Bombay High Court
Sigmarq Technologies Pvt Ltd And 2 ... vs Manugraph India Limited And 7 ... on 14 September, 2017
Bench: S.C. Dharmadhikari
COMAP40.16.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL APPEAL NO. 40 OF 2016
IN
NOTICE OF MOTION NO. 494 OF 2014
IN
SUIT NO. 516 OF 2013
1 Sigmarq Technologies Pvt. Ltd., having ]
its registered office at A-258, Kegal ]
Hatkanangale, Five Star MIDC, Kolhapur ]
5416216, Maharashtra ]
2 Rajesh Rangrao Ghorpade ]
(Director of Sigmarq Technologies Pvt.Ltd) ]
residing at Plot No.15, RS 918/1918, ]
Shri Bhavani Grihnirman, Devkar Panand ]
Kolhapur 416 216 Maharashtra ]
3 Pradeep Appasaheb Shirale (Director of ]
Siqmarq Technologies Pvt. Ltd.),residing at ]
Post Nagaon, Hatkanangale, District ]
Kolhapur 416216, also at A-258, Kegal ]
Hatkanangale, Five Star MIDC, Kolhapur ]
416 216, Maharashtra ] ... Appellants
Versus
1Manugrah India Limited, A company ]
incorporated and registered under the ]
Companies Act, 1956, having its registered ]
office at Sidhwa House, 1st Floor, N.A. ]
Sawant Marg, Near Colaba Fire Station, ]
Colaba, Mumbai 400 005. ]
2 Param Print Solutions Pvt. Ltd., having its ]
registered office at 917/918, Shri Bhavani ]
Gruha Nirman Sanstha, Devekar Panand, ]
Kolhapur 416 002. ]
SRP 1/106
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3 Gopal Balwant Vichare (Chairman & M.D. ]
of Sigmarq Technologies Pvt. Ltd.),residing ]
at 2156 D, Shukrawar Peth, Near Jain ]
Kolhapur 416002. Also at A-258, Kegal ]
Hatkanangale, Five Star MIDC, Kolhapur ]
416 216, Maharashtra ]
4Dhanaji Ramchandra Bhalkar (Director of ]
of Sigmarq Technologies Pvt. Ltd.),residing ]
at Plot No.107, Saneguruji Vasahat, ]
Kolhapur 416 002, Also at : A-258, Kegal ]
Hatkanangale, Five Star MIDC, Kolhapur ]
416 216, Maharashtra ]
5 Sarjerao Vishnu Chandane (Director of ]
of Sigmarq Technologies Pvt. Ltd.),residing ]
at Post Belavale, Taluka Kegal, Kolhapur ]
416002, Also at : A-258, Kegal ]
Hatkanangale, Five Star MIDC, Kolhapur ]
416 216, Maharashtra ]
6 Shubhendra Madhavarao Mordekar ]
(Director of Manugraph India Limited and ]
Param Print Solutions Pvt. Ltd., residing at ]
Plot o.18, R.S. No. 917/918, Shri Bhavani ]
Gruha Nirman Sanstha, Devkar Panand, ]
Kolhapur 416 002. ]
7 Venkatesh Anantnarayan, Managing ]
Director of Param Print Solutions Pvt. Ltd. ]
residing at A521, 5th Floor, Anant Regency ]
CHS Limited, 46, M.M. Malviya Marg, ]
Opp. M.T.N.L., Mulund (West), Mumbai-80 ]
8 Milonarayan S. Mishra & Others, Unknown ]
(Director of Param Print Solutions Pvt. Ltd. ]
residing at 260/10199, Kannamwar Nagar ]
No.1, Vikhroli (PU), Mumbai - 400 033. ] ... Respondents
SRP 2/106
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WITH
COMMERCIAL APPEAL NO. 41 OF 2016
IN
LEAVE PETITION NO. 11 OF 2016
IN
SUIT NO. 516 OF 2013
1 Sigmarq Technologies Pvt. Ltd., having ]
its registered office at A-258, Kegal ]
Hatkanangale, Five Star MIDC, Kolhapur ]
5416216, Maharashtra ]
2 Rajesh Rangrao Ghorpade ]
(Director of Sigmarq Technologies Pvt.Ltd) ]
residing at Plot No.15, RS 918/1918, ]
Shri Bhavani Grihnirman, Devkar Panand ]
Kolhapur 416 216 Maharashtra ]
3 Pradeep Appasaheb Shirale (Director of ]
Siqmarq Technologies Pvt. Ltd.),residing at ]
Post Nagaon, Hatkanangale, District ]
Kolhapur 416216, also at A-258, Kegal ]
Hatkanangale, Five Star MIDC, Kolhapur ]
416 216, Maharashtra ] ... Appellants
Versus
1Manugrah India Limited, A company ]
incorporated and registered under the ]
Companies Act, 1956, having its registered ]
office at Sidhwa House, 1st Floor, N.A. ]
Sawant Marg, Near Colaba Fire Station, ]
Colaba, Mumbai 400 005. ]
2 Param Print Solutions Pvt. Ltd., having its ]
registered office at 917/918, Shri Bhavani ]
Gruha Nirman Sanstha, Devekar Panand, ]
Kolhapur 416 002. ]
SRP 3/106
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3 Gopal Balwant Vichare (Chairman & M.D. ]
of Sigmarq Technologies Pvt. Ltd.),residing ]
at 2156 D, Shukrawar Peth, Near Jain ]
Kolhapur 416002. Also at A-258, Kegal ]
Hatkanangale, Five Star MIDC, Kolhapur ]
416 216, Maharashtra ]
4Dhanaji Ramchandra Bhalkar (Director of ]
of Sigmarq Technologies Pvt. Ltd.),residing ]
at Plot No.107, Saneguruji Vasahat, ]
Kolhapur 416 002, Also at : A-258, Kegal ]
Hatkanangale, Five Star MIDC, Kolhapur ]
416 216, Maharashtra ]
5 Sarjerao Vishnu Chandane (Director of ]
of Sigmarq Technologies Pvt. Ltd.),residing ]
at Post Belavale, Taluka Kegal, Kolhapur ]
416002, Also at : A-258, Kegal ]
Hatkanangale, Five Star MIDC, Kolhapur ]
416 216, Maharashtra ]
6 Shubhendra Madhavarao Mordekar ]
(Director of Manugraph India Limited and ]
Param Print Solutions Pvt. Ltd., residing at ]
Plot o.18, R.S. No. 917/918, Shri Bhavani ]
Gruha Nirman Sanstha, Devkar Panand, ]
Kolhapur 416 002. ]
7 Venkatesh Anantnarayan, Managing ]
Director of Param Print Solutions Pvt. Ltd. ]
residing at A521, 5th Floor, Anant Regency ]
CHS Limited, 46, M.M. Malviya Marg, ]
Opp. M.T.N.L., Mulund (West), Mumbai-80 ]
8 Milonarayan S. Mishra & Others, Unknown ]
(Director of Param Print Solutions Pvt. Ltd. ]
residing at 260/10199, Kannamwar Nagar ]
No.1, Vikhroli (PU), Mumbai - 400 033. ] ... Respondents
WITH
COMMERCIAL APPEAL NO. 49 OF 2016
SRP 4/106
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IN
LEAVE PETITION NO. 129 OF 2014
IN
SUIT NO. 632 OF 2014
Le Travenues Technology Pvt. Ltd., A ]
Company incorporated under the Companies ]
Act, 1956, having its office at H-3/157, ]
Second Floor, Vikaspuri, Delhi - 110 018,and ]
also at 3rd Floor,Bestech Centre Point,A Block ] ... Appellant
Sushant Lok Phase-I, Gurgaon - 122 002. ](Ori.Defendant)
Versus
Ezeego One Travel & Tours Ltd., A company ]
incorporated under the Companies Act, 1956 ]
and having registered office at 1st Floor, Cecil ]
Court, Lansdowne Road, Colaba, Mumbai ]
400039 & corporate office at Vaman Centre ]
Marol, Makwana Road, Off Andheri Kurla ] ... Respondent
Road, Andheri (East), Mumbai - 400059 ](Ori. Plaintiff)
Dr. Birendra Saraf with Ms. Pooja Kshirsagar, Mr. Amol Kumeria
and Mr. Chandansingh Shekhawat i/b ALMT Legal for the
Appellants in COMAP No.40 of 2016 and COMAP No.41 of 2016.
Mr. Ravi Kadam, senior counsel withi Mr. Ashish Kamat, Mr.
Rohan Kadam, Mr. Abhimanyu Kharote i/b M/s. Desai and
Diwanji for the Respondent No.1 in COMAP No.40 of 2016 and
COMAP No.41 of 2016.
Mr. Alankar Kirpekar with Mr. Muralidhar Khadilkar i/b MAG
Legal for the Appellant in COMAP No.49 of 2016.
Mr. Virag Tulzapurkar, senior counsel with Mr. H.W. Kane, Mr.
A.H. Kane, Mr. Nikhil Sharma and Mr. Aasif Navodia i/b W.S.
Kane & Co. for the Respondent in COMAP No.49 of 2016.
CORAM : S.C. DHARMADHIKARI &
PRAKASH D. NAIK, JJ.
SRP 5/106
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THURSDAY, 14TH SEPTEMBER, 2017
ORAL JUDGMENT : [Per S.C. Dharmadhikari, J.]
1 This appeal by the original defendant Nos.1, 3 and 4
challenges an order passed by the learned single Judge in Notice
of Motion No. 494 of 2014 in Suit No.516 of 2013.
2 By this order, which is fairly detailed, the learned
single Judge disposed of a preliminary issue of jurisdiction raised
by these defendants under section 9-A of the Code of Civil
Procedure, 1908.
3 There are two suits filed and our order passed today
in the present appeal will dispose of the applications insofar as
the above, in both suits.
Manugraph India Limited. The appellants before us are the
defendant Nos.1, 3 and 4 to this suit.
5 There is another Suit No. 632 of 2014, which is the
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subject matter of Commercial Appeal No. 40 of 2016.
6 To our mind, the fate of Commercial Appeal Nos.40
and 49 both of 2016 shall decide Commercial Appeal No.41 of
2016 as well.
7 The learned single Judge found that in Suit No.632 of
2014, a preliminary issue was framed on 31 st March, 2016. The
defendants in these suits urged that the plaintiffs have their
registered office in Mumbai and they have a branch office in
Delhi, where the defendants have their place of business.
According to these defendants, when the cause of action has
arisen within the territorial limits of plaintiffs branch office at
Delhi, then, this Court would have no jurisdiction to entertain and
try the said suits. It is only the Courts in Delhi which would
possess such jurisdiction.
7A The appellants-original defendant Nos.1, 3 and 4 in
Suit No.516 of 2013 take a substantially similar plea. There, the
facts projected were that the plaintiff in this suit has its
registered office in Mumbai. The defendants in that suit are based
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in Kolhapur. The defendants allege that the plaintiffs also have
an office in Kolhapur and that the site of the suit, therefore,
should be Kolhapur.
7B It is such an objection which has been considered by
the learned single Judge and thereafter he concluded that in the
light of the discussion, the preliminary issue in both suits has to
be answered in the negative. In other words, this Court would
have jurisdiction to entertain and try both suits. On such a
preliminary objection to the territorial jurisdiction of this Court,
after hearing both sides, the learned Judge passed the following
order :
"... ... ... ...
38. In this view of the matter, the preliminary
issues in both the matters are answered in the
negative. This Court has jurisdiction to try and
entertain both the Suits.
39. The Plaintiff's Notice of Motion will
accordingly be set down for hearing, since the
pleading in both are complete. List both Notices of
Motions in both the Suits but separately for hearing
and final disposal in the week of 11th July 2016."
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Thereafter, the learned Judge directed that the
Notices of Motion for interim relief moved by the plaintiffs will
have to be heard separately.
9 It is such an order which is under challenge before us.
10 It is common ground that the appeal is preferred
under the Commercial Courts, Commercial Division and
Commercial Appellate Division of High Courts Act, 2015 (Act 4 of
2016). This Act shall now be referred to as Act 4 of 2016.
11 According to the parties, the appellate power is to be
found in Chapter IV titled "Appeals", particularly in section 13.
12 Mr. R.M. Kadam, learned counsel appearing for the
original plaintiff-respondent No.1 in Commercial Appeal No.40 of
2016 has raised a preliminary objection to the maintainability of
this appeal.
13 He invited our attention to sub-section (1) of section
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13 as also sub-section (2) thereof to contend that the order under
appeal is not an appealable order. It is not a decision by which
even if the appellant is aggrieved allegedly, he can, as of right,
maintain an appeal. According to Mr. Kadam, the law does not
enable filing of appeals by parties like the appellants-defendants
unless and until the impugned judgment and order is, as
contemplated by the Code of Civil Procedure, 1908, either a
decree or an order. The proviso to sub-section (1) of section 13,
according to Mr. Kadam, would denote that an appeal shall lie
from such orders passed by a Commercial Division or a
Commercial Court that are specifically enumerated under Order
XLIII of the Code of Civil Procedure, as amended by the Act 4 of
2016 and section 37 of the Arbitration & Conciliation Act, 1996.
However, the sub-section (1) of section 13 cannot be given a
wider meaning so as to enable this Court to entertain any and
every appeal.
14 He would submit that the words "decision of the
Commercial Court or Commercial Division of a High Court "
appearing in sub-section (1) of section 13 would, together with
the further words "from the date of judgment or order, as the
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case may be", indicate that Act 4 of 2016 does not enlarge or
widen either the power of appeal or the ambit and scope of the
appellate power. That is circumscribed or restricted by sub-
section (2) of section 13 and sub-section (2) would indicate that
there is no right of appeal created outside the Act 4 of 2016.
Therefore, other legislation or laws cannot be looked into so as to
vest or create a right of appeal in a litigant like the appellants.
15 Mr. Kadam would then summarize his arguments by
contending that a decision not giving any question or issue a
finality or adjudicating it as such and prejudicially affects any
rights of parties like the appellants could, therefore, not be
termed as an order or judgment / decision enabling filing of an
appeal to challenge it.
16 Mr. Kadam would submit that the Act 4 of 2016,
together with its preamble and in the backdrop of its object and
purpose, denotes that the commercial disputes which may be
forming subject matter of a suit or proceedings in the nature of
arbitration have to be disposed of expeditiously.
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17 If during the stage or course of such proceedings or
suits some issues emerge and there is a ruling thereon, does not
mean that such a ruling or decision can be challenged in appeal.
That would mean at a interlocutory stage the proceedings or the
suit would be interrupted and there will be no progress till the
disposal of such appeals. In other words, the proceedings or the
suit would not proceed and that would completely defeat the
object and purpose of the Act. If commercial disputes involving a
specified value have to be brought to an end and decided
expeditiously, then, an interpretation consistent with that object
and purpose be placed on section 13.
18 On the other hand, Dr. Saraf and Mr. Kirpekar