights of one of the parties is a 'judgment'. However, an 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. This court further held that there is no inconsistency between Section 104 read with Order 43 Rule 1 of the SRP 97/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 ::: COMAP40.16.doc CPC and the appeals under the Letters Patent. The Letters Patent do not exclude or override the application of Section 104 read with Order 43 Rule 1 CPC to internal appeals within the High Court. Even if it is assumed that Order 43 Rule 1 does not apply to Letters Patent appeals yet the principles governing those provisions would apply by a process of analogy. A perusal of Section 104 read with Rule 1 of Order 43 of the CPC shows that while an appeal is provided against an order refusing to set aside the abatement or dismissal of a suit; there is no appeal provided against an order whereby the abatement or dismissal of a suit has been set aside. Whether the trial judge passed an order setting aside an abatement or allowed substitution of the legal representatives, no valuable right of parties was decided. The constitution of the suit was rendered good and the suit proceeded ahead for being tried on merits. Such an order does not amount to 'judgment' within the meaning of Letters Patent. [Underlining ours] 13 The learned counsel for the appellant has invited attention of the Court to the Full Bench decision of the Calcutta High Court in Nurul Hoda and Ors. vs. Amir Hasan and Anr. AIR 1972 Cal 449 and the Division Bench decisions of the Punjab High Court in Smt. Chando Devi vs. Municipal Committee, Delhi AIR 1961 Punjab 424 and of the Bombay High Court in Maria Flaviana Almeida and Ors. vs. Ramchandra Santuram Asavie and Ors., AIR 1938 Bombay 408.SRP 98/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 :::
COMAP40.16.doc 14 In Nurul Hoda & Ors. (supra), Sabyasachi Mukharji, J. (as His Lordship then was), speaking for the Full Bench, held that a decision setting aside an abatement does not in any way effect any right accrued to the defendant and, therefore, does not amount to a 'judgment'. No merits, in controversy between the parties, have been decided; the order merely reopens the controversy.
15 A Division Bench of the Punjab High Court, consisting of D. Falshaw and G.L. Chopra, JJ., in Smt. Chando Devi's case (supra) has held that the order setting aside the abatement of a suit or appeal is not a decision which affects the merits of the question between the parties by determining some right or liability in the suit. Such an order cannot be regarded as a deciding a question materially in issue between the parties and directly affecting the subject matter of the suit and, therefore, it would not amount to a 'judgment'.
16 In Maria Flaviana Almeida & Ors.'s case (supra), Chief Justice Beaumont speaking for the Division Bench observed that an order setting aside an abatement is really one in procedure. The party originally had a cause of action which through no fault of their own came to an end by the death of their opponent and the effect of setting aside the abatement is merely to excuse delay in restoring the suit to an SRP 99/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 ::: COMAP40.16.doc actionable condition. The Division Bench held that the order setting aside an abatement does not effect the merits of the dispute between the parties though it certainly determines a right and, therefore, does not amount to a 'judgment'."
90 This judgment has been cited and relied upon in several cases and matters later on by the Hon'ble Supreme Court. The distinguishing part in the subsequent judgments or decisions is not on the meaning of the term 'judgment'. There is one judgment which must be referred in this context and that is Bhag Mal alias Ram Bux & Ors. vs. Munshi by LRs & Ors. (2007) 11 SCC 285. In this judgment, it is stated that decision on merits is not the only test to determine the finality of the same. In another judgment on the meaning of the term 'judgment', in the case of Midnapore Peoples' Co-op. Bank Ltd. & Ors. vs. Chunilal Nanda & Ors. (2006) 5 SCC 399 : AIR 2006 SC 2190 , the expression has been considered and given a meaning as ascribed by the Division Bench in Hubtown.
91 Then, we have a judgment by a three Judge Bench in the case of Subal Paul vs Malina Paul AIR 2003 SC 1928 : (2003) SRP 100/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 ::: COMAP40.16.doc 10 SCC 361, which has also been later on followed. It has been followed in the case of Liverpool & London S.P. & I Association Ltd. vs. M.V. Sea Success 1 & Anr. (2004) 9 SCC 512 . We have also a judgment of the Hon'ble Supreme Court's five-Bench judgment in the case of P.S. Sathappan vs. Andhra Bank Limited & Ors. (2004) 11 SCC 672. In all these cases, the expression 'judgment' has been, not just in the context of clause 15 of the Letters Patent, but even otherwise understood to mean something which gives finality or which satisfies the tests laid down by the Hon'ble Supreme Court as noted above. 92 Similarly, we must also note sub-section (1) of section 13 of the Act 4 of 2016, which provides for an appeal by a "person aggrieved". In the case of Banarasi & Ors. vs. Ram Phal AIR 2003 SC 1989, this expression was interpreted by the Hon'ble Supreme Court in the context of sections 96 and 100 of the Code of Civil Procedure. Section 96, as is evident, provides for an appeal from an original decree and section 100 provides for second appeal. In paragraph 8 of this judgment, the Hon'ble Supreme Court held as under:
"8 Sections 96 and 100 of the CPC make SRP 101/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 ::: COMAP40.16.doc provision for an appeal being preferred from every original decree or from every decree passed in appeal respectively; none of the provisions enumerates the person who can file an appeal. However, it is settled by a long catena of decisions that to be entitled to file an appeal the person must be one aggrieved by the decree. Unless a person is prejudicially or adversely affected by the decree he is not entitled to file an appeal. See Phoolchand and another v. Gopal Lal 1967 (3) SCR 153; Smt. Jatan Kanwar Golcha v. M/s. Golcha Properties (P) Ltd., 1970 (3) SCC 573; Smt. Ganga Bai v. Vijay Kumar and others., (1974) 2 SCC
393. No appeal lies against a mere finding. It is significant to note that both Sections 96 and 100 of the CPC provide for an appeal against decree and not against judgment."
93 Even this view has been relied upon in later judgments and we would refer to the judgment in the case of Hardevinder Singh vs. Paramjit Singh & Ors. (2013) 9 SCC 261 . Thus, even if the word 'decision' is taken to be a decree, the provisions enabling filing of an appeal and worded like sub- section (1) of section 13 do not enumerate the categories of persons who can file an appeal. The significant words and expressions appearing in section 13(1) and its proviso are " Any person aggrieved by the decision may appeal ... ... ... from the date SRP 102/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:48 ::: COMAP40.16.doc of judgment or order, as the case may be " and "An appeal shall lie from such orders passed by a ... ... ... that are specifically enumerated under Order XLIII of the CPC as amended by this Act ... ... ...". The intent of the legislature is obvious and in the first part of sub-section (1) it employs the words " a person aggrieved by the decision may appeal from the date of judgment or order " to convey that the remedy of appeal may be resorted to, but that will not be available as of right and whenever that remedy can be availed of as of right, the words and expressions used in the proviso convey the same clearly. Then by sub-section (2) it is stated that no right of appeal is provided otherwise than in accordance with the provisions of the Act 4 of 2016. The persons prejudiced or affected by a decision can maintain an appeal but whether that should be entertained or not depends upon the nature and effect of that which is appealed against. Whether a decision is appealable or not depends upon the facts and circumstances in each case. Once this vital distinction is borne in mind and so viewed, there is no scope for accepting the argument of Dr. Saraf in the case before us that though an objection to the territorial jurisdiction of this Court has been overruled, that order or the reasoning overruling this objection is SRP 103/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:49 ::: COMAP40.16.doc of the nature enabling the appellant to file an appeal. Neither of the Division Bench judgments enable filing of an appeal against such an order.
94 We are, therefore, of the firm view that in the facts and circumstances of this case, considering the nature of the order under appeal even if we go by the view taken in Hubtown's case as also the relevant paragraphs in the case of Smt. Sushila Singhania, the test would be whether the same concludes the rights of the parties. That has not concluded the rights, but it has merely overruled an objection to the territorial jurisdiction of this Court raised as a preliminary one by the defendants. The defendant, in the event aggrieved by the final decree, can always, in one of the grounds of appeal, raise the issue of correctness of this order as well. For that purpose, we need not entertain this appeal and prolong the trial. We have noted that the object and purpose of the Act 4 of 2016 was present to the minds of both Division Benches and to ensure expeditious disposal of the suits and applications involving a commercial dispute, the Parliament had enacted a scheme. We would be defeating and frustrating it wholly in the event we hold that an order of the present nature SRP 104/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:49 ::: COMAP40.16.doc and impugned in this appeal is an appealable one under sub- section (1) of section 13. Therefore, upholding the preliminary objection of Mr. Kadam, we dismiss all these appeals. 95 At this stage Dr. Saraf and Mr. Kirpekar would submit that the appellants would like to challenge this order in a higher court and therefore, the Notice of Motion seeking interim relief should not be heard for a period of eight weeks. 96 Mr. Rohan Kadam appearing for the plaintiff- respondents opposes this request of Dr. Saraf by urging that now that this Court has dismissed the appeal, and, therefore, after a success, the plaintiff should be allowed to apply for interim relief. 97 The application for interim relief has been pending for more than three years.
98 In the light of the fact that we have applied the tests laid down by the Hon'ble Supreme Court and which tests have been extensively referred in the two Division Bench judgments, we do not think that we should accede to the request of Dr. Saraf SRP 105/106 ::: Uploaded on - 29/09/2017 ::: Downloaded on - 29/09/2017 22:57:49 ::: COMAP40.16.doc for that would defeat the mandate of Act 4 of 2016 in ensuring expeditious disposal of the suits and applications in commercial disputes. Hence the request is refused.
PRAKASH D. NAIK, J. S.C. DHARMADHIKARI, J.
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