Conflicting Judicial Decisions Pertaining To The Code Of Civil Procedure, 1908

[Cites 152, Cited by 0]

Law Commission Report

Conflicting Judicial Decisions Pertaining To The Code Of Civil Procedure, 1908

LAW COMMISSION
OF INDIA

ONE HUNDRED FORTY -- FOURTH

REPORT
ON

CON FLICTIN G JUDICIAL DECISIONS
PERTAININ G TO THE
CODE OF CIVIL PROCEDURE, 1908

APRIL , 1992

D.O. No. 6(3) (14) /92-LC(LS)
CHAIRMAN

K. N'. SlN(jll
(I;'.\'-CHlI.I7 ll.'SIl('.L oi INDIA)

GOVERNMENT OI? INDIA
SHASTRI BHAWAN

NEW DELHI-110001
Tel.OIT. 38 44 75

Res. 3019465

April 28, I992.
My dear Minister.

I have great pleasure in iorwarding herewith the 144111 Report of the Law Commission on the
subject "Conllicting Judicial Decisions pertaining to t1Ie Code of Civil Procedure, 1908".

2. Incidentally. it is the First Report after the constitution oi' Xlll Law Commission. Earlier, the
Commission in its 136th Report considered a conllict oi' decisions on certain speciﬁc Acts relating
to Hindu Family Law. The present Report deals with certain conflicting Judicial decisions pertaining
to the pl'OVi>l0l1S ofthe Civil Procedure Code, and recommendations have been made to resolve them,
keeping the public interest in view.

3. The present Law Coinmission was constituted with eliect from 1st September, 1991. l have been
appointed as Honorary Chairman after may retirement as Chief Justice of India, and I have assumed
olﬁce on [st January, 1992. At present, the Commission consists of myself and the Member--Secre-
tary, Shri G.V.G. Krishnamurty, and other Members are yet to be appointed.

4. The study in respect of this Report was conducted by Shri P.M. Bakshi earlier, as a Member of
revious Law Commission. and it has been continued b the vresent Law Commission suo motu.
P Y I

5. 1 hope this Report will be placed before the Parliament soon and expeditious action will be taken
to implement the recoinmendations contained herein.

With kind regards.

Yours sincerely,
Sd/-
(K. N. SINGH)

Hon'ble Shri K. Vijay Bhaskar Reddy,
Minister for Law, Justice & (joinpuny Ailairs,
Government of India,

Shastri Bhavan,

New Delhi-110001

Copy to 2

Hon'ble Shri P. R. Kuinaramangalain,

Minister ofState for Law, Justice & Company Affairs.
Shastri Bhavan, NEW Delhi-1 10 001
94-M/S29MofLJ&CA---1

Chapter 1--Introduction .
Chapter lI--~Scctions 1to20
Chapter HI--Sections 21 to 40
Chapter lV--~Scctions 41 to 100
Chapter V~--Sections 101 to I58
CHAPTER V[»--Orders 1 to 10
CHAPTER VII--~Orders 11 to 20
CHAPTER VI [I--Ordcrs 21 to 30
CHAPTER IXr--Orders 3 I to40
CHAPTER X»-Orders 41 to End .

CHAPTER XI~--Summary of Recommendations

CONTENTS

i-ii

Incas

CHAPTER I

INTRODUCTION
1.1. GENESIS OF THE REPORT

In the present report, the Law Commission of lndia proposes to deal with the conflicts of' judicial
decisions pertaining to the Code of Civil Procedure, 1908. The Commission has already forwarded
to Government its report on the subject ofconllicts of decisions and the mechanism for solving those
conflicts. and has in that report dealt with the conﬂcts of decisions on certain speciﬁc Acts relating to
Hindu Family Law.* The present report seeks to carry further the task undertaken by the Commission,
that is. to make recommendations For resolving conflicts ofjudicial decisions on important enactments.
The subject has been chosen suo morn by the Commission.

1.2. Scope of the Report. We would like to make it clear that the report is conﬁned to conﬂicts ofdeci-
sions and does not purport to address itselfto questions of other reform ;, ii' any, that may be needed
in the Code under consideration. As a pragmatic measure, and in order to enable the Commission to
deal etTectively and promptly with urgently needed amendments. this approach has been considered

preferable.

Commission of India (LCI). l36th Report.
94-M/S29MofLJ&CA--l (Li) 1

CHAPTER II
SECTIONS I TO 20

2.1. SECTION 2(2) AND DISMISSAL FOR DEFAULT

2. 1 . I. Section 2(2) of the Code. which deﬁnes the expression 'decrce", provides that "decree" shall
not include----

"'(a) any adjudication from which an appeal lies as an appeal from an order, or
(b) any order of dismi.s'.s'al_ for default".

7. I .2. Question for comizleration-«With reference to elause(b) quoted above, a question has arisen as

to the precise scope of the expression "dismissal for default".

2. I .3. There exist, what may be called, the narrower view and the wider view on the subject. Accord-
ing to the narrower view, the expression "dismissal for default" covers only a dismissal for default of
appearance. According to the wider view, however, any kind of default. e.g., default in furnishing
better particulars. falls within clause (b) of section 2(2), so that dismissal for such a default is also ex-
cluded from the deﬁnition of "decree".

2. I .4. The narrower view of the expression "dismissal for default", and the consequent wider
view as to the scope of "decree". has been taken by the following High Courts :--«

(a) Allahabad 1.

(b) Calcutta}

2. I .5. A wider view of the expression "dismissal for default", and consequent narrower view
of the word "decree", has been taken by the following Courts: -

(a) Andhia Pradesh, 7

(b) Assam, 8

(d) Oudh, 10

(e) Patna, 11 and

(f) Allahabad (later case)".

2. I .6. Thus. in the I942 case from Oudh13, it was held that dismissal of an appeal for non-
prosecution is not a "decree". even if a decree is actually prepared in the particular case.

I. Sycd Mohammadi v. Cliaiidra, AIR I937 All 284, 285. (Naiamtulah J.)(DismissaI for want of prosecution of suit
is a decree. It IS not dismissal for default).

2. Abdul Majid v. Amina, AIR I942 Cal 539, 541 (Biswas J.).

Budhulal v. Chhotelal, AIR I977 MP 1, para 22, 23 (F8) (failure to pay costs--dismissal is appealable.).

4. MP State Cooperative v. J.L. Chouksey, AIR 1980 MP 204, 206, para 8 (failure to give better particular---order of
dismissal is "decree" (U.N. Bachawat J.).

5. Nazir Abbas Sujiat Ali v. Raza Azamshah, AIR 1941 Nag 223, 224 (Vivian Bose J.) (failure to give better particulars-
order held to be "decree", and hence appealable, as a "decree". The order determines, conclusively, certain right).

6. Radhabai v. Purdibai, AIR I943 Nag I49, I5I : ILR (I943) Nag 6I3 (Digby J.). When the suit is dismissed because
adjornment costs are not paid, the order is :1 "decree" and appealable. Suit cannot be restored under the inherent
power ofthe court.

7. In re C/Iouzlurll, AIR I955 AP, 74. 77, 78, IJJIKL I3 (PB) (Ju Igment by Subba Ra.) CJ. want of prosecution---
Dismissal).

8. Gauhati Bank v. Baliram, AIR 1950 Ass I69, I72.' I73, I74, paras 22, 24 (Ram Labhaya J,) (dismissal for non-
payment o)f costs or other defects is covered by dismissal for ''default'') (Thadani C..I. refused to express opinion on
this point .

9. In re N. Kayam/m, AIR I9-'II Mad 836, 837 (PB) (non-payment of co irt fee).

I0. Jagdish Kumar v. I-{.iri Kislnn Dis. AIR I942 Oudh 362. 364, 365 (Thomas E.J. and Agrawal J.) (see infra).

II. State of Bihar v. Mansoor Alam Khan. AIR I983 Pat 6|, 8, para 8 (B.P. Jha J.). (Order dismissing appeal for de-
fault in paying court Joe is not :1 "decree" and IS not appealable as a decree. It is covered by "dismissal for de.
fault").

12. Tafazzul v. Shah Mohammad, AIR I949 All 261 (Seth J.) (want ofprosecution).

13. Jagdish Kumar v. Hari Kislmn Das. AIR I942 Oudh 362 (Thomas C] & Agarwal J.).

lo)

-- .. l ,«....._.v.awu

2. l .7. R€C0.I71l71(?I1([ClII'0il' ----It appears to us that it is better if the position is clariﬁed by providing
that dismissal of a suit for any kind of default should take the order out of the deﬁnition of "decree".
On principle, when there is no adjudication on the merits, it should not be regarded as a "decree"
and should not be appealable as a decree. Practically, all the defziuls that have ﬁgured in the case law
(siimiiiztrised l1l)(:)V'/Ci) were tleﬁiiilts entailing dismissal for :1 technical fault. or procedural iion-comp-
liaiiee. There was no Cl(.'t'isl0l1 on the merits. lfao, it should not be regarded as a deterinination en-
joyipg the i7E,'l1('l'Il\1I.\/.Lll{'ll,)l(.' to (I decree (one appeal as of right. on facts and law, plus second appeal
on aw).

We recommend that in section 2(2), an Explanation should be inserted, as under :--

"Expla;1ation.~'Default' includes default of appearance as well as any other kind of default"

.Section 2(ll) and Joint Hindu Family

[9
K9

2 .2. l. Section 2(l l) of the Code reads as under :--

2(l 1) "legal representative" mean. a person who in law represents the estate ofa decreased person,
includes any person who in term eddies with the estate of the deceased and whereas party sues or
is sued in a representative Cl1(ll'2'.ClCi" the person on whom the estate devolves on the death of the

party so suing or sued;'

2.2.2. Qi(('.s'Ii0r1_/"0I'. eo.:1sideration~--The question has arisen whether in the case of a Hindu un-
divided lainily, the surviving coparcener becomes alegal reprsentative for the purposes of the Code.

2.2.3. The following High Courts hold that a surviving coparcener is a legal representative:----

(a) Allahabad,"
(b) Madras, 15
(c) Patna. 1"

2.2.4. But a judgment of Bombay High Court (in a Full Bench ruling) creates some doubt, as
itcontainsdicta--
(a) that a son who takes property by survivorship is not a legal representative, but

(b) 'as regards separate property, he is a legal representative. 17

2.2.5. In an earlier Bombay case." also, a view had been taken that joint family members cannot
be "legal representatives", though this view was criticised, in part, in a later case of the same High

Court. 19

2.2.6. The Supreme Court has taken a broader View of the expression legal representative" as
deﬁned in the Code and have of served" as follows :

'The deﬁnition is incl iisive in character and its scope is wide, it is not conﬁned to legal heirs only
instead it stipulates a person who may or may not be heir, competent to inherit the property of
the deceased but he should represent the estate of the deceased person. It includes heir as well
as persons who represent the estate even without title either as executors or administrators in
possession of the estate of the deceased. All such persons would be covered by the expression
'Legal Representative'. If there are many heirs, those in possession bona _ﬁ(]€, without there being
any fraud or colltision, are also entitled to represent the estate of the deceased.'

In the above case, the Supreme Court referred to an earlier case decided by it 21, where it reco-
gnised the principleof representation of the estate by some heirs; in that case, the Court held that if
after bona fide enquiry, some but not all the heirs of the deceased defendant are brought on record,
the heirs so brought on record represent the entire estate of the deceased and the decision of the Court
in the absence of fraud or collusion binds even those who are not brought on record as well as those
who are impleaded as legal representatives of the deceased defendant.

14. Gyan Datt v. Sadanand, AIR 1938 All 163, 164 (Ganga Nath J.).

15. Nagappa Nadar v. Karuppiah Nadar, AIR 1925 Mad 456, 457 (on the death of managing member becomes the
legal representative).

16. Alekh Chandra v. Krishna Chandra, AIR 1941 Patna 596, 599 (Fazal Ali & Varma JJ.).

17. Jamburao v. Annappa, AIR 1941 Bom. 23, 24, 25 (FB).

l8. Chunilal Harilal v. Bai Mani, AIR l9l8 Bom. 165, I66 (Beaman & Heaton JJ.)

19. Ganesh v. Narayan, AIR 1931 Born. 484.

20. Custodian ofBranches of BANCO National Ultramalnino v, Nalini Bai Naique. AIR 1989 SC 1589 (K. N. Singh
& K. N. Saikia, JJ.).

2]. Dayaram v. Sliyam Siindari. AIR l9i35 SC 1049.

2.2.7.. Recoinmendation----lt seems to us that in order to put the matter beyond doubt. it is desirable to
clarify the position by providing that when a eoparcener in a Hindu undivided family dies, a surviving
coparcener shall be deemed to be a legal repi'e~entative of the deceased. We recommend accordingly.

2.3 Section 10 and Identity of Relief
2.3. 1 Section 10 of the Code of Civil Procedure in its main paragraph (so far as is material) pro-
vides as under

"No court shall proceed with the trial of any suit in which the matter in issue is also directly
and substantially in issue in. a previously instiuted suit between the same parties . . . . ..where

such suit is pending in the same or any other court in India /iar/"rig_im'i.s'(/iction I0 grunt I/7(' relief

claimed . . . . . . . . . . . .

2.3.2. QII('.\'If()II for <*on.s'iz/era!i0n----For the present. we are concerned with the words "having
jurisdiction to grant the reliefclaimed". Do these words refer to the relief claimed in the .\'cc'0na' suit
or do they refer to the relief claimed in the first suit 'T

2.3.3. The Calcutta High Court'-"-' has held that the above words refer to the relief claimed in
the second suit.

2.3.4. However. it appears that in a Bombay case'-"'. Blagden J. had some difficulty in construing
the section. Although he reached the same conclusion, he did describe the wording of the section as
'curious'.

2.3.5. Rccoririiioiir/cirion-~lt seems desirable to take the opportunity of making the matter clear,
by adding in section I0, after the words "relief claimed", the words "in the suit subsequently insti-
tuted".

2.4 Section ll and Consent Decrees

2.4. l. The principle ofrcsjudicarri. as codiﬁed in section 11, has a number of facets, one ofwhich
is concerned with the operation of the doctrine in relation to compromise decrees.

2.4.2. Question to be c'on.s'ideri'zI~Tlie question to be considered is this. Does this section 11
apply to consent decrees '.' I

2 .4. 3. One view is that it does not. The following High Courts. namely :--~~

-- (at) Bombay (one case)?'

(b) Delhi, '-""

(d) Rajasthan. 37 and
(e) Sind 2*

have taken the view mentioned above. namely. that section 1 I does not apply to compromise decrees.

2.4.4. But some High Courts have taken the view that for the purpose ofres_/udicata, a consent
decree has "to all intents and purposes. the same effect as a decree" passed after hearing. This view
has been taken by the following High Courts :--

(a) Bombay (another case). 9'-'
(b) Calcutta, 3" and
(C) Punjab, '*1.

22. Mirta Lina Private Ltd. v. Finlay Mills, AIR I982 Cal. 4|, 47, para 21, sub-para(2) (Mrs. Monjula Bose J.)

23. Sankalchand v. Prukash. AlR I947 Born. 84 (Blagden J.).

24. Minalal v. Kharsetii, |l.R 30 Bom. 385, 408 .cited by Mulla. CPC (l98l), Vol. 1, p. 14.

25. Manohar lall v. Naraiiidass. AIR 1987 Del 226, 230, 23], para 28 (G.C. Jain J.).

26. Uphars v. Ka. Esiboll, AIR 1986 Gauhati 55, 56, paras 4, 5 (Manisana Singh J.).

27. Bhanwarlal v. Raja Babu. AIR 1970 Rttj I04, I06. (D.M. Bhandari C.J. and VP. Tyagi J.)

28. Ratanchand v. Anandrai. AIR i933 Sind 53. 55 (Aston A.J.C.) (Matters forming part of consept decrees are not
re: jut/icam, as they are not decided on the basis of hearing, though they may operate as estoppel, Mulla 9th
Ed..p.29cited).

29. Bhai Shankar v. Morarji, lLR U912) 36 Bombay 283, 2R7 cited by Mulla CPC (1981), Vol. I, p. I44.

30. Krishna Subala v. Dhanpaii, AIR I957 Calcutta. 59. 64, 65 (DB).

3|. Naidermal v. llger Saiii, AIR 1966 |'unj;ib 509, 5l2. para 6.

'_I

-+----

'J:

2.4.5. In the Punjab ca.se"'-' . Ms. Justice SK. Kapur observed as under :--

"It is well established that a judgement based on consent is as much intended to put a stop to
litigation between the parties. as a judgment which results from the decision of the Court after
the matter has been fought out to the end in so far as the matter is actually dealt with by
the consent decree. The question in all such cases is whether the consent decree did settle the

is.sue between the parties".

2.4.6. In a Madras case. 33 it was emphasised that before a consent decree can operate as
estoppel. the court. on the facts pI'O\'l(leLl. must come to a clear conclusion that the parties intended
that the consent decree should have the etliect ofdeciding finally the questin raised. for. "the fact that
there was an acttc contest and the matter was actually put in issue. furnishes a valuable test".

2.4.7. In a Patna case"4. the position was thus described by the Division Bench :-

"A compromise decree. it is true, is not a decision of the court. It is the acceptance by the court
of some thing to which th parties had agreed. It is in that sense. that compromise or consent
decrees have been described as contract between the parties to which is .'-;LlpCt'impOSCd the com-
mand of the court. The court merely sets its seal on the agreement entered into between the
parties. It is. therefore. not a decision of the court non applfcatlon of its mind and the statutory
bar of rc.s'_/"111/it'(/m under section II of the Code of Civil Procedure is not a'..tracted. But. at
the same time. it equally well-established that a judgment by consent or default is as effective
an estoppel between the parties. as the judgment whereby the court exercises its mind ona
contested case".

2.4.8. Even though the matter may have passed from the stage of representation into an agree-
ment. there are cases where the courts are entitled to entertain a plea of estoppel in order to ptevent
fraud or circuitry of action. Reliance in this connection may be placed on the decisions of the Sup-
reme Court in Sum/erbm' v. Dem/i S/zankar Dav/zpande, (AIR 1954 SC 82). Sai/emlra Nurayan B/um./'11
Deo v. The State of OI'/.V.S'(l (AIR I956 SC 346) and Pu/avarr/ii Van/ram Subba Rao /2. Va/luri ./ag(m-
I1(I(//I(! Rao (AIR I967 SC 591). As a matter of act. a Bench decision of the Calcutta High court in
Secretary of State for India in Council v. Attemlranaf/1 Dusk. ILR 63 Cal 550 at p. 558 was approved
by the Supreme Court in the case of Sui/<>/tdra Narayan B/ta/1_/'a Duo (AIR 1956 SC 346). The para-
graph quoted with approval runs as follows

" . . . . . . . .the consent order is as effective as an order passed on contest, not only with reference
to the conclusions arrived at in the previous suit but also with regard to every step in the
process of reasoning on which the said conclusion is founded."

2.4.9. The point has come up before the Supreme Court more than once. but the decisions of
the Court on the subject cannot with respect be easily reconciled. The earlier view of the Supreme
Court wls that a consent decree has the binding force of /'c.vjt/d/"Cara. 35. 3"

2.4. 10. But later decisions of the Supreme Court seem to take a contrary view. It seems that
the earlier decisions were not cited before the Court at the time when the later cases were decided. 37

2.4. I I. The Supreme Court decision33 in Subba Rao'.s case was relied on in at Delhi case"
recently, for holding that where a previous petition for eviction is withdrawn as a result ofa compro-
mise. a subsequent application for eviction on the same ground is not barred by rat' jut/ic'am, because
in order to create the bar ofrasg/'u(lt'¢'ata. the earlier case must have been "heard and ﬁnally decided"
by the court. That is not the case where the decree is passed on compromise.

2 .4. I2. The Supreme Court has, in a very recent case. 40 adhered to their earlier view, and have
approvingly referred to the I954 case where they observed that a consent decree is as binding upon the
parties hethereto as a decree passed by invitum', and that the 'compromise having been found not to be
vitiated by fraud misrepresentation. misunderstahding or mistake. the decree passed thereon
32. Ihizl.

33. Appalanarasiah v. Cittavadu, AIR I934 Mad 454. 456 (Venkata Subba Rao 1.), following Govinda Krishna v.
Venkatasubbiah, AIR I929 Mad 694.

34. Garaj Narain \'. Babulal, AIR I975 Patna 38 pages 58, 62. Para 9 (D.B.).

35. Shankar v. Balkrishnan, AIR I954 SC 352. 355. para 9.

36. Sunderabai v. Devaji. AIR I954 SC 82.

37. Subbarao v. Jagannadha Rao, AIR 1967 SC 59! , 594, 595. Para I0:

Baldev Das V. Filmistan Distributors. AIR I9/0 SC 406.

38. Subba Rao v. Jagannadha Rao, AIR I967 59!.

39. Manoharlal v. Narain Dass AIR 1987 Delhi 226, 230, 231, para 28.

40. Bymm PestonjiGariwaI:1 v. Union Bank of India AIR I991 S.C. 2234 (Dr. T. K. TI1ommen& R. M. Salui, J1.)-

has the binding force of 'rcsjudicara'. The Supreme Court, further rel"erretl to the 1956 case " and
observed that ':1 judgment. by mnsrtit l.\ iu.lc11<:lecl to stop liti;;:J.t;on l)Cl.wC<'.!1 the parties just a< much
as ajudgmcnt. resultmg lrom a decision. ol the tourt at the end olia long tll'£.LWll out right', and that 'a
compromise decree creats an estoppel by judgment'.

2.4.13. Remmmemlafirm ----The matter is of practical importance and ol' LL recurring nature, and
is one which aflects the very jurisdiction of the Court. It therefore seems desirable that it should he
placed beyond doubt, by a suitable amendment. It is suggested that an E.\',n/unarimz .3'/101//1//Jv (I(/(l<'(I
in Section ll to provide that the provisions ofSection ll shall apply to a consent decree.

2.5 Section 20 and Place of Suing

2.5. l. The Code of Civil Procedure, in section 20, makes provision regarding the place of suing
for various kinds of suits (apart from suits relating to immovable property e:c.). Generally, money
suits can be ﬁled where the cause of action arises or the. debtor resides, C{tI'I'lC.s' on bu mess or personally
works for gain.

2.5.2. Questimzfor considwatio/1-----One ol" the qustions which has ;l.l'l-.Cl1 whether a suit for
money can be ﬁled at the place where the creditor resides, carries on business or personally works for
gain. This question is itself linked up with a question of substantive law. that is to say, the rule that
the debtor must ﬁnd out the creditor. Can this rule ol' substantive law be invoked tor the purpose ol'
giving co n1petence_into a court having jLll'l>dlCl'.lOI1i8.t the place where the creditor resides', carries on
business or personally works for gain, in cases where the loan was advanced elsewhere '?

2.5.3. Three views seems to prevail on the subject :--

(i) The above rule can_be' invoked to give territorial competence to the court within the local
limits of whose jurisdiction the creditor resides or carries on business, unless the agreement
indicates to the countrary.

(ii) The above rule yields an important material for constructing the contract, but does not itself
give competence to th court.

(iii) The creditors' residence etc. is only one factor to be considered.

2.5.4. In 1927, the Privy Council stated that it is the duty ofthe debtor to ﬁnd out the creditor
to make payment, ifthe agreement does not ﬁx a place for payment. The Privy Council was construing
section 49 of the Indian Contract Act and, as a matter of construction of the contract at issue in the
particular case, it held that the contract impliedly ﬁxed a particular place for payment. The case was
decided on an interpretation of the contract. But the judgment contains dicta as to the legal position,
to the effect that the debtors' duty is to ﬁnd the creditor.

