Calcutta High Court
Krishan Kumar Agarwala vs Reserve Bank Of India And Others on 8 May, 1990
Equivalent citations: AIR1991CAL272, 94CWN919, AIR 1991 CALCUTTA 272, (1990) 94 CAL WN 919, (1991) 1 CALLJ 316, (1990) 2 CAL HN 377, (1991) 1 BANKCLR 259
ORDER
1. In this application filed by the respondents for vacation of the ex parte interim order of injunction issued against them, the two questions that have arisen for consideration are -- (a) whether the ex parte interim order has automatically stood vacated on the ground of the application for vacation not having been disposed of within the period specified in Clause (3) of Article 226, and (b) whether on the facts and circumstances and the relevant law on the point, the order, if still in operation, should be discharged or otherwise altered, or, if the order is no longer in operation, a fresh interim order is warranted.
2. Where an interim order has been made after giving the party affected an opportunity of being heard, such an order is ordinarily not to be discharged or varied unless such discharge or variation has been necessitated by a change in the circumstances or unless the Court is satisfied that the order has caused undue hardship. But when such an interim order has been made ex parte without giving the party, affected an opportunity of being heard, the aggrieved party is entitled to object to its continuance and to ask for its vacation or variation on any ground available under the facts and the law and not merely on the ground of any change of circumstances or the order causing undue hardship. This principle has now been expressly enacted in the second Proviso to Rule 4 of Order 39 of the Code of Civil Procedure by the Amendment Act of 1976 and even though the provisions of the Code do not apply ex proprio vigore to the proceedings under. Article 226, the principle contained in the Proviso is so eminently reasonable as to warrant universal application. The respondents, therefore, in this case, are entitled to ask for vacation on the ground that such order ought not to have been made under the facts and the law.
3. As to the first question, namely, automatic vacation of an ex parte interim order on the ground of non-disposal of an application for its vacation within the period specified in Article 226(3), Mr. Pal, the learned counsel for the petitioner, has urged several grounds against such automatic vacation and has argued the matter with admirable dexterity.
4. Mr. Pal has firstly urged that clause (3) itself, inserted by way of substitution by the Constitution (Forty-Fourth Amendment) Act, 1978, is ultra vires the Amending powers of Parliament under Article 368 of the Constitution, as by the provisions of Clause (3), one of the basic features of the Constitution has been affected which Parliament cannot do in view of the majority decisions in Kesa-vananda Bharati, . Mr. Pal has urged that the power of Judicial Review is one of the basic features of the Constitution as clearly ruled by the Supreme Court in Indira Nehru Gandhi, and Clause (3) of Article 226 has affected that power of Judicial Review.
5. The power of this Court to issue ex parte interim orders in furtherance of the main relief prayed in a petition under Article 226 neither was nor is a creature of Article 226, or any other provisions of the Constitution and therefore cannot be a "feature" far less a 'basic feature', of the Constitution, and, therefore if the power is no such feature, basic or otherwise, of the Constitution, the provision of Clause (3) providing for the automatic vacation of an interim order, if the application for its vacation remains undisposed of for certain period, cannot be said to affect or alter any feature or the structure of the Constitution.
6. Mr. Pal has also urged that by providing for such automatic vacation of interim orders, passed by the Court under the provisions of Clause (3), Parliament has clearly exercised a Judicial jurisdiction not vested in it under the Constitution. The contention must be rejected as without any substance. Laws relating to administration of justice and the procedure for such administration are clearly matters within the jurisdiction of the Legislature and in the exercise of such legislative jurisdiction, the Legislature can even provide for ouster of jurisdiction of Courts and that too, even with retrospective effect. It may provide, as it very often does, that even proceedings pending in a Court shall stand abated and that is obviously an exercise of Legislative and not Judicial jurisdiction. To accept such a broad proposition would lead us to hold that the provisions of the Code of Civil Procedure for providing dismissal of a pending suit under Order 9, Rule 9 or Order 11, Rule 21, or striking out of defence in a pending suit under the latter provisions or under any other law is an adjudicatory and not a legislative exercise. As would appear from Article 323A, even the jurisdiction of the High Courts and also of the Supreme Court can be and have been taken away by the Constitution (Forty-Second Amendment) Act 1976.
