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Kaikhushroo Pirojsha Ghiara Vs. C.P. Syndicate, Ltd. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case NumberO.C.J. Appeal No. 7 of 1948 and Insolvency No. N 264 of 1947
Judge
Reported in(1948)50BOMLR744
AppellantKaikhushroo Pirojsha Ghiara
RespondentC.P. Syndicate, Ltd.
DispositionPetition dismissed
Excerpt:
.....'substantial question of law,' what is-concurrent findings-litigation, finality of-federal court, appeal to-insolvency notice, contents of.;the court of appeal in the high court of bombay is the final court normally and ordinarily in the province of bombay.;generally, law favours a finality in litigation. it is only in the special circumstances laid down in the code of civil procedure, 1908, that a litigant is entitled to travel outside the province and go to the highest court in the realm which is now the federal court.;when the trial court and the court of appeal in the high court concur in their judgment, the petitioner must satisfy the court of appeal, before which he comes for leave to appeal to the federal court, that a substantial question of law arises which requires further..........c.j.1. this is an application by the petitioner for leave to appeal to the federal court. an insolvency notice was taken out against the appellant for adjudicating him insolvent and the appellant took out a notice of motion to set aside that insolvency notice. mr. justice tendolkar dismissed the notice of motion holding that the insolvency notice was a valid notice. from the judgment of mr. justice tendolkar an appeal was preferred to the bench consisting of myself and mr. justice bhagwati and we affirmed the judgment of mr. justice tendolkar and dismissed the appeal (july 22, 1948). the petitioner seeks to go to the federal court on the ground that the question involves a substantial question of law.2. now, in order to determine this question, one or two very fundamental.....
Judgment:

M.C. Chagla, C.J.

1. This is an application by the petitioner for leave to appeal to the Federal Court. An insolvency notice was taken out against the appellant for adjudicating him insolvent and the appellant took out a notice of motion to set aside that insolvency notice. Mr. Justice Tendolkar dismissed the notice of motion holding that the insolvency notice was a valid notice. From the judgment of Mr. Justice Tendolkar an appeal was preferred to the bench consisting of myself and Mr. Justice Bhagwati and we affirmed the judgment of Mr. Justice Tendolkar and dismissed the appeal (July 22, 1948). The petitioner seeks to go to the Federal Court on the ground that the question involves a substantial question of law.

2. Now, in order to determine this question, one or two very fundamental principles have to be borne in mind. The first is that the Court of Appeal in this Province is the final Court; it is the final Court normally and ordinarily. The other principle is that law favours a finality in litigation and that it is only in the special circumstances laid down in the Code that a litigant is entitled to travel outside the Province and go to the highest Court in the realm, which is now the Federal Court. When the trial Court and the Court of Appeal have concurred in their judgment, it is for the petitioner to satisfy the Court of Appeal, before which he comes for leave to appeal to the Federal Court, that a substantial question of law arises which requires further deliberation and adjudication by the highest Court. Frankly, it is not at all easy to determine what a substantial question of law contemplated by Section 110 of the Civil Procedure Code is. The only guidance that we have had from the Privy Council is that substantial question is not necessarily a question which is of public importance. It must be a substantial question of law as between the parties in the case involved. But here again it must not be forgotten that what is contemplated is not a question of law alone; it must be a substantial question. One can define it negatively. For instance, if there is a well established principle of law and that principle of law is applied to a given set of facts that would certainly not be a substantial question of law. Where the question of law is not well settled or where there is some doubt as to the principle of law involved, it certainly would raise a substantial question of law which would require a final adjudication by the highest Court.