2.5.5. The dicta of the Privy Council have been construed dfferently by dilferent High Courts,
which is one reason why the conllict otvicws has arisen with reference to sectin 20.

LI:

.6. The view of the High Court ofAndhra Padesh is that the above rule applies to India.43
2.5.7. This is also th view of the Gujarat High Court.44

2.5.8. According to a ruling of the Calcutta High Court" also, where no place of payment is
ﬁxed by the contract and the money to be paid is a liquidated sum, the general rule mentioned above
applies. In the Calcutta case, certain money as due from the defendant (the State of Punjab) to the
plaintiffs (a company). The court took note of the fact that the plaintiffs all along had their registered
ofﬁoe in Calcutta and the bills were also sent fro m 21'. ofﬁce to the defcndanx, though the company had
temporary arrangement at Nangal (which was in the Punjab at that time). duringthe progress of the
work out of which the claim of the plaintilf arose. The High Court of Calcuttagheld that the suit at
Calcutta was competent. 4"

41. Sailendra v. State of Orissa, AIR 1956, SC 346.

42. Soniram v. R. D. Tata, AIR 1927 pp 156.

43. Maira v. Noore Mohammad, AIR 1956 A.P. 231, 233, 234, para 19 (reviews of case law) (Gopalakrishnan Nair J.)
44. Shobhasing v. Saurashtra Iron Foundary, AIR 1968 Guj. 276, 277, 278, para 2 (N.K. Vakil J.) (review cases).

45. §,t1aJt:h(;l;jI;1n'j";1.t)>. v. A. K. Raha (Engineer) Ltd., AIR I964 Calcutta 418, 420, 421, paras 4 & 5 (Bachawat & A. K.

46. North Bengal et. Zamandary Co. Ltd. v. Surcndra Nath, ILR (I957) 2 C' l. (. C'. J: ggl-1~] '- ' ,n
can 321 (review case law). following Drexel v. D. (men 1 Ch. 25, 26, d i 1 J' 5] V' S""'m°'"' AR '96'

2.5.9. The High Courts of Allahabad and Patna fall in the second cat«:5:oi'y. According to the
Allahabad High (_.'«.H.i1't. 4-7 the rule that thl' (l.Cl'l<>l' must .'»ccl~. the ct'«:tlit<vl'. witilv not -lpplic bl; as
such in India, L7'lll lvc ct.-ii--itlriul as a lent-..»=' for d- t«;t'im;ii.i_j. the i:=l:.';ili«-'tint LT-re 1".llllt.'o to the
place of payment. ()n that basis, the High Court held that in the ciici_imsta.ltccs of the case, the re-
asonable inference could be drawn that payment was to be made at the place of business of the
plaintiffat Kalpi, where the plaintill' carried on business and could give a 'Lll\Cl';L1l'~:'U for the money;
or where he would l1:1\t.' an agent who could give such a discharge.

2.5. ll). The Patna High Court 4°' takes a View substantially similar to Allahabad. lt holds the
English rule as to the obligation of the debtor to seek the creditor as not applicable to lndia, but also
holds that it is permissible to take recourse to the English rule for the purpose of construing the terms
of a contract, in order to ﬁnd out whether the parties, by necessary implication, intended that the pay-
ment should be made at the creditor's place of business.

2.5. l I. However, according to the Punjab High Court 4" (which represnts the third view),
the English ruleon the subject is net, as a matter of law applicable in India to determine the forum for
instituting the suit by the creditor. The creditor's place of residence or business is only one factor to
be taken into account. This means that such place does not, in itself. confer jurisdiction on the court
at such place of residence or business (of the creditor).

2.5. l2. Retrommcm/ation---»ln our view. the position should be clariﬁed and the pl;=CC where the
creditor resides should also be treated as the place where the pl'-.}'l'l1{3-it is to be vitae' unless the agme-
ment expressly provides to the contrary. We would recommend that an [:"xpi'zi/iaiiuiz may be added
to Section 20, in suitable terms, to achieve the objective. This is the view ofthe majority of the Hlg_h
Courts and represents, in large number ofcases, the intention of the parties. V

47. Manohar Oil Mills v. Bhawani, AIR l97l Allahabad 326, 327, paras 4 and 5.
48. Johri Mull v. Hira Lal, AIR 1961 Patna l98l, I99. para 3 (v. Ramaswamy CJ. ond R.K. Choudhary 1.).
49. Hira l.al v. Baijyanath, AIR 1960 Punjab 450, 453, 455, paras 9, 15, 22 (EB) (Dulat, Dun and Bishan Narain JJ.)

CHAPTER III
SECTIONS 2! TO 40

3.1 Section 3-1 and Rate of Interest

3. I .l Under section 34. the Court can award interest pem/wile //re at such rate as it considers
"'reasonable" (subject to certain I'CSII'IC'[|OIISJ in a money decree.

3. l .2 Qznvrio/1 for ('0lI.\'i(/r'I'(/I/011 On one point conccring section 34 a conflict of views seems to
exist. Can the Court acting under scctin 34 award interest pendentc litc at a rate lngher than tlte
contractual rate '.'

3. I .3 In a Rajasthan case, 1 the plaintiffs suit was decreed but no inter: st _rmzr/mic /ire or future
interest was awarded. The defendant preferred appeal before the single Judge of the Rajasthan
High Court. and the plaintiff filed a cross-obiection praying for interest pwir/mic lite and future at
the rate of 3"»,/, per annum. The learned single Judge dismissed the defendants' appeal. disallowed
interest p('n(/('lIlI(' /in». but awarded future interest at the rate of 6"," per annum_ from the date of decree
till the date of payment. The defendant preferred another appeal before the division Bench of
the Rajasthan High court on the ground that when the future interest claimed in the cross-objection
was only 3 'f... Il'.t3 plaintiffcould not have been allowcd6 'ﬁgperanntiin future lI'IILI'C.\i. and that ordinarily
interest stipulated in a bond is not to be exceeded Wl1.;I'I future interest is 3llO\\L'tl bcca use the creditor
has additional security in the shape of a decree. The Division Bench observed that awarding of futurer
interest on the principles contained in section 34 is fundamentally 21 matter of iudicial discretion and
noted that the learncdsingle Judge was persuaded to allow 6"; future interest because he had dis-
allowed interest ])('I'l(/('I17(' lite. and that the rate of future interest in some cases could possibly act
as a lever to accelerate the payment ofthe decretal amount. They held that the single Judge was right
when he awarded 6 "/f, per annum future interest against the defendant. even though the rate was higher
than the one stipulated in the original bond or more than the interest claimed by the plaintiff in his
cross--objection.

3.1 .4 However. according to the Andhra Pradesh High Courtl, "the Court cannot granta higher
rate ofinterest than what was contracted between the parties, even pmr/cnrcllilc. The area is cover
by contract or statute. Section 34(1), C.P.C.. regulates the grey area. By implication. it is either
the contractual rate or less, but I101 in excess thereof."

3. I .5 Accordingly. the Court in Andhra Pradcsh held that the grant of rate of interest at I2",/,
from the (late 0/'ins-titmimz till the date of realisation was illegal.

3.l .6 While considering the question whether the Court can award interest pcmlenre /ire at a rate
of interest higher than the contractual rate. it is to be pointed out that the ward of interest [)('(/rIl('I1fc
lire itself is discretionary under section 34. and the Court may or may not award such interest. This
view has been held by sevreal High Courts.3 The Supreme Court4 has also held that an arbitrator has
the power to award interest pal:/mic lite on the princple of section 34. and that it is a matter within his
discretion to be exercised in the light of all the facts and circumstances of the case.

3.1.7 The Suprcmc Court has obscrved:5

"It is no doubt true that the rate of interest to be allowed in regard to mesne proﬁts or under
section 34 in such cases is discretionary. seeing there is in them no question ofany contractual rate
or any particular rate ﬁxed by statute. The only limitation which is prescribed by section 34. as
it stands now. is that the rate shall not exceed 69{, per annI_vm--a limitation which did not ﬁgure
in the section before its amendment though courts as a general rule seldom awarded any rate in
excess of 6",/, per annum . . . . . . . . . .The amended section 34 is in fact a statutory recognition that
6",', is not by itself an unconscionable or an unreasonably high rate. "

I. Lehru Narain v. Kanhaya Lal. AIR 1973 Raj. 316 (B.P. Beri, C. J. and M. L. Joshi. J.).

2. Union Bank of India v. Krishnaiah, AIR 1989 AP 211

3 (a) United Bank of India v. Rashyan Udyog. AIR I990 Calcutta 146;

(b) Canara Bank v. K.S. Kushalappa. AIR 1990 Karnataka I45;
(C) Kalyanpur Cold Storage v. Shohanlal Bajpai. AIR 1990 Allahabad ZIR:
(d) United Commercial Bank, Silchar v. Satish Chandra Ghosh. AIR 1991 Guwahati 59:
(e) Union Bank of India v. K. Kumarnanunni Nair. ArR I99! Kerala H8;
ti') M/s Jain Mills and Electrical Stores v. State of Orissa, AIR I99l Orissa I17.
4. Secretary. Irrigation Department, V. G.C. Roy, I99I (2) SCALE I369.
5. Mahant Narayana Dasjee Varu v. Board of Ttrustees. Tirumala Tirupati Devastham. AIR I965 SC I23].

3. I .."i. Rw-out/ttrrttt/u/in/t------This question needs to be settled. ()rdinat'ily, the contractual rate
would not be exceeded. But there ca n be circumsta nccs where the contractual rate is too low and does
not meet the requirements ofjtrsticc. There can be a situation wherein the defendant has deliberately
protracted the proceeding. In such cases. the court should have power to award a higher rate of in-
terest than that contracted lot. If the defendant has been detaining the money and earning interest
at It higher rate in the market. the plaintiff should not sulTer from the delay. From this point of view.
it appears to be desirable to provide that the court may. in the interest of justice, direct that the de-
fendant shall pay a rate of interest higher than the rate provided for in the contract. This /)('I1(/WZIL'
lite interest would of course be granted by the courts as per practice.

3 .2. Section 34 and Negotiable Instruments
3.2.1 Section 34 CPL' has also led to another problem pertaining to negotiable instruments.

3 .2 . 2. Qtt:>stion_/"or ('OHStl/('1'(([/()lI~--Tllc question is whether the provisins of section 34 of the Code
of Civil Procedure in so far as it concerns interest petztletzte //tu. override the provisions of section 79
of the r\'egotiab!e Instruments Act. I881. According to section 79, Negotiable Instruments Act IRRI.
"when interest at a sepeciﬁed rate is expressly made payable on a promisory note or bill of exchange
interest s/zu// /we m/ctt/tttt»t/ at the rate speciﬁed, on the arneunt of principal money due thereon, from
the date of intrument. until .\l(t /1 date rt/'tor I/It' im;tt'tzttirttt of (I suit to cover such amount. as the court
directs. Section 79 thus, makes (what appears to be) a mandatory provisions regarding interets, and
the words "such datc after the institution of a suit" seem to sugges that even for some period after the
institution of the suit. the interest must run at the contractual rate. though the court has a discretion to
ﬁx the outer limit of the period.

3.2.3 In contrast. the provisions of section 34 of the Codeof Civil Procedur leave the matter to
the discretion of the court for the entire period commencing with the institution of suit. Generally
the contractutd rat- of interest isawarded by civil courts in decrees for the payment of money. where
the contract provides for interest. Still. in exceptional circumstances, the court can. under section
34 of the Code. award a dilierent rate of interest for the period beginning with the suit. Thus. there is 21
conﬂict between the two statutory provisions. inasmuch as!

(i) the Code of Civil Procedure leaves the matter to the discretion of the court, while

(ii) the Negotiable Instruments Act makes the award of interest at the contractual rate manda-
tory.

3.2.4. Consequently. judicial decisions on the subject are also conflicting. According to the
High Court of Rajasthan. the provisions of section 79. Negotiable Instruments Act, prevail over those
of section 34 of the Code of Civil Procedure!)

3 .2 . 5 In contrast. the High Court ofAndhra Pradesh has held that section 34 ofthe Code of Civil
Procedure prevails over section 79 of the Negotiable lnstru merits Act. According to that High Court.
the court has a discretion to award such interest as it thinks reasonable for the period of pendency of
the suit on a promissory note or bill ofexchange. It is not necessary that the court must grant interest
at the rate speciﬁed in the promisory note or bill of exchange, as provided in section 79, Negotiable
Instrument Act.7

3.2.6 The Jammu and Kashmir High Court (in a Division Bench ruling) has also held that even
where section 79 of the Negotiable Instruments Act applies. the court is not bound to award interest
at the contractual rate. and that the discretion of the court under section 34. Code of Civil Procedure
remains unaffected, even in suits on negotiable instruments.3

3.2.7 R('('0I)1ItIt'm/(1lion to anrcml Negotiable Instruments A ct+-- In view of the conﬂict of decisions
on the subject the law stands in need of clariﬁcation. On the whole. it seems preferable to confine
section 79. Negotiabie Instruments Act. to the period before the institution of the suit, thus adopting,
in substance. The View taken by the High Courts of Andhra Pradesh and Jammu and Kashmir.
Matters relating to the period oflitigation can best be left to the discretion ofthe court and, from that
point of view, section 34 should be allowed to operate even regarding suits on negotiable instrument.
In practice. this will not make much difference because, even under section 34 , courts in most cases

6. Utsav Lal v. Mohan Bros.. AIR I975 Raj. 236, 237, 238, paras 4, 5, 6, (V. P. Tyagi J.)_, following Ram Singh v.
Dewan Chand. AIR I960 Punj 286 and dissenting from Piara Lal v. S. Herchand Smgh, AIR I961 Punj. 442.

7. United Bank of India v. P. Krishnaiah. AIR I989 A.P. 2ll.
(Ramaswamy J.)

8. United Commercial Bank v. Hans Raj Saraf , AIR 1989 J & K 28, 30, paragraph 8 (DB).

do direct that interest pendent /ile should be paid at the contractual rate. But as a matter of legis-
lative provision, and on principle, it seems prelerable to leave the discretion to the court and conse-
quentially amend section 79, Negotiable Instruments Act, by substituting, for the words "such date after
the institution of a suit," the words "notlater than the institution of a suit." We recommend
accordingly.

3. 3 Section 39 and Execution of Decrees outside Jurisdiction

3 .3. 1 Section 3 9 authorises a court to send a decree for exeetion to another court in certain speci-
ﬁed situations. Broadly speaking, these are situations where the property or person
or against whom, execution is sought, is outside the local limits of the jurisdiction of the court.

3.3.2 Question for t'r/lull'/CI'(1ti()n-- The section uses the word "may", and this has led to a con-
troversy whether the court which passed the decree can itself execute the decree. In other words, does
word ''may'' imply that sending the decree to another court (in the circumstances mentioned above) is
discretionary ?

3. 3. 3 The Bombay High Court has held9 that a court cannot execute a decree in which the sub-
ject matter of the suit or application for execution is situated entirely outside its jurisdiction. Territorial
jursdiction is a_ condition precedent to _a court executing a decree. Hence, the court cannot attach pro-
perty outside its local jurisdiction. If it does so, and the decree is subsequently transferred to another
court, a private purchaser who has purchased the property after attachment can challenge the legality
of attaciiinent, in appeal, for the ﬁrst time. Once it is held that the attachment is void, it must cause
failure of justice. However, the Rajasthan High Court has taken a different view. WT" The Bombay
judgement dissents from the Rajastlian view.

3.3.4 It appears that in 1890, the Calcutta High Court had held that a court cannot execute a
decree against property outside its jurisdiction."

3.3.5 But in 1982, the Calcutta High Court13 has held that the word "may" in section 39 is par-
missive. The court possing a decree can execute it, no matter that the suit property is not within
its jurisdiction. The Calcutta High Court distinguished the following cases ;

(i) (1912) ll_.R 39 Cal 104 and
(ii) AIR 1932Cal 213.

It relied on the decision in AIR 1939 Cal 403.

,_ 3.3.6 According to the Kerala High Court also, the court which passed the decree can execute it
by attaching property outside its _jl1l'1SdlCtl0I1.]4 1

3.3.7 The Rajasthan High Court has also taken the view that the court which passed the decree
can execute it directly even outside its jurisdiction. 15"'16

3.3 .8 RecommemIutz'on--lt is submitted that the Bombay view is the correct view. The use of
"may" in section 39 does not mean that the court which passed the decree can execute the decrees
irrespective ofterritoriallimitations. The word"may"ismeantforcases where thereare circumstances
in which execution as such is considered illegal. Any other view would totally upset the entire secheme
of the code as to jurisdiction. It seems desirable to clarify the position by inserting an Explanation
below sccion 39 to provide that nothing in the section shall be construed as authorising the court to
execute a decree against a person or property outisde the local limits of its jurisdiction. We recommend
accordingly.

9. Sahaba Yeshwant Naik v. Vinod Kumar, AIR 1985 Bom. 79, 81, 83, paras ll, 13 (DB),
10.' Tarachand v. Misrimal, AIR 1970 Raj 53, 55, 57, 58, paras 8, 12, 13, 14, 15, 20, 22 (DB) (paras 14, 15 in particular).

11. Laxmi Narain v. Firm Ram Kumar Suraj Bux, AIR 1971 Raj. 30 (Jagat Nara in CI & G tta i ' '
Vasireddi Srimanthu v. B. Benkatappaya, AIR 1947 Mad. 347. ya a n 1) (dlsscmmg from

12. Premchand Dey v. Nikhoda Deb, (1890) [LR 17 Cal 699 (FR).

13. Arati Rani Paul v. Balai Chandra Paul, AIR 1982 NOC 42 (Cal) (Monjula Bose J.) .
14. Chithraru v. Gopala, AIR 1967 Ker. 81.

15. Laxmi Narain v. Firm Ram Kumar Suraj Bux, AIR 1971 Raj. 30.

16. Tarachand v. Misrimal, AIR 1970 Raj 53.

)_p

CHAPTER IV
SECTIONS:4l TO 100

4 . 1. Section 92 and Necessity of Notice before Granting Leave.

4.1. 1 Section 92 of tlie Code, so far as is material, makes a provision for the grant of leave to
tile suits regarding public charities, in the following terms 2

"Section 92. Public C /rarities---(l) In the case of any alleged breach of any express or constructive
trust created for public purposes ofa charitable or religious nature, or where the direction of the
Court is deemed necessary for the administration of any such trust, the Advocate General, or two
or more persons having an interest in the trust and having obtained the leave of the Court may
institute a suit, whether contentious or not, in the principal civil court of original jurisdiction or in
anyother Court empowered in that behelf by the State Government within the local limits of
whose jurisdiction the whole or any part of the subject-matter of the trust is situate to obtain a
decree . . . . . . . ."

4. 1.2 Question for co/zsideratio/zAThe question has arisen whether, before granting leave under
section 92, notice to the defendant is necessary.

4.1.3. According to the Punjab and Haryana High Court, notice is not needed. The case law
has been reviewed in these words in its judgment1 :~

"A Single Bench of this Court in Prithipal Singh V. Magh Singh, AIR I982 Punj. and Hr. 137
held that the Court does not have to write a reasoned order. It does not even have to give a notice
to the defendant of the application seeking leave to ﬁle the suit, as the order granting leave is of
an administrative nature. However, contrary view was taken by the Delhi High Court i11 Gur-
dwara Prabandhak Committee, Delhi Cantonment v. Amarjit Singh Sabharwal, AIR 1984 Delhi
39 and by the Madras High Court in T. M. Shaninugham v. Periyar Self-respect Propaganda
Institution, AIR 1985 Mad. 93, though none of the said High Courts noticed judgement of this
Court given earlier. It was under these circumstances that case was referred to the larger Bench,
vide my order dated 12-8-1985."

4.1.4 As noted by the Punjab and Haryana High Court, the Madras High Court has taken the
view that leave cannot be granted without ordering notice to the defendants. In the Madras case,
it was held that a suit cannot proceed on the basis ofa leave which was granted without such notice,
although a fresh suit can be ﬁled after obtaining proper leave? The Delhi High Court-3 has held
that the order is a judicial one and should state reasons.

4. I .5. The view of the Madras and Delhi High Courts has been impliedly overruled by the
Supreme Court4 in a recent case where it observed that the desirability of such notice being given to
the defendant cannot be regarded as a statutory requirement to be complied with before leave under
section 92 can be granted as that would lead to unnecessary delay and, in a given case, euasc considerable
loss to the public trust. The Su reme Court held that ifa suit is instituted on the basis of such leave
granted without notice to the defendants, the suit would not thereby be rendered bad in law or non-
maintainable. However, it further observed that as a rule of caution. the Court should normally,
unless it is impracticable or inconvenient to do so, give a notice to the proposed defendants before
granting leave under section 92 to institute a suit, as if felt that the defendants could bring to the notice
of the Court that the allegations made in the plaint are frivolous or reckless, or that the persons who
are applying for leave are doing so merely with a view to harassing the trust or have such antecedents
that it would be undesirable to grant leave to such persons.

4.1.6. Recommerulatio/1----To expect the court to issue notice and then to try the several points
of detail before granting leave in the light of the objections put forth by the prespective defendants,
would mean that there will be a trial before a trial. This would not be desirable, in our view. Our

1. Lachmandas v. Ranjit Singh, AIR 1987 Punjab and Haryana 108, 109, paras 3 7.

T. _S5i2;nmugham v. Periyar Self-respect Propaganda Institution, AIR 1985 Mad. 93, 94, 95, paras 5 & 6 (Venkata-
swa i . .

3. Cvilurjdwlara Prabhandhak Committee v. Amarjit Singh Sabharwal, AIR 1984 Del. 39, I4, 42, paras ll & I2, (S.B.
a , .).

4. R.M. Narayan Chettiar v. N. Lakshmanan Chettiar, AIR 1991 SC 22l.
ll

recommendation. tlierclorc. to in~.crt an E_\'p/cmultb/1 below section ')2 to the ellcct that the court
may grant leave untler this section without issuing notice to any other person. This does not. of
course. mean that the court will grant leave as a matter of course. The said Exp/zmalion to section 92
may read as under :

"l;'.\'p/ii/iul/0.': --|i shalt riot be obligatory for the court before granting leave under this section to
issue notice to the part}. proposed to be sued by the person applying lor leave."

4. 2 Section 96(3) And Consent Decree

4.2. I Section 96(3) of the Code of Civil Procedure bars an appeal against it decree passed with the
consent of the parties. However, under Order 43, rule IA, it is permissible in an appeal against the
main decree to contest the validity of the order of the court recording a compromise or refusing to
record a compromise under Order 23 of the Code.

4.2 .2. QHL'.\'[f0Il _/"or consiz/era!ian~-There has arisen the question whether an order under Order
23, rule 3, recording or relusing to record a compromise. is appealable.

4.2.3. In an Andhra Pradcsh case,' it was held that an order rejecting an pplication to record to
compromise is not a "decree"and is not appealable under section 96 of the Code, because it does not
conclusively determine the tights of the parties. This was the view of Sitaram Reddy J. and Raghuvir
I. who held in the above case that such an order is a decree, but is not appealable. because of the
deletion of Order 43, rule I (m). in I976. They seem to have stressed the words "Save as otherwise
expressly provided" in section 96. According to them. the intention ofthe Parliament is that no appeal
would lie when the compromise is recorded or rejected under Order 23, rule 3. Actually, in the
Andhra Pradesh case, the matter had not been dealth with in the Trial Court on the merits. It was a
civil miscellaneous appeal, brought in by the petitioning ﬁrst defendant, against an order made by the
Sub-Judge, rejecting to record a compromise in terms of the affidavit and to pass a compromise de-
cree.

