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Jalpaiguri Cinema Co. Ltd. and anr. Vs. Promotha Nath Mukherjee and ors. - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtKolkata High Court
Decided On
Case NumberAppeal No. 393 of 1973 (Company Application No. 122 of 1973 connected with Company Petition No. 398
Judge
Reported in[1978]48CompCas131(Cal)
ActsCompanies Act, 1956 - Sections 397 and 398; ;Code of Civil Procedure (CPC) , 1908 - Order 1, Rule 10
AppellantJalpaiguri Cinema Co. Ltd. and anr.
RespondentPromotha Nath Mukherjee and ors.
Appellant AdvocateSamaren Sen, Adv.
Respondent AdvocateGupta, Adv.
DispositionPetition dismissed
Cases Referred(River Steam Navigation v. Kumar Iron and Steel Ltd.
Excerpt:
- ghose, j.1. this appeal is directed against the judgment and order dated november 29, 1973, directing, inter alia, the respondents pramotha nath mukherjee and monoranjan mukherjee to be added as parties to the company petition no. 398 of 1972 and granting leave to the said respondents to continue the said company petition and all proceedings thereunder, and further directing the original petitioner, dilip kumar ganguli of the said company petition no. 398 of 1972, to be transposed to the category of respondents and all consequential amendments to be carried out in the cause title of the said company petition.2. the said company petition was filed on october 3, 1972, by the original petitioner, dilip kumar ganguli, who was at all material times and still now is a shareholder of the.....
Judgment:

Ghose, J.

1. This appeal is directed against the judgment and order dated November 29, 1973, directing, inter alia, the respondents Pramotha Nath Mukherjee and Monoranjan Mukherjee to be added as parties to the Company Petition No. 398 of 1972 and granting leave to the said respondents to continue the said company petition and all proceedings thereunder, and further directing the original petitioner, Dilip Kumar Ganguli of the said Company Petition No. 398 of 1972, to be transposed to the category of respondents and all consequential amendments to be carried out in the cause title of the said company petition.

2. The said company petition was filed on October 3, 1972, by the original petitioner, Dilip Kumar Ganguli, who was at all material times and still now is a shareholder of the Jalpaiguri Cinema Company Ltd., an existing company within the meaning of the Companies Act, 1956, under Sections 397 and 398 of the Companies Act, 1956.

3. The company was incorporated under the Indian Companies Act, 1913, in 1948. One of the promoters of the company was Nagendra Nath Ganguli. The company started construction of a cinema hall, but failed to continue the construction for paucity of funds and created three several mortgages on the assets and properties of the company and obtained loans for carrying on the business of the company. The last mortgage which was the third mortgage was created by the company in favour of the respondents Nos. 8, 9 and 10. The said mortgage was a usufructuary mortgage.

4. The respondents Nos. 8, 9 and 10 as mortgagees were put in possession of the cinema house of the company and have been running the same. Between January 4, 1967, and January 12, 1967, the respondents, Pramotha Nath Mukherjee and Monoranjan Mukherjee, purchased equity shares in the said company of the face value of Rs. 2 lakhs 14 thousand and lodged the same with the company for registration. Upon refusal of the company to insert the name of the said respondents, Pramotha Nath Mukherjee and Monoranjan Mukherjee, as the holders of the said shares in the share register of the company, the said respondents appealed to the Central Government under Section 111 of the Companies Act. The Central Government on December 19, 1969, directed the company to register the said shares in the name of the said respondents, Pramotha Nath and Monoranjan Mukherjee.

5. The company challenged the said direction of the Central Government in a proceeding taken under Article 226 of the Constitution at the Delhi High Court. The company's application for quashing the said direction of the Central Government was dismissed by the Delhi High Court. The Delhi High Court also dismissed the company's application for leave to appeal to the Supreme Court against its aforesaid order. The Supreme Court also rejected the company's prayer for special leave to appeal to the Supreme Court against the said order,

6. Thereafter, in November, 1971, Dilip Kumar Ganguli and another applied to the company court under Sections 397 and 398 of the Companies Act for various reliefs. In the said application an order was made, inter alia, appointing a special officer for making an inventory of the books of account of the company and restraining the directors of the company from doing anything except carrying on day-to-day management of the company and pass resolutions only in regard to the pending litigations to which the company was a party.