7. Mr. Pal has then urged that since an application for vacation may not be disposed of within the time specified in Article 226(3) for no fault of the Writ Petitioner in whose favour the order was made and may not be so disposed of due to inadvertence of the office of the Court in listing the application or due to the Court itself being pre-occupied with other matters or otherwise, the period specified or the provision providing for its automatic vacation on the expiry of the period specified must be held to be directory. It is true that actus curiae nemmem gravabit and it is almost settled law that where a statute prescribes a period within which a Court or Tribunal or any other public functionary is to dispose of a matter or discharge a function, over which the parties to be affected thereby would have no control, the period so prescribed is not to be taken as that mandatory as to vitiate the disposal of the matter or discharge of that function beyond that period. Section 17(2)(a) of the West Bengal Premises Tenancy Act, 1956 provides that "the Court shall" make an order "within a period not exceeding one year", but any challenge to an order solely on the ground of its being made beyond one year cannot but fail on the principle that a party may have no control over the functions of the Court.
8. If the provisions of Article 226(3) only provided that "the High Court shall dispose of the application" within the period specified, I might not have any hesitation in holding the provisions to be directory and disposal of the application even after the specified period to be permissible. But here clause (3) has not only affirmatively enjoined the Court to dispose of the application within the period specified, but has also negatively in categorical terms provided for the consequence of non-disposal within the period and has clearly enjoined that "if the application is not so disposed of, the interim order shall......
stand vacated". When a statutory provision not only directs a thing to be done in a specified manner or within a specified period, but at the same time provides for the inevitable consequence of non-compliance with the direction, the direction must be held to be obligatory and not merely directory. I am, after all, interpreting a provision of the Constitution, inserted by a careful Amendment thereof almost after three decades of the working of the Constitution and I must not construe any such provision as to render that provision almost meaningless with such clear words, staring at the face, categorically providing for the consequence of non-compliance and enjoining that "the interim order .....shall stand vacated". I have not been able to pursuade myself to agree, notwithstanding all the pursuasiveness of the argument advanced by Mr. Pal, that these words are only directory and the interim order shall not stand automatically vacated on the expiry of the period specified in spite of the clear mandate conveyed by those words.
9. I have, in this connection, taken note of the provisions of Rule 3 A of Order 39 of the Code of Civil Procedure, inserted by the Amendment Act of 1976. There, after providing that where an injunction has been granted without giving notice to the opposite party, the Court shall make endeavour to finally dispose of the application within thirty days from the date when the injunction was granted, it has also been provided that "where it is unable so to do, it shall record its reasons for such inability". The absence of any such provisions for recording reasons in Article 226(3), coupled with the categorical direction for automatic vacation of the ex parte interim order would go to show that the provisions of Article 226(3) are intended to be mandatory.
10. I must place on record that Mr. Pal with exemplary fairness has placed before me the only reported decision on the point to his knowledge, even though the same is entirely against his contention. That is a single-Judge decision of the Rajasthan High Court in Gheesa Lal v. State, where also it was argued that as the application for vacation was not listed within the specified period on account of mistake of the office, the party could not be made to suffer. This argument was repelled and it was held that it was for the party who had obtained, an ex parte order, to take "active steps" to get the matter listed in Court within the period specified after he has received a copy of the application for vacation and that if he does not do so, "he can do so at his own peril". In view of the mandate in Article 226(3) and the serious consequences envisaged therein, "the petitioner as well as the Court's office, both must get the matter considered by the Court immediately" and "if that is not done, the petitioner cannot escape the liability by pointing out that the office has failed to list the case in Court". It was held further that "in case 14 days are likely to expire and the office has failed to list the case, the Counsel for the petitioner can bring it to the notice of the Court and get it listed immediately by obtaining instructions of the Court", because "this Constitutional mandate admits of no exceptions".
11. Grave apprehensions have been expressed by Mr. Pal that if the provisions of Article 226(3) are held to be mandatory and strictly enforced, the major bulk of the ex parte interim orders in this Court, with its number of cases almost reaching a breaking-point, would stand automatically vacated and that too, very often, for no fault or laches on the part of the Writ Petitioner. It may be that the learned Advocate-General appearing for the respondents has also shared similar apprehension and that may be reason as to why, after urging on the first date that the interim order in this case has stood vacated under the provisions of Article 226(3), his learned junior on the next day tried to convey to me the impression that the respondent would not like to press the point any further. I had to remind the learned junior counsel that after a question of interpretation, necessary for the disposal of the case, has been raised and argued at one stage, it is no longer within the jurisdiction of any party or Counsel to take away that question from the seisin of the Court and once a Court finds a question of law of substantial importance to be involved in a case and finds further that the same requires determination, it must determine the same, whatever change of stand is made by the Counsel at a later stage.
12. But the apprehensions as expressed above may not be that grave. For even though I hold that the provisions of Article 226(3) are mandatory and therefore if the application for vacation is not disposed of within the specified period, the original ex parte interim order shall automatically stand vacated, nothing shall prevent the Court to grant an interim order afresh after hearing the parties, on the application for vacation or otherwise, if the Court finds sufficient grounds to make such fresh order.