4.2.4 Neither of the Judge seems to have noted Order 43, rule IA which was itself inserted in
1976. Order 43 rule I (in) (before I976) provided an appeal under section I04 against--

"an order under rule 3 of Order 23, recording or reusing to record an agreement, compromise or
satisfaction."

This was deleted in I976 by the amending Act. But as stated above. the same Act inserted Order
43 rule IA, permitting the appellant in an appeal against the main decree, to challenge the recording
or non-recording ofcompromi se.

4.2.5 Some dilﬁculty is created on the above point, as the High Court of Madhya Pradesh" has
expressly dissented from the Andhra Pradesh case of 1981 mentioned above. In the Mad hya Pradesh
case (leaving aside facts which are not material for the present purpose), an application for recording a
compromise had been accepted by the Trial Court, dismissing the objection raised by the opposite party,
inter-alia, to the effect that his signature to the compromise had been taken under coercion and that it
was not legal. Some question arose as to whether the compromise application embraced properties
which were not subject matter of the suit, or whether it involved persons who were not parties to
the suit.

-4.2.6. The Trial Court. however, recorded the compromise apparently rejecting the objections
and this point was raised before the District Judge by way ofa miscellaneous civil appeal under Order
43, rule IA. The appeal agianst the order rejecting the compromise was dismissed on merits. But in
the meantime, against the order of the Trial Court, passing-a decree in terms of the compromise, a
civil revision was taken to the High Court. In I983, the High Court (in that Civil revision) set aside
the order of the Trial Court, because it embraced other properties and parties, as stated above. The case
was remanded to the Trial Court with a direction that it will be open to the non--applicant to urge that
decrcee be passed with respect to that part of the compromise which related to the suit. But the appli-
cant would be at liberty to show that the clause was inseparable from other clause, i.e. that he could
raise that point in opposition to the non--appIicant. The Trial Court. holding the clause to be sepa-
rable, passed a decree in respect ofeviction of the applicant from the suit property. Against this order
a civil revision was preferred to the High Court. The applicant also preferred, before the District
Judge, under Order 43, rule IA, an appeal against the order. The District Judge held that as a regular
appeal lies under section 96 of the code against the judgment and decree of the Trial Court, the proper
court fee must be paid.

5. G. Peddi Reddy V. G. Tirupatty Reddy. AIR I981 A.P., 362 (Raghubir & Seetha Ram Reddy .1 1.).
6. Thakur Prasad v. Bhagwandas, AIR 1985 M.P. I71, I75, para 5.6 (C.P. Sen and Gulab Gupta, JJ.).

»
.............

, ,..,_....m~--...' 'Pﬁ-

ﬂ' .«. .....---vs' ' """'"

>4 13 4.2. 7 Against this order, the applicant took a civil revision in the High Court. The High Court held that no revision lies against the order of the Trial Court recording the compromise and passing a decree in terms thereof, because an appeal lies under section 95, read with Order 43, rule IA, against such an order.

4.2.8 The Andhra Pradesh Judges, with respect, failed to notice Order 43, rule IA. If they had noticed that provision, probably, the ruling would have been different.

4.2.9 The High Court of Madhya Pradesh has observed :

"T/ze apparent conﬂict between S. 96(3) and Order 43, Rule 1A can only be resolved in the manner suggested by us*. The court should lean against a construction which would make any particular provision futile. The court should also, as far as possible, avoid a construction which results in an anomaly. Clearly, the intention of the Legislature in making the amendments in the Civil Procedure Code was to simplify the procedure and avoid multiplicity of the proceedings in order to curtail litigation. Therefore, the clear intention in enacting Order 23, Rule 3A and deleting Order 43, Rule l(m) and adding Rule lA to Order 43, is that whatever objection may be separate suit and the appeal under Order 43, Rule l( m) has been abolished, so he has to challenge the same in the appeal against the decree that may be ﬁled under S. 96 read with Order 43, Rule 1A. If the appellate court ﬁnds that a compromise was lawfully recorded, then the appeal has to be thrown out as incompetent. If any other interpretation is put, then Order 43, Rule 1A(2) becomes meaningless. If there can be no appeal against the decree recording a compromise, then what is the purpose is saying in this sub-rule that the recording of the compromise can be challenged in an appeal against the decree, which means that if the compromise is not lawful, then an appeal can be ﬁled and recording of the 'compromise can be challenged under this sub-rule."

4.2.10 Recommendation ---These two decisions have created a curious situation. In practice, a eonﬂict is likely to arise on the question whether an. order under rule 3 of Order 23, recording or refusing to record an agreement, compromise or satisfaction is appealable. Notwithstanding the provisions of Order 43, rule 1A, the lower courts in Andhra Pradesh will ﬁnd the situation em- barrassing. Apart from that, the Madhya Pradesh judgement shows that considerable confusion (though unnecessary) is created by failure of the courts to read section 96 with Order 43, rule IA. In our view, the position should be clariﬁed by an amendment.

4.2. I I We suggest that it would be desirable to add, under section 96 (3), a proviso, as under 2-

"Provided. that nothing in this sub-section shall affect any right, in any appeal against a decree passed in a suit, to contest the decree on the ground that the compromise should, or should not, have been recorded."

'Emphasis supplied.

94-M/S29MofLJ,&CA-- -2 VCHAPTILR v SECTIONS 101 T() 158

5. 1 Section 104 and Appeals Against Orders 5.1.l Section I04(I) provides as under:~« ''(I) 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."

Section 104(2) reads as under :

"(2) No appeal shall lie from any order passed in appeal under this section."

Unlike sub-section (I). which expressly saves other laws, sub-section(2) contains no savings regarding other laws.a.nditseems that the legislative intention is to 'bar a second appeal against orders passed in first appeals against ordes. However, there isa conﬂict of decisions on the subject.'-' 5.1 .2 Qucstimifor c'onsizIerurion --When an order is passed by a single Judge of the High Court in an appeal from an order passed by a lower court, the question often arises whether an appeal under the Letters Patent is maintainable against such an order

5. I .3 According to one view. the bar against appeal contained in section 104(2) operates in such cases.' But according to the other view. it does not so operate.2

5. I .4 In the Bombay case." the order of injunction had been passed by the City Civil Court Bombay. under Order 39. rules I and 2 ol' the Code. The party against whom the order was passed appealed to the Bombav High Court. and the appeal was allowed by a single Judge. From this appellate order, an attempt was made to take a letters Patent appeal to the Division Bench of the High Court, but the Division Bench held that no such appeal was maintainable in View of section 104(2) ofthe Code. There were earlier rulings of the same High Court, to the same eﬁ"ect.4 ' 5. 1 .5 According to the Gujarat High Court also, a Letters Patent appeal is barred in such a situa- tion.5 5.1.6. This isalso the Keralaviewﬁ

5. I .7 The Mad hya Pradesh High Court has, however, held that a Letters Patent appeal from an appellate order under section I04 is not barred.7 5.1.8 This is also the Madras.view.3--"

5.1 .9 The Andhra Pradesh High Court 10 different from the Madras High Court and pointed out that the latter did not refer to the decision of the Supreme Court" in Shah Babulal Khimji's case. Subsequently, the Madhya Pradesh High Court I3 examined the decision of various High Courts and, relying on the decision of the Supreme Court. held that a Letters Patent appeal from the order of the single Judge of the High Court passed in appeal under Order 43, rule I is incompetent on account of the bar contained in sub~section (2) of section I04.

5.1.10 In the above circumstances. a clariﬁcation of the law is needed.

*Paras 5.1.3 to 5.1 .9 infra.

1. Bombay, Oujarat. Andhra Pradesli and Keralaasec infra

2. Madhya Pmdesh and \/Iiidras. see i'vifm Pandey Misra and Co. v. Anil Upendra Pit-ale, AIR I989 Bombay 72.

3.

4. Obcdur Rahman _v. Ahmedali Bharucha, AIR I983 Bom. I20, I21, para 8 & 9, (DB); El[1la{I'!1l9y8C§)g1I']l']7|§SgS(IOIICr v. Rajendra Singh, AIR 1984 Born 478, following Shah Babulal, v. Jayaben D. Kania, I , 1.

5. Madhusudan Vegetable Products v. Rupa Chemicals, AIR, I986 Guj 156 (Gokulkrishnan CJ. & SB Majumdar J.).

6. Abraham v. Illani. AIR I981 Ker. I29, 130, I3I, para 6 (relying on the practice of the Kerala High Court with refer- ence to section 5. Kcrala High Court Act, 1958).

7. Shrichand V. Tejinder, AIR I979 MP 78, 82, para I I (DB).

8. V.S. Bhoopathi Vijaya Raghava Chettiar v, Radha Rukmini Ammal (I984) TNLJ 92, referred to in Pandey Mishra & Co. v. Aml Upendra Pitale, AIR I989 Bom. 72.

9. Rukmani v. H.N. Thirumalai Chettiar, A R I985 Madras 283, 284, para 3 (DB).

10. Ghantasala Seshamma v. Gollapalli Ra_iaratnam, AIR 1990. Andhra Pradesh 19. ll. Shah Babulal Khimii v. Jayaben, AIR 1981 SC ]786_ I2. B.S. Adityan v. Fencying Association of India. AIR I99I. Madhya Pradesh 3l6 (DB).

I4 l5

5. l , I l Recon1/ize.'rJario.'i 7-lt it-.aig;;este(l that the ﬁrst view, i.e. the riar1'ov.'cr view, should be pre- lbtTed and in.corpor:1tc.t ll'! the win. ilCl\'il'l:,'41't"'J!(-.it'l to V';|,'.'lOU".L)()fl'iiLlC1'l'.llO|'l , inclucling in particular the need for ﬁnality at some stage in such matters. the amendment should provide as above, by adding a suitable Explzmatinn to section 104(2) on the subject. The present laitgiiage of ueetion l04(_2) also l"-avours this approach. The new [;'.\'p/zznaﬁon could be so;newhat on the following lines :

"E.\'pl(muri0ni -Where an order is passed by a single Judge of the High Court in an appeal from an order passed by a court subordinate to the High Court, no furtlter appeal shall he against the first mentioned order. notwithstanding aityhng to the eo:i'.:'ary coniaziied. in the Letters Patent constituting the High Court."

5.2 Section I07 and |)eﬁt-ieney in the Court Fees 5.2.1 A question arising out oi'-scr_:tioi1 107 (also connected with Order 7. rule ll) may now be considered. Where the memorandum otnppeal appears to be deﬁcient in court ice. the qt!a3.»t't0t1 arises as to what order the court should pas»:. Section li_'>7 reads as under :2 2- |t),7(a') S',ll)jc.Tl to ;-aeh comlltioas and l?niTt:tt'.ons as may be p:'es<:s'it>e<l. an appellate court shall have power V»

(a) to (d) x x x (2) Subject as aforesaid. the appellate court shall have the same power» and shall perform as nearly as may be the same (lLlLlC'.§ as are conferred and imposed by this Code on courts oforiginal jurisdiction in respect of suzts instztuted therein."

Order 7 rule it reads as under

"Raj/'twin/1 of p/ai;1r----The plaint shall be rejected in the Following Cases :~ (21) where it does not disclose a cause of action :

(b) where the reliefclai med is under-Valued. and the plaintiff, on being required by the court to correct the valuation within -it time to be ﬁxed by the Court, ﬁtils to do so:

(cl where the reliefclai med is properly valued but the plaint is written upon paper insufT1cien- tly stamped, and the palintiﬁ". on being required by the court to xapply the requisite stamp-

it yer within tt time to be ﬁxed b the Court, fails to do so :

P I Y

(d) where the suit appears froin the vtatement in the plaint be barrel by any law :

Provided that the time ﬁxed by the Court to-' the Correction oi' the vzmrttion or supplying of the requisite stamp--paper:; shall not be crtcnded unless thr: Court, for ~,:r.~.o:1s; to hr: recorded, is satisﬁed that the plaintiff was prevented by any cause of an r."~;Ception'3,l n..".tut':? i'i'-rut correcting the \.;:luation or supplying the requisite stamp papzrs. as the case may b ~, within. tit'. time ﬁxed by the Court and that rcfttsztl to extend the time would cause grave injustice to the plaintitT."

5.2.2. Question for consiclc»ratio/1-The basic question is whether Order 7, rule l1(b) and (c) are attracted to appeals.

5.2.3. According to one view, in such a case, Order 7, rule 11 can be invoked. This means that wherethe reliefclaimed in the appeal is under-valued [clause (b)] or, (through the relief is properly valued), the plaint is written upon paper which is insuﬁiciently stamped [clause (ell. the court is expected to call upon the appellant to cor rect the valuition or to supply the requisite stamp paper within a time ﬁxed by the court. It is only the:'<:at'tt-i'. i.e. if the appellant do;-s not rrsetify the deﬁciency within the ﬁxed time, that the s".DDCL'.lC-itl1l3z_', rcjectetl. The court cannot stI';tigl1t:t\w.y ili~, miss the appeal for deﬁciency in court t'ec.'3

13. Anantha_ Naicken v. Vasudev Naiehan. AIR 1967 Ker. 85. para 3 (Vaidialingam .l.)_"lt' it is found at the hearing that detictt court fee has not been paid. the proper thinj: would be to stop further li-:1ring',. . . . .and direct the plaintﬁ' or the party concerned to pay the nceess:1r\'eourt fee." '

94.M/S29MofLJ&CA--~2(ti) must be given in the case of memor-andu=n o 16 uch time is given. The question is whether such an opportunity t'z~.pp;u.l also. There is a conﬂict of decisions on the point.

time must be given for the purpose 2- 5.2.4. In the case oI'u plaint s According to the following High Courts.

(a) Bomay,'4

(b) Kerala,15

(d) Patna," and

(e) Tripura.'-8 5.2.5. In contrast, the following High Courts take the view that the appellate court is not bound to grant time, though it has a discretion to granttimc :-

(i) Allahabad,"

(ii) Jammu and Ke.shmir,?0

(iii) Madras,'21

(iv) Nagpurf'-'

(v) Punjab,?3 and

(vi) Rajasthar1.24 estion whether Order 7, rule lI(c) applies to the rejection of appeal. In I914, the Bombay High Court took the view that a memorandum of appeal stands on the same footing as a p1aint.'~'5 Exactly a year later, the Madras High Court'-'6 doubted the corretness of this judgment. In I938. Mr. Justice Varadachariar of the Madras High Court, speaking for aDivision Bench of the Madras High Court. in an elaborate judgment, held that Order 7, rule 1I(c) does not apply to appeals."

5.2.7. A Division Bench of the Punjab and Haryana High Court'38 has laid down the law as under in 1970 :

"The latest judgment of the Madras High Court taking the same View is of Varadachariar and Pwzdrang Row, JJ. in Sit/zaranza_1'ya r I varuri Ramayya AIR I038 Mad. 316. The learned Judges of the Madras High Court also after consideringa large number of previous cases came to the conclusion that the provisions of Order 7, Rule lI(c) of the Code of Civil Procedure do not apply to appeals and that the appellate court is entitled to reject an appeal if the full court fee has not been paid without callin g upon the appellant to pay the deﬁcient court fee, teca use, in so 'sion has been made in 0.41 Rule 3 far as the memorandum of appeal was concerned, express provi 5.2.6. This question is connected with the qu

14. Phaltan Bank v. Baburao, AIR I934 Bom. 43, 45, para 4; Achut Ramehandra v. Nagappa, AIR I914 Bom. 249.

15. Anantha Naichen v. Vasudeva Naickan. AIR I967 Ker. 85, para 3.

16. Achut v. Sibram. ILR (I962) Cut. 818.

17. Sarjug Prasad. Surcndrapat, AIR 1939 Pat. I37 (DB);

Ramati Singh v. Shitab Singh, AIR I939 Pat. 432 (Opportunity must begiven); Mahabir Ram v. Kapil Dco, AIR I957 Pat. II(l) (Raj Kishore Prasad J.); Tulsi Ram v. Keshri Prasad, AIR 1962 Pat. I89, I90 (case of plaint ); (Anant Singh J.) (Opportinity must be given).

18. I-I.C. Sarkar v. H Jyoti Bali. AIR I970 Tri. 26 (R.S. Bindra, J.C.) .

19. Wajid Ali v. Isar Bano, AIR I951 All 64 (Full Bench of 5 Judges) (relying on section 149): Bibbi v. Shugan Chand, AIR 1968 All 216, 224 (court may give time).

20. Collector, Land Acquisition v. Dina Nath. AIR I977 J & K 11, 15, para 20.

21. Sitaramiah v. Ramiah. AIR 1941 Mad. 838 (FB).

22. Atmaram v. Singhai Kasturehand, AIR I930 Nag. 224 (Macnair, A..l.C.).

23. (a) Raj Kumar v. Amztr Singh, AIR I98I Punj I (FB).

Jagat Ram v. Khairati Ram, AIR 1938 Lah 3|6 (FB). see infra.

(0) Balwant Singh v. Jagjit Singh, AIR I947 Lah 210 (Elaborate discussion).

24. Amar Singh v. Chaturbhuj. AIR 1957 Raj 367; Gulam V. Shrikalyan, AIR I975 Raj. I50, I52 paras 7 and 8. (Kan Singh J.) (Time may be granted at the discretion of the court) (section I49 relied on).

25. Achut Ramaehandra v. Nagappa, AIR I914 Born. 249.

26. Narayana Rao v. Seshamrna, AIR l9l5 Mad 426 (2).

27. Sitharamayya v. Ivaturi Ramayya, AIR 1938 Mad 3l6 "I)I3).

28. Aley Textile v. The British India Corg)or'ni-:n, ILR (1970) 2 Punj and Har I27, cited in Raj Kumar v. Arnar Singh AIRl98II'&Hl,5para9(FB). 1 44» 17 for its rejectioii on the ground s stated in that rule. After her: ring the lee. med counselfor the parties at length and after careful consideration of the mi'-.tter, we are inclined to agree with the view taken by the Division. Bench of the Madras High Court in Si':/im'anm)'ya's case (supra). The provisions of section I07 (2) have been expressly made subject to such conditions and limitations 'as may be prescribed.' In section 2(l6) 'prescribed is stated to mean 'prescribed by rules.' Whereas speciﬁc provision has been made in rule ll ol"Order 7 relating to plaints. no corresponding provision has been made to that effect in Order 41 of the Code, which contains the entire relevant procedure relating to appeals. Agreeing with the reasoning on which the judgment of the Division Bench of the Lahore High Court was based, we do not appear to be bound to allow the appellants an opportunity to make up the deﬁciency in court fee after the expiry cfthe period of limitation for preferring the appeal particularly in a case where there is no dispute about the quantum of the court fee payable, but the appellants have knowingly and deliberately paid deﬁcient court fee on the solitaiy ground that they were not possessed oi' suﬂicient funds to pay the requisite court fee within the period of limitation. Since the petition of appeal did not bear the requisite court fee, no proper appeal has in fact been ﬁled in this case."

5.2.8. The Ful Benchjudgment ofthe Punjab and Haryana High Court of 1981 aproves of the above reasoning.'-'9 5.2.9. ln an appeal filed under the Representation of the People Act, the Supreme Court held that if the claim of the appellant that on the pleadings in the election petition no triable issue arose is well-founded, then the petition was liable to be dismissed under Order 7, Rule, 11, even in appeal.

5.2. 10. Rec-ommendati'on--lt appears to us that the controversy needs to be resolved and that the better course would be to adopt and incorporate a view which would apply the provisions of Order 7, Rule ll(b) and (c) to appeals also. It is not fair that a hearing on the merits should be precluded merely by reasons of dieﬁciencics in court fees. There should be inserted a suitable Explanation to section 107 for adopting the above view. In the alternative, in Order 41, a rule applying the provisions of Order 7, rule ll mumtis mumndis to appeals can be inserted as suggested in the next paragraph. The latter course may perhaps be more convenient and we recommend its adoption.

5.2. ll. We note that Order 41 rule 3(1), (so far as is material) provides of rejection ofa memo- randum of appeal. In rule 3, sub-rule(lA) should be addedas under :

"(Al) The memorandum ofappealshall be rejectedinthe following cases :

(a) where the relief claimed is under-valued and the appellant, on bcin g required by the court to correctthe valuation within a time to be ﬁxed by the eourt, fails to do so; or

(b) where the relief. claimed is properly valued, but the memorandum of appeal is written upon paper insufliciently stamped, and the appellant, on being required by the Court to supply the requisite stamp paper within a time to be ﬁxed by the court, fails todoso.

"Provided that the time ﬁxed by the Court for the correction of the valuation or supplyingof the requisite stamp-papers shall not be extended unless the Court, for reasons to be recorded, is satisﬁed that the appellant was prevented by any cause of an exceptional nature from correcting the valuation or supplying the requisite stamp papers, as the case may be, within the time ﬁxed by the Court and that refusal to extend the time would ea use grave injustice to the appellant."

5.3. Section 136 and arrest of persons or attachment of property in outside district 5.3.1. Under section 136 of the Code, when a Court executing a decress has to arrest a person or attach a property outside its jurisdiction, it can issue a warrant or an order for the purpose and send it through the District Court. Thereafter, the District Court shall cause the arrest or attachment to be made by its oﬂicers or by a court subordinate to itself and shall inform the court which issues the warrant or order. Other proceedings follow, as providedin the section. As regards the actual procedure to befollowed, the relevant. part ot'sectionl36( 1) provides that the Court to which the application is made----

"inay in its discretion, issue a warrant of arrest or make an order of attachment and send to the District Court within the local limits of whose jurdisdicton such person or property resides oi is situated, a copy of the warrant or order, together with the probable amount of the costs of the arrest orattachmcnt."

5.3.2. Question for con.si'dertiun--The questionhasarisen whether the provision in section 136(1) to the c-ll'ect that the warrant is to be sentthroughthe I/ieDistrict Court is mandatory (sothatnon- compliance with the provision will render the proceeding void) or whether it is discretionary (so that the non-compliance is regarded as a mere irregularity).

29. Raj Kuir/nar V. Amar Singli, AIR 1981 P& H 1 (FB).

Lalit Kishore Chaturvedi v. Jagdish Prasad AIR [90 Supreme Court 1731.

Judge, Lucltnow, on th3 authority ofa precept received by hint front B€I1Ci1OIntl1c'Aliililttbtttllllgll Court held35 the attaeltmcnt to be 18 5.3.3. Some IIiglt("ottrtst::l<cthe Iirst view and accordingtotheni--- . (I) an order ztd.liw.:s:;x:tl to (1 Court except through the District Court, would be it nullity; (2) the ztttaclttitent eiliectedin pursuance of suclian or ermaybeignoretlasvoid;and (3) it the property so attached is actually sold, the SLtlC can be set aside on prooi' ofsubstatttial injury to theappellant.

This view istaken by the following High Courts:

(a) A1lahzibad,31

(b) My:;ot'e."'~'

(c) Patna,5==; and

(d) Punjak34 5.3.4. In the Allahabad case, the question was whether attaclunent ol' property by the Civil Kanpur, was valid. The Division invalid. As the matter is discussed at some length in the judgment, it will be useful to quote paragmplis J7 and 17A oftlte judgment, which are as under :

"I7. It appears to us that the provisions of 13641.2': quite explicit. and even though it may, to sotne ex tent. be s;tid that the section lays down procedure to r attachment ol' property outside the jurisdiction of the Court ordering the same, it also ptecribes jurisdiction for attachment of property in such c.::~;-.s;. The very tlrct that the orderoi'attacl1ment has to be sent to some other Court, mdie.:te~i that the Court ordering the attachment has no jurisdiction to cause the u.ttacltin.ei=.t bring rnadc outside its own territorial jurisdiction. In order, therelorc, that zv.ttacliine,iit be inztde, two conditions must be satisﬁed, namely :-

(I) The property must lie within the territorial jurisdiction of the Court cau:ing the attacltntent to be made.

