Skip to content


Watanmal Boolchand Vs. N.V. Stoomvaart - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai High Court
Decided On
Case Number O.C.J. Suit No. 58 of 1953
Judge
Reported in(1961)63BOMLR702
AppellantWatanmal Boolchand
RespondentN.V. Stoomvaart
Excerpt:
.....case before it the two conditions mentioned in that rule are fulfilled, viz., whether there is any issue or issues which are pure issues of law and whether the case or any part thereof is capable of being disposed of on such issue or issues only. the second condition would be deemed to have been fulfilled if the decision of such issue or issues of law would dispose of the case or any part thereof if such decision is one way but not the other. if the court reaches a decision that both the conditions have been fulfilled, it is obligatory upon the court and the court has no option but to determine such issue or issues of law as preliminary issues.;if in the determination of the aforesaid first condition the court comes to the conclusion that there is no issue before it which is purely as to..........being a judicial discretion. on the basis of his contention that the provision of the said rule is discretionary and not mandatory, mr. jhavery wanted to further contend that the facts and circumstances in this case are such that the court should exercise its said discretion against trying any issues as preliminary issues as a piecemeal trial is not desirable in this case. but i did not allow mr. jhavery to develop his said further contention as, in my opinion, the provision of the said rule is mandatory and not discretionary. 2. order xiv, rule 2 provides as under:where issues both of law and of fact arise in the same suit, and the court is of opinion that the case or any part thereof may be disposed of on the issues of law only, it shall try those issues first, and for that.....
Judgment:

Mody, J.

1. [His Lordship after stating the facts of the case, proceeded.] Twenty issues have been raised on behalf of defendants Nos. 4 and 5 and seven on behalf of defendants Nos. 1 and 2. Mr. Desai, the learned Counsel for defendants Nos. 4 and 5, applied that issues Nos. 1 to 7 of his clients be tried as preliminary issues and Mr. Nariman, the learned Counsel for defendants Nos. 1 and 2, applied that issues Nos. 2, 3 and 4 of his clients be tried as preliminary issues. Mr. Jhavery, the learned Counsel for the plaintiffs, opposed that application. Mr. Desai thereupon contended that issues Nos. 1. to 7 of his clients were issues of law and that, in view of the provisions of Order XIV, Rule 2, of the Code of Civil Procedure, this Court was bound to try, i.e., this Court had no other option but to try the said issues as preliminary issues. Mr. Nariman advanced similar contentions as regards issues Nos. 2, 3 and 4 raised on behalf of his clients. Mr. Jhavery, however, contended that under Order XIV, Rule 2, it is not obligatory on the Court to try any issues, even though they be issues of law only, as preliminary issues but that it is merely discretionary for the Court to do so, such discretion being a judicial discretion. On the basis of his contention that the provision of the said rule is discretionary and not mandatory, Mr. Jhavery wanted to further contend that the facts and circumstances in this case are such that the Court should exercise its said discretion against trying any issues as preliminary issues as a piecemeal trial is not desirable in this case. But I did not allow Mr. Jhavery to develop his said further contention as, in my opinion, the provision of the said rule is mandatory and not discretionary.

2. Order XIV, Rule 2 provides as under:

Where issues both of law and of fact arise in the same suit, and the Court is of opinion that the case or any part thereof may be disposed of on the issues of law only, it shall try those issues first, and for that purpose may, if it thinks fit, postpone the settlement of the issues of fact until after the issues of law have been determined.

