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Laxmi Investment Co. Pvt. Ltd. Vs. Tarachand Harbilas and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai High Court
Decided On
Case NumberMisc. Petn. No. 1 of 1966, in Special Civil Suit No. 4 of 1960
Judge
Reported inAIR1968Bom250; (1967)69BOMLR629; ILR1967Bom1381; 1967MhLJ97
ActsCode of Civil Procedure (CPC), 1908 - Sections 141 and 151 - Order 9, Rule 9
AppellantLaxmi Investment Co. Pvt. Ltd.
RespondentTarachand Harbilas and ors.
Appellant AdvocateK.C. Cooper, Adv. i/b., ;Kanga and Co.
Respondent AdvocateS.J. Deshpande, Adv.
Excerpt:
.....shown for the restoration of the second application. (ii) that in such a case section 151 of the code of civil procedure could well be applied because there is no other remedy open. (9) it is basing themselves upon the last mentioned principle that the courts have differed on the nature of the remedy available to a party in a case like the one before us. the question they raise is whether in a case like the present, section 141 of the code of civil procedure read along with order ix rule 9 would apply or not. (10) the principal question, therefore, is whether section 141 would apply in a case like the one we have before us and it is here that the remarks of the privy council in ilr (1895) 17 all 106 come into play. (11) we cannot put the matter better than it has been put by mr...........the footing of the agreement. the suit was filed on the 26th june, 1960 and was fixed before the civil judge, senior division, khamgaon on 22nd february, 1961. on that date the advocate for the plaintiffs reported no instructions and withdrew from the suit in consequence of which the civil judge dismissed the suit for default. on 22nd march, 1961 the company made an application no. 28 of 1961 for restoration of the suit to the file under order ix rule 9 of the code of civil procedure. before that application could be heard the company was ordered to be wound up and the liquidator was put in charge of the affairs of the company. according to the liquidator, however, he knew nothing of the pendency of the suit or of the application for restoration filed on the 22nd march, 1961. that.....
Judgment:

Kotval, C.J.

(1) This petition has been referred to a Division Bench for decision by Mr. Justice Tulzapurkar because the learned Judge entertained some doubt whether he has the power to grant the application made before him. It virtually raised the following question:-

'Where an application to restore a suit to file under order 9 rule 9 is itself dismissed for default, whether a further application to restore the application under Order 9 rule 9 to the file will at all lie?'

The learned Judge felt that in view of the decision of this Court in D. B. Manke v. B. Walwekar, AIR 1923 Bom 386, such an application might not lie, but there are conflicting authorities on the question.

(2) The circumstances under which Miscellaneous Petition No. 1 of 1966 came to be filed are as follows: The applicant is the liquidator of a company known as the Laxmi Investment Co. Private Ltd. of Akola. He was appointed the liquidator of the company after an order of winding up was passed on 12th February 1962. This company had entered into an agreement with one Tarachand and others to purchase the immoveable property from the said Tarachand and others for a sum of Rs. 60,000 on 23rd January, 1957. The agreement was subsequently modified in December 1957 whereby the company agreed to pay Rs. 25,000 more to the vendors. The vendors did not fulfil their agreement and the company filed a suit (C. S. No. 4 of 1960) for specific performance and damages on the footing of the agreement. The suit was filed on the 26th June, 1960 and was fixed before the Civil Judge, Senior Division, Khamgaon on 22nd February, 1961. On that date the advocate for the plaintiffs reported no instructions and withdrew from the suit in consequence of which the Civil Judge dismissed the suit for default. On 22nd March, 1961 the company made an application No. 28 of 1961 for restoration of the suit to the file under Order IX rule 9 of the Code of Civil Procedure. Before that application could be heard the company was ordered to be wound up and the liquidator was put in charge of the affairs of the company. According to the liquidator, however, he knew nothing of the pendency of the suit or of the application for restoration filed on the 22nd March, 1961. That application (application No. 28 of 1961) for restoration of the suit came up for hearing before the Civil Judge on 19th April 1962 and no one being present on behalf of the company the application was dismissed. The Court did not know that a liquidator had been appointed and the liquidator did not knew that the suit had been filed and dismissed or that the application for the restoration was pending. The present application which under certain circumstances, has come to be renumbered as application No. 1 of 1961, was filed by the liquidator on behalf of the company on the 19th June, 1962 praying that the order of dismissal of the application to set aside the ex parte decree dated 19th April 1962 should be set aside and the miscellaneous application No. 28 of 1961 should be restored to file. The liquidator has alleged that he had no knowledge whatever of the pendency of the suit or of its dismissal for default nor of the fact that an application to restore the suit to the file had been made and was pending on the file of the Civil Judge. He alleged that he came to know of the pendency of the suit and the application only on the 18th June, 1962 from one of the former directors of the company one Amratlal Vyas and thereupon he acted very promptly. He alleges that he sent a telegram to the clerk of the Court of the Civil Judge, Senior Division, Khamgaon informing him that he had learnt about the dismissal of the application for restoration of the said application No. 28 of 1961. This application was filed on behalf of the Liquidator by the said advocate on the 19th June, 1962 and was followed up three days later by an application for condonation of one day's delay in filing the said application for restoration on 22nd June 1962.

(3) These were the proceedings taken before the Civil Judge Senior Division, Khamgaon, but in view of the Liquidator having been appointed in the meanwhile on 20th March, 1963 the Civil Judge acting under the provisions of section 446(3) of the Companies Act, 1956 transferred the proceedings to the High Court. At that stage the application presented on 19th June, 1962 came to be renumbered in this Court as application No. 1 of 1966. It is that application which came before the learned Single Judge and since the decision in AIR 1923 Bom 386 was relied on behalf of Tarachand and others and since that is a decision of a Division Bench, the learned Judge felt that he should refer the question to a Division Bench for considering the effect of the decision in AIR 1923 Bom 386.

(4) Now we may say at once that in our opinion the decision in D. B. Manke's case, AIR 1923 Bom 386 cannot apply to the facts of the present case, nor is it an authority for what it is supposed to be. In that case the plaintiff had filed a suit in the Court of Small Causes at Bombay to recover wages from the defendant. The suit was decreed ex parte because the defendant's pleader did not attend to contest the suit at the hearing. The defendant then filed an application for setting aside the ex parte decree and the application was fixed for hearing on the 10th April 1922. The notice issued was under Order IX rule 9 of the Code of Civil Procedure. The notice was, however, struck-off for want of prosecution and the defendant presented a further application for setting aside the ex parte decree which was clearly barred. The Small Causes Court treated it as an application to restore the application previously made under Order IX rule 9. The Court restored it and passed an order against the plaintiff for a fresh trial of the suit. The plaintiff had come up to the High Court in revision against that order.

(5) Now what the Division Bench held in D. B. Manke's case, AIR 1923 Bom 386 was that 'it cannot be said that there is any rule in the Code of Civil Procedure that enables the Court to restore an application made under Order 9, rule 9 which has been dismissed for want of prosecution. It is urged upon us that the Court has inherent powers to make orders within the provisions of section 151 and that this was an order made accordingly. There is no reference made in the decision of the Court that the order was made under S. 151. It is quite clear that if that section had been considered, the order under revision could not possibly have been made under it. That section gives the Court power to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court. The plaintiff has got a decree and the defendant had every opportunity of appearing in Court at the time of hearing and also when notices were issued by him against the plaintiff for a new trial. It cannot be said therefore that in any circumstance it is necessary for the ends of justice that he should have yet another opportunity of harassing the successful party. The latter portion of the order which we have deliberately quoted in extenso commencing from the reference to section 151, nowhere says that section 151 cannot apply in such a case. On the contrary, what the Division Bench in effect said was that if that section were to be considered, upon the facts and circumstances before it the order under revision could not possibly have been made. They proceeded to demonstrate why and they pointed out that section 151 only justified the making of an order for the ends of justice or to prevent abuse of the process of the Court and in the circumstances of that case, justice was met by not giving the defendant another opportunity of harassing the successful party. That, therefore, was a decision upon the facts and circumstances of that case. What the Division Bench clearly said in that case was that assuming that section 151 applied sufficient cause had not been shown for the restoration of the second application. At no stage did the Division Bench say that section 151 would not or did not apply. On the contrary, they assumed that it would apply but showed that upon the facts and circumstances of that case even if it applied sufficient cause had not been made out. We cannot, therefore regard that case as authority for the proposition that under section 151 the second application would not lie to restore to file the application under Order IX rule 9 dismissed for default. It is the head note of the case which gives a completely wrong impression.