(2) 'i'he Courtorderingtheattaehntent must be sezicdol'then1;.ttcr.

"l7A. 'I'i;e ( ottrt ordering attachment beforejudgment is seized of the matter, but the doesiiotlie within itsjurisdiction. lftheorderof attaclimcnt is sent to a Court other than the District Court, the property required to be attached may lie within the jurisdiction of that Court but that Co-.trt cannot be seized of the matter unless the proceedings for atta=.chmcnt a re properly before it. S1li)~»\,'t.'ll()I1s (I) and (2) of section I36, tlterclbre, prescribe not only the tnanner in which the «".i't't't-'.'l'til'l('ltl shall be made but alsojurisdiction l'or niaking the attachment. On receipt of the o rites' of? .tt:achtnent, the District Court is seized oi' the matter and the property is also within its jurisdiction and :i.ttachment can, therefore, be made by it. Sub-section (2), however, prescribes that the Di:,iI'lC[ Court may cause the attachment to be nntde by its own cI'iiccrs or by a Court SubOl'dil1I.';t<J l.'I it:;tll'. II' the District Court exercises th.~.;,ptit.i1 ts.» get the attaclimcnt made by a Court blIl):.iI'tllt'.:'.lC to its;;li', it will be only then that the Court will be ~ei/etl oi' the matter and since the property also lies 'within itsjttrisdietion, it will bablc to get it attael'.»:tl."

property 5.3.5. The diliiculty' created by section I36 and its proper ratit nale ilit\C been dealt with by High Court of lVIy:mre."" The following quotation from para 9 oi" thejttdgement is oi' some help :--

32. 33,.

34.

35.

"The cottccrtstis izfjtulicial a pinion in India in behz' it uppers to be in coii.~oi:,;tiice with the view which] have t2=.l\;<:n., can be seen front the decisions clialie various High ('out is, namely AIR 1968 Punj & l~I1tt'y 461 (liltagtx. n. D.:s Pribhdas v Santoklv Singh Sarait Singh): AIR 1963 All 320 (Hall Rahiin this 6'; Sons v Firm Samiullah and Sons): AIR 1051 Madh Bha 82 (Rameshwara- dhyal Ra m~aw.-:: oop v Bhcemsen Dulci1and)z1nd AIR I '$3.7 Pat 603; (Bansropan Singh v Emperor). Sri Chattre, tl. .- learned counsel for respondent No. I It. pressed into service the decision of the High Court or" Ti:=.vancore--Cocl1in in AIR 1952 Trav Co. I59 (FB) bCL\\'CC11 Mariamma Mathew v Ittop Poulo and the decision ofthe Kerala High Court in AIR 1963 Ker 193 between Mookan Ouseph Tho.a;~,i<utty v Purainundclcat Pandinjare l\"lLt.(la?tl1ilNa1't1l which followed the earlier decision ol'the 'I'rav;.neore-Cochin High Court. The view taken by the High Court of Travancore- Cochin as well ..s the Kerala High Court in the aforesaid two decisions is that the giving effect to the order ot";:tt:;t-lttncitt is only a procedural matter and that therefore section 136 of the Code of Civil Proc.:tltt"e should not be regarded as a provision coriI'erringjurisdiction on another Court in givitigetfeet to the order orattttcltinent. l have already discuss:-tl the relevant provisions ofthe Code Rahim Bux an-.l sons V. I-'irm Samjullu & Sons, AIR 1963 All. 320 in': infra). S.A. Patil v. P. I4. Rajput, AIR 1973 Mysore 82, 84, 85 para o t.i'\/Ialimath J.). Bansropan v. Emperor, AIR 1937 Pat. 603, 605 (James & Madam .II.). Bhagwan Das v. santokh Singh, AIR 1968 Punj. and Hary. 46! 2 "o Pm Rahiin Bux .\2 Sons v. I irm Saiiiitillti and Sons, AIR I963 Ali;tli.tl~.i.i 1.'- S.D. Singh .I.).

I R 467.

I. 31». Paragraplts 17 to (M.C. Desai CJ. & 19 of Civil Procedure and recorded my t'eason.s to show that section I36 of the Code of Civil Pro- ccdure is one which provided for conferring jurisdiction on Court to gixre effect to the order of attachment made by another Court, which jurisdiction it does not otherwise possess. With great respect I ﬁnd myselfunable to agree with the view taken in those two decisions that section 136 of the Code of Civil Procedure deals only with the procedural aspect and that any irregularity in followingthc satne does not vitiatc the attachment made."

5.3.6. The point was considered at some length by the High Court of Patna in a Division Bench ruling.37 though it was a csitninal case, the que.~tion related to interpretation ofsection 136 ofthe Code ofCivil Procedure, the oue.-lion being whether a person who {escaped from the custody of court peon who had arrested him on a defective warrant could be ccnvicted under section 148 of Indian Penal Code. In this case. the warrant wasnot senttothe District Court but was endorsed directly to the Munsif and it ultimately found its way to the Di.stt'ict Judge who ordered it for execution. The argument was that the District Judge has no power thus to execute a warrant which was not properly addressed to him under section I36. The Advocate General conceded that in this case the warrant was defective and could not be defended as a good warrant. The High Court made the following obserVations.:--

It apperars to us that when a Court exercises the extraordinary powers conferred by S. I36. Ci\ il P. C.. the pI'O\'l5I0n> ofthat section must be strictly observed. and warrant must be endorsed tothe District Court outsidethe jurisdiction of the issuing court, in which the warrantis to be executed The warrant against Ramraj Singh was, therefore. deferctive and Mt. Sri Narain Sahay argues that as that was the warrant which was actually executed which led to the rescue. Ram Rai Singh cannot be treated as having been in lawful custody and no offence was therefor committed wider s. 225 B of the Code by anybody concerned. Ifthe matter endedthere. the petitioners who have been convicted of the offence of rescuing or escaping ftotn lawful custody and of rioting with the cotnmon object ofelfecting the rescue or escape would apparently be entitled to acquittal on those Charges. although this defect in the form ofthe wa rtant was manifestly not known to them atthe time."

5.3.7. But, as the learned Adtocate General points out. "the petitioners have been convicted.

not merely for the rescue of Ramraj Singh but for that of Bamropan Singh also. Ransropan Singh was actually under arrest for the reason that he had wounded 21 constable,and had committed in the presence of the two constables, an offence punishable under section 324, .'.P.C., for which, the police officers had powers to artesthim under Clause 1 ofsection 54, Criminal Procedure Code, so that he was in lawful custody and the persons rescuing him actually committed the oﬂence punish- able under section 225 of the Code. If he is regarded as having been in custody in execution of the warrant issued under 0. 38, r. I. Civil Procedt re Code, the persons concerned in the rescue were quilty of the offence punishable under section 225B of the Code, since there was no defect in the warrant against Bansropan, so that in any view of the matter the persons resi5.ting the arrestof Hanstopan and rescuing him from custody were rightly convicted. Ramraj Singh merely escaped from the custody of the peon who had arrested him on a warrant which was defective. So faras he is concerned. the ﬁnding and sentences of the trial Court must be set aside, and he must be acquitted and dicharged from his bail."

5.3.8. In contrast, the following High Courts take the view that such non-compliance isa mere irregularity. which willnotvitiatethe proceedings :

(i Andhra Ptadcsh;3" and

(ii) Kerala.

5.3.9. Interpreting section IOI of the 'l"ranvancote Civil Procedure Code (corresponding to section I36). :1 Full Bench ofthe Travancote-Cochin High Cour 14" took the viewthat the aforesaid section prescribed a mere matter of procedure, a nd sending the war rant. not to the district court but to a subordinate court in another district is only an irregularity which does not affect thejurisdictoin of the court. The Travancore-Cochin High Court put forth the reasoning that when an order ofattachment is sent to the district court, the district coutt has no discretion ofits own to refuse execution. It is bound to carry out the order itself, or to get it executed through a subordinate court. But, in the Allaha- bad case" of 1963, this reasoning Itas been criticised in the following words :-

certainly true that [ho I)islrict Court. to which the order of attachment is sent, has no y out the order of the Court issuing the order ofattachment, t the provision nutde for the order ofattachtnent being sent "ll discretion in the matter and has to cart' but that does not necessarily ntean tha

36. S.A. Patil v. P. K. Rajput, AIR I976 Mysore 82, 85, 86 para 86.

37. Bansropan Singh v. Emperior, AIR I937 Pat. 603, 605 (James L Madan JJ.) .

38, Pollumal V. S.C. Negoji Rao, (l975)2. A.P. I.J. I43 cited by A.N. Shah. CPC(l989) Page I352, footnote I5.

39. .\I\mL'.Ill Ouseph v. Paramundekat. AIR 1963 ket. I93.

40. .\I;tri.unma Mathew v. Ittop Poulu, AIR 1952 Travancore Cochin I59 (FR).

41 . R-.tliim Box and Sons v. Firm Samiulla and Sons, AIR 1963 Allahabad 320.

to the Court is a mere matter to procedure. The very fact that the Court ordering the attachment cannot itself issue a warrantand scnditdirectto the nazir for cxecution,indicates that a question of jurisdiction is involved in it. With respect, therefore we are unable to follow the view taken by the Full Bench in AIR 1952 Trav. Co. 150 (supra) and hold that the Civil Judge at Lucknow had no jurisdiction to attach the properly andthe attachment was consequentlyinvalid. The effect would be as if attachment had not been made atall."

5 . 3. 10. It is desirable that the position in this regard should be clariﬁed. Adoption ofthe view that the non-compliance is a mere irregularity, would, at the ﬁrst sight, appear attractive, because the quest- tion may be raised why a procedural irregularity should invalidate the act of a court, particularly in execution.

5.3.11. However, as mentioned above, many ofthe High Courts have pointed out that section 136 really creates a jurisdiction where there would otherwise be none. If the section had not been there, then the following consequences would have ensued :-

(a) The court issuing the order contemplated by section 136 (i.e., arrest or attachment of a person or thing outside its jurisdiction) would have been incompetent in the matter, beca-

use, in genera1,a court can only deal with matters within its local jurisdiction;

(b) The court within whose jurisdiction the person' or thing actually is, would have (but for the section), no competence, because a court, in general, in concerned only with the execution of it own processes.

5.3.12. It is this vacuum that is sought to be ﬁlled in by section 136. Its terms must, therefore, be strictly complied with.

5.3.13. There is another aspect to the matter. Section 136 does not itself give jurisdiction to a subordinate court in a direct manner. What it contemplates is that the district court will issue the warrant of arrest or order of attachment--.-orit will cause it- to be done by a. subordinate court. Further, as provided by section 136(2), it "shall inform the court which issued or made such warrant or order of arrest or attachment." Thus, there is an element of centralised authority in the District Court. It seems, therefore. to be a logical view to take that any other mode of proceeding is not contemplated by thesection as a valid procedure.

5 .3. 14. Recommendation--The position should therefore be made clear by inserting an Explana- tion after sub-section (4) in section 136 on the lines indicted below.

"Explanation---A warrant of arrest or an order of attachment shall be acted upon only when received through the District Courtas providedm sub-section (1)."

We recommend accordingly.

CII/\l'TIiR VI ORDERS 1 to I0

6. 1. Order 2, Rule 2 and Mesne Proﬁts Already Accrued

6. l . I. Ordgr 2, rule 2(1), requires that "every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action". If the plaintiff does not do so, then, under rule 2(2), "he shall not afterwards slit in respect of the portion so omitted". Similarly, sub- rule ,(3) Rule 2, Order 2, provid:s as under :

"(3) A person entitled to more than one reliefin re_sp:ct of the same cause of action may sue for all or any ofsuch reliefs, but if he omits except with the leave ofthe Court, to sue for all such reliefs, he shall not alterwurds sue forany relief so omitted".

6. I .2. Questir)/1_/8)/' considw-arimz. The question that has arisen is this. If a person sues for possession of property without claiming the mesne proﬁts that have already accrued against the defen- dant who is alleged to be in wrongful possession, can hr: sue later for such accrued mcsnc proﬁts 7 Or, is such a suit barred by Order 2, rule 2(3) 1'

6. I .3. According to the following High Courts, ifa plaintiff who sues for possession of immov- able property fails to claim accrued inesne proﬁts, he cannot subsequently sue for the mcsnc proﬁt which had already accrued at the time of the earlier suit 2--

(a) Allahabad;'

(b) Bombay (later view);'-' (C) Madhya Pradesh;'' ((1) Orissa;4 and

(e) Patna.5

6. I .4. According to the following High Courts, however, such a suit is not barred :-

(i) Andhta Pradcsh;6

(ii) Bombay (earlier view);7

(iii) Calcutta;8

(iv) Madras;9 and

(v) Punjab and Haryana.1°

6. I .5. The Madras case was a Full Bench decision. The Bench posed the following question ;

"Ifa plaintiff sues for possession only, when he might have jointed in the same cause of action claims for pI'0ﬁlS and damages, is it open to him to sue subsequently for proﬁts which became payable before the institution ofthe suit and which might have been inluded in the suit ?"11 It answered the question in the atﬁrmative.

1. Saghir(Hassan v. Fayab Hasan, AIR I940 All 524 [dissented from Sadhu Singh v. Pritam Singh, AIR I976 P & H 38,47 FB)].

2. Channappa v. Bagalkot Ban,, AIR 1942 Bom. 338 (Heaumont U.J. & Sen J.). 3 Ram Swarup v. Jitmal, AIR 1966 MP 186, I88, para 8 (Krishnan J.).

4. Mukunda v. Krupasindhu, AIR 1954 Orissa 202, 203, 204, left hand para 3.

5. Ramjanam Singh v. Khub Lal, AIR 1925 Fat. 145.

6 Abburi Rangamma v. Chitrapu Rao, AIR 1966 AP 325.

7 Ramchandra v. Lodha, AIR 1924, Bom. 368.

Kishorilal Roy v. Sharut Chunder (I882) ILR 8 Calcutta 593; Sris Chandra v. Joyaramdanga Coal Co. , AIR I-942 Cal 40; Santosh Kumar v. Sachindra Nath, 62 Calcutta Weekly Notes 759.

9. Ponnamal v. Ramamirda Aiyar, AIR I915 Mad. 912,913 (FB).

10. Sﬁidlgu Singh v. Pritamsingh, AIR 176 P & H 38 (PB), dissenting from Saghir Hassan v.Tayab Hassan, AIR 1940' A . 24.

ll. Ponnamalv. Ramamirda Ayiar, AlR l9|5 Mad.9l2,9l3 (FB).

21 22

6. I .6. The i'~/l£I.tli'Il\ ea .c of I9I5 points out that when Order 3, rule 4 says that no claims shall be' _lUil1-Jd with \U.ll\ to.' irn.iiov.. ble property except claims for mcsne proﬁts ctc., "it is quite clear that the legislature coiisidemtl that ciaiins for the recovery ofand and claims for inesne proﬁts were sepa- rate cause: of actioi'i".1'-'

6. I .7, ltumiziiiicmmi/.,:ii-lt appea. s to us that the reasoning advanced in the Madras case13 of I9l5 is ui=.aiii»c»\er-.ahIc. The need is to codify that interpretation by suitably amending the law. An explanation could be added to Order 2, rule 2 for the purpose.

6. 2. Order 2, Rule 2 and Suits Filled Simultaneously . 6.2. I. A C0lliI'0\'C1':s_y whieli Iias arisen out of Order 2, rule 2(2), is concerned with the prohibition indicated by the words "he shall not cg/"lei-it'ai'(/S sue in respect of the portion so omitted or re- linquished."

6.2.2. Qiimtimi for m_m'it/c/'arimi--Tlie question is this. What is the position if two suits are ﬁled on the same day, making dli'i'CI'€l"lI. claims founded on the same cause of action ? How are the provisioiis of Order 2, rule 2 to be applied in such cases '.7 6.2.3. High Courts have expressed tliiee diverging views on this question. The three views are :--~

(i) Ori,Icr 2, rule 2, applies in such a case-. One or the other suit must be dismissed. and, for this purpose, the suit which bears T/It' later number, should be taken as suit ﬁled "after-

wards".

(ii) The rule applies, and the pl;-.intiﬂ' must elect. But the test of "numbering" of the suit as per (i) above, should not be applied. The election should be of the plaintiff, who should decide which suit he desires to proceed with.

(iii) The ('o art should allow the two suits ﬁled on the same day to be consolidated. instead of forcing upon the plaintilf dismissal of one of the suits as per (ii) above.

6.2.4. The first view is taken by the Allahabad High Court." The second view is taken by the Madras High (.'ourt.1-" The third view has been taken by the Bombay High Court."

6.2.5. In our opinion, the Allahabad view (i.e., the ﬁrst view mentioned above) is, with great respect, not a very satisfactory one. The accidents of numbering of suits should not conclusively determine the, C1H'L'Cl' of one or other oftwo suits ﬁled on the same day. As regards the Madras view, (i.e., the second of the three views mentioned above), it is, no doubt, a more practical view than the ﬁrst one. Still, we think that the Bombay view is the most preferable for a variety of reasons. In the ﬁrst place, it does substantial justice to the parties by suggestinga procedure (consolidation) which is convenient. Secondly. it strikes a I'airly good balance between the interests of the plaintilfand those the defendant. The pI;--,in'iiIl', if he has a just cause, is enabled to obtain trial thereof. At the same time, the defendant is spared of the inconvenience of being vexed by two different suits based on the same cause of action. Thirdly, consolidation of suits and hearing them together really achieves the main object of Order 2, rule 2, which is to avoid multiplicity 0fl;tlg3.tiOI1 in the shape of "splitting of claims". If the plaintitfcoinmits an irregularity by consolidating the claim, the court can rectify the irregularity by consolidating the splil portions of the claim.

_6 . 2. 6. Reconum»iidati'oiz--We would, therefore, recommend that a new rule 2A should be inserted in Order 2, as under :--- , "2A. Suits ﬁled on 1/18 sanze day on same cause of action.--Where a plaintiff sues the defendant on the same day through two or more separate suits in the same court and the suits are based on the same cause cl' action, then--

(a) The prgivisioits of rule 2 of this Order shall not apply, but

(b) the court shall pass an order for consolidation of the suits and hearing them together, in the interests ofjustice."

6.3. Order 2, Rule 2 and Arbitrations 6.3.]. Order 2, rule 2 (to state its gist, again. so far as is material), provides that the plaintiff suing in court in respect ofa cause ofaction must include the entire claim arising from that cause of action must include the entire claim arising from that cause of action, and, if he does not do so, he cannot later institute a suit for the claim not made earlier.

12. Ibid.

13. Ibid.

14. Murti v. Bhola Ram, (89) ILR I8 All I65 (FB).

I5. Rayalu Ayyar v. Rainudu Ayyzir, AIR I926 Mad. 934, 935, 936 (Coutts Troller (C.l.).

16. Gancsh v. Gopal, AIR I943 Rom. I2, I7, 19 (Broomﬁeld & Macklin J1.) 23 6.3.2. Question for coirsitlcratior. A controversy exists as to the applicability of this rule to arbitrations.

6.3.3. The Delhi High Court has held that Order 2. rule 2 does not €1_PI%Iy to arbitrations on the reasoning that the arbitrator is not a "court". The High Court has described Order 2, rule 2,. as a penal provision. "draconian in nature". and has held it to be unjust to apply the rule to arbrtrations." The Gujarat High Court. however. holds the rule to be applicable to arbrtratrons.18 The Calcutta view on the subject has been ﬂuctuating.l9

6. 3.4. In a Calcutta case decided in 1964, there are dicta tc the eflect that the principle of the rule does not apply to arbitration proceedings." However, in a later ease of the same High Court, it was held that the principle of this tile applies to arbitration proceedings in appropriate cases."

6.3. 5. In Kerorimall v. Union of India, Calcutta High Court" has held that the same dispute, once referred and embodied in an award, cannot be the subject matter of a fresh reference and. to that extent. the rule Ol'I'('.§'_]'lrl(/I.('(lf(' applies to arbitration proceeding. But it further held that there is no authority for the proposition that disputes which could have been raised. but were not raised previously, could not be raised on the principle of constructive re.s'jud1'caIa. It proceeded to observe that "there is authority for the proposition that the principle of Order 2 rule 2 is not applicable to arbitration proceedings. It is not necessary for me in the instant case to consider to what extent the rule of constructive i'c*.s'_/iiz/icatu is applicable to arbitration proceedings because I hold on facts that the instant dispute was expressly left out of consideration in the previous arbitration proceeding on the ground that the arbitrator locked jurisdiction to entertain the dispute."

6.3 . 6. Following observations of Ronkin J. from Balmukundis case?" are quoted in the above case" :--

"Order: ll rule 2 is a spccial pI'(Wl\lOI1 tlouhtlcss of the conrpletcst wisdom but unknown to the common law one moreover which attaches an indiscriminate and indeed incalculable penalty to it condition diﬂicult to deﬁne. There is I think a cardinal error involved in any attempt to appeal even to the principle on which the Rule is founded for the jurisdiction of an arbitrator drapcnds not upon the existence of a claim or the accrual of the cause of' action but upon exis- tence oi' a dispute."

6.3.7. The Delhi Higlt Court=~'> Itas also held Order [I rule 2 to be not applicable to arbitrations I'oIIowiirg the case of Kcrorinrall (AIR I964 C2-.1545). The Delhi High Court has dissented from the later'_iI.1tlgemcnt oi' the Calcutta High Court by Sabyasaehi Mukharji J. (as he then was) in the case oi'Ji\vn-rini Engineering Works Pvt. Ltd. v. Union of India'~'°'. The Delhi High Court has obser- ved as under ' "A l'.'.".I'l1Cd .ludg=.r oi' the Calcutta High Court (Sabyasachi Mukharji J.) held that though Order 11 rut; 2 does not in terms apply to proceedings under the Act there is no reason why the principle thereof \llOulLl not b: applied to arbitration proceedings in appropriate cases. With respect to the Iezii-ited_juctgc, I feel bound to differ on the applicability of Order II rule 2 to arbitration pro- -' Cccdltlgs. The l'(.'L'.,\0I'I is that the arbitrator is not a Court. Order II rule 2appIies to proceedings before a Court. It cannot apply to proceedings before the arbitrator. It is a penal provision. It is draconian in nature. To apply Order II rule 2 to arbitrations will not only be illegal but also unjust. I do not deny that the principle of res judicara applies to arbitration. That doctrine is founded in public policy and applies equally to suits and awards".

6.3.8. Tire Gujarat High Court has, however, disagreed with the view taken by the Calcutta and Delhi High Courts. It lras said 27 "it is not possible for me to agree with the view taken by the Calcutta High Court in J lwllfltil Engineering Works". The learned Judge of the Delhi High Court has held that principle ofrasg/udicata apply to arbitration because that doctrine is founded in public policy and applies equally to suits and awards. Order 2 rule 2 is an analogous principle founded on

17. Alkarma New Delhi v. DDA, AIR I98I Delhi 230.

18. See Gujarat Cases, Infra.

19. See Calcutta cases,/"u,/i'u.

20. Kerorimall v. Union of India. AIR I964 Cal 545, 548, para I0 (PC Mallick .l.) 2I. Jiwani Engg. Works Pvt. Ltd. v. Union of India. AIR 1978 Cal 228 (Sabyasichi Mukherji J.).