3. Now, turning to the question involved in this appeal, the first question that had to be considered both by Mr. Justice Tendolkar and the Court of Appeal was as to the construction of the decree on which the insolvency notice was based, and the contention put forward by the appellant was that the payment of Rs. 2,50,000 was not an absolute and unqualified obligation to pay, but was conditional upon certain debentures to be transferred by the judgment-creditor. All the three Judges who considered this question came to the conclusion that the contention of the appellant was untenable and could not be accepted. Mr. Seervai has pressed upon us the fact that all the three Judges have come to the same conclusion, but by different process of reasoning. Now, if this process of reasoning was inconsistent or self-destructive, then certainly Mr. Seervai would have been right in asking us to allow the matter to be further considered by the Federal Court. But these processes of reasoning supplement each other and the result is that the ultimate conclusion to which all the three Judges arrive is reinforced by the reasoning which each of them has advanced in coming to that conclusion. It is true that the question of the construction of a document is certainly a question of law, but it would be, in our opinion, erroneous to contend that every construction of a document necessarily involves a substantial question of law. This was a decree undoubtedly of a rather complicated character which had various provisions in it. But ultimately what the Courts had to do was to look at the various provisions and to come to the conclusion as to whether the obligation to pay on the part of the judgment-debtor, on which ultimately the insolvency notice was based, was an unqualified obligation or not. We do not think that the construction which the Courts were called upon to place on the decree raises any substantial question of law.

3. The other substantial question which Mr. Seervai contends arises on the judgment of the Court of Appeal is as to the validity of the insolvency notice. The main argument advanced by the appellant as to why the insolvency notice was not valid was accepted by the Court of Appeal, but that argument became infructuous in view of Ordinance III of 1948 that was passed validating the notice. The other two contentions which were not covered by the Ordinance were held by the Court of Appeal to be a mere surplusage and that conclusion was arrived at by applying to these provisions the well established principles of insolvency law, and the well established principles of insolvency law are that nothing should be stated in the insolvency notice which might act as a trap to the debtor or which might put upon the debtor a heavier burden than the law requires him to carry. Having accepted those principles and having applied those principles, the Court came to the conclusion that the two particular provisions in the insolvency notice did not form part of the requirements in the main body of the notice and they could be safely ignored by the insolvent and, therefore they had no other effect than merely surplusages.

4. The third possible point of law which according to Mr. Seervai can arise on this judgment is as to the fact that the insolvency notice was taken out by one judgment-creditor although the decree was in favour of four judgment-creditors. Mr. Seervai has relied on certain observations of Mr. Justice Bhagwati who delivered a separate judgment concurring with the view that I took as to the notice. But I have pointed out in my judgment that there was no substance in this argument, because a joint decree passed in favour of more than one plaintiff can be executed by any of them on behalf of the others, and all that this insolvency notice meant was that the notice was taken out by one judgment-creditor who had that right, as he could have executed the decree on behalf of all the judgment-creditors.

5. We are most anxious that unnecessary litigation should not be encouraged and there should be some finality to litigation, and, therefore, unless a higher Court takes a different view as to what substantial questions of law really mean under Section 110, we would not like parties to feel that every question of law entitles them not to be content with the view of the final Court in the Province, but to go to a higher Court for a further elucidation on that point. The result is that the petition must fail and must be dismissed with costs.

6. Mr. Seervai says that he wants to apply to the Federal Court by special leave to appeal, and he wants us to stay further proceedings on the insolvency notice pending the disposal of that application. We will give Mr. Seervai time up to August 16, 1948, to make the necessary application for an interim stay to the Federal Court. If the order is made, then no further question arises. If Mr. Seervai fails to obtain the necessary order from the Federal Court, then further proceedings on the insolvency notice will go on as a matter of course. Mr. Purshottam Tricumdas says that he will not insist upon service for any particular period required by the rules of the Federal Court. He will accept notice whenever served upon him and will be prepared to argue the matter before the Federal Court. Liberty to Mr. Seervai to apply to us on August 16 in case he fails to get the necessary order from the Federal Court.

7. Mr. Seervai undertakes on behalf of his client not to deal with, dispose of or alienate any of his properties pending the disposal of the interim application before the Federal Court.


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