(6) Mr. Cooper has also pointed out one other circumstance in connection with that case namely that in point of fact section 151 did not apply to Small Causes Courts at that time and the powers under section 151 could not have been exercised by the Court of Small Causes in that case at all. This circumstance was not taken into account.

(7) Upon the authorities a power to restore such an application to the file can be spelt out under two heads. There are a number of authorities supporting either one or the other view. The two alternative views are (i) to support such an application under Order IX rule 9 read with section 141 of the Code of Civil Procedure which says that the procedure provided in the Code in regard to suits shall be followed, as far as it can be made applicable. In all proceedings in any court of Civil Jurisdiction; (ii) that in such a case section 151 of the Code of Civil Procedure could well be applied because there is no other remedy open.

(8) The difference of opinion between the several High Courts stems from the remarks of the Privy Council in the leading case of Thakur Prasad v. Fakirullah, ILR (1895) All 106. It is now settled law that section 151 of the Code of Civil Procedure does not confer any power upon any Court but is merely declaratory of a power which inherently exists in every Court, and all that it says is that 'Nothing in this Code shall be deemed to limit or otherwise affect the inherent power of the Court to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court.' The section assumes that the power is inherent in a Court and is merely declaratory of it. Secondly it is also settled law that section 151 of the Code cannot be invoked where there is a specific provision in the Code giving a remedy to a party. In such a case the party would be limited to that remedy and the inherent power under section 151 would not be available to such a party.

(9) It is basing themselves upon the last mentioned principle that the Courts have differed on the nature of the remedy available to a party in a case like the one before us. The question they raise is whether in a case like the present, section 141 of the Code of Civil Procedure read along with Order IX rule 9 would apply or not. It if applies, obviously upon the principle stated above, section 151 of the Code of Civil Procedure would not be attracted, but if section 141 read with Order IX rule 9 would not apply, then there would appear to be no other remedy provided in the Code and the inherent power under section 151 would come into play.

(10) The principal question, therefore, is whether section 141 would apply in a case like the one we have before us and it is here that the remarks of the Privy Council in ILR (1895) 17 All 106 come into play. In that case the Privy Council were concerned with an application for execution and the question was whether section 647 of the them Code of Civil Procedure which corresponds to section 141 of the present Code applied. The Privy Council held that section 647 does not apply to applications for execution. They took the view that it only applied to original matters in the nature of suits. Their Lordships said at page 111 of the report. 'Their Lordships think that the proceedings in probates, guardianships, and so forth, and do not include executions.' The divergence of opinion amongst Courts in India has arisen from the different interpretations put upon this view of the Privy Council, especially as to what their Lordships implied by the words 'such as proceedings in probates, guardianships, and so forth.' The Courts which have taken the view that section 141 read with Order IX rule 9 would apply to an application to restore an application under Order IX rule 9 which has been dismissed for default, have interpreted the remark of the Privy Council to include all applications within section 141. Since section 141 would apply to other applications according to this view, there is no question of turning to section 151. The other view has limited the remarks of the Privy Council to applications which are ejusdem generis with proceedings in probates, guardianships and so forth, that is to say not interlocutory applications or applications which arise out of other proceedings such as suits but which in themselves initiate a lis. In our opinion, the latter view is to be preferred.