22. AIR 1964 Cal 545.

23. Balmukund Ruia v. Gopiram Bhotika, AIR 1920 Cal 808(2).

24. Kerorimall v. Union of India, AIR 1964 Cal. 545.

25. Alkarma, New Delhi v. DDA, AIR 1981 Del. 230.

26. Jiwani Engineering Works v. Union of India, AIR I978 Cal 228 (Sabyasachi Mukherji J.).

27. Kothari & Associate Baroda v. State ofGujarnt. AIR 1985 Guj 42, 45, 46 para I0 (R.A. Mchta J.).

28. Jiwannni Fngg. Works Ltil. v. Union of India AIR I978 Cal 228 (Sabyasachi Mukherji J.).

public policy. The leai tied Judge of the Delhi High Court li;t.s ob:»ci'vcd that such provision of Order 2 rul-.: Z is |)=.'ll1t.l anti to apply the »-.:-.in: to .\.rbitr.ltions would be illcgaland unjust. I ant with respect unable to agree witli any of the .e adjectives. ll' rule of rm',/iiclimiri is founded on l';LliOlI.';ll and just public policy it would equally apply t0 the extension efthe same principle. In the ca se of Balmukund Ruia [AIR I920 Cal 808(2)] Rankin J. had observed that Order ll rule 2 is a. special provision doubt- less of the completest wisdom but unknown to the common law one moreover which attaches an indiscriminate and indeed uncalculablo penalty to a condition difﬁcult to deﬁne. "Although I am unable to agree with the latter part of the above quotation it is clear that the provision of Order 2 rule 2 is a rule oi'compl«.rte<t wiadosn. It' it were to attach any indiscriminate and in.deed incalculable penalty to a condition difficult to define it would not be rule of completest wisdom. The rule is merely to the elicct that a person shall includi: whole of his claim to respect to the same cause of action and omission to sue in respect ofany portion. of his cl:=.in1 would be barred. This is a salutary provi- sion which prevents multiplicity of proceedings and avoids the vice of splitting up the cause of action as observed by the learned judge in the case of Jiwnani Engineering Works. This principle ought to apply with greater force to the arbitration proceeding. which is meant for speedy disposal of disputes and if successive disputes on the same cause of action could be raised, that would de-feat the very object of the arbitration: proceedings. The claim before the Arbitrator is clearly in the nature of the suit and, instead ofa Civil Court adjudicating upon the claim, a separate forum of arbitrator adjudi- cates upon the same claim. Therefore. for the purpose of (arbitration) Order 2, rule 2 the principle of constructive res jm/icatu ought to apply naturally to arbitration proceedings. I am in respectful and complete agreement with the reasoning and conclusion of the learned Judge in the case of Jiwnani Engineering Works :

The Judgement of the Supreme Court in the case of Munshi Ram v. Banwari Lal AIR 1962 SC 903, indirectly lends support to this l't'8.SOlllng. In that case, after arbitration award. the parties had arrived at a different settlement under Order 23 rule 3 and not in terms of the award and the Court held that the provisions of Order 23 rule 3 would be applicable. The Supreme Court observed that "the power to record such an agreement and to make it a part of the decree whether by including it in the operative portion or in the schedule to the decree, will follow from the application of the Civil Procedure Code by section 41 ofthe Arbitration Act and also section 141 of the Code."

Accordingly, the Gujarat High Court held that where disputes arose between the Government and the construction contractor, and, on the application of the contractor, the previous arbitration was made for a certain amount claimed as compensation due to delay or extension of time limit by the Government for execution of the order, a subsequent application for reference to arbitration claiming a certain amount under a dilferent hzad based on the same cause of action (delay ofextension of time limit) would be bared."

6.3.9. The matter needs attention. It seems desirable to provide that the provisions of Order 2, rule 2 apply to arbitrators. Order 2, rule 2 is not a penal provision, but is intended to prevent multiplicity of suits. The reasoning elaborated in the Gujarat judgement in support of applying Order 2, rule 2 to arbitrations appears to be very persuasive.

6.3.10. It may be that Order 2, rule 2 is a stringent provision. But such a stringent rule appears to be needed in the interest of avoiding multiplicity of arbitration claims. There is no reason why the;principle applicable to ordinary litigation should not apply to arbitrations as well. Provisions in Order 2, rules I and 2 of the Code, which prohibit the splitting of claim under the same cause of action are aimed at avoiding multiplicity of suits on the same cause of action."

In fact, Order 2, rule I itself declares that its object is to prevent further litigation concerning them, i.e. concerning the subject in dispte. The legislative intent is that. as far as possible, all matters in dispute between the parties relating to the same transaction should be disposed off in the same suit.31 This object is relevant equally to arbitrations, as to suits.

6.3.11. Recommena'atiorz-----It seems desirable to insert a provision in the Arbitration Act, 1940 say, as section 13A, on the following lines :--

"l3A. Party to include whole claim and all reliefs--Subject to the provisions of the arbitration agreement, the provisions of 2 of 0 II in the First Schedule to the Code of Cvil Procedure, 1908, shall, so far as may be, apply to arbitrations governed by this Act, as they apply to suits to which the said Code applies."

_ The above recommendation is made for the reason that it is as much necessary to avoid multiple arbitrations on the same cause of action, as it is to avoid multiple suits on the same cause of action.

29. Kothari and Associates, Baroda v. State of Gujarat, AIR 1985 Guj 42, 44, 45, 46 paras 6---10.

30. Mulla, CPC (1984) Vol. 2, p. 883.

31. Saral Chand v. Mohun Bibi (1898) ILR 25 Cal 37], 390.

6.4. Urtlrxr 7. Ru/w lI)u) r/ml ('lIll.$1.' ii/'u;'(in/z 6.4. I. Ordsi' 7. rule II(:t) provides. that Ill-'2 [)lZ'.lIll sliall be r-.jccic.:l \\"lit:i'c it docs not disclose it cause ofaction. This has been interpreted by the Supreme Court as. m.-.;-hing that if. on a. incaiiin_gl'iil reading of the plaint it is found inaiiifest that the plaint is vcxatioiis or incritlcss in the sense ot not disclosing a clear right to suit. then the plaint is to be retected.-*'--' 6.4.2. Quesﬂoiz for consideration. The question for C0l1Sl{lCl'LllI0l't is this. For deciding whether the plaint discloses a cause of action or not. should the court assume the axerinents inzide in the plaint to be correct for the time being and then decide whether those 'cl'.Ci'lll_('.l':iS disclose a cause of action '3 Or, can the court go further and hold a deeper enquiry ?

6.4.3. The High Court of Rajasthan has held that wliat the court has to decide is, whether the allegations made in the plaint disclose a cause of action. This does not entitle the court to hold a probe into those allegations on the basis of the plea raised by the d:fendant.33 6.4.4. On the other hand, the High Court of Delhi34 seems to take a view which would Confer on the court a wider power. In the Delhi case. the question was as towhether the State Trading Corporation was the agent of the Central Government, by reason of which the (fentral Government was liable for the breach of contract committed by the Corporation. It was urged on behalf of the Union of India (Central Goxernment) that the plaint did not disclose any cause of action against the Union of India and the suit should be dismissed against it. The High Court held that it was to be seen if, actually according to law, the contention ofthe plaintillthst the STC is an agent of the Govern- ment is jiistiﬁed or not and mere allegation of the plaintiff was not enough. This Delhi judgement has been dissented from, in the Rajasthan judgment35 of I983.

6.4.5. In an Allahabad case, it was emphasised that two cases stand apart from each other :~--

(i) case where the plaint itself does not disclose the ca use of action; and

(ii) case where, after the parties have produced oral and documentary evidence, the court, after a consideration of all the materials, comes to the Conclusion that there is no cause of action.

In the former case, Order 7, rule I I(a) is attracted. while in latter case it is not attracted according to the Allahabad view/.36 6.4.6. In the Delhi case of I981. the arguments placed before the court and the reasoning of the court are found in paragraphs II and I2 of the judgment, quoted below.37 "I I. The learned counsel fol' the plaintiff contended that at this stage the only thing plaintiff has to show is that the allegations contained in the plaint do spell out at cause of action against defendants including the Union of India, in the present case. that it is not necessary that the said cause of action should be established and that the matter of establishing cause of action would come up for consideration only when tlir: case would be tried on merits. He, therefore, suggests that let this application of the Union of India be dismissed and the matter as to whether the plaintiﬁ" has any cause of action against the Union of India should be decided after the framing of issues and leading of entire evidence. The learned counsel explains that in the present case there was allegation of the plaintillthat defendant no. 2 was agent of the Union of India and that the said allegation is sufficient for disclosing the cause of action against the Union of India. In support of this contention he relied upon a judgement of Assam High Court in Shanti Ranjan Das Gupta v. Dasuram Mirzamal Firm, AIR I957, Assam 49. It was held that a plaint could not be rejected on the ground that there was no cause of action for the suit because that was some- thing dilterent from saying that the plaint itself did not disclose any cause of action. The learned counsel contended that in the present case what the Union of India was urging was that the plain- till" had no cause ofaction because according to law defendant No. 2 was not agent of the Union of India.

''12. But the law in this respect is laid down by the Supreme Court in T. Arivandandam v. T.V. Satyapal, AIR 1977 SC 242I. It is laid down that if, on a meaningful and not formal reading of a plaint. it is manifest that the plaint is vexatious or meritless in the sense of not disclosin a clear right to sue, trial court should exercise its power under Order VII Rule ll, Code of ivil Procedure, and should reject the plaint. So, it is meaningful reading of the plaint which is re- quired. It is to be seen if actually according to law, on the allegations contained in the plaint, defendant No. 2 was agent of the Union of India or not. Mere formal allegation of the plaintiﬂ'

32. T. Arvindanandam v. T.V. Satyapal, AIR I977 SC 242l. 2423, para 5.

33. Ranjeetmal. v. Poonain Chand, AIR I983 Rajasthan I, 2, para 3 (Dwarka Prasad J.).

34. Sakthi Sugars Ltd.. v. Union hf India, AIR I981 Delhi 212.

35. Ranjeetmal v. Poonain Chand. AIR I983 Raj I, 2 (Dwarka Prasad J.).

36. Jagannath Prasad v. Chandrawati. AIR I970 All. 309, 31 I , para 6 (FB) (per Gyanendra Kumar J.).

37. Sakthi Sugar Ltd. Union of India, AIR 1981 Del 212.

that defendant No. 2 was agent of the Union of India is not to be accepted. In \iew of the .'§I_i,p.1'ij-inc (f\_iii_r*t, ;_4i,i_t1n,»rit_\', it is (Le i1ii_t_v of the (f'i,iiiI't tn pr-\l_\c \\l1ct,_lici' alI(*;_v3timis inmic' in the plain! Iriaclr: rlcl€ii(l;iiit No. ?;is .-igciit and the llnioii of India as the priiicip.=l according to law. I have already held that according to law. defendant No. 2 was not agent of the Union of India, and that being so plaint does not disclose any cause of action against the lU.t'[CI'".

6.4. 7. R('('0I)II77('I1(/(Ifi0rl-'*~Tl18I'C appears to be need for clarifying the position. because the situa- tion in question is ofa recurring nature. The object of the provision giving power to reject the plaint to ensure that an unnecessary trial of the various points raised in the plCEl(ll1lf.\' should not be held where, even after act:-priizg I/ze a//egutio/I to be correct, there is no cause of action in favour of the plaintiff. This being the objective, it is desirable that the narrow view of the scope of the rule should be adopted rather than the wider view. If there is a serious question to be decided, the proper course would be to let the suit proceed and then determine the matter on preliminary i~:sui:s. Accov'iliiig.ly, it is suggested that Order 7, rule I l(-ii), should be replaced by the following :

"(a) where, the (Il'£'I'lM('l1/S mar./c in the plaint, even assuniing I/iem 10 In: /l'l!(', do not disclose a cause of action".

6.5. Order 8, Rule 6A and Limits as to nature of Counter-Claim 6.5.1. in the Civil Procedure Code, provisions relating to counter-cl:iims have been inserted in 1976. A controversy has arisen as to the kind of counter-claims and the class of suits to which these provisions apply. Order 8, rule 6A(l). reads as under :----

"6-/\(I). A defendant in a suit may. in addition to his right of pleading a set-oil' under Rule 6, set up, by way of counter--claim against the claim of the plaintill', any right or claim in respect of a cause of action accruing to the defendant against the plaintiff either before or after the ﬁling of the suit but before the defendant has delivered his defence or before the time limited for deli- vering his defencc has expired. whether such counter-claim is in the nature of a claim for damages or not :

Provided that such counter-claim shall not exceed the pecuniary limits of the jurisdiction of the court."

6.5.2. Order 8, rule 6-A (2) provides, inter alia, that such cunter-claim shall have the same effect as it plaint. Order 8, rule 6-A(4) provides that the counter-claim shall be treated as a plaint and governed by the rules applicable to plaints.

6. 5.3. Question for c-oizsi'deration----With reference to these provisions, the question has arisen whether, in a suit seeking a permanent injunction (or, for that matter, any kind of non-monetary relief), a counterclaim can be entertained.

6. 5.4. The High Court of Patna has held thatthe rightfto make a counter-claim is limited to cases involving a money claim.38 6.5.5. lt is necessary to quote paragraphs 8 to ll of the judgment of the Patna High Court, because there wereseveralquestionsinvolved. These paragraphs read as under :--

"Now, the question which has to be examined is as to whether there is any limitation on the nature of the counter-claim ? Rule 6 prescribes certain conditions before a plea of set~off can be entertained. These conditions are that (i) the suit must be one for recovery of money, (ii) the set--otT claimed by the defendant must be in respect ofan assertained sum of money, (iii) such sum must be legally recoverable by the defendant from the plaintiff (iv) both the parties must till the same character as they ﬁll in the plaintiffs suit, (v) such claim should not exceed the pecuniary limit of the jurisdiction ofthe court.

"So far as the new Rule 6-A is concerned, no such restrictions have been mentioned. It simply enables a defendant to set up by way of a counter-claim "any right or claim in respect of a cause of action accruing to the defendant against the plaintiff'. Can it be said that in view of Rule 6-A defendant is at libeity to raise any dispute in the suit of the plaintiff irrespective of its nature '.7 "The expression 'counter-claim" has often been used in context with 'set-off'. In Stroud's Judicial Dictionary it has been mentioned that "set-oﬂ' and counter-claim confer deﬁnite and independent remedies upon the defendant against the plaintiff." The expression 'counter-claim' had not been used in rule 6, but in severaljudicial pronouncements the said expression has been used alongwith the expression 'set off'. In the case of Sheobachan Pa ndey v. Madho Saran Choubcy (AIR 1952 Patna 73) a Bench ofthis Court while construing the scope of Order 8, rule 6 observed as follows (atp. 75) :

33. Jashwant siiigii v. Darshan Kaur. AIR 1933 Patna 132, 134, 135, paras 8-11 (Division Bench).

"A cr0ss~claim may be sent up as a shield or as asword. When it is Sf,'-i. U15 118 sliicld it is a defensive wcapori and riiav he pleaded by the c1<'f'i'iicl:iii't to reduce' the linlwility iigiiiiist him even to the full extent ofthe plaii1tiﬁ"s clniiii. A coiiiitci'--i.-laiiii ill llli' slinlw ofei ilvl1~n~i\c measure is what is tcchnica lly known as a set-oiii"

"if the expression 'counter-claim" used in the aforesaid Rule 6-A is given an interpretation to include any claim irrespective of its nature and as to whether it has any connection with the claim ofthe plaintiffthen in a suit ﬁled on behalf of the plaint_itTfor recovery ofan amount advanced to the defendant. defendant can make a prayer to declare his title and to passa decree for recovery of possession in respect of any land or house against the plaintiff of thzitsuit. ifany such dispute is pending between them, although it has no connection whatsoever with the claim for a money decree made on behalf of the plaintiff. In my view._ the framers _of the Code never purported to enlarge the scope ofa suit filed on behalf of the plaintiff. at the instance of the defendant. When they have used the expression 'counter-claim' it means that the claim and the counter-claim may be decided in the same suit in order to avoid multiplicity of the suits. Perhaps, keeping this aspect of the matter in view. by amendment R 6-C has also been introduced which is as follows :--

"6-C. Exclusion of counter-claim----Where a defendant sets up a counter-claim and the plain- tiff contends that the claim thereby raised ought not to be disposed of by way of counter. claim but in an independent suit, the plaintiff may, at any time before issues are settled in relation to the counter-claim, apply to the Court for an order that such-counter-claim may be excluded and the Court, may. on hearing of such application make such order as it thinks ﬁt'?! Learned counsel appearing for 'the petitioner has also drawn our attention to new rule 6-17 of Order 8 and the amended r l9 of O 20 in support of his contention that the right ofthe defendant to raise a counter-claim has limited by the Code only in cases where the "dispute is in respect ofa money claim' Rule 6-F ofOrder8 is as follows :--

"6-F. Relief to defendant where counter-claim succ-eeds--Where in any suit a set-off or counter. claim is established as a defence, against the plaintiff's claim, and any balance is found due to the plaintiff or the defendant. as the case may be, the Court may give judgment to the party entitled to such balance."

From rule V-F, it is appa rent that counter-claim mustrelate to a monetary claim, beca use Coure has been vested with power to pass a judgment even in respect of any balance found due to the defendant. Rule 19(1) of Order 20 is as follows 2-

"l9 (l). Where the defendant has been allowed set-off (or counter-claim) against the claim of the plaintiff. the decree shall state what amount is due to the plaintiffand what amount is due to the defendant, and shall be for the recovery of any sum which appears to be due to either party." .

''In view of the amended Rule 19(1), which is a provision regarding preparation of the decree in respect of suits where a counter-claim has been allowed by the Court, it is clearvthat in the decree what amount is due to the defendant has to be stated. In my opinion, the contention of the learned counsel for the petitioner that counter claim under the rules aforesaid can be made only insuch suits in which there is dispute in respect of money claim, has to be accepted. In the instant case the suit which was ﬁled on behalf of the plaintiff was for declaration that he was the licensee of the premises in question and has a right to remain in possession thereof for the period mentioned in the plaint. In my view. it was not open to the defendant to make a prayer for eviction of the plaimiﬁ"

by way of counter-cIm'm. As such. the order amounts to an exercise of ju-risdiction illegally and with material irregularity and calls for an interference' by this Court." ' 6.5.6. On the other hand, according to the High Court of Pun_iab and Haryaiia, it is permissibleas to ma kea counter claim for non-monetary relief'; this is alsothe Kerala view.40

6. 5.7. The Patna view, with respect. goes counter to the whole concept of counter-claim. In this context. it would be useful to quote from Mulla41. ' . . ' "Rules 6-A and 6-G are new and confer in addition to a right of set-oﬁ' under rule 6a statutory right to ﬁle a counter-claim. Before their addition in order 8 a set-off and counter-claim were strictly speaking'not permissible unless they fell within the limited compass of rule 6.42 Even in the case of an equitakle set-oﬁ' where the dcfendant's claim made in the set-off was larger than the

39. Suman Kumar v. St. Thomas School & Hostel, Air 1988 Punjab & Haryana 38, 39, para 2 (and earlier Punjab Cases cited in it, particularly Bhim Sain v. Laxmi Narain, AIR l982 P & H 155). i

40. Raman Sukumaran v. Velayudhan, AIR l982 Ker 253, 255 para 6 (Khalid J.). 4]. Mulla, Code of Civil Procedure, (1984) Vol 2 page 1086.

42. Laxmidas v. Nanabhai, AIR 1964 S.C. 1].

plaintiff 's claim and courts in view of order 20, rule 19 allowed a counter-claim for the balance. .

amount as 4-1 cross-suit. such procedure was admitted only where the claim in the plaint and that in the c0uut€r~claim arose /'mm the mine lI'(IIISu('fit)n or u .\'i'rii=-.5" 13/ I/'aI1su<'rI'u/1.3' w/iir/1-amounterl In the same IruII.\'m"Ii(III. The new rules now confer a statutory right to a defendant to setup a counter claim. The claim need not be for liquidated amount. This is clear from the words "a claim for damage< or not" in rule 6--A. The wide words which r 6-A is couched shows that it can be brought in respect ofany claim that could be the subject ofan independent suit. It is no longer confined to money claims or to causes of action of the same nature as the original action and it need not relate to or be connected with the original cause of action or matter. The words ' any right or claim in respect of a cause of action accruing to the defendant" sho\v that the cause of action from which the counter-claim arises. need not arise from or have any nexus with the cause of action pleaded by the plaintiff. A claim founded in tort may be opposed by one founded on contract. Further. the defendant by his counter-claim may ask for any relief, e.g.. a declara- tion, relief against forfeiture, iniunction receiver, speciﬁc performance. an account. payment of a money claim or damages. The words, "both before or after the ﬁling oftbe suit" in rule 6-A show that a defendant may set up a cause ofaction which has accrued since the suit was filed".

A counter claim may contain more than one cause of action provided the diﬂ'ercnt cause of action are such as can b.-joined in a suit as an independent. suit. Rule; applicable to th: form ofa plaint would apply toa counter-claim (rule 6-A).

6. 5.8. The Karnataka High Court43 has observed that a set--ol'f is. a defence put forward seeking absolvement from payment ofthe claim made, whereas counter-claim is 9 separate and indepen- dent action for recovery of money from the other person and such a courter--claim need not be limited to monetary claims only.

6.5. 9. The Orissa High Court" has held that Rule 6-A ofOrder 8 cannot be construed ina limited scnseas has been done by the Patna High Court, and that the Court can entertain by way ofa counter- claim whether the claim is in respect ofmoney or not.

6. 5 . 10. Recommendation :-----In our view, the exposition ofthe law by Mulla (quoted above) is a sound one. It is supported by the wide language ofthe provisions in question and (read in conjunction with the safeguards providedin the rules) does justice to both the parties. We recommend that the wider view of the scope of counter-claim should be incorporated by suitable amendment. This could be achieved by adding. below Order 8. rule 6-A(l). an Explanation on the following lines.:--

"EvpIanation.--Subject to the other provisions of this Code. it is immaterial that the cause of action in the counter--claim is not based on the same transaction as the suit. or that the suit is not for money. orthat the counter-claim is not for money.

6. 6. Order 9, Rule 13 and failure to attach copy of plaint 6.6.1. Order 5, rule 2. provides that a copy ofthe plaint must accompany the summons. Order 9. rule 13, second proviso, however. (as insertedin 1976). provides as under :-

"Provided f urthcr that no Court shall set aside a decree passed ex parte, me rely on the ground that (here has been an irwgu/m'it.i in the service of summons. if it is statisﬁed that the defendant had notice ofthe date of hea ring and had suﬂicient time to appear and answer the plaintiff's -claim."

6.6.2. Questionfor mns'ideration.--The question has arisen whether an ex parte decree can be set aside for breach of0rdcr 5. rule 2.

6 .6. 3. The High Court of Punjab and Haryana has held that not attaching the copy ofthe plaint to the summons is a mere irregularity; and, if the defendant has come to know of the case. the ex porre decree cannot beseta aide, merely on the ground of theabove irregularity'45..

6.6.4. But the High Court of Orissa seems to have taken a different view on the sub'ect4°_ 6.6.5. The Madhya Pradesh High" Court has.8.1SO.he1d that the language of Order 5. rule 2 is mandatory and whenever summons are issued to a defendant. it must accompany a copy of the plaint ora concise statement. It observed as follows :--

"The law is that alongwith the summons, a copy of the plaint should be served as it is very much essential because the purpose of service of a copy of the plaint, or if so permitted. of a-concise statement thereof. is to bring home to the-defendant knowledge of a particular suit having been instituted" against him so that he may know what-is the claim brought cut by the plaintiff against

43. M/s Anand Enterprises v. Syndicate Bank, AIR 1990, Karnataka I75.

44. M/s Ramsewak Kashinath v. Sarafuddin, AIR 1991, Orissa 51.

45. Risaldar Pakhar Singh v. Bhajan Singh, AIR 1987. Punjab and Haryana, I70, l72, I73, paras 6 to 9.

46. Hiren Ghosh v. Sasikala Padhi, (I984) 57 Cuttack LT, 494 cited in Risaldar Pakhar Singh v. Bhajan Singh, AIR 1987 P & H 170, I72, I73, paras 5 and I0.