3. In my opinion, the language of Order XIV, Rule 2, even by itself, irrespective of any decided cases as to its interpretation, is clear and unambiguous and presents no difficulty as to its interpretation. An issue can be of fact or of law or of mixed facts and law. Now, this rule says that if the Court is of the opinion that the case or any part thereof may be disposed of on the issues of law only, it should try those issues first. As stated in the opening part of this rule, its provisions would apply 'where issues both of law and of fact arise in the same suit'. If in a suit issues are as to facts only, the provisions of this rule do not apply. There is also no other provision in the Code which empowers the Court to try in such a suit some issues of fact as preliminary issues before trying the remaining issues which would be of fact, although there are decided cases, I will point out later, which lay down that even in such a suit the Court has a discretion to try some of such issues of fact as preliminary issues under certain circumstances. If in a suit the issues that arise are all of law only, no occasion would arise for trying any issues of fact and the Code does not provide for trial of any one or more out of such issues of law as preliminary issues. The Code contains a provision for trial of certain issues as preliminary issues only when issues of law as well as of fact arise in a suit and that provision is contained in Order XIV, Rule 2. What that rule provides is that in such a case if 'the Court is of opinion that the case or any part thereof may be disposed of on the issues of law only, it shall try those issues first'. Therefore, before the provision of that rule can apply, the Court must first decide two points. If the Court decides, firstly, that there are any issues in the suit which are purely issues of law, that is not even of mixed law and fact, and secondly, that the case or even any part of the case can be disposed of on such issues of law only, then the provision contained in the said Rule 2 becomes applicable. So far as the second point is concerned, the actual words used are: '' the Court is of opinion that the case or any part thereof may be disposed of on the issues of law only'. The use of the word 'may' here means that the Court has to come to a prima facie conclusion that if the particular issue of law is decided in favour of the party on whose behalf the issue has been raised, it may dispose of the whole case or any part thereof but if it is decided against that party, the same may not dispose of the whole case or any part thereof and the other issue or issues in the ease would have to be tried. Now, the word used in this connection in the rule is 'opinion' which must be interpreted to mean a decision. Whether the issues are or are not of law and whether the case or any part thereof is or is not likely to be disposed of on those issues only are matters for decision by the Court and not, as contended by Mr, Jhavery, matters of the Court's discretion or even judicial discretion. The difference between a decision by a Court and the exercise of a discretion-even a judicial discretion-by the Court is quite clear. A decision is objective and it does not bring in any element personal to the Court, A discretion, on the other hand, is subjective and incorporates within it an element personal to the Court. If that discretion be judicial discretion, it would still be subjective, although the scope or ambit of the element personal to the Court is circumscribed and limited, because such discretion must he exercised on well-recognised judicial principles and is capable of being tested by a Court of Appeal. But within such circumscribed and limited sphere it remains subjective. Once the Court decides that there are any issues in the suit which are purely of law and further that the case or any part of the case can be disposed of on such issues of law only, the provision of Rule 2 comes into operation and it says: 'it shall try such issues first'. The word used is 'shall' which makes that provision mandatory. It leaves no option or discretion to the Court. The Court has no alternative but to try such issues as preliminary issues.

4. I will now turn to the decided cases as regards the interpretation of the said Rule 2 which were cited before me.

5. In Udmi Ram v. Ohasi Ram A.I.R.[1038] All. 753, the trial Court rejected an application to have an issue of jurisdiction decided first on the ground that it was undesirable to decide the case piecemeal and decided that the case would be tried as a whole. The trial Court did not express any opinion as to whether the case could be disposed of on that issue alone. Against that order a revision application was made to the High Court which was heard by Kendall J. In interpreting Order XIV, Rule 2 the learned Judge has stated (p. 753) :

In my opinion this rule can be interpreted in one way only, and that is that the Court must decide whether the case can be disposed of on the issue or issues of law only in the first place, and if it is of opinion that the case may be disposed of on those issues only, it has no option, but must decide those issues first. In the present case the Court has not put to itself the question at all, and has therefore expressed no opinion one way or the other. It has merely decided that it is not desirable that the case be decided piecemeal, and apparently it has been guided only by questions of convenience. The rule however as I have pointed out, makes it obligatory for the Court to consider whether the case may be disposed of on the legal issue alone, and as it has not done so it has undoubtedly acted irregularly, that is to say, otherwise than in accordance with the rules laid down in Sch. 1. The effect of this of course may be that the Court may waste a good deal of time, and the parties may be called on to undergo a good deal of expense to no purpose if it is ultimately found that the Court has no jurisdiction and this no doubt is the reason why R. 2, Order 14, has been drafted so as to make it mandatory for the Court to decide the issue of law first in such a case.

This judgment proceeds on the basis that the relevant issue in the case was a pure issue of law. It should be noted, firstly, that the consideration by the Court whether the case can be disposed of on the issue or issues of law only has been referred to as a decision and not an exercise of a discretion by the Court and, secondly, that the provision of Order XIV, Rule 2 was interpreted as mandatory. I am in respectful agreement on both these points of interpretation,

6. Order XIV, Rule 2 was also interpreted by a Division Bench of the Punjab High Court in Paartap Singh v. Gurmej Singh , and the relevant passages appearing in the judgment of Bhandari C.J., are the following (pp. 411-412) :

I regret, with all respect to the very learned Judges on whose opinion the above argument is based, that I am unable to concur in the view that even if a case or a part thereof can be decided on a preliminary point of law the Court has a discretion to say that it shall not be so decided. Rule 2 provides that if the Court is of opinion that the case or any part thereof may be disposed of on the issues of law only it shall decide those issues first. Where the word 'shall' is used in a statute the presumption is that its use is imperative and not merely directory, particularly when it is addressed to a Court or a public servant and when a right or benefit depends on its imperative use.