(11) We cannot put the matter better than it has been put by Mr. Justice Mukerji in Sarat Chandra Bose v. Bisheswar Mitra : AIR1927Cal534 . After quoting the said passage from the judgment of the Privy Council in ILR (1895) 17 All 106, the learned Judge remarked 'The expression 'so forth' must, in my opinion, be read as meaning proceedings ejusdem generis with the instances that precede it, and include such proceedings as in divorce, in insolvency, for succession certificate and the like and the expression 'original matters' in my opinion confirms that view as meaning matters which originate in themselves and not those which spring up from a suit or from some other proceedings or arise in connection therewith.' The Calcutta High Court itself had taken a contrary view in Bipin Behari Shah v. Abdul Barik, ILR 44 Cal 950=AIR 1917 Cal 548 and the Division Bench in ILR 54 Cal 405= : AIR1927Cal534 , dissented from it (vide page 411 (of ILR Cal)=(at pp. 535-536) (of AIR) as follows:-

'The criterion of originality as indicated in ILR 44 Cal 950=AIR 1917 Cal 548 in the passage quoted above is not what is meant. This passage has been construed by the learned Judges of the Allahabad High Court as meaning that the second application might be treated as an original application for restoration of the suit itself Pitambur Lal v. Dodee Singh - ILR 46 All 319=AIR 1924 All 503 but with all respect I am unable to agree that that is what the passage means I think the true meaning of the passage is that, in the opinion of the learned Judges, a proceeding which originates in a new application which has to be numbered as a separate miscellaneous case and decided upon evidence satisfies the requirements laid down in the decision of the Judicial Committee. In this view I am unable to concur.'

Several other Courts have followed this view, See Nathuni Singh v. Naipal Singh, : AIR1958Pat107 , Kunj Behari v. Chanchala Das, : AIR1966Ori24 , Pooranchand v. Komalchand, : AIR1962MP64 . We are unable to accept the view of the Patna High Court in Doma Choudhary v. Ram Naresh, : AIR1959Pat121 (FB) and of the Andhra Pradesh High Court in Raja Appa Row v. Veera Raghava. AIR 1966 Andh Pra 263.

(12) We may make it clear at this stage that we are strictly confining ourselves to a case where an application to restore a suit to file is dismissed for default and not a case where an ex parte order is passed, for as pointed out in Ramkarandas v. Bhagwandas, : [1965]2SCR186 , different considerations would prevail in such a case. In such a case it may be urged that a remedy under Order IX rule 13 exists and therefore the inherent power under section 151 could not be invoked. In the Supreme Court case to which we have just referred the Supreme Court was concerned with an ex parte decree passed in a summary suit under Order 37 of the Code of Civil Procedure and the question was whether such a decree could be set aside under the inherent power under section 151. The Supreme Court pointed out that Rule 4 of Order 37 expressly gives power to the Court to set aside the decree passed under the provisions of that Order and therefore there was no scope for resort to section 151 for setting aside the decree. Similarly in another case referred in the arguments before us namely Arjun Singh v. Mohindra Kumar, : [1964]5SCR946 , the Supreme Court was considering a case where an ex parte decree had been passed and the Supreme Court held that 'the inherent power of the Court could not override the express provisions of the Law. 'If there are specific provisions of the Code dealing with a particular topic and they expressly or by necessary implication exhaust the scope of the powers of the Courts or the jurisdiction that may be exercised in relation to a matter the inherent power of the Court cannot be invoked in order to cut across the powers conferred by the Code.' For this reason we would make it clear here, that we confine ourselves to the facts and circumstances of the present case where the suit was dismissed for default, an application to set aside that dismissal for default was made and it was also dismissed for default. We are also not concerned with a case where an ex parte decree happens to be passed proceedings are taken to set it aside.

(13) In our opinion, therefore, the application filed by the Liquidator on the 19th June, 1962 and supported by his affidavit of the 22nd June, 1962 can be considered under the inherent powers of the Court under section 151 of the Code of Civil Procedure. Since this was the question upon which the learned single Judge entertained doubt, and in view of what we have said in this judgment the case must now go back to the learned single Judge for disposal according to law. Costs shall be costs in the application.

(14) Case remanded.


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