47, Laxminarayan v. Ramcshwar, AIR 1990 Madhya Pradesh 155 .

p... ._ _<v'.

__...,« ......,_ .._._--

him and he may make up hi: mind to defend himself or not. This is the reasson why the law makers have made Rule 2 of Order 5. C.P.C. mandatory by using the w rd shall. Accordingly, if the summons is not issued it cannot be said th=.+ t there is a valid service on the defendant and when there is no valid service. even ifan ex parte decree is passed on such service. it has to be set aside."

6.6.6. Rer-omn:ena'ation.----lt appears to us that the latterview is preferable. The ojbect of serving a summons on the defendant is to make him aware of the nature and details of the claim. Strictly speak- ing. it i) the plaint that gives the real case. The summons is only incidental to the plaint. Even if the defendant may otherwise have received casual information about the litigation, that cannot constitute suﬁicient notice of its details. No one can assess with reasonable fullness the nature and dimensions of the litigation without a copy of the plaint or, if so permitted, a concise statement. We would, therefore, recommend that the Orissa view should be adopted and suitably codiﬁed. The object could be achieved by inserting in Order 9. rule 13 a further proviso below the proviso quoted above as under 1--

"Provided also, that notwithstanding anything contained in the above proviso where a copy of the plaint or concise statement has not been attached to the summons as required by rule 2 of Order V, such omission shall be deemed to be sufficient ca use for setting aside a decree passed ex-parte. "

M/S29Mof LJ&CA--3 CHAPTER VII ORDERS 11 T0 20

7.]. Order 14, Rule 2(5) and Examination of Witness 7.1.1. Order 18, rule 2(4) of the Code of Civil Procedure provides that notwithstanding any- thing contained in the rule, the Court may, for reasons to be recorded, direct or permit the defendant or any party to examine any witness at any stage. A ' ' 7.1.2. Question for considerat/'on--Some controversy whether the expression "'at any stage"

in this sub-rule means that any stage previous to the delivery of judgement. The application. can be made 'or whether the expression bears a more limited meaning. . .

7.1.3. The Orissa High Court? has held that the expression means any stage previous to deli-- very ofjudgment. But the Bombay High Court has taken the view, that once the case is closed for judgment. the defendant cannot apply under Order 18 rule 2(4) to cross-exainine the plaintiff and to adduce evidence. The Bombay High Court has expressly disagreed with the Orissa ruling. which holds that the expression means any stage prior to the delivery of the judgment in the case.

7. l .4. Recommendation--~It is desirable to settle the law by a suitable amendment. To siretch the sub-rule as permitting such an application to call a witness after the case is closed forjudgment, seems to be an underisable expansion of the normal procedure and, for this reason, it is recoinmen-

-ded that in Order 18, rule 2(4). after the words "at any stage" which appear at the end, the words "before the case is closed for judgment" stshould be added'.

7.2. Order 18, Rule 3 and Reservation of evidence 7.2.1. Order 18. rule 3(so far as is material), provides that where there are several issues, the burden of proving some of which lies on the other party, the party beginning may, at his option, either produce his evidence on those issues, or reserve it by way of answer to the evidence produced by the other party. The rule thus gives two options to the party, namely, (1) the option to produce, or (ii) the option to reserve. The procedure to be followed, if the latter option is exercised by the party in question, is set out in the latter half of the rule,.

7.2.2. Question to be considerecl~--There is some controversy as to the exact stage at which the option allowed by the rule to the party beginning is to be exercised.

7.2.3. According to one view, the option must be exercised at the time, or before the time when tche tltie other side begins and enters upon his evidence. This view is taken by the following High our s--

(a) Andhra Pradesh3; (plainti1'I' need not opt before beginning his evidence).

(b) Delhi;4 (C) Punjab and Haryana5; and

(d) Rajasthanf' One can describe it as the liberal view.

7.2 .4. According to another view, the option must be exercised when the party himself begins. This view is taken by the Madhya Pradesh High Court7.

7.2.5. According to the Madhya Pradesh High Courts, the stage when the party begins must apprise the Court, is when that party begins. The court followed an unreported judgment of the same High Court (dated 23.10.1970) holding as under :

"The party beginning must elect at the time of beginning whether it will produce evidence on all the issues or only on those (issues) the burden of proving which rests on him and the reser-

vation is allowed when the other party has closed his evidence.' (This is how the earlier judge- ment of 1970 is quoted in the 1977 case). The Madhya Pradesh High Court dissents fro.m the Alekh v. Bharamar, AIR 1978 Orissa 58, 59, paras 2, 4 (S. Acharya J.).

Wasudeo v. Jagannath, AIR 1986 Bombay 43, 44, 45, paras 6 and 7 (Dhabe J.) .

Nookalamma v. Simhachalam, AIR 1969 AP 82, 83 (1971); 2 APLJ 339 (Kondaiah .l.).

Kaviraj Ganpat Lal v. Om Prakash, (I975) 77 Punj LR(D) I0, referred to in AIR 1983 P & H 210. Jaswaiit Kaur v. Devinder Singh, AIR 1983 Punj & Haryana210(see infra').

lhderjeet Singh v. Raghunath Singh, AIR 1970 Raj 278.

Laxmi Narayan V. Baburam, AIR 1977 MP 191 (U. N. Bhachawat J.) (see infra).

ibid, paras 7 and S. 30 31 \.'i6\\.' of Andhra Pradesh, Mysore and Rajasthan on the subject. However, as the trial court had not examined whether the plaintiff had or had not led evidence on the issues which he could have reserved by porperly exercising the option, the High Court remanded the case with the following irection:

"The trial court is directed to hear the parties and after considering the matter from the aspect whether the plaintiff had in fact led evidence on issues mentioned in para 2 above or not, decide the question ofpermitting the plaintiffto lead evidence in rebuttal ofthese issues.

7.2.6. The Madhya Pradesh judgment of 1977 (supra) has been expressly dissented from, by the High Court of Punjab and Haryana.9 a 7.2.7. The view of a Division Bench of the Punjab and Haryana High Court1° is that the stage for reserving the right to lead evidence in rebuttal should "remain open upto the time beyond which it might lend to cause prejudice to the other party. Plainly enough, this would be the point of time before the commencement of the evidence by the opposite side at which stage clear notice may be given that the same may well be met by rebuttal testimony.' 7.2.8. According to this view, no serious prejudice arises, even if the right is exercised at a stage later than the commencement of the evidence of the party who has the right to begin. In the larger perspective ,therefore, the High Court oprted for a somewhat liberal view, to hold that this right may well be exercised at any time before the commencement of the evidence by the opposite side, so as to put it on guard and avoid prejudice before it begins the examination of its own witnesses.

_ 7.2.9. According to the Mysore High Court, though the law does not prescribe the stage for apprising the court of the option, it is reasonable that this should be done "before he begins to adduce his evidence, and in any case before the other party begins his evidence, so that it might be home in mind that the party beginning has not closed his evidence." In the Mysore case, the defendant (on whom the burden of proof lay on the facts and who had, therefore, the right to begin) did not apprise the court of the exercise of option until the evidence of both the parties was closed and the case set for arguments. It was held that the option could not be exercised at such a late stage."

7.2. 10. Recommendation.--In our opinion, the position deﬁnitely stands in need of clariﬁcation. The choice is between theliberal view and the strict view. The liberal view* should be preferred, because it can be adopted without any prejudice to the other side. The strict view** not only does violence to the language but is unnecessarily harsh. It is, therefore, suggested that Order 18 rule 3, aslit stands at present, may be renumbered as sub-rule (1), and a new sub-rule (2) be added to that m e, as under :

"(2) The option referred to in sub-rule (1) shall be exercised and communicated to the court before the other party begins to produce its evidence.' *Paragraph 7.2. 3. supra.

"Paragraph 7.2.4. supra.

9. Jaswaht Kaur v. Devinder Singh, AIR 1983 P & H 210, 213 para 11 (DB).

10. Ibid.

11. S. Chandra Keerti v. Abdul Gaﬁ'ar, AIR 1971 Mys. 17, 18, paras 2, 3, and 4 (K. Jagannatha Shetty 1.).

CHAPTER VIII ORDERS 21 TO 30

8.1 Order 21,Ru!e 32(5) CPC 8.1 .1. In the Code of Civil Procedure, there is a provision for punishing disobedience to an in- junction issued by the Court. Order 21, rule 32 ofthe Code deals with the subject. Apart from arrest of thejudgmcnt-debtor or attachment of his property for such disobedience, Order 21, rule 32, sub-rule (5) provides that where a decree for speciﬁc performance of a contract or for an injunction has not been obeyed. the court may, in lieu of or in addition to the other processes mentioned above, direct that "tlte act required to he done" may be done, so far as practicable, by the decree-holder or some other person appointed by the Court, at the cost of the judgement-debtor. Upon the act being done, the ex- penses incurred in doing it may be ascertained in such manneras the Court may direct and may be re- covered as if these expenses. were included in the decree.

8. 1 .2. Quc»sri'on_for r-onsi'derari'on--Now a controversy has arisen as to the meaning of the word "act required" in Order 21, rule 32(5) of the Code. Do these words also cover the situation where a prai.'-ibitory iniunction has been incrporated in the decree or, are they conﬁned to cases where the decree is a mandatory one '.7 I 8.1 .3 There are two views on the subject---the wider view and-the narrower view. The wider view has been taken by Allahabad. According to the Allahabad High Court, whether the injunction is mandatory or pro hibitory, rule 32 (5) applies, and relief of the nature mentioned therein can be obtained in execution; a separate suit is not necessary. In the Allahabad casel, the decree restrained the judg- mentadebtor from causing obstruction to a certain pathway; On the jud ent-debtor placing ob- stacles, the decree-holder sought, in execution (i) attachment of the offending constructions, (ii) re- moval ofthose constructions and (iii) detention of the judgment-debtor in civil prison. The judgment- debtor raised an objection that such execution of the decree was not permissible. But the Allahabad High Court held that it was permissible.

8.1 .4. In an ear'ier A"ahabad casc2, the plaintiﬂ" had obtained an interim injunction directing the defendant to refrain from interfering with p'aintiﬂ"s possession of certain plots. It was held that plaintiff can sue to recover damages, if the defendant stops him from cultivating the plot. Plaintiﬂ"s remedy was not conﬁned to execution, This 'case,'however, does not directly hold that Order 12 rule 32(5) is narrow in scope, as held by some of the other High Courts, In other words, it does not rule out the enforcement of a preventive injunction through execution.

8.1.5. In contrast, the following High Courts have taken the view that a fresh suit is required, where the injuncton is a prohibitory one :----

(i) Andhra Pradesh3,

(ii) Ca1cutta4,

(iii) Karnataka5,

(iv) Keralao,

(v) Madras7, and

(vi) Punjabs.

8. 1 .6. The Andhra Pradesh reasoning is, that while Order 21, rule 32, sub-rule (1), would apply to mandatory as well as prohibitory injunctions, sub-rule (5) applies only to mandatory injunctions'.

I-larihar Pandey v Mangal Prasad, AIR 1986 All 9, 13, 14 paras 16-19 (N. N. Mithal 1.). Chiranji Lal v Behari, AIR 1958 All 326, 329, paras 27, 28 (R. N. Gurtu J.).

Evuru Benkata Subbayya v Srishti Veerayya, AIR 1969 A.P. 92, 97, 98 paras 9, 10 (DB).

Hem Chandra v Narendra Nath, AIR 1934 Cal. 402, 403, 404.

Kariyappa v Haladappa, AIR 1989 Karnataka, 163 (Bhat J.) Joseph v Makkaru, AIR 1960 Ker 127, 129 para 14 (M.S. Menon and B. Velu Pillai .I.I.).

Nari Chinnabba Chetty v E. Chengalroya Chetty, AIR 1950 Mad 237.

Murari Lal v Nawal Kishore, AIR 1961 Pun 547, 549 paras 5-9 (S.S. Dulat and D. K. Mahajan JJ.). Evuru Venkata Subbayya v Sristhi Veerayya, AIR 1969 AP 92, 97, para 9.

?'.*9'!".'"

§0.°°>'.°' / '@253.' IT' """ I' 33 It has observed as under :

"Sub--rule (') is the only pertinent provision, but that again, on the l:.:.ngu:'r.gC uscd, 9-PPllCS t0 mi'-11' datory injunctions. The word "injunction" in sub--rule (5) has been qI15'.llﬁ€d by the words "has not been olieye./.l" and the rule says. that in the event of disobedience of the injunction, the Court in;-.y direct that the act required to be done inlay be done so far as practicable by the decree-holder. or some other person appointed by the Court. This could only be a mandatory direction. A proliibtryry direction would 17:' 410/ I0 (/0 an (1('I. A niantl;itory direction is ;. command to do a positive act; a prohibitoty injunction a negative one resttziining him from doinga particular act. The dilference between the two is obvious and iu'e 32(5) can on'y be construed as applying to mandatory injunctions and not to prohibitory injunctions."

8. l .7. In a Calcutta ease placing a narrow construction on Order 21 rule 32(5), it was stated.10 "In the ea c ofrnandatory injuttion clause (5) would often give the decree-holder a complete remedy. But it'-a simple prohibitoiy injunction is disobeyed .: fresh cause of action arises for which adequate remedy, either by a mandatory injunction or in some other way has to be sought for in a suit."

8. l .8. In Karnataka case," the decree-holder, sought in exectiticn the appointment ofa Com- missioner for the removal ofa superstructure which had been unatuhorisd-.ly built by the judgement- debtor, in viol:w.tion ofthe injunction granted by a decree oftho Court. Thv Kar1'iat:aka High Court held that this could not be done by way of an execution proceeding. In its \ icw, the decree-holder must in such circumstances. hie a separate suit. This conclusion is basetl on a narrow construction of the words "act required" in Order 2], rule 32(5).

8 . l .9. According to one of the Keiala cases, Order 2l, rule 32(1) applies to a preventive injunc- tion." However, the judgement does not discuss the scope of Order 21, rule 32(5). In an earlier judgement does not discuss the scope of Order 21, rule 32(5). In an earlier judgement,13 it had held that Order 21, rule 32(5) does not apply to probibitory injunctions.

8. l . 10. In a De'hi case," the competition was between Order 21, rule 3/. and Order 21 rule 35 The injunction issued against the licensee was to vacate the premises occupied by him as licensee. It was held that steps to evict the licensee would mean, practically, dispossession of the licensee (judgement-debtor). This was not permissible under Order 21, rule 32.

8.1 .11. The Delhi case was really one in which the decree against the licensee was to quit and vacate the premises. The decree inquestion was sought to be enforced under Order 21, rule 32(5). The Court held that rule 32(5) cannot, in the very nature ofthings, come to the aid ofa decree-holder to obtain possession. But the rulings of the other High Courts (mentioned above) do reveal a conﬂict of decisions.

8. l . 12. RecommendaIion----Clariﬁeation is obviously needed on the point at issue. It is suggested that as a matter of legislative amendment. it is preferable to incorporate the wider view (though the majority ofthe High Courts have taken a contrary view)andto provide hatthe words "act required to be done" cover prohibitory (as well as mandatory) injunctions. This would also be in confor- mity with section 3(2), Genera' Clauses Act, 1897 which provides that in all Central Acts, the word "act" includes illegal omissions. Besides this, on the merits, there is aojustiﬁcation why a decree-holder should be driven to a separate suit for getting relief in the natire of enforcement ofa decree which the must have obtained after considerable expenditure oftime, labour and mon:y.

8.2 Order 21 rule 97 and application by a third party 8.2.1. Order2l, rule 97, may now be taken up. It deals with resistance or obstruction to possession of immovable property.

8.2.2. Question for consideration---On the question whether an application under Qrder 2], rule 97 by a third party other than the (L'CI'C3--l10ld'3I'/0.'L1CllOl1~]')ut'ChfiS€I' is competent, there has been a conﬁiet of decisions.

10. I-lem ('handra v Nuremlra Nath, AIR [934 Cal 402, 403, 404 (M. N. Mukherji & S. K. Ghosh JJ.). 1]. Kariyappa v Halatlappa, AIR I989 Karnataka I63 (Bhat J.).

12. Paul v Cheeran Narayanan, AIR 1960 Ker 332. 213 (Krishnamoorthy [yer 1.).

I3. Joeph V Makkarlu, AIR 1960 Ker I27.

14. SarupSingh V Daryodhan Singh,AIRl973 Delhi l427(FB).

8.2.3. It has been l1t.:'d by the lligh Court oi' Sikim13 tltut sucli an application is competent' because-

(i) ifthere is a right, there must be a remedy; and

(ii) the absence of an express provision enal;'inga party to move the court. does not mertn that a party cannot mo: the court for enforcing his right.

But it has been held by he High C.>u rts of C '-.lcutta"" , Madhya Pradcsh 17 and Rajasthan 1' that this is not permissible. The Madhya l'r.td:slt t'i',Z'.\'0l1ll'tg is to the effect that the third party can institute an independent civil suit tor the (l-.'Cl;tt'U.Ili)l1 til' title_ elaitniitg therein the relief of temporary injunction to protect his p0:;';css'i0n. But an u.pplicatin under Order 2|, rule 97, is out of question. According to the High Court of Mzidhya Pl'.'1dCSl"|, Order 21, ru'e 97, is permissive and not mandatory and the the decree-holder is not b mid to l'«?1u\) rt to it against his will. 'No enquiry into the title or possession of a third party is contemplated at any rate at ltis instance either under the rules 35 and 36 or under rules 95 and 96 ofOrde; 21. C.P.C. when the decree-holder or the auction-purchaser applies for obtain- ing possession. Subsequently. when the decree-holder or auction-purchaser is met with obstruction or resistance in obtaining possession, one ofthe options open to him is to apply under rule 97.' 8.2.4. The Rajastlian judgement, which discusses the matter elaborately, points out that if the legislature had intended to give such 9. right, it would have made such a provision.

8.2.5. The High Court of Calcutta 19 has also held that--

(i) a third party or

(ii) a person claiming in good faith to be in possession ofthe property on his own account or on account of some person other than the judgement-debtor or

(iii) a person cl;-imingbo/ta-/id» to have a right to be in such possession-- none of these clztsscs of persons h we /()('«'l.\' stundi to make an independent application under the pro- Visions of Order 21, rule 99, C..P.C. lt was further observed that on a construction of rules 97' to 99, it appears that if there is resistance to delivery oi' possession to the decree-holder or purchaser, it is only they who can apply under the provisions. of Order 21 rule 97."

8.2.6. The Punjab & Haryana High Court 3" has held that the objetor could ﬁle objections claiming the disputed property to be his own under rule 97 of Order 21 only when an application is made by the Ll|3'Cl'CC-llOld'.':l' under sub-rul-.: ( I ) this Rule and the court proceeds to adjudicate upon the application in accordance with the provisions contained in the subsequent rules.

The Madras High Court 21 has emphasised that "the main feature of the amendments made by 1976 Act is that all questions including the question as to the right, title or interest in 'the property arising between the parties to the proceedings under rule 97 or rule 99 must be determined by the exe- cuting court and not left to be decided by way of separate suit."

8. 2.7. The Supreme Court decided in the negative the question whether :1 writ petition under Article 226 was inaintttinablc \-\"llt..'9l ll1CI'i1 were elaborate and cxltatustive provisions in the Civil Pro- cedure Codi: to r denlitlg with the mattarr of executability of a decree, in all its aspects. The Supreme Court also observed that the claim of the writ petitioners of being in possession of the premises as- tenants in their own right and net as sub~ten:.mts of the tenant against whom alone the eviction decree had been passed, should have been ;'.dju(lic2=.t::d upon and ﬁnding recorded on the character of possess- ion of the petitioners, before proceeding to consider whether the decree was executable or not against them.

8.2.8. Recammwzdalion---It appezt rs to us that, in the Interest of smooth and expeditious dis-, posal of execution proceedings, it is preferable to incorporate the view taken by the High Courts of Madhya Pradesh, R;=._i;:sthan and Calcutta and we recommend that Order 21, rule 97 be amended for t9l_1,e purpoge in c. suibable manner. it may be convenient to add an Explanation below Order 21, rule ,as un =:r :

"Exp/(matioiz.-----T\Iothing in this rule shall beconstruced as enabling a purchaser who is_ not the decree-holder (or-siny person acting at the instance of such person) to apply under this rule".

l5. Ram Chandra v V[.l~lfT171l Singhi, AlR 1983 Sikkim l.

16. Gopal Chandra vSheikh Jamsed, AIR 195 Cu! 51.

17. UshaJain v ManmohanBajaj,AlRl980Ml'l46(FB).

I8. Madan Lal v Huns Ra_i,AIR I985 Raj l9,25 to 27 paras i 5--~24(M.C.Jain J.).

19. Gopalchandra v ShcikhJamsed.AlR l95 Cal5l.

20. Joginder Kaur v Yashodadevi AIR 1990 Puniab & =l xryana 235.

2 . N. Palaniappnn v G. Pilll(lLll'{Xllg£1l1, AIR 1990 Madrm .527.

22. Ghanshyamdus Gupta v Anant Kumar, AIR 1991 SC 225l.

y/4 c/--we" 1; ---------s ~ 35 8.3 Order 23, rule 1(3), and abalcrncut of suit 8.3. I. Order 23. rule H3) pzrmits \ViLl1:lI'£l\V.ll ml' '1 suit with lily-ray t ) iii» :-. Fix-.;l1 suit in c*rt:v.in circuinstzmccs naincly, "fomial dc|'::ct" or "~;ullictcnt grounds .

8.3.2. Ql(('SfI'0}1f()I' co/irirlc/'atz'o/r--Tl1e question is, whether the rule applies in case of partial or total abatement of a suit, on the death of a party.

8.3.3. According to the High Court of Madras 23 it does. According to the High Courts of Orissa 24 and Gauhati3~. itdoes not.

8. 3 .4. The Orissa reasoning is to the effect that to permit the plaintiﬂ" to withdraw in such circum- stances would be to permit him to get round the provision contained in Order 22, rule 9, and would be to put 2'. premium on the laches and negligence of the plaintiff. it would confer undue ad- vantage on the plaintiff and cause great disadvantage to the surviving defendant and to the legal re- presentative of deceased defendant. By reason of abatement of a suit on dmztli, certain rights and beneﬁts accrue to the surviving defendant and also to the legal I'(*pt'r':sCnl:'.1lvC of the deceased de- fcntlzint depending on he suitand the reliefs claimed. "I can see no l'e:'.S()l'., (:il.i1Cl' in law or in equity, to deprive ths defendant and the legal representative, of the rights and advantages so gained by th: llailureofthe plaintiff to substituc, by psrmitting xvitlidrawal ol'thc suit with liberty to ﬁle a fresh suit on the same cause of action".9"

8.3.5. There seems to be an earlier Calcutta case 27 taking the View thrt in such circumstances withdrawal cannot be granted. In that case, the suit was against the sole d::-meritlaznt for possession. On his death, his legal representatives were not substituted and, consequently. the suit abated. It was held that inasmuch as there was no suit pending upon abatemtmt of the suit against the sole defendant, withdrawal of the suit with liberty to ﬁle a fresh suit could not be permitted.

8.3 .6. But in a later Calcutta case, 25 suchleave was granted where the suit abated on death ofone co-trespasser.

