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Yusuf I.A. Lalji Vs. Abdullabhoy Lalji (No. 2) - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case Number O.C.J. Suit No. 2638 of 1921
Judge
Reported inAIR1930Bom362; (1930)32BOMLR667
AppellantYusuf I.A. Lalji
RespondentAbdullabhoy Lalji (No. 2)
Excerpt:
.....ainsworth v. wilding [1896] 1 ch. 673 ; and khitipati roy v. dharani mohan mooherjee (1920) i.l.r. 48 cal. 484, followed. - - as it seemed to me that the case depended on a question of fact i adjourned the application into court and allowed the parties to argue the question as to whether the consent order complained of could be set aside by an application. it would be lamentable] indeed if the court is impotent to set aside such interlocutory orders even though they may be made by consent if on proper grounds the court is satisfied that its interference is necessary to prevent an abuse of the process of the court. 451):-that an order by consent can be revised or varied in circumstances showing that the consent had been given under misapprehension or mistake is well settled and it is..........can be set aside if a serious and substantial injustice to the party is clearly shown. in this suit a consent order was taken to have an account taken in a particular manner. after that in the same suit it was contended that the consent order was not binding on the parties. that application was rejected. as far as i can see from the report mr. degruyther who argued the case fully and whose argument is described as illuminating and candid did not raise the point that a consent order could not be set aside in the same suit by an application and that if it is to be set aside an independent suit for that purpose was necessary. in the same volume there is another case which i may refer to and that is sir rameshwar singh v. hirendra singh : (1924)26bomlr1153 . there by consent an order was.....
Judgment:

Rangnekar, J.

1. In this case, by consent of the parties an order was made on Daosmbar 11. 1928, authorising the receiver in the suit to pay the sum of Rs. 40,000 to defendant No. 13. Defendants Nos. 4A, 4B, and 6 thereafter appeared before me in chambers and applied for setting aside that order on the ground that the order was obtained on certain false representations and promises. The application was dismissed by me on the ground that it was a consent order and could not be set aside except by 1 proceedings properly framed for that relief. After this, these defendants presented an application for review of my order. When that review application came before me it was contended on behalf of defendant No. 13 that no review lay. In answer to that contention Mr. Taraporewala argued that even if technically an application for review did not lie the Court had jurisdiction to entertain the application under its inherent jurisdiction. After hearing the arguments, I delivered a judgment in which I held that under the inherent jurisdiction of the Court it was open to me to entertain the application for setting aside the consent order. As it seemed to me that the case depended on a question of fact I adjourned the application into Court and allowed the parties to argue the question as to whether the consent order complained of could be set aside by an application.

2. The question which I have to decide is whether an interlocutory order made by consent of the parties in a suit can be set aside by an application in the same suit on proper grounds, or whether as Mr. Kania who represents defendant No. 13 contends a suit must be filed to have the consent order set aside.

3. It is conceded and established by authority that the Court has jurisdiction to set aside a consent decree upon any ground which would invalidate an agreement between the parties. As was observed in Wentworth v. Bullen (1820) 9 B. & C. 840:-

The contract of the parties is not the less a contract, and subject to the incidents of a contract, because there is superadded the command of the Judge.

It is equally established that a party must file a suit properly framed to set aside a consent decree or judgment which until it is set aside acts as an estoppel. It is unnecessary to refer to the reported decisions in England and in this country on this point.

4. The question is whether these principles apply to a mere interlocutory order in a suit made by consent of parties, such as, for instance, an order for the appointment of a receiver, or for the issue of a commission, or for interim payment and so on. I have carefully examined the cases referred to at the bar and others dealing with the question at issue, and it appears to me that in Wentworth's case although the head-note speaks of ' a consent order ' the order in question was really in the nature of a final order or judgment and not an order of an interlocutory nature.

5. In my opinion there is a distinction between a consent judgment or final order in the nature of a judgment determining or adjudicating upon substantive rights between the parties on the merits of the case and merely interlocutory orders made to facilitate the progress of the suit or to give interim relief to parties on admitted or proved facts. Over this latter, the Court has and must have, I think, full control and jurisdiction, and such orders can be set aside in the same suit on proper grounds such as mistake or fraud or misrepresentation. It would be lamentable] indeed if the Court is impotent to set aside such interlocutory orders even though they may be made by consent if on proper grounds the Court is satisfied that its interference is necessary to prevent an abuse of the process of the Court.

6. This opinion is not without support. In Mullins v. Howell (1879) 11 Ch. D. 763 it was held that 'the Court has jurisdiction to discharge an order made on an interlocutory application by consent when it is proved to have been made under a mistake, though that mistake was on one side only.' Jessel M. R. observed (p. 766):-

I have no doubt that the Court [has]... a sort of general control over orders made on interlocutory applications [even though they are by consent].

This case I find is not overruled and is cited in the text-books and has been referred to in other cases. Thus in Ainaworth v. Wilding [1896] 1 Ch. 673 Romer J. referred to the case of Mullins v. Howell at p. 677 and observed:-

I am not now speaking of cases where the Court acts by the consent of the parties ; I think that with consent of the parties I should have had jurisdiction, but on the authorities that is not free from doubt; and I am not speaking now of merely interlocutory orders, even if drawn up, as to which different considerations probably apply, as was pointed out by the late Master of the Rolls in Mullins v. Howell.

The learned counsel for defendant No. 13 has referred to a passage in Daniel's Chancary Practice, Volume I, p. 709. I do not quote the passage but it is clear to me that the learned authors of that book when they speak oil a consent order they really mean a consent judgment or a final order in the nature of a judgment. For just after the passage referred to at page 710 they observe m follows:-

The above observations relate only to final orders, since interlocutory orders remain in the control of the Judge and can be varied by him as occasion .

8. The same question arose in Khitipati Boy v. Dharani Mohan Mookerjee I.L.R. (1920) Cal 448 There an order by consent was made in chambers for the issue of a commission to examine a certain lady at a certain place. Subsequently, an application was made to vary that consent order or to set it aside and one of the contentions raised was that the order could not be varied. Ghose J. observed (p. 451):-

That an order by consent can be revised or varied in circumstances showing that the consent had been given under misapprehension or mistake is well settled and it is unnecessary for me to deal at length with the authorities.

Therefore I do not doubt that I have power to vary the order of the 14th Jane, even though the order has been completed and filed in this Court.

9. It is true that this is a decision of a single Judge. But with respect I think it lays down a correct proposition of law,

10. I may now refer to a Privy Council decision which also supports the conclusion to which I have come. In Jamnabai v. Fazalbhoy (1923) 26 Bom. L.R. 189 their Lordships of the Privy Council held that a consent order can be set aside if a serious and substantial injustice to the party is clearly shown. In this suit a consent order was taken to have an account taken in a particular manner. After that in the same suit it was contended that the consent order was not binding on the parties. That application was rejected. As far as I can see from the report Mr. DeGruyther who argued the case fully and whose argument is described as illuminating and candid did not raise the point that a consent order could not be set aside in the same suit by an application and that if it is to be set aside an independent suit for that purpose was necessary. In the same volume there is another case which I may refer to and that is Sir Rameshwar Singh v. Hirendra Singh : (1924)26BOMLR1153 . There by consent an order was made for the appointment of a receiver and certain powers were given to him for the administration of the estate in the execution proceedings. In the same proceedings one of the parties, the appellant before the Privy Council, wanted to have the consent order set aside, and their Lordships held that a consent order did not prevent one from impugning the administration thereunder which is of such a character as either amounts to malfeasance and accordingly releases the consentor or has been proved by experience to be in substance so protracted and imperfect as to be futile.

11. The point to be noted, so far as these two decisions of the Privy I Council go, is that nobody ever argued in those cases that a con-sent order could not be varied or an application and that an independent suit was necessary.

12. I am, therefore, of opinion that the Court has jurisdiction to set aside an order made by consent which is not in the nature of a final order or judgment but which is merely an interlocutory order in the suit provided proper grounds are made out.

13. I shall, therefore, hear the parties now on the merits of this application. The suit will be placed on tomorrow's board after testamentary suits.


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