7. The said application under Sections 397 and 398 of the said Act was, however, directed to be taken off the file inasmuch as the letter giving consent by the requisite member of shareholders to move the said application was not annexed to the petition. The interim orders passed in the said application were, however, directed to continue until November, 1972.

8. On October 3, 1972, the Company Petition No. 398 of 1972 was filed by the said Dilip Kumar Ganguli under Sections 397 and 398 of the Act and obtained various ad interim orders. The application was made returnable on November 21, 1972.

9. It is admitted that no notice of their intention to appear at the hearing of the application was given by or on behalf of the respondents, Pramotha Nath Mukherjee and Monoranjan Mukherjee. Nothing appears on record that any leave to intervene by the said respondents in the said Company Petition No. 398 of 1972 was either prayed for or granted. Although the respondent, Pramotha Nath Mukherjee, affirmed an affidavit on February 13, 1972, intending obviously to use the same at the hearing of the said Company Petition No. 398 of 1972, no copy thereof was served on the petitioners of the said Company Petition No. 398 of 1972 or on the company.

10. On May 7, 1973, the petitioner in the said Company Petition No. 398 of 1972, submitted to the court that he did not want to press the said Company Petition No. 398 of 1972. Upon the respondents, Pramotha Nath Mukherjee and Monoranjan Mukherjee objecting either to the withdrawal or the dismissal of the said Company Petition No. 398 of 1972, the said application was adjourned.

11. On May 9, 1973, the respondents Nos. 1 and 2 applied for being added as parties to the said petition and substituted in the place and stead of the original petitioners in the Company Petition No. 398 of 1972. The said application made by the respondents Nos. I and 2 was opposed by the company.

12. On August 1, 1973, respondent, Pramotha Nath Mukherjee, applied for rectifying of the share register under Section 155 of the Companies Act by inserting his name as the holder of the above mentioned shares.

13. On November 29, 1973, order was made by the company court for rectification of the share register as prayed for by respondent, Pramotha Nath Mukherjee. Thereafter, the order was made in the application made by the first two respondents for being added as parties to the Company Petition No. 398 of 1972, from which the present appeal has been preferred.

14. Counsel appearing on behalf of the appellant submitted that the order under appeal amounted to a final refusal to put an end to a proceeding between parties on record and assumption of jurisdiction over new parties.

15. The order under appeal also has the effect of taking away from the company a valuable defence of lapse of time which is a bar to a proceeding under Sections 397 and 398 of the Act. The order also according to Mr. Samaran Sen finally defeated the rights of the original petitioners who were dominus litie in the said proceeding as originally framed to have their application dismissed. The order amounted to miscarriage of justice and must be set aside.

16. The proceeding under Sections 397 and 398 of the Act is not a representative action and could not be refused to be withdrawn by the original petitioners. The grounds made out in the application for being added as parties by the respondents Nos. 1 and 2 was that they had obtained leave to file affidavit in the main Company Petition No. 398 of 1972, Their supporters have been holding approximately fifty per cent. of the shares subscribed. Their relations are also mortgagees of the company's assets and if a fresh application under Sections 397 and 398 is filed by them that would lead to incurring of costs and multiplicity of proceeding.

17. Mr. Sen further submitted that the effect of the order is laying down of the principle that court cannot dismiss an application made under Sections 397 and 398 of the Act even if the petitioner does not appear or even if the pleadings are not completed. It means that if the petitioner does not want to continue a proceeding the court itself must ascertain facts and decide the application on merit.