Indeed, it has been held that in such circumstances even the expression 'may' may acquire the meaning of the expression 'shall'. There is nothing in the context or manifest purpose of the rule to indicate that the Legislature did not intend to use the word 'shall' appearing in Rule 2 as a word of command.

It seems to me therefore that when the Court is of opinion that an objection raises a serious question of law which, if decided in favour of the party objecting, would dispense with any further trial or at any rate with the trial of some substantial issue in the action, it has no option but to decide that issue first:

It is quite clear that the learned Chief Justice has interpreted the provision of Rule 2 to be mandatory. Immediately after the above passages, the judgment proceeds (p. 412) :

It has discretion to determine whether the case or any part thereof can or cannot be disposed of on issues of law only: Ganapathia v. Somasundaram : AIR1950Mad213 . It may hold, for example, that the objection in point of law is not clear, and explicit, or that the allegation wears a doubtful aspect, that it raises a mixed question of law and fact, or that the matter is one which by reason of the obscurity either of the facts or of law ought to be decided at the conclusion of the trial, or that the facts are in dispute, or that a vital and undetermined question of fact is presented.

In such a case the Court may decline to determine the points of law as points of law. If, however, clear-cut issues of law are presented and there are no matters on which further light would be thrown at the trial and the decision on the points of law will substantially dispose of the whole or a part of the action, it has no discretion in the matter. It has discretion indeed to determine whether the case or any part thereof can or cannot be disposed of on issues of law only, but if it finds in the exercise of its own honest judgment and discretion that it can, it must decide those issues first.

It cannot decline to decide those issue on extraneous grounds, for example that piecemeal decision of suits is not desirable or that the Representation of the People Act, 1951, requires that election petitions should be disposed of expeditiously. The Court has discretion to determine whether the occasion for the exercise of the power has arisen, but if it holds that the occasion has arisen, it has no discretion to decline to exercise that power (Maxwell on Interpretation of Statutes, Tenth Edition, page 249).

This conclusion flows from the commonsense principle that where power is conferred on a Court or tribunal and its exercise is made mandatory on the existence of certain conditions, and those conditions exist in fact, it has no discretion as to whether, in good faith or otherwise, the power shall be exercised. I am of the opinion that the provisions of Rule 2 are mandatory and that the only discretion left to the Court is to form and express an opinion as to whether the case can be disposed of on the issues of law.

The word 'discretion' has been used at several places in these four passages occurring in the judgment. But where it has been used in connection with the consideration whether the particular issues are or are not issues of law and whether the case or any part thereof can or cannot be disposed of on such issues of law only that word has been used, not in the sense that Mr. Jhavery would like me to interpret, but as meaning a judicial determination or decision or, to use the phrase occurring in these passages itself, 'the Court's own honest judgment'.

7. In Shiv Bhagwan v. Onkarmal (1951) 54 Bom. L.R. 330 decided by a Division Bench of this Court consisting of Chagla C.J. and Bhagwati J. the question whether if any issue in a case was an issue of law and if the ease or any part thereof may be disposed of on such issue only it was obligatory on the Court to try as a preliminary issue did not directly arise for determination but certain observations in the judgment of Bhagwati J. are useful. In that case Shah J. as a Judge of this Court, as he then was, as the Court of first instance, tried an issue as to jurisdiction as a preliminary issue and dismissed the suit. The plaintiff appealed and the said report is a report of the judgments of the said Appeal Court, In that appeal a contention was raised that Shah J. had wrongly taken the view that an issue with regard to jurisdiction is always an issue of law and in that connection Chagla C.J. has stated that an issue as to jurisdiction may in some cases, as on a demurrer, be an issue of law only but in other cases it may require leading of some evidence in which event it would raise a mixed question of law and fact and that in the latter case it may be tried as a preliminary issue or it may be tried as an issue along with other issues depending upon whether the evidence with regard to jurisdiction could be separated from the evidence on the other issues. As the point whether the provision of the said Rule 2 is mandatory did not arise in that case, the judgment of the learned Chief Justice does not deal with it nor does it contain any observation on that point, but the judgment of Bhagwati J., who was then a Judge of this Court, contains the following passage which is relevant to that point (p. 354) :.The obligation is laid on the Court to try the issue of jurisdiction as a preliminary issue only if it is an issue of law....