13. I would, therefore, take up the question as to whether the materials on record would justify the grant of an interim order in terms in which the ex parte order was granted or in any other form even though the original ex parte order has suffered automatic discharge.
14. The interim order of injunction, in this case, which was granted ex parte, directs the respondents not to give any effect or any further effect to the permissions granted by the respondent Reserve Bank of India to and in favour of the respondent No. 4, Mr. R. J. Brealey for the acquisition of a number of equity shares and preference shares in the Titagarh Jute Factory, respondent No. 9. The copies of permissions granted by the Reserve Bank of India to the respondent Mr. Brealey are annexed to this petitions as Annexure 'L' and Annexure 'M', The learned Advocate-General has placed strongest possible reliance on the five-Judge unanimous decision of the Supreme Court in Life Insurance Corporation v. Escorts Ltd., and has urged that the decision in an irresistible authority for the view that once permission of the Reserve Bank of India has been obtained under the Foreign Exchange Regulation Act, 1973, whether before or after the purchase, the company cannot, thereafter, refuse to register the transfer of shares, "nor is it open to the company or any other authority or individual to take upon itself or himself, thereafter, the task of deciding whether the permission was rightly granted by the Reserve Bank of India" and that "the provisions of the Foreign Exchange Regulation Act are so structured and woven as to make it clear that it is for the Reserve Bank of India alone to consider whether the requirements of the provisions of the Foreign Exchange Regulation Act and the various rules, directions and orders issued from time to time have been fulfilled and whether permission should be granted or not".
15. Whether the petitioner in this case, professing to be owner of only 100 shares, can at all challenge the permission granted by the Reserve Bank of India, would have to be decided at the final hearing of the Writ Petition and not now at this stage, even though I may not agree with Mr. Pal that any such question may not at all be gone into at this interlocutory stage as the same would have to be finally determined at the main hearing of the Writ Petition. As pointed out by K. C. Das Gupta, J. speaking for the Division Bench of this Court in Ashalata Mitra v. A.D. Viz., (1955) 59 Cal WN 692, the fact that a question is to be finally determined by a Court at the trial cannot, by itself, be a ground for not considering the very same question at an earlier interlocutory stage under an application for an interim order of injunction or the like, though such determination shall be only for the purpose of that interlocutory application and cannot take the place of a final determination at the trial.
16. I have, however, noted that, even according to the decision in Escorts Ltd., (supra at 1413), there may bea "limited classes of cases where the grant of permission by the Reserve Bank of India may be questioned by an interested party in a proceeding under Article 226 of the Constitution on the ground that it was mala fide, or there was no application of mind or it was opposed to the national interest as contemplated by the Act, being in contravention of the Act and the Rules, orders or directions issued under the Act". Mr. Pal has urged that there was no application of mind by the authorities concerned in granting the permission. The materials on record as at present go to show, at least prima facie, that the authorities have applied their mind in granting the permission and have laid down in appreciable details the terms and conditions subject to which the permission granted in favour of the Respondent No. 4 would operate. Whether those terms and conditions are sufficient to safeguard the national interest would still be open to question at the final hearing. But "non-application of mind" cannot obviously be equated with "correct and all-comprehensive application of mind". On the materials on record as at present, it cannot be said that any prima facie case of either "mala fide", or "non-application of mind", or of being adverse to "our national interest has been made out. Needless to say, this would not prevent the petitioner from making out any such case at the final hearing on proper or further materials and this observation of mine as to the absence of a prima facie case must, as it cannot but, remain confined for the purpose of this application.
17. I repeatedly asked Mr. Pal as to what injury or inconvenience, irreparable or otherwise, the petitioner can suffer if the interim order as prayed for is declined and, if I have not failed to understand him, he has not been able to point out to any such thing. If at the final hearing, the Writ Petitioner succeeds on the Petitioner proving mala fide, or non-application of mind, or injury to national interest or otherwise, the impugned permission of the Reserve Bank of India shall fall through and with that all the transfers, if any, affected on the strength of such permission. The petitioner, therefore, must be held to have failed to satisfy the tests of irreparable injury or of balance of convenience and inconvenience, even assuming that he has made out a prima facie case for consideration.
18. I accordingly hold that the ex parte interim order granted in favour of the peti-
tioner has already suffered automatic expiration on the expiry of the period specified in Article 226(3) and that on the materials now on record I have not been able to find any case warranting interim interdiction any further.
19. Order accordingly.