18. The counsel, according to Mr. Sen, in an application under Section 397 cannot advise that it was useless to go on with the proceeding or that he had no case to go on with or that application was misconceived or even cannot abandon any charge made in the petition. Refusal to allow to withdraw also means that the conduct of a proceeding under Sections 397 and 398 is really in the hands of the court and not with the lawyers. And court cannot direct the settlement of such proceedings and provisions of the Code in regard to the dismissal, settlement, and withdrawal of actions become inapplicable.

19. The main contention of Mr. Sen was that it was obligatory upon the court to dismiss the application when the petitioner's counsel submitted that he had not been pressing the application. Mr. Sen, in support of his contention, relied on Rules 101 and 102 of the Companies (Court) Rules, 1959. Rule 100 of the said Rules lays down that a petition for winding up of a company shall not be withdrawn without the leave of the court. (See Rule 100(0).

20. Rule 101 provides for substitution of a creditor or a contributory in the place and stead of a petitioner in the winding up petition where such petitioner is not entitled to present a petition or fails to advertise his petition within the time prescribed by the rules or by order of court or consent to withdraw the petition or allow it to be dismissed or the hearing to be adjourned or fails to appear in support of the petition when it is called on, on the day fixed for the hearing of the petition or on the adjourned date of hearing. Rule 102 lays down the procedure on such substitution in terms of Rule 101 of the said Rules.

21. Although under Rule 88(2) of the said Rules a petition under Section 397 or 398 cannot be withdrawn without leave of the court, there is no specific provision for substitution of the petitioner in an application under Section 397 or 398 of the Act by any other shareholder of the company in the Companies (Court) Rules, 1959. Mr. Sen submitted that by providing for express power of substitution of the petitioner of a winding up petition in the circumstances mentioned in Rule 101 of the said Rules, and not providing for such power in cases of petitions under Section 397 or 398 of the Act, the Rules have excluded such power on the part of the court.

22. Moreover, Section 405 of the Act provides for addition of any person or managing director or any other director, managing agent, secretaries, treasurers or the manager of a company who have not been impleaded as a respondent to an application under Section 397 or 398 to be added as a respondent to such application provided the court is satisfied that there was sufficient cause for adding them as party respondents. Absence of such provisions either in the rule or in the statute for adding or substituting any petitioner in an application under Section 397 or 398 of the Act, go to show, according to Mr. Sen, that there was no such power in court to do so.

23. The standing counsel appearing on behalf of the respondent submitted that the order under appeal is not appealable inasmuch as the order has been made as stated by the learned court of first instance either under Order 1, Rule 10, of the Code of Civil Procedure or in the exercise of inherent jurisdiction of the court under Section 151 of the Code of Civil Procedure.

24. A proceeding initiated under Section 397 or 398 of the Act, according to the standing counsel, is a representative action and so all persons interested in such a proceeding may apply to be added and be added by the court, subject to the condition that such a person himself could initiate the action and that the result of the action would be binding upon him.

25. In the instant case, if the respondents Nos. 1 and 2 could complain against the oppressions alleged in the main petition filed under Section 397 or 398 of the Act, they could join the petitioner in the original petition or apply to be joined either as petitioners or respondents in the main application. There is no rule framed by the Supreme Court under Section 643 of the Act prohibiting addition or transposition of parties in application under Section 397 or 398 of the Act.

26. According to Mr. Gupta, even if such rules were framed it would have militated against the provisions of Section 643(b) of the Act. Rules 101 and 102 of the Companies (Court) Rules, 1959, according to Mr. Gupta, are provisions in addition to the provisions contained in the Code of Civil Procedure and in particular in Order 1, Rule 10, of the Code. The respondents Nos. 1 and 2 who have been added as petitioners in the main petition are interested in the subject-matter of the main petition and having the oppression or wrong alleged in the main petition remedied.

27. The main allegations or cause of action in the application under Section 397 or 398 of the Act are oppression to shareholders and mismanagement of the affairs of the company. This oppression and mismanagement are continuing acts of oppression and mismanagement.

28. In fact, one of the main acts of oppression alleged in the petition are the refusal of the company to record the names of the respondents Nos. 1 and 2 as the shareholders in respect of the abovementioned shares. For the aforesaid reasons the appeal has no merit. I shall now advert to the authorities cited at the Bar.

29. The first case cited by Mr. Sen in support of his contention that the order under appeal is a judgment within the meaning of Clause 15 of the Letters Patent was the case of M.B. Sirkar and Sons v. Powell and Co., : AIR1956Cal630 . In the said case an amendment of the plaint was allowed by substituting the original defendant, M.B. Sirkar & Sons, described as a firm by a company of the same name.

30. In the said case when the substitution was made of the company in place of the original defendant which was a firm in the suit the plaintiff (it was held) could not institute a fresh suit against the substituted defendant. The amendment, therefore, took away the defendant's right in regard to limitation and in the aforesaid special circumstances the order of amendment was held to be a judgment within the meaning of Clause 15 of the Letters Patent.

31. The next case relied on by Mr. Sen was the case of Shorab Merwanji Modi v. Mansata Film Distributors, : AIR1957Cal727 . Shorab Modi's case was relied on by Mr. Sen because in the said case it was held that an order refusing the stay of a suit under Section 10 of the Civil Procedure Code was ' judgment ' within the meaning of Clause 15 of the Letters Patent. In coming to the said conclusion the learned Chief Justice analysed the effect of an order either staying a suit under Section 10 of the Civil Procedure Code or refusing to stay a suit under the said section. Chakrabartti C.J., expressing the opinion of the appellate court consisting of himself and A.K. Sarkar J., was of the view that the question involved in an application under Section 10 of the Code of Civil Procedure was the jurisdictional question of the court to entertain and try a suit and, therefore, an order refusing to stay a suit under Section 10 of the Civil Procedure Code involved assumption of jurisdiction by the court over the proceeding and rejection of the defendant's plea that the court could not entertain or try the suit.

32. Similarly, an order staying a suit under Section 10 of the Civil Procedure Code involves refusal to assume jurisdiction and thus such orders touch jurisdictional question and are patently judgments within the meaning of Clause 15 of the Letters Patent.

33. In the instant case Mr. Sen submitted that, by refusing to allow to withdraw the application or dismissing the application when the petitioner did not press the application, the court refused to terminate the proceeding and assumed jurisdiction. In the instant case the court undoubtedly had power not to allow to withdraw the application under Rule 88(2) of the said rules and merely added the respondents, Pramothanath and Monoranjan Mukherji, as parties to the proceeding as petitioners and transposed the original petitioners to the category of the respondents.

34. The case of Mohammed Felumeah v. S. Mondal, : AIR1960Cal582 , wherein an ad interim order of injunction granted originally in an application under Article 226 of the Constitution restraining one of the respondents from granting any licence under the West Bengal Cinemas (Regulation of Public Exhibition) Rule, 1956, was modified subsequently on an application for vacating the said ad interim order of injunction by allowing the issue of temporary licence in favour of one of the respondents pending the disposal of the rule, the order was held to be a judgment within the meaning of Clause 15 of the Letters Patent. Inasmuch as the said order affected the rights and liabilities of the parties for the period the said order was to be in force, however short that period might be.

35. In the instant case the order under appeal does not seem to us to affect any of the rights or liabilities of any of the parties at all. It was contended by Mr. Sen that the right of the original petitioners to withdraw the petition has been finally decided by the order under appeal. We are unable to accept the said contention of Mr. Sen. In any event, the original petitioners have not preferred any appeal. None of the appellants' right was affected by the said order.

36. Mr. Sen relied on M.L. Sethi v. R. P. Kapur. : [1973]1SCR697 , for the proposition that the expression 'jurisdiction ' had different facets and in many cases even though a tribunal had jurisdiction originally to enter into the enquiry, if it does something which it had no jurisdiction to do, or fails to do something which was its duty to do during the course of the said enquiry the decisions of the tribunal would be null and void.

37. Thus, want of jurisdiction or exceeding or acting in excess of jurisdiction are really jurisdictional questions. Mr. Sen contended that even a decision erroneous on a question of law may be held to be touching a jurisdictional question. But it has to be noticed that distinctions have to be drawn that there are distinctions between erroneous decisions on question of law relating to question of jurisdiction of a court and erroneous decision on question of law not touching the jurisdiction of the court. The decision on latter question, however erroneous it may be, cannot be said to involve any jurisdictional question.

38. In Iswar Singh Kripal Singk & Co. v. Rajputana Trading Co. Ltd. [1973] 77 CWN 326 (Cal) it was decided by a Division Bench of this court that an order striking out the defence against the delivery of possession under Section 17(3) of the West Bengal Premises Tenancy Act, 1956, was 'judgment' within the meaning of Clause 15 of the Letters Patent. The reason stated by the Bench was that the order striking out the defence was a decision or determination of a part at least of the substantial rights of the defendant in the suit. The order depriving the defendant of his right to defend the suit so far as delivery of possession was concerned finally affected in any event a part of the right of the defendant so far as the suit was concerned.

39. Similarly, in Chittaranjan Mondal v. Sankar Prosad Sahani [1972] 76 CWN 781; : AIR1972Cal469 an order refusing to restrain the plaintiff-decree-holder from executing a decree for ejectment in an application filed in appeal against the said decree was held to be a judgment within the meaning of Clause 15 on the ground that the order was passed in an independent proceeding which was ancillary to the appeal.

40. Ved Prakash v. Iron Traders (P.) Ltd. [1961] 31 Comp Cas 122 (Punj) decided that a person whose name did not appear on the register of members of a company was not competent to move an application under Sections 397 and 398 of the Companies Act. Such person must first have the register rectified before he can bring a proceeding under Sections 397 and 398 of the Act.

41. In the instant case, order has been made for rectifying the share register of the company by inserting the names of the respondents Nos. 1 and 2 and as such the said respondents were competent to move an application under Sections 397 and 398 of the Act. In any event, such a question has to be decided in the application under Sections 397 and 398. Now is not the time or stage to decide the said question. In re Wier [1871] 6 Ch App 875, in our opinion, has no bearing on the controversy which we are called upon to decide in the instant appeal.

42. The question whether a proceeding under Section 397 or 398 is a representative proceeding is not necessary for us to decide in the instant appeal and we refrain from doing so. In Sisir Kumar Tarafdar v. Manindra Kumar Biswas, : AIR1958Cal681 , names of both the defendants were struck out and another person was substituted as a defendant.

43. The facts of the instant case are different. None of the parties has been dismissed from the proceeding. Name of none of the original parties has been deleted. They continue to remain parties to the proceeding but only the original petitioners have been transposed to the category of respondents and the respondents Nos. 1 and 2 in the appeal have been added as petitioners in the main application.

44. Syed Mahomed Ali v. Sundaramurthy [1958] 28 Comp Cas 554 (Mad) was decided before the Companies Court Rules came into operation in 1959 and does not seem to be an authority on the question whether parties can be added in a proceeding under Section 397 of the Act. Whether the petitioners are competent to continue the proceeding under Section 397 or 398 of the Act initiated originally by the respondent, Dilip Kumar Ganguly, have not been decided by the order under appeal.

45. The said question if raised will be decided at the hearing of the main petition. For the said reasons we do not think that the Stadmed's case [1969] 39 Comp Cas 741 (Cal), or the case of Mohta Brothers [1970] 40 Comp Cas 119 (Cal), need be dealt with by us.

46. Even in cases where the plaintiff does not want to proceed with his action it is not incumbent upon the court to dismiss the action. The court may if it so desires deal with the action on merit without dismissing the same. Reference in this connection may be made to Dasarath Mandal v. Emperor, ILR [1907] 34 Cal 325 and Pazhaniandi v. Naku, AIR 1927 Mad 109. A petitioner likewise in an application filed under Section 397 or 398 of the Act cannot insist on dismissal of the application on the ground that he does not want to press the same. Notwithstanding the unwillingness of the petitioner to press an application under Section 397 or 398 of the Act, the court may deal with the application on merit.

47. Rule 88(2) of the Rules ensures that no petitioner of an application filed under Section 397 of the Act may withdraw the application without the leave of the court. We do not think that a petitioner of such an application may by-pass the provisions of this rule by not wanting to withdraw the application but insisting on the dismissal of the application on the ground that he does not desire to press the same. He cannot, in our opinion, do indirectly what he cannot do directly by virtue of Rule 88(2) of the said Rules.

48. The cause of action for making an application under Section 397 of the Act is that there must be acts by persons in control of a company prejudicial to public interest or oppressive to any member or members of the company excluding the applicants or oppressive to any member or members of the company including the petitioners in an application under Section 397 of the Act.

49. Respondents Nos. 1 and 2 in whose favour orders have been passed by the Central Government under Section 111 of the Act as well as by the court under Section 155 of the Act directing the appellant to insert their names in the register of members as the holders of the shares mentioned hereinabove, were entitled to move an application under Section 397 or Section 398 of the Act. See Stadmed Pvt. Ltd. v. Kshetramohan Saha [1969] 39 Comp Cas 741 (Cal).

50. The respondents Nos. 1 and 2 were interested co-shareholders of the company in the allegations made in the petition and in having oppression or wrong complained of in the petition remedied. Upon a perusal of the petition and, in particular, paragraphs 12, 13, 18, 22, 30 and 33 to 35 thereof it appears to us that the main allegations complained of in the petition are oppression to shareholders and mismanagement of the affairs of the appellant-company. The said acts are continuing acts of oppression and mismanagement. One of the acts of oppression complained of is the refusal of the company to rectify the share register by inserting the names of the respondents Nos. 1 and 2. The petitioners may not have personal knowledge of the acts of oppression alleged in the petition; but, none the less, they may prove the same by means of affidavit-evidence already filed in the proceedings.

51. Reference in this connection may be made to Bengal Luxmi Cotton Mills Ltd., In re [1965] 35 Comp Cas 187 (Cal). Long v. Crossley [1879] 13 Ch D 388 (Ch D) and Mohta Bros. (P.) Ltd. v. Calcutta Landing and Shipping Co. [1970] 40 Comp Cas 119 (Cal). If the respondents Nos. 1 and 2 be entitled to complain against the acts of oppression alleged in the main petition filed under Section 397/398 of the Act they were entitled to join in the original petition at the time of the commencement of the proceeding or apply thereafter to be joined in the said petition, for the simple reason that the result of the said application would be binding upon the said respondents.

52. For the aforesaid reasons, learned judge was perfectly justified, in our opinion, in joining the respondents Nos. I and 2 in the petition as the petitioners and transposing the original petitioner to the category of respondent in the main application.

53. Section 643 of the Act conferred power upon the Supreme Court after consulting the High Courts to make rules for the purposes and of the effect as mentioned in different clauses and sub-clauses of the said section. Clause (a) to Sub-section (1) of the said section empowered the Supreme Court to make rules providing for all matters, inter alia, relating to the winding up of companies. Clause (b) to Sub-section (1) to the said section empowered the Supreme Court to make rules if it so desires consistent with the Code of Civil Procedure in regard to the matters mentioned in different sub-clauses under the said Clause as well as in regard to the matters mentioned in the different sub-clauses under Sub-section (2) of the said section.

54. Rule 6 of the Companies (Court) Rules, 1959, makes the provisions of the Code applicable to all proceedings under the Acts and the Rules, except as provided by the Act or the Rules. Neither the Act nor the Rules forbid addition or transposition of parties. In fact, Rules 100 to 102 of the Rules are additional provisions to what are contained in Order 1, Rule 10, of the Code of Civil Procedure. The Code of Civil Procedure, 1908, was an Act enacted to consolidate and amend the laws relating to the procedure of the civil courts and, unless expressly barred from being applicable to the proceedings under the Companies Act, shall apply to them.

55. The provisions of Order 1, Rule 10, of the Code of Civil Procedure have not been made inapplicable to proceedings under the Companies Act by the said Act and thus, in our opinion, apply to a proceeding filed under Section 397 or 398 of the Act. Sub-rule (2) of Rule 10 of Order 1 of the Code provides as follows :

'The court may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the court to be just, order that the name of any party improperly joined, whether as plaintiff, or defendant, be struck out, and that the name of any person who ought to have been joined, whether as plaintiff or defendant, or whose presence before the court may be necessary in order to enable the court effectually and completely to adjudicate upon and settle all the questions involved in the suit, be added.'

56. Section 141 of the Code provides that the procedure laid down 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. Thus, Section 141 of the Code makes the provisions of Rule 10 of Order 1 of the Code applicable to a original proceeding like amongst others an application under Section 397 or 398 of the Companies Act. We have mentioned hereinabove that the respondents Nos. 1 and 2 were interested in the said application filed under Section 397 of the Act and thus were properly added by the trial court to avoid multiplicity of proceedings. The court was empowered to do so and in its discretion has done so.

57. The Supreme Court in Razia Begum v. Anwar Begum, : [1959]1SCR1111 , was pleased to observe that the question of addition of parties under Rule 10 of Order 1 of the Code of Civil Procedure was not one of initial jurisdiction of the court generally; it was a question of exercise of judicial discretion. The said observation applies, in our opinion, to the order under appeal.

58. It should be noted that the order under appeal is not appealable under the provisions of the Code of Civil Procedure. The said order, in our opinion, cannot be said to be a 'judgment' within the meaning of Clause 15 of the Letters Patent. The order was passed as stated by the learned judge in the judgment under Order 1, Rule 10, of the Code of Civil Procedure or in exercise of inherent jurisdiction. It does not appear to us that by the said order any of the right or liability of any of the parties in the main application has been decided. They will be gone into and determined at the hearing of the main application.

59. It is true that an adjudication need not be on the merit in controversy between the parties. The order under appeal, in our opinion, was a mere step towards final adjudication on merits of the disputes between the parties in the application under Section 397 of the Act. Thus, we are of the opinion that the observations of the Full Bench in paragraph 9 of the judgment in the case of Nurul Hoda v. Amir Hasan, : AIR1972Cal449 [FB], apply with full force to the order under appeal. The order under appeal does not satisfy the test of a ' judgment ' as enunciated in Nurul Hoda v. Amir Hasan, : AIR1972Cal449 at 453 [FB], Laxminarayan Tamkotwalla v. Udairam Khemka, : AIR1961Cal386 , Tulsiram Bhagwandas v. Sitaram Srigopal, : AIR1959Cal389 , Shesh Giridas Shanbhag v. Sunderrao, AIR 1946 Bom 361 and Daulatram Agarwalla v. Champalal Jugraj, : AIR1963Cal337 ; 66 CWN 364 at 376. It does not even satisfy the test as laid down in Mansata's case, : AIR1957Cal727 at 731, and in Felumeah's case, : AIR1960Cal582 at 587. The order under appeal merely decides the right of the respondents Nos. 1 and 2 to continue the proceeding filed under Section 397 of the Act and is not a ' judgment '. [See John Herbert & Co. Pvt. Ltd. v. Pranay Kumar Dutta [1966] 36 Comp Cas 485; 70 CWN 516 (Cal).]

60. In Appeal No. 20 of 1969--decided on 16-1-70--(River Steam Navigation v. Kumar Iron and Steel Ltd.] it has been held by a Division Bench of this court that an order passed under Order 1, Rule 10, was not appealable.

61. The same was the view of this court in Appeal No. 152 of 1968, Brahmaputra Tea Co. Ltd. and AIR 1917 Cal 627. The order under appeal does not terminate any proceeding, does not determine any controversy on merit. All defences like limitation, competency of the petitioners, maintainability of the application and like have been kept open.

62. For the reasons stated hereinbefore there is no merit in this appeal. The appeal must fail and is dismissed with costs.

B.C. Mitra, J.

I agree.


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