The word used is 'obligation' which negatives Mr. Jhavery's contention that the provision of Order XIV, Rule 2 is discretionary. The decision in this case, however, makes it clear that if an issue is not purely as to law only but raises a mixed question of law and fact, then it would be discretionary for the Court whether to try it as a preliminary issue or not.

8. The position in Prithvi Raj v. Munnalal was similar to that in the said Bombay case as the relevant issue therein was whether the trial Court had territorial jurisdiction, but there are observations in the judgment of Wanchoo C.J., as he then was, of the Rajasthan High Court, which are relevant. The same are (p. 113) :

What then is exactly the scope of Order XIV, Rule 2? It provides for disposal of certain issues as preliminary issues. But there are two conditions which, in our opinion, must be fulfilled before it can be applied. The first condition is that the issue must be an issue of law, i.e. it should not be an issue either of fact or mixed fact and law, but an issue of law pure and simple. The second condition is that the Court should be of opinion that the case or any part thereof may be disposed of on that issue. This does not, in our opinion, mean that the issue is of such a nature that its decision may result in the disposal of the suit.

What Order XIV, R. 2 requires, in our opinion, is that the Court should look at the issue of law, & if it is of opinion that prima facie the decision will go one way, namely, that the case or part of the case would come to an end, it should proceed to decide the issue as a preliminary issue. It seems to us useless to decide even an issue of law as a preliminary issue if for example, it is clear to the Court prima facie that if it decides that issue, it will hold that the suit is not barred by limitation or res judicata.

It is only where the Court can prima facie see that the suit is barred by limitation or by res judicata that it may proceed to try the issue as a preliminary issue and dispose it of.

Thereafter there are other passages in the judgment which show that Wanchoo C.J. has interpreted the provision of the said Rule 2 as obligatory, for example,.In such a case the question of jurisdiction is not a question of law within the meaning of Order XIV, Rule 2, and the Court is not bound under that provision to decide it as a preliminary issue.... (p. 113).

9. In Janki Das v. Kalu Ram A.I.R. [1986] Pat. 250, in the trial Court an application was made to try the issue whether the suit was barred by the principles of res judicata as a preliminary issue. The trial Court contented itself with the statement that it was undesirable to try cases piecemeal as such course might result in a remand but did not definitely express an opinion that the case could not be disposed of on the issue of law only. Against that order a revision application was filed to the High Court at Patna which was heard by Courtney-Terrel C.J. It was therein held that to express an opinion in that case that that case could not be disposed of on the question of law only would be erroneous. As regards Order XIV, Rule 2 the learned Chief Justice states (p. 253) :.O. 14, R. 2 of the Code is mandatory; the only thing left open to the Court is to form and express an opinion of whether the case can be disposed of on the proposed issue of law only, but the opinion, even if expressed, must be expressed upon some reasonable materials.

But in an earlier passage in his judgment the learned Chief Justice observes (p. 252):

The fact is that some harmony has to be observed between the general principle that it is undesirable to try cases piecemeal and the specific and wholesome provision of Order 14, Rule 2, Civil Procedure Code, which is for the purpose of preventing the injustice of a party being able to force his opponent to go at great length into evidence when the simple decision on a point of law might render the investigation of the facts unnecessary.

It is this passage which Mr. Jhavery has relied upon. Now, in my opinion, these remarks are couched in this language because at that stage the learned Chief Justice was dealing with what the trial Court had said, viz. that it was undesirable to try eases piecemeal. The interpretation placed on Order XIV, Rule 2 was that it was mandatory and this passage, in my opinion, does not detract from that interpretation. If, however, this passage were to be interpreted as contended for by Mr. Jhavery, the said two passages in the judgment would be inconsistent with each other, because if Order XIV, Rule 2 is mandatory a Court is bound to act in accordance therewith and no question would arise of maintaining any harmony as mentioned in this passage. But in any event if the last quoted passage must be read in the way Mr. Jhavery has contended, I would respectfully agree with the passage where Order XIV, Rule 2 has been interpreted to contain a mandatory provision, but not with the other.