8.3.7. In :1 Gauhati case 9 it was lieldthitt the abatement c.-l' suit against a trespasser defendant was not a formal defect within Order 23, rule l. As regards the expression "sulﬁcicut ground" also counsel could not point out any. "in my opinion, when a defect goes to the root oi"'the plaintiﬁ"s case and aifccts its merits, it cannot be a formal defect andthe omission on the part of the plaintiff to substitute the heirs of the deceased plaintiff is not such a defect."

8.3.8. Rvrmmmnrlalion--This brief resume ofthe case law shows need to r clariﬁcation. Strictly speaking, where a suit has abated' by reason ofdeath, the suit comes to an end (i) by operation of the events that took place (ii) in the light of the law relating to abatement. Tltcrciorc. it sounds illogical to take a view that in such a case, the court can permit witltdrawal of the suit w.-th liberty to ﬁle a fresh suit. It would appear that to settle the controversy on the subject, it is iiec:.;sary to insert an Explanation in order 23, rule 1(3), as under :-

"E.\'p/anatr'0n.--Where, as result of the provisions contained in Order 22 of this Schedule, a suit has abated or a part ofthc claim has abated, the abatement shall not b: dc. med to constitute 11 sufﬁcierit ground for granting to the plaintilfperniissioti under this <tlb-'fill? ;o \VlIlld!'c':\V from such suit or from such pint ol'the claim, as the case inay be, with libzfly V' l"'31l'u1'e"- fresh Suit"-

23. Perla Perumal v Pichan (l9l0) 8 I C 268, cited in Seshamma v Venkata Surayanarayana. [LR 33 M.1d_643. AIR 1914 Mad 170(2) (Sadasiva Aiyar and Spencer JJ.). (But the permission cannot be availed of, to sue the heirs of the de- ceased).

24. Shyam Ray v Haramani Dci, AIR 1984 Orissa 67, 69, 70 para ll (R.C. Patnaik J.).

25. Prabhat Chandra Saikia v Rajani Bala Devi, AIR 1972 Gauhati 85, 86 (Bahrtrul Islam I.)

26. Shuam Ray v Harmani Dci, AIR 1934 Orissa 67.69, 70, 71 para l3 (R.C. Patriaik J.).

27. l6{_/zir;1(t):sl1 v lfeo Mehar Bibi (I936) 40 CWN 10l9 (RC Mitter 1.), noted in Shyam Ray v Harnarn De, AIR 1984 Ori , para ...

28. Hakir Maliariicd v Abdul Majid, AIR 1953 Cal 588. para 3 (There is no elaborate discussi-.»n (GN Das MJ.).

29. l'rabh.i1 Cl'lIlnLll'.1 Suikia v l{:.ij.u1i llala Devi, AIR 1972 Gauhati 85, 86(B;tli;1rul Islam .I.).

l CHAPTER IX ORDER 31 T() 40

9.1 Order 33, Rule land Corporations

9. l . l. Order 33, rule I, ol'thc Code ot'Civil Procedure 1908, provides that a suit may be instituted byan indigent persons (previously. a "paup<:r").

9.1.2. Question for consideration The question has arisen ivhother this rule applies to artiﬁcial (judicial) persons. There is a conflict ol' decisions on the point.

9. 1.3. The controversy can be best illustrated by narrating the developments that took place in the High Court of Punjab, where a narrower view. taken by a single Judge, came to be later replaced by a wider view, taken by a Division Bench. According to an earlier Punjab case} the expression "person", for the purposes ofOrdcr 33, does not include a limited company. This conclusion is support- ed by three main reasons. First, the Explanation to rule l speaks of "wearing apparel" and these are words which could not apply to a limited company. Secondly, Order 33. rule 3, provides for personal appearance in the court--which would not be appropriate for a company. Thirdly, Order 33. rule 4, speaks of "examining" the applicant, which also would not be appropriate in the case of artiﬁcial persons. This view was, however, later overruled.'-' 9.1.4. Overruling a single Judge ruling of 1951, the Punjab High Court" in l960 has, through a Divison Bench ruling held, that "person" in Order 33 of the Code includes juristic persons (in that case, Gurudwara Sahib Kothi Begwal). The Division Bench relied on section 3(3')), General Clauses Act, I897, under which the expression "'pcrson" includes any company or association or body of individuals, whcthei incorporated or not. The Division Bench did not agree with the objction based on the word "apparel". It pointed out, referring to Perumal v Sankha Nidh Ltd., AIR 1918 Mad 362 (DB), that all that the E.\'p/amlfion means is, that if the appellant has I/It' necessary wearing apparel, then the value thereof can be deducted in asessing the applicant's means. It also added, that in a Supreme Court case4 relating to the standing orders of an electric company, the Supreme Court had quoted, with approval, an English case,-' where it had been held, that a right ofappeal conditional on the appellant's entering into a recognisance was available to a Corporation. This showed that require- ments contemplating something personal did not come in the way ofa corporation claiming the beneﬁt ofthe main provision.

9.1.5. According to the Division Bench ofthc Punjab High Court (1960), the condition regarding rccognisancr: may be treated as inapplicable to corporations and the clause can be split up for the purpose. As regards Order 33, rule 3 which relates to "appearance", the Punjab Division Bench again pointed out (quoting the Madras case of 1918) that where, from the very nature ofthe party, the physical presence ofthe party is not possible, then the requirement for personal appearance would not apply.

9. l .6. The follo wing courts (besides the Punjab High Court) have also held that Order 33 applies to artiﬁcial persons (Corporations and deities) :

(a) Madras :6

(b) Mysore?

(c) Oudh;"'

(d) Rangoon ;9

(e) Madhya Pradesh.'0 Associated Pictures Ltd. v National Studies Ltd., AIR l95l Punj 44% (Falshaw J.) (Overruled in AIR I960 Punj 73).

Sahib v Harnam Singh. AIR I950 Punj 73 (DB) f_K.L. Gosain & Harbans Singh .I.I.) overruling AIR l95l Put 3 Ibia'.

4 Nagpur Electric Light and Power Co. Ltd. v Srce Pathirao, AIR I958 SC, 638.

5. Gortis v Kent Water Works Co. (1827) 108 ER 741 (Bayley J.).

6. Perumal v Vcnkatesam. AIR l9l8 Mad 362 (Bakewell and Kumar aswarni Shastri 11.).

7 M.C. Chiknanjudappa v D. K. Pillan, AIR 1955 Mys 128, 129, para 4 tHombe Gowda J.). 8 Sripal Singh, v U. P. Cinctone. AIR 1944 Ou-tlh 248 (Thomas J.).

9 D. K. Cassim & Sons v Abdul Rehman, AIR 1930 Rang 272 (Das & Brown JJ.).

l0- Namlkisliore Mohanlal v Thunjhunwala, AIR l990 MP 33].

FA us...

3 7' 9.1 .7. But. in a Calcutta case" the negative view was taken on the subject, holdingthat Order 33, rule I does notapply to artiﬁcial persons.

9. l .8. In a Manipur case". (followingthe Punjab Single Judge case of I95], but without noticing the Punjab Division Bench ruling of l960), it was held that Order 33. rule l. is conﬁned to natural persons. In this judgment. stress seems to have been laid on the requirement of personal appearance and it was held that a deitv cannot be allowed to sue as a pauper in the court. The court took the view that unless rules l. 3 and'4 of Order 33 are amended by the legislaturc. it is not possible to hold, on the existing I'lll€>'.ll1£tK a deity oran idol could ﬁle it suit througha shebait in forma pauperis.

9. l .9. Reeontrmandation.----Clariﬁcation is needed on the point discussed above. The Supreme Court Judgmcnt13 of 1958 indirectly lends support to the wider view. In our opinion, the wider view should be codiﬁed as it is desirablethat a provision of the nature under discussion should be com- prehensive and should be available tojuridical persons.

9.1 . l0. As a matter of legislative policy. it does not appear proper that artiﬁcial persons should be deprived ofthe beneﬁt of Order 33, rule 1. Even if corporations may not usually need it, the re may be cases where otherjuristic persons--such as a deity--may have to take recourse to this provision. It is, therefore, suggested that a rule may be added at the end ofOrdcr 33. to provide as under :

"The provisions of this Order shall apply to persons other than human beings, with such modi- fications as may be appropriate to facilitate suchapplication."

9. 2. Order 33, Rule 1, Clause (at, Explanation I 9.2.]. Under Order 33, rule I. a suit may be instituted by an indigent persons subject to the provisions ofthe Ordar. Explanation I toclause(a) ofthe rule provides as under 2-

"A person is an indigent person----

(a) iflw is not po.s'.s'c.s'.s'cd of .YllﬂI('iL'IIt mutt/zs (other than property exempt from attachment in execution ofa decree and the subject matter ofthe suit) to enable him to pay the fee prescribed by law for the plaint in the suit."

9.22. Qtwsfi0n_f()I' can.rideration----Tl1e Explanation to Order 33, rule 1, inter alis, stresses the element of "possession". A question has arisen whether 21 mortgagor who has mortgaged his pro- perty, can be said to be "possessed" of the property.

9. 2.3. There is also an exclusion, by virtue ofthe Explanation, for the subject matter of the suit. A conﬂict of decisions has arisen on the question whether the mortgagor's equity of redemption can be said to be "subject matter" of the suit. There is some obscurity also, on the question whether such equity can be said to be "possessed" by the mortgagor.

9. 2.4. The High Court of Calcutta" has held that in a suit for the enforcement ofa mortgage ﬁled by mortgagee, the equity of redemption is not subject matter of suit. No doubt, as a result of the decree for sale, the mortgagor's equity of redemption would be lost. But the subject matterof the suit is only the money claimed by the mortgagee which is charged on the immovable properties that are mortgaged.

9.2.5. According to the Patna High Court also16 the equity of rt.-demption cannot be excluded where the morgtagee sues for engorcement of the mortgage.

9.2.6. However, according to the High Court of Andhra Pradesll. in the mortgagee's suits, such equity must be excluded." The High Court agreed with the Madras view on the subject" and held, that even though the mortgagor was in possession of the mortgaged house, yet, as it had already been the subject matter of a preliminary decree, in favour of the mortgagee (against which decree, the mortgagor was now seeking permission to appeal as an indigent), "if it is considered to be the subject matter of the suit, then the respondent (mortgagor) would be under heavy pressure, either to part with the property or to further encumber the property at disadvantageous terms to secure the court fee. Under the circumstances, I am ofthe view that a broad construction is call ed for, in cons- truing the words " subject matter ofthe suit" and, if so construed , Iam of furt her view that the house subject of the mortgage should be exempt from the subject matter of suit, as provided under Explanation l(a) of rule 1 of Order 33."

ll. Bharat Abhyudaya Cotton Mills v Katitesltwar Singh, AIR 1938 Cal 745 (Costello and Biswas JJ.).

12. Radha Krishna v Nathmal, AIR 1963 Malrfipur 49, 41, 42. para 6, l3 (Thirumalpad .l.C.).

l3. Nagpur Electric Light and Power Co. v Sree Pathira i, AIR 1958 SC 658.

14. Subodh Chandra Nag V. K. L. Bank, AIR 1941 Cal 659, 660, 661 (RC Mitter & Khundkztr J.l.). l5. Durgal'r;tsad v Srinfivassurcka, AIR 1930 Pat 368.

I6. Sreeamttlu v M.Adinarayan Rao,AlR1985 AP(r2,(»4(Ramaswamy.l.).

17. For the Madras cases, see i'n_/ra.

9.2.7. What would be the position in redemption suits'? A view (in favour of exclusion) has been taken in two iVl;itlr;'.s (ltscs, rel:-.ting to suits for redemption.13'19 9.2.8. Btit the Allahabad view on the subject is to the contrary, holding that even in a rede- mption suit, the equity of redemption must be included in calculating the means of the applicant for indigent statu:=..'20 A I "- 9.2.9. Thus, in this situation, there is a conﬂict between Allahabad and Madras. It may also be i'.i:n'ti-:2:"-.~:l that in the Andhra Pradesh case of 1985 (though it was a suit by the mortgagee), the High Ct=u'='t t~xprc:,sly expressed" its agreement with the two Madras cases which were concerned with suit by the iziorigagoi'. The position has become more complicated by reason of the fact that in a Calcutta case'-3 (which stself was a suitt for enforcement of mortgage), the court observed, with reference to the .1'-..ll;tli2 bL'Ldl'L1.l111g-.23 as under':-

"But we dos not wish to place much reliance upon the decision of the Allahabad High Court, reported in 33 All. 237, for the reason that in that case, the suit was nota suit for enforcement of the ft1OI'lgé.gC, but it was a suit for redemption. It may be possibleto take the view that in a suit for 1'cdi*;t1ptit»17., the equity of redemption is the subject matter of the suit. But we may point out that, in spite oi such it contention, the Allahabad High Court took the view that in considering the application to sue /I1f()I'l1'l(I[)(!i!]}('I'iS in a suit for redemption, the value of the equity of redemp- tion will 11; to to le t:.kc;it by the court in considering the question of the ability of the applicant to pay the requisite court lees". ' A 9.2.10. Rtcaiiiiiitiidu/ion.----It appears to us, that the realistic approach would be to exclude the mortgagor's equity of rcdemp,ion, while calculating his means for the purpose of Order 33. Our recoiiii~.ieiidz,ti«:-n, tliei'efmL, would he to insert below Order 33, rule 1, an Explanatiiiu, some- what on the follow ng lines :-

"E.tplanutioiz: in suit to which Order 34 applies, the mortgagor's right to redeem the mort- gage shall be exciudedin calculating his means for the purposes of this rule."

9.3. Order 33, Rule 5 and return of Application for want of Jurisdiction 9.3. 1. Order 33, rule 5, states that the court shall seject an application (for indigent status) in any one oi the circumstances n'1enti_oned in clauses (a) to (g) of that rule which, however, do not cover the case where the suit 15 not within the jurisdiction, pecuniary or otherwise, of the court.

9.3.2. QLl('SIi(IIl j'"or codsidcrarion.--'l'he question, therefore, arises whether rule 5 is exhaustive of the circumstances in which an application could be rejected, or whether the return or rejection of the application can be ordered outside the rule--1"or example, where the court does not have juris- diction- and the case dealt with iii Order 7, rule 10, of the Code.

' 9.3.3. The High Court of Patna24 has taken the View that consideration of the question of juris- diction would arise only after the application is registered as a plaint. The Patna High Court pro- ceeds on the reasoning that the application is not a "plaint" and does not reach the stage of a plaint until the application is duly granted. Order 33, rule 5, gives no authority for returning the appli- cation for want oi" jurisdiction, according to this view. I I -

9.3.4. On the other hand, the High Court of Kerala has held that such an application can be returned for presentation to the proper court.25 The Kerala High Court proceeded on the reasoning, ﬁrst, that Order 33, rule 5, is not exhaustive and, secondly, that an application for permission to sue as an indigent person is not merely an application pure and simple but it must also contain the parti- culars required in regard to plaints.

18. Manicka v Narayanaswamy, AIR 1933 Mad 679 (Cornish J.).

19. Devaki v Rajagopal, AIR 1956 Mad 628, 629 (Basheer Ahmed Suyed J.).

20. Kapil Deo singh v Ram Rikha Singh, (1911) ILR 33 A11237.

21. Sreeramulu v Adinarayana, AIR 1985 AP 62, 65, para 7.

22. Subodh Cl18i'.Cll'a v K. L. Bank, AIR 1941 Cal 659, 660.

23. KapilDeo v Ram Riklia,(l9l l)ILR 33 All237.

24. Mohaiiimed Abbas Mallik v Tahera Khatoon, AIR 1974 Pat 324, 326, 327, para 5, 6 (DB) dissenting from :

(a) Periyasaiiii v Minor Ulaganathan, AIR 1949 MadI62. '

(b) Prem Singh v Sat Ram Das AIR 1958 Punj 52 (Bhandari CJ.).

(c) Madhura Krisiinamurthy v Year Ramamurthy,AIR,1957AP65-l.

(d) Raj Narain v Bliim Singli,AIR 1966 A1184.

25. V.Srcedharan v T.T. Naiiy, AIR 1987 Kerala 249, 251 ,paras 8 84 9tD.B.).

'I v-

.a...

.-.-.....4 39 9.3.5. Th=: Kerala High Court has also rcitied on the Supreme Court ca so of Vijay Pratap Singh V Dukl1Haran Nath Smghzé wherein the follovi ing observations occur:---

"An application to sue inform pauperis; is but at method prescribed by the Code for institution ofa suit by a pauper without payment ol'ti": prescribed by the Court I-'e.-s Act. lithe claim made by the applicant that he is a pauper. is not (.'Sl¢'.l)liSl1Cd, the application may fail. . ..The suit commences from the moment an application for permission to sue in _/it-rma pauperis as required by Order XXXIII is presented. and Order 7, rule it), would be as IIILU. h applicable in such a suit, as in a suit in wihch court-lee had been duly paid".

9.3.6. Rumnnimdutitm.----We find the Kerala reasoning persuasive* and would recommend its adoption.

9.3. 7. The object could be achieved by inserting in ord:r 33, new rule 4A, in these terms :-

"4A Return of application beyond /'urisdz'ctz'on.---

The court shall return an application to the applicant for presentation to the proper court if the averments made by the applicant in the application show that the suit would be be-

yound the jurisdiction of the Court."

I was directed by P.P.S. to Hon'ble Chairman to 9.4. Order 34, code of civil procedure, and Mortgages of Movables 9.4. 1. Order 34, of the Code of Civil Procedure. makes certain provisions as to suits on mort- gages. The heading of the Order shows that it is conﬁned to mortgage of immovable property.

9.4.2. Question for ('0nsiderati0n.--The question has, nevertheless, arisen whether the Order applies also to mortgage of movable property or hypothecation thereof. There is a conflict of views on the subject amongst the High Courts.

9.4.3. The High Court of Punjab has held that Order 34 does not apply27 to such transactions. This is also the Bombay view." The Bombay judgment traces the history of the law, as under:--

"But in construing this rule we must have regard to the context in which it appears, and I think also to its historical origin. 0. 34 was incorporated in the Civil P.C. in 1908. and the provisions oi' the order were taken from the Tranr-.l'er of Property Act. R. l4 was S. 99. T.P. Act, and that section appears in Chapter 4 ol' the Act which is headed "Oi lvlot'tg:igcs of immovable Property and Charges". "('liarge" is defined in S. 100 oi' the Act and applies only to charges of immovable property. So that O. 34. was substituted for sections in the Trarsfer oi' Property Act which dealt only with mortgages of immovable proerty and I think a presumption arises that in taking these provisions out of an Act relating to property and incorporating them in an Act relating to proce- dure the legislature did not intend to extend the scope of the provisions. although, no doubt, that presumption would be rebuttcd if the legislature had used language to show that it did in~ tend extend the scope of the provisions. Now not only is there no reference in 0.34 movable pro--- perty but the order is headed "Suits relating to mortgages of immovable property."

"Then, the substiuntive provisions of the order use such words as "mortgages" "mortgage se- curity" and "mortgage property" without any distinction being drawn between mortgages of mov. able and immovable property, and it seems to me that in those circumstances we must read the heading as in effect deﬁning those general words and limiting their operation to mortgages on immovable property. We referred to a certain number of cases as to the efTect of headings in an Act of Parliament, and Mr. Coltman contends, relying particularly on the case of Flectcher v Birkenhead Corporation (I). that the Court can only look at a heading in order to assist in the construction of some word or phrase which is doubtful or ambiguous. and he says that the word o-" 0 . 34 "mortgage", "mortgage security" and so forth are not ambiguous, but it seems to me that that is putting the case on too narrow a ground and that we are entitled to look at the heading in order to conﬁne the generality oi' the language used in the body'of the order. Reading 0.34 in the light of the heading, and having regard to the history of the order, \ve must in my judgment construe it as conﬁned entirely to mortgages of immovable property. That being so, I think that the counterclaim of defendant 6 necessarily fails."

26. \/ijay Pratap singh V Dukh Haran Nath Singh, AIR I962 SU 94l I.

27. New Citizen v Burnel & C0,, AIR 1954 Punj I30, ISI, para 2 (Bhandari .l.).

28. Ollieial Assignee v Chimmiram M°Slal, AIR I933 Bom. Si, 54, 55 (Beaumont Q1. and Blackwell J.).

9.4.4. But the (iujarnt Iligli Court. has i'<>s_:zIt'tletl Order 34 as ;ipplital)l<. to the liypotltecation of n1acl1iiiet'y.'--""Ihcrc is also .2 dicttiin. to the iitilllc cllect. in a Calcutta case. Thr dictum is. "The morlt gage, no doubt. wins in respect of iiimalile», but the rules of Order 34 ol' the code are based on well settled rules ol' equity which, in the ahiencc of z.;ny:,tt:tutory provisions to the contrary, s/zoulrlbe applied in suits on mortgages 0] iiiavubltzr as ire//."30 9.4. 5. In a CaIcutt.= casc31 relating to the hypothecation of movables, the bank was held entitled to a. decree for stile (the borrower having defaulted), and it was held that the trial court ought not to have allowed instalments. This view is apparently based on the assumption that Order 34 applies to movables and tliercforc the provision oi' the Code (Order 20 rule It CPC) which applies to a decree for money and allows the award of instalments, does not apply.

9.4.6. In the Calcutta case of 1987,32 the position was stated as under 1--

"We may well agree with Mr. Bose that under the Indian law, there can be valid mortgage of movables, though such a mortgage may be ditlerent from such mortgage at common law or under Bills of' Sale Act.

"Such mortgage, when not accompanied by delivery of possessions, is still operative save and except Ugtilitst /to/m_/it/c l"Lll'ClI1IS9I'S without notice. See Misrilal v Mosahar Hossain (I886) ILR 13 Cal 262, Venkut'..clial.iin v Vcnl~.ataraini Rcddy, AIR I940 Mad 929. This position appears 110v.' to be well recognised. But still the question remains as to whether a suit for enforcement of such rt mOI'i_,g£IgC :<h:ill 'be governed by a procedure similar to the one prescribed by Order 34 of the Code. Though lVIr. 3o.v. has contended that it slzould be so governed the judicial opinion on I/1:'/7()1'/.7/' is/101 imi/mini. Indeed a Division Bench of this court in the case of Co-operative Hindu- sthan Bank v Surendra l\':tth Das 3-5 Cal WN 263 : (AIR 1932 Cal 524) observed 2 'The iiitiitgzige no doubt was in respect of movablesbut rules of Order 34 of the Code are based on well settled rules of equity which in the absence of any statutory provision to the contrary should be applied in suits on mortgages of movables as well.' This observation supports the stand taken by Mr. Bose. But this observation has not been ap- proved but distinguished by other High Courtsivide New Citizen Bank v K.B. Burnel AIR I954 Punj ISO. in the case of Otlicial Asignee of Bombay v Chimnir-am Motilal, AIR I933 Bom 5| a Division Bench ol' the Bombay High court on more persuasive reasons has held that Order 34 of the Code is applicable to suits on mortgages in respect of immovable properties only, and not to suits on mortgages in Nrspect of movables. On very careful consideration of the legal position we could prefer to follow the Bombay decision as above rather than the obiter observations of this court.

Though we may not accept the contention of Mr. Bose that the principles underlying Order 34 of the ('ode will govern the suit out of which. the present appeal arises, yet we are left to consider two important issues, viz. (I) whctlier in such a suit there could be order for payment on instal- ment and (2) whether and how far the court in decreeing the interim interest or interest on judge- ment can deduce it from the contractual rate. We propose to consider the two issues separately':

9.4.7. It may he mentioned that mortgages and other securities for money charged on movable property are reccgitisetl in Indian law. Section 66(3), Sale of Goods Act, 1930, lays down that the provisions of the Sale of Goods Act do not apply to any transaction in the form of a contract of sale which is intended to c.permte by way of mortgage, pledge, charge or other security. Although. this section does not expressly mention "hypothecation", a transaction of' hypothecation has been recognised in India.34"3"* 9.4. 8. Unlike a pledge, hypothecation of movables can be effected without delivery of possession to the ereditor.'35

29. G.S.F.U. v Jayshree Industries, AIR I986 Guj. 29, 3I, 32, paras 2-3 (J.P. Desai J.).

30. CJo5operative Hinclustin Bank v Surendra Nath, AIR I932 Cal 524, 533, left hand (MN Mukherjee & S.N. Guha, J . . i

31. Uffited Bank of India v New Gleneoe Tea Co. Ltd. (I987) 62 Company Cases 762 (Cal), AIR 1987 Cal 143.

32. United Bank oflndia v New GlencoeTea Co. Ltd. AIR I987 Cal I43, 145, paras 6. 7 (DB).

33. Bank of Baroda v Rabari Baehubltai Hirabhai, AIR 1987 Guj k, p.ir:i 3.

34. Re Yellamma Cotton Mills, AIR I969 Mys 280. 287, paras 36, 37 t?\. Narayan Pai J.).

35. State Bank of India v Victory Export Import Synicatc, AIR 1978 J & K 76, 77. para 3 I. K. Kotwal J.).

-4 41 9.4.9. In this context. the High Court of Mysore has observed36 as under :--~ "in the case of l)_\'p0l.lTCCl![l0'n or pledges of movable goods, there is no doubt about the creditors' right to take possession. to sell the goods directly without the intervention ofcourt tor the purpose of recovering his dues. The position in the case of regular pledge completed by possession IS undoubted and set out in the relevant sections of the Contract Act. Hypothecation is only extended idea ofa pledge. the creditor permitting the debtor to retain possession either on behalf of or in trust for himself (the creditor)"

"Hence, so far as the movables actually covered by the hypothecation deeds are concerned, there can be no doubt that the Bank is entitled to retain possession and to exercise the right of private sale."

9.4. 10. The High Court of Jammu and Kashmir37 has dealt with the matter thus :-

"One of the ingredients of a valid pledge is the delivery of goods by the pawnor to the pawnec. Unless. therefore, a contract or a transaction at the time of its inception is accompanied by deli- very of the goods pledged. it would not come within the deﬁnition of a pledge. A deed of an agreement not falling within the deﬁnition of a pawn or pledge would not be covered by Art 6(2) of Sch I to the Stamp Act and consequently the stamp payable on such a document would not be governed by the schedule provided therein. The crucial question which, therefore, falls for the. determination is whether or not in the instant case delivery of possession of the goods hypothe- cated had also passed on to the Bank at the time the agreement dated I8-5-I970 came to be exe- cuted. On this score there is no dispute between the parties, and rightly so, because even on a plain reading of C I 6 of the agreement ittranspirsc that the possession of the goods hypothecated was to remain with the debtor itself. That being so, this deed cannot be held to be a deed of pawn or pledge so as to attract the mischief of Art 6(2) of Sch 1 to the Stamp Act. A transaction of hypothecation and 21 transaction of pledge have a common ingredient inasmuch as both of them create a security in the goods hypothecatcd or pledged for the repayment of the loan; the ownership in the goods remaining" with the person hypothecatiiig or pledging the same. Never- thcless, there is a distinction between these two transactions because unlike a pledge where the possession of the goods pledged must pass on to the pawnee, no such possession passes on to the creditor in case of hypothecation."

9.4. l I. This being the legal position, the controversy as to the applicability of Order 34 of the Code to the hypothecation of movables is of practical importance, because, if a decree passed on hypothecation of movables is regarded as a mortgage decree, then the provisions of the Code of Civil Procedure relating to money decrees would not apply. This means, inter alia, that there can be no order for instalments in such :2 suit.38 Order 34 of the Code does not envisage instalments, in con-

trast with suits for money not secured by a mortgage. For suits in the latter category. Order 20, rule ll of the Code provides for instalments.

9.4.l2. Recommendation--~~Tltc matter seems to need clariﬁcation. The object of Order 34 appears to be to regulate only suits concerning mortgages of immovable property----see the heading of the Order. This is borne out by the history of the provisions. It will be convenient to add, below Order 34, rule I, the following Exp/mzaiion as Explanation 2 (after renumbering the present Explana- lion as Explanation l) :-----

"Exp/anation 2.--Nothing in this Order applies to a mortgage, charge, hypothecation, pledge or other security crea ted in respect of movable property."

9.5 Order 39, Rule 2A and breach of injunction 9.5. 1. Order 39, rule 2A, punishes disobedience to an injunction issued by the court.

9. 5.2. Que.m'on_fm- c-onsi'zleratiun---The question has arisen whether, after a temporary injunction is vacated, its breach (committed before it was vacated), can be punished under Order 39, rule 2A. 9.5.3. The following High courts hold that this is not permissible :

(a) Allahabad39 and -

(b) Punjab.40 \

36. Re Yellamma Cotton Mills. AIR 1969 Mys 280, 287, paras 36. 37 (A Narayan pai J.).

37. State Bank of India v Victory Export Import Syndicate, AIR 1978 J & K 76, 77, para 3 (I. K. Kotwal J.).

38. Basanta Kumar v Chota a B k' A ., AIR 1948 P - ' ' _ kara Su bba, AR [979 nMgapdltr l 3am] arilsnl (suryamurtﬁi; 1a5 ( Shearer and Reubclf, JJ.). Nishantilal v A. San'

39. (a) Sitaram v Ganesh Dad, A.l.R. 1973 All 449 (Hari Swarup J.).

(b) Sheo Kumar v Zila Sahakari Vikas Sangh, AIR l983 All 180 (SC) Mathur 1.).

40. Rachhp -i Siligh v Gtird irshzin Singlt, AIR 1985 Punj & H-xry 299, 301, para 5 (DB), agrecirg With Shoo Kunar Saxena V Zila Sahkari Vikas Sangh, AIR All 180.

42"

9.5.4. The ,~\ll:ili:Ih:iil decisions before 1961 seem to einplizisise the impropriety of such punish- iiii~ni,4l 'I3 But :.iil>:.cqi.iciit decisioiis oi' that High Court seem to regard such punishment as even illegal. The /\llLllJ(ll'Id(l High C<..ui't-l3 is of the view that the purpose of Order 39, rule 2A is to enforce the order of injunction and thatthis provision permits the Court to execute the injunction orderzthe purpose is not to punish Ihe.man but to see that the oi der is obeyed and the wrong done by disobe- dience of 'hp order is remedied and the status quo ante is biought into eﬂcct. The High Court ob'sci'ved'thut this view ﬁnds suppoit from the observations of the Supreme Court,44 wherein the latter held that the proceedings are in substance designed to effect enl'orceinc.it 01' or to execute the order and a p imllel xvasndrawn betwct n the provisions of Order 21, rule 32 and of Order 39. rule 2(iij) .which is simil:-ii'-to Order 39. rule 2A.

9.5.5. In contrast. with -the first view, the following High Courts hold such punishment to be permissiblv: :

A, (I) 'Gujarat;45 and -

' '(2j':Orissu.46" 47 " 9.5.6. In _t.ll'5-Ql.'.lSS7.l _c;i:~;e of l97_l, it was pointed out that what the court was concerned with, was not tlze ulti'm:=tc decision. but whether, on the date of the impugned act, the injunction had been violated. ' ' .

. . V

9. 5:7." -l'he matter has not reached the Supreme Court. There are dicta in a Privy Council case to the"e'fTe-ct that tiiijiijuiictioii mustbc obeyed while in force, even if it is subsequently discharged because the plzzintiﬁ"'fuiled.45< But tlie case did not speciﬁcally involve the question whether breach of an injunction can be plllllslltfa after the injunction has been vacated.

' '. 7 9.5.8. 'Recon:/iztanclatiuvz4111 the interest of maintaining judicial dignity, it seems proper that the power or the courts must be recognised and put beyond doubt, even where the injunction has been vacated. ' The High Courts which"tzike a different view have advanced the reason that such punish- meiit does not ﬁt in with the language of Order 39, rule 2A. But, with respect, the language presents no insurmountable problem. The precise dictum of the Privy Council in the judgement of 191549 was "it was of course, interlocutory, not ﬁnal, but it is binding on all parties to the order so long as it remains undiscl'ia_rged;" We recommend that this approach should be adopted by suitably amending qrdei' 39, rule 2A.

9.5.9. 'The t'ollowing_ Ex-plzmation may be added to Order 39, rule 2A(l) :----

I "Ex/rlaiia/ion»~«Tlie'conrt rnz'-.._v znztke an order under this sub-rule, notwithstanding that the in- junction or other order has been subsequently discharged or varied or set aside by the court under rule 4.ot' this Order or by any other court in appeal or revision."

. .. ~

41. Surendra Nath v Sinclair Day. AIR 1950 All 285, 286 para 4 (Mallik DJ.) (Application for_notice of contempt held, no deliberate disobedience. As order was vacated, it would nut be proper to issue notice).

42. Manoharlal v Prem Shankar, AIR 196 All 231, dissented from in Govinda v Chakradhar. AIR I97! Orissa 10, para 2

43. Sitaram v Ganesh Dass, AIR 1973 All 449.

44. State ofBiharvSonabati Kumar,AIR 1961 SA 221;

45. Thakorelal v Chandulal,AIR 1967 Guj 124, 125, 126, para 2.

46. Clovinda v Chakradhar, AIR 1971 Orissa 10, 11 para 2 (R. N. Misra, J.) (Punishment upheld), though injunction had been dissolved.

47. Kisohre Chandra v Puri Municipality. AIR 1988 Orissa 184. '

48. Eastern Trust v M3<keni7ie. Mann & Co. AIR 1915 RC. 106(2), H0.

49.' "' 'Ibid. ' V4 '~u CHAPTER X ORDERS 4] TO EN l)

10. 1. Order 43, Rule 1(r), Appeal against Interlocutory Orders Passed Ex-parte

10. I . I. Order 43. rule 10') provides to' an appsal algzizlst "an ordzr uade' rule 1, ml: 2, rule 2(A), rule 4 or rule 10 of Order XXXIX". Rule 1 ofOrder 39, mentioned in Ordtr 43, rule l(r), relates to injunctions and connected orders.

how far an appeal is maintainable against an order passed in appeal against an interlocutory order passed ex-parte.

10.1.2. Qzlestion /br rvmsi(I€rati(m--Tl1ere appears to be a conﬂict of decisions on the question

10. l .3. According to the High Court of Keralal, such an appeal is maintainable.

I0. I .4. The Allahabad? and B0mbay3 High Courts also held such appeal to be maintainable, as also the Andhra Pradesh High Court'.

I0. I .5. But a different view has been taken by the High Courts of Karnataka5 and Madras6, The Madras case would seem to disallow even an appeal against an original interlocutory order. if passed ex parte.

I0. I .6. The reasoning underlying the ﬁrst View is that such an order is also an Order 39 of the Code.

I0. I .7. The second view, wl1ich is the contrary view, is based on the reasoning that the "order under Order 39, rule I," referred to in Order 43, rule I, must be a decision based on some ground and not a mere preliminary order for maintaining the status quo.

10.1.8. The Orissa High Court7 also isof the view that "an order declaring to pass exparte temporary injunction and issuing notice to other side" is not appealable.

10.1.9. Rec-ommendation--lt seams proper to settle the conﬂict of decisions. It is suggested that in the interest of expeditious disposal of litigation, it should be enacted that an appeallate order does not fall within Order 43, rule I. This should not cause hardship, since, in appropriate cases the remedy of revision would still be available. We recommend accordingly. The object can be achieved inserting in Order 43, rule I an Explanation on the above lines.

1. V.T. Thomas v Malayula Manozama Company Ltd. AIR 1989 Keral a 48, 52 para 14.

2. Zilla Parishad v Brahma Rishi Sharma, AIR I910 All 376 (DB).

3. Jusa v Ganpat, AIR I976 Bom.222,223, para 1 and 3 (Dharamdhikari,J).

4. Andhra Pradesh University v Pvor Raju (1974) 2 and WR 17 cited in Jusa v Ganpat, AIR l966 Bom 222.

5. ' Parijath v Kamalksha Nayar, AIR 1982 Karnataka I05, 110, para 15 (DB).

6. Abdul Shukoor Sahib v Uma Chandrer, AIR I966 Madras 352 paras 5, 6 (DB).

7. Nalinprava Patnaik v Smt. .lyorn1a_\'ee Das. AIR I991 NOC 70 (Orisszl).

.. W--...,_. . X ' ' I .

mﬁ LA _V .

CHAPTER xi_ SUMMARY or RECOMMENDATIONS ' The follwoniiig is the .\'Llll1l1]:?.1'_V of the recommendations made in the preceding Chapters.

- 1. In section 2(2) .after numbering the ending Explanation as Explnation l. and Explanation should be insert rd as under :~--

"Explanarion 2--'Dcfault' includes default ofappearance as well as any other kind of default"

(Para 2.1.7)

2. In section 2(l 1), it is desirable to clarify that when a eoparcener in a Hindu undivided family dies. a surviving coparcener shall be deemed to be a legal representative of the deceased. (Para 2. 2.7)

3. In section 10. after the words "relief claimed". the words " in the suit subsequently instituted"

should be added.

(Para 2.3.5)

4. In section 11, an Explanation should be added to provide that the provisions of section ll shall apply to a consent decree.

(Para 2.4.13)

5. In section 20, an Exp/cination may be added to clarify that the place where the creditor resi- des should also be treated as the place where the payment is to be made, unless the agreement ex- pressly provides to the contrary. I I V F 'at: . "' ..

. .5 I (Para 2.5.12) l.«../'': 6'. In section 34, it isrdesirable to provide that the Cotrrt_maLy, 'in the interest ofjustice, direct « thatxthe defendant shall pay pendente lire interest at a rate higher than the rate provided for in the con-

tract; this pcndente lire interest would be granted by the Court as per practice. (Para 3.1.8) t It is desirable that, with rcga rd to payment of interest, section 34 of the Code should be allowed to operate even iegarding suits on negotiable instrtiments. and that section 79 of the Negotiable in- ttruments Act should be confined to the period before the institution of the suit. This may be eff- ected by substituting in section 79 of the Negotiable instruments Act, for the words "such date after the institution of a suit", the words " not later than the institution ofa suit". (Para 3.2.7) *8. 'An E.\'[)/tl/It/I/(I/I should be inserted below section 39 to provide that nothing in the section shall be construed as authorising the court to execute a decree against a person or property outside the local limits of its jurisdiction.

- e (Para 3.3.8) { 9. An Explanation should be insertedAbelow section 92 as under:--

"E.rplanatinn-lt shall not be obligatory forthe court before granting leave under this section to issue notice to the party proposed to be used by the person applying for leave."

_ . hi' (Para 4.1.6)

10. Under section 96(3), 21 proviso shouldwbeadded as follows :--

"Provided that nothing in this sub--scction shall affect any right, in any appeal against a decree passed in a suit, to contest the decree on the ground that the compromise should, or should not. have been recorded." . ) ' 5* (Para 4.2.11)

11. A-suitable Explanation_< inyaeyebeadded to section 104(2) on the following lines:--

xj "Exp/anarion.--Where aniorder is passed by a Single Judge of the High Court in an appeal from an order passed by a court subordinate to the High Court, no further appeal shall lie agai- nst the ﬁrst mentioned order, notwithstanding anything to the contrary contained in the Letters Patent constituting the High Court."

(Para 5.1.11) 44 fl

--~ 45 ,1 l2? There should be inserted a suitable E.\'/Jlanafion in section I07 to clarify that the provisions of Order VII. rule I I(b) and (C) apply to appeals also. In the Z1ll:Cl'll.{llIVC. in Order XLI, a rule apply- ing the provisions of Order VII. rule I I nmtal/s nmtz/mli.\' to appeals should be inserted as follows :--

"ln rule 3. sub--rule (IA) should be added as under:--

''(IA) The memorandum ofappeal shall be rejected in the following ease.s:----

(a) where the relief' claimed is undervalued and the rippcllnnt. on being required by the court to correct the valuation within a time to be fixed by the court, fails to do so; or

(b) where the relief' claimed is properly valued but the the memorandum ofappeal is wirtten upon paper insutliciently stamped. and the appellant, on being required by the court to suply the requisite stamp paper within a time to be ﬁxed by the court, fails to do so The latter course may be more convenient for adoption.

aw L. ,,,_., (Para.st5.2.rl0~&~5.2.11) +3 an livplanation s/hould be inserted after sub-section (4) in section I36 on the lines indi' \ cated below:---

"Explanatinn--A warrant of arrest or an order of attachment shall be acted upon only when received through the District Court as provided in subsection (I).

15 ; (Pa1-a-- 5:3.l4) Ifa person sues only for possession_ol'immova_ble property when he might have joined in L' v,*'/by 'ft.' A ' ' : '}U (Para 6.1.7) . I .' l f("F"Ir'( 1" '-"TV on the same cause of action, then-- _\_v

(a) The provisions of rule 2 of -this Ord'e§:'shall not apply, but

(b) the court shall pass an order for consolidation of the suits and hearing them together.

in the interests of justice."

(Para 6.2.6)

--»-£67. ltrseems desirablb to insert a provision in the Arbitration Act, IEMO, as section 13A on the following lines :-----

"I3A. Party to include whole and all reliefs----Sibject to the provisions of the arbitration agree- ment, the provisions of rule,2 of Order I! in the. First Schedule to the Code of Civil Procedure, 1908 shall, so far as may be, apply to arbitrations governed by this Act, as they apply to suits to which the said Code ap lies." (' l t W ?..~t». "}""';(.(;\,;Q. Pg:-'I'«'"" aj""'"'" ' (Para 6_'.3:1"1I) ,..l?')']'n Order Vll, rule II, the existing clause (a) should'be1'eplaced"by~t;In,sfollowing:-- .

" a where the averments made in the plaint, even assuming them to be true, do not disclose a cause of action."

"Ezrplanation----Subject to the other provisions of this Code, it is immaterial that the cause of action in the counter-clrum is not based on the 'same transactions as the suit, or that the suit (Para 6.5.10) 46 «(t ' - .. _;,,'5c;j {'53.

)9. In Order IX. rule l3.a luv. tlteeproviuHhwHbﬁ ?vﬂw'secoi1d proviso as under :--

"Provided also the notwithstanding anything contained in the above proviso, where a copy of the plaint or consisc statement has not been attached to the summ us as required by rule 2 of Order V. such omission shall be deemed to be sufficient cause for setting aside a decree passed (Ix parte."

' (Para 6.676) ,3 30. In Order XVIII, rule 2(4), after the words "at any stage" which appear at the end, the words, 'X; "' "before the case is closed for judgement" should be added... (Para 7\.L. 4) .i'In Order XVIII, rule 3 as it stands at present may be renumbered sub-rule (1). and a new sub-rule (2) may be added as under :-

"(2) The option referred to in sub-rule (1) shall be exercised and comm=.micated to the court before the other party begins to produce its evidence."

(P{ll'R--~-7-r~2».-40) X 432. It should be clariﬁed that the words "act required to be done" occurring in rule 32(5) of (--ijﬂ,,_p? " Order XXI cover both prohibitory and mandatory injunctions. ' 7;: w,- (Para 8.1 .12)

-25'. in Explanation should beadded below Order XXI, rule 97, as under :--

"Explanation----Nothing in this rule shall be construed as enabling a purchaser who is not the decree holder (or any person acting at the instance of such person) to apply under this rule."

5"' JD If:-.,._ «t ,,»<.' I" 5,»(\ «E {L ' :.'1.~*.-~-:.¥._{1'v€;»zv_.«,< (Para 8 . 2 . 8) , ~ . re .

r,.~a.~

24. in Order xxnr, rule 1(3), arusxplanarion should-be inserted as ~follows :-

."ExpIanation-Where, as a result of the provisions contained in Order XXII of this Schedule, a suit has abated or a part of the claim has abated. the abatement shall not be deemed to consti- tute a sulﬁcient ground for granting to the plaintiff permission under this sub-rule to withdraw from such suit or from such part of the claim, as the case may be, with liberty to institute a fressh suit."

,_,.-_» M , , , é . 'r. ' (Para ~a.3'.1z)\ a t N' i >,\ v 25. In Order XXXIII.-a ~rule--m&y---behaddeil at the end to provide as under :-

- °, ...r' "The provisions of this Order shall apply to persons other than human beings with such-modi- ' ﬁcations as may be appropriate to facilitate such application." W',/-' i . \ A ' ' v+j I ' i * C "r 1- 2.»- "" " =.-~:'> . (Para'9:1'.'9T

26. Below Order XXXIII, rule 1, followinglines :-

"Explanat%n----In a suit which Order XXXIV applies, the mortgagoy's right to redeem the inert- gage shall be excluded in calculating his means for the purposes of this rule."

Tb \Af'-€,[LtY ,r__ ':r;,__': fa'.

' .. glﬁﬁt Order XXXIII, iLn4;W--1'.1l-l£'r 4A~~s1't9uld --b3iﬁsert:ed_, irrthese terms :-- A "4A. Return of application beyond iurisdintion--Tl1e court shall return an application to the applicant for presentation to the proper court 'if the averments made by the applicant in the application show that the suit would be beyond the jurisdiction of the Court'? ' ' § 'le : :.4l'i*""'"i" "'*1"'M' (pmagfgm . 28. Below Order XXXIV, rule 1. after renumbering the present Explanation as Explanation 1 :-- .; I : V "Explanation 2. Nothing in this Order applies to a mortgage, charge, hypothecation, pledge or other security created in respect of movable property." I 4 /- i , (P&rﬂ~'9-.4--.~l2) I 0 -mi». W _ .

429.» Tlhrfollowing Explanation Order XXXIX, rule 2A( 1) :--

V X .

"Explanation. The Court may make an order under this sub-rule. notwithstanding that the injunction or other order has been subsequently discharged or varied or_s-et aside by the court under rule 4 ofthis Order or by any other Court in appeal or revision."

(Para 9.5.9)

- > _.._......~ . ,_ .e-,_i_ ,..-

" 2' _. . $47 rv ,3 :}",\/'v*.

30 Jan ()i'».l<:i': XlJ|l, rule l, ,l:'.\'p/ Itutiulz eiliould be insei't:f,:d}t«» provide Lllt appellate order will 115$ lull within thix rul(.':~l i'/____ y c » (P'c'.l'il l().l 9) Th: above recommendations we l«tVC made would help in l'U>0l'».lx1g the conflicting opinions and interpi'cta1ti0ns in the ﬁeld ol' pro etrclural law in various Cases decided by the High Courts. These reeommendJ.tions involve umsndmentﬁ mainly to the Code of Civil Procedure, 1903 and :1 couple of incidental anlendmrxnts to the provisions of the Negotiable Instruments Act. l88l and the Arbitra- tion Act, l940 have also bsen suggested. We believe that implementation of these -'.;-commendzttions would be beneﬁtting the interests' of'-the litigant public and the judiciary in our country.

Sd/-

(K. N. SINGH) ('/mirnmn Sd/-

(G. V. G. KRISHNAMURTY) /V1'Pm}?('I'-S('('/'('l'(ll"l ' New Dal/11', (I'{/rm' the 28 April, l9')2.

94..\vl/S29M0l'l..l&CA -600 'Z242-95~~GlPS

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Conflicting Judicial Decisions Pertaining To The Code Of Civil Procedure, 1908