Bhenoy G. Dembla vs Prem Kutir (P) Ltd.
2003 Latest Caselaw 716 Bom

JUDGMENT

D.Y. Chandrachud, J.

1. On 14th February, 2003 Justice D.K. Deshmukh allowed an appeal filed by the Respondent under Section 10F of the Companies Act, 1956 against an order of the Company Law Board. The maintainability of a Letters Patent Appeal against the order of the learned Single Judge has been questioned having regard to the amendment to Section 100A of the Code of Civil Procedure, 1908.

2. The Appellants filed an application under Section 111 of the Companies Act, 1956 against the refusal of the respondent to register the transfer of certain shares in their names. The Appellants had entered into an agreement for the sale of Flat 6C in a building known as Premkutir, at Backbay Reclamation in Mumbai on 2nd October, 1993. The respondent having refused to accede to the transfer of 55 equity shares and in view of the provisions of Article 40A of the articles of association of the company which stipulate that the ownership of shares of the respondent is essential for the occupation of a flat, the appellants moved an application before the Company Law Board under Section 111 of the Act. The Company Law Board held in favour of the appellants by its order dated 23rd February, 2001. In April 2001, an appeal was filed before the learned Single Judge by the respondent under Section 10F of the Companies Act, 1956. The appeal was allowed by an order dated 14th February, 2003.

3. The amended provisions of Section 100A of the Code of Civil Procedure came into force on 1st July, 2002. Section 100A as amended provides as follows :

"No further appeal in certain cases.--Notwithstanding anything contained in any Letters Patent for any High Court or in any other instrument having the force of law or in any other law for the time being in force, where any appeal from an original or appellate decree or order is heard and decided by a Single Judge of a High Court, no further appeal shall lie from the judgment and decree of such Single Judge."

4. Counsel appearing on behalf of the respondent while objecting to the maintainability of the appeal urges that inasmuch as the judgment and order of the learned Single Judge has been delivered on 14th February, 2003, after the amended provisions of Section 100A were brought into force, the Letters Patent Appeal is clearly not competent. On the other hand, on behalf of the appellants it has been urged that the right to file an appeal is not a matter of procedure, but of substance and that the filing of the application before the Company Law Board carried with it a concomitant vested right to institute proceedings in appeal on the basis of the law as it stood when the original application was filed before the Company Law Board in 1999. In the alternative, it has been urged that even if it is held that the amended provisions of Section 100A would govern a case such as a present, since the judgment and order of the learned Single Judge was delivered after 1st July, 2002, nevertheless those provisions will only operate to bar a further appeal by the respondent and not by the appellants, since it was the respondent who had filed the appeal under Section 10F against the order of the Company Law Board.

5. The right of appeal, it is well-settled, is a matter of substance and not of procedure. The right to institute an appeal vests on the date when the original proceedings are instituted. In Garikapati Veeraya v. N. Subbiah Choudhry , a Constitution Bench of the Supreme Court laid down principles of law which have since been followed by the Supreme Court in several cases. The Supreme Court held in Garikapati Veeraya's case (supra) that the right of appeal is not merely a matter of procedure, but is a matter of a substantive right. The institution of a suit carries with it the implication that all rights of appeal are preserved to the parties thereto till the rest of the career of the suit. Consequently, it was held that the right of appeal is a vested right which accrues and exists from the date when the lis commences and although it may be actually exercised when an adverse judgment is pronounced, such a right is to be governed by the law which prevails on the date of institution of the suit and not on the law that prevails on the date of the decision or on the date of the filing of the appeal. However, it is equally a matter of settled principle that the vested right of appeal can be taken away by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise.

6. Section 100A of the Code of Civil Procedure was initially inserted by an Amendment Act of 1976. The Statement of Objects and Reasons indicated that Letters Patents Appeals lie in certain cases against the decision of a Single Judge in a second appeal. Such an appeal in effect amounted to a third appeal. Consequently, "for the purpose of minimising delay in the finality of adjudication" the legislature considered that "it is not desirable to allow more than two appeals". Therefore, Section 100A was inserted to provide that there should be no further appeal against a decision of a single Judge in a second appeal. Section 100A as it was introduced with effect for 1st February, 1977 provided that no further appeal shall lie from a judgment, decision or order of a Single Judge of a High Court, where an appeal from an appellate decree or order is heard and decided by the single Judge. The provision contained a non obstante clause so that it had effect notwithstanding anything contained in the Letters Patent of any High Court or in any other instrument having the force of law or in any other law for the time being in force.

7. The Code of Civil Procedure (Amendment) Act, 1999 was introduced in order to give effect to the recommendations of the Justice Malimath Committee. The Statement of Objects and Reasons records that the Committee examined the issue of further appeals against a judgment of a single Judge exercising even a first appellate jurisdiction. The Committee recommended that no further appeal in this regard should lie. The Committee had also recommended that there should be an abolition of appeals to a Division Bench against a decision and order rendered by a single Judge of the High Court in proceedings under Articles 226 and 227 of the Constitution. Thereafter in view of the representations received from Bar Associations in the country, the provision for the abolition of Letters Patent Appeals came to be confined to appeals against judgments of a Single Judge of a High Court exercising appellate jurisdiction, whether that appeal was against an original or appellate decree or order.

8. The object of a provisions of Section 100A, as amended, is to reduce the delay in litigation. One of the reasons for delay is perceived by the Parliament as the hierarchy of appeals and it is envisaged that a sense of finality would be imparted to adjudication by a reduction in the number of appeals. Section 100A came into force with effect from 1st July, 2002. Section 100A, it must be noted, uses the words "where any appeal from an original or appellate decree or order is heard and decided by a single Judge of a High Court". The use of the word "is" would make it abundantly clear that what the legislature intended was that no further appeal should be maintainable where any appeal from an original or appellate decree or order is heard and decided after 1st July, 2002 by a single Judge of a High Court. Therefore, the necessary intendment of Section 100A is that even if a suit or other proceeding has been instituted in a court of competent jurisdiction prior to 1st July, 2002, the exercise of the appellate remedy against a decision of a Single Judge rendered after the date must necessarily be brought in conformity with the amended provisions of Section 100A. In other words, where the appeal from an original or appellate decree is decided by a Single Judge of a High Court after 1st July, 2002, no further appeal would be maintainable. To hold otherwise would run contrary to the plain intendment as well as the object and underlying purpose of Section 100A. Undoubtedly, the general principle of law is that an appeal is a matter not of procedure but of substantive right. However, the right to file an appeal which accrues on the institution of a lis can be taken away either by express words or by necessary intendment. There can be no gainsaying the fact that in introducing the amended provisions of Section 100A, the legislature was concerned as much with the existing backlog of cases as the accretion to the backlog that would accrue by the institution of fresh cases after the amended provisions were brought into force. Consequently, it would be unreasonable to attribute to the legislature the intendment that while seeking to bring into effect a provision which was intended to cure the delays of litigation, the legislature would have intended to exempt from its purview all cases which had been filed prior to the date on which the amendment was brought into force. Therefore, the necessary intendment of Section 100A is that its provisions will apply even if a suit was instituted prior to 1st July, 2002 so long as the judgment and order of a learned Single Judge of the High Court in appeal against an original or appellate decree has been rendered on and after the date on which the amendment was brought into force.

9. In taking this view, we are supported by two Full Bench decisions of the Madhya Pradesh and Gujarat High Courts. In Laxminarayan v. Shivlal Gujar , a Full Bench of the Madhya Pradesh High Court had held that the words "is heard and decided" are "used absolutely in praesenti' and that apart from this, the words "no further appeal shall lie" are also to be conjointly read with the words "is heard and decided". The Madhya Pradesh High Court has specifically rejected the contention that Section 100A as amended would protect the right of appellants which existed in respect of suits instituted prior to 1st July, 2002.

10. The judgment of the Full Bench of the Gujarat High Court in Nasik Hing Supplying Co. v. Annapurna Gruh Udyog Bhandar [2003] 44(2) Guj. L.R. 926 is of some significance to the issue involved in the present case because it specifically deals with a right of appeal which was expressly conferred under a special law, in that case, the Trade and Merchandise Act, 1958. In Section 109(2) of the Act an appeal to the High Court against an order or decision of the Registrar under the Act or rules framed thereunder is provided. By Sub-section (4) of Section 109 every appeal is to be heard and decided by a Single Judge of the High Court. Sub-section (5) of Section 109 provides that where an appeal is heard by a Single Judge, a further appeal shall lie to a Bench of the High Court. The Full Bench of the Gujarat High Court held that as a matter of general principle where a first appeal is decided on or after 1st July, 2002 by a Single Judge from an original or appellate decree or order, no further appeal under the Letters Patent shall lie before a Division Bench of the High Court. However, the Court held that the non obstante clause with which Section 100A begins is not in derogation of the express provisions of a special law conferring a substantive right of appeal against the decision of a Single Judge of the High Court before a Division Bench of the same Court. In fact, it was noted that Section 4(1) as well as Sections 96, 100, 104 and 105 of the Cr.PC. preserve a substantive right of appeal conferred by a special law. Hence, inasmuch as the Trade and Merchandise Act, 1958 is a special law and Sub-section (5) of Section 109 expressly confers a right of appeal against an order of a Single Judge of the High Court to a Division Bench, that right has not been taken away by the amended provisions of Section 100A.

11. In taking this view, the Full Bench of the Gujarat High Court inter alia relied upon the decision of the Supreme Court in Municipal Corporation of Brihanmumbai v. State Bank of India AIR 1999 SC 380. Under Section 217(1) of the Bombay Municipal Corporation Act, 1888 an appeal against a rateable value or tax fixed or charged lies before the Chief Judge of the Small Causes Court. Against the Appellate order of the Chief Judge of the Small Causes Court, an appeal is provided for to the High Court under Section 218D. A Bench of three Learned Judges of the Supreme Court held that under the Bombay Municipal Corporation Act, no further appeal has been provided against the judgment of a learned single Judge of the High Court, deciding the second appeal under Section 218D of the Act against an appellate order of Chief Judge of the Small Causes Court passed under Section 217. Section 100A of the Cr.PC. as introduced by the Amendment Act of 1976 came up for consideration before the Supreme Court and it was held specifically to bar further appeal in such cases.

12. The principle of law which emerges is that unless a special statute expressly confers and recognize a right of appeal before the Division Bench against the judgment and order of a Single Judge of the High Court in the exercise of the appellate jurisdiction, no such appeal would lie upon the enforcement of the amended provisions of Section 100A against a judgment of the Single Judge rendered on and from 1st July, 2002. In other words, where the decision of the Single Judge in the exercise of the appellate jurisdiction, against an original or appellate decree is rendered on and after 1st July, 2002 no further appeal would lie unless the special statute in question expressly recognizes a further right of appeal to the Division Bench.

13. In the present case, the Companies Act, 1956 confers a right of appeal to the High Court under Section 10F against a decision rendered by the Company Law Board. There is no express conferment of a right of a further appeal to the Division Bench against the decision of a learned Single Judge. That being the position, an appeal to the Division Bench is clearly not maintainable against the decision of the Single Judge rendered after 1st July, 2002.

14. Counsel appearing on behalf of the Appellants urged that even if the provisions of Section 100A are held to be attracted, the expression "no further appeal shall lie" must be interpreted to mean a further appeal at the behest of the party which had filed the first appeal before the learned Single Judge. Hence, the submission that was urged was that an appeal by the appellants herein is maintainable since the appeal before the learned Single Judge against the decision of the Company Law Board was filed not by the appellants, but by the respondent. We find absolutely no merit in the contention. The expression "further appeal" has not been used in the restrictive sense to circumscribe a further appeal only by a party which had initially filed an appeal before the learned Single Judge of the High Court. Section 100A cannot be restricted in its ambit by any such process of artificial construction. The plain words of the statute must be given effect to. Those words mean what they say - where an appeal is heard and decided by a Single Judge from an original or appellate decree, no further appeal shall lie. The learned single Judge delivered judgment on 14th February, 2003 which was after the date of the enforcement of the amended provisions of Section 100A on 1st July, 2002. The appeal is not maintainable.

15. This is not really a provision regarding the ouster of jurisdiction. The decision of the Supreme Court in Bhatia International v. Bulk Trading S.A. does not advance the case of the appellants.

16. Before concluding the judgment, we must advert to the judgment of a Division Bench of this Court in Shri Chandreshwar Bhuthanath Devastan of Paroda v. Subiraj Prabhakar Naik [2003] 105(2) Bom. L.R. 915. The Division Bench has held there that the amended provisions of Section 100A would apply also to appeals which have been filed and were admitted before 1st July, 2002 and are pending for final disposal and that even such appeals would be rendered as not being maintainable. We have reservations about the correctness of the view expressed by the Division Bench. However, we are informed that a reference has been made to a Full Bench in the course of which the Court will decide upon the correctness of the view expressed by the Division Bench. This issue does not arise in the present case since the judgment of the learned single Judge was rendered on 14th February, 2003 which was after the date on which the amended provisions were brought into force. We do not express any final opinion on the wider issue of the position of appeals which were admitted prior to 1st July, 2002, beyond what we have already said, since the matter is awaiting determination before the Full Bench.

17. In the present case, the appeal is not maintainable and is accordingly dismissed on that ground.