10. Mr. Jhavery relied upon the case of Ganapathia v. Somasundaram : AIR1950Mad213 . In that case the trial Court declined to decide an issue as to jurisdiction as a preliminary issue. The defendant applied to the High Court in revision, and that application was heard by Mack J., who has, in his judgment, observed:.Under Order 14, Rule 2, Civil P.C., a Court has ample discretion to try an issue of law if it is of opinion that the case or any part thereof may be disposed of on issues of law only and for that purpose may postpone the settlement of issues of fact till after the issues of law have been determined.

This passage practically merely reproduces the words of Order XIV, Rule 2. The provisions of that rule have not been analysed nor has the effect of the word 'shall' appearing in that rule been considered. Moreover, there follows another passage in that judgment which is as follows (p. 214) :.The discretion that a trial Court is called upon to exercise under Order 14, Rule 2, is a nice one to be determined by the facts of each case, in other words, whether the preliminary issue of law raised would be sufficient and is so clear cut that it will decide the suit finally once and for all.

This second passage suggests that what the learned Judge had in mind when he used the word 'discretion' in the said first passage was only the 'discretion' mentioned in the second passage, viz., 'whether the preliminary issue of law raised would be sufficient and is so clear cut that it will decide the suit finally once and for all'. The word 'discretion' appears to have been used in respect of the decision as to the existence of what 'Wanchoo C.J. has in the said Rajasthan case referred to as the two conditions, viz., whether the issue is a pure issue of law and whether if it is decided one way it would dispose of the whole case or any part thereof. In my opinion, the decision as to whether these two conditions exist or not is not strictly speaking a matter of the Court's discretion but is a matter for its judicial determination although the word used in the rule is 'opinion'. But whether the ascertainment whether these two conditions exist be a matter for the Court's discretion or judicial determination, the judgment of Mack J. is, in my opinion, not an authority for the proposition that the provision of Order XIV, Rule 2 is not mandatory. If that judgment could be read as deciding that that provision is not mandatory, I would respectfully disagree with the same.

11. I will now refer to the case of Sowkabai v. Sir Tukojirao Holkar (1931) 84 Bom. L.R. 6, although it is not strictly relevant for my purposes. In that ease a Division Bench of this High Court has held that Order XIV of the Civil Procedure Code gives no power to the Court to frame a preliminary issue of fact but yet when the Court has framed the issues which properly arise the Judge may in his discretion select one or more of those issues to be tried first and independently, where the evidence on such issue or issues can be conveniently separated from the rest of the evidence and the finding on that issue or those issues may render the trial of other issues unnecessary. It should be noted that this principle applies when all the issues in a case are issues of fact only and there is no issue purely of law.

12. My conclusion, therefore, is that Order XIV, Rule 2 does not apply unless one or some of the issues in a case are purely as to law. What Order XIV, Rule 2 lays down is that the Court has first to judicially determine whether in the case before it the two conditions mentioned in that rule are fulfilled, viz., whether there is any issue or issues which are pure issues of law and whether the case or any part thereof is capable of being disposed of on such issue or issues only. The second condition would, of course, be deemed to have been fulfilled if the decision of such issue or issues of law would dispose of the case or any part thereof if such decision is one way but not the other. If the Court reaches a decision that both the conditions have been fufilled, it is obligatory upon the Court and the Court has no option but to determine such issue or issues of law first as preliminary issues. If in the determination of the said first condition the Court comes to the conclusion that there is no issue before it which is purely as to law but that all issues before it are only as to facts or even if some of the issues be of mixed fact and law, the provision of Order XIV would not apply but the Court would yet have a discretion to try one or more of such issues as preliminary issues. In such latter types of cases the Court, in exercising its discretion, would, on the facts of the particular case before it, have to bear in mind the two well-known but contra-acting principles, one being that to save waste of time and costs it would be desirable to dispose of the case on a preliminary issue if prima facie there are strong probabilities that such preliminary issue would dispose of the case, and the other being that piecemeal trial of suits should be avoided with the view to obviate remands and thereby avoid litigation from being protracted.

13. Both Mr. Desai and Mr. Nariman contended that all the issues, which they apply should be tried as preliminary issues, are purely as to law. In view of the position in law being as stated above, I will now proceed to consider whether those issues or any of them are purely as to law only and if so, whether they or any of them are capable of disposing of this suit or any part of it. [The rest of the judgment is not material to this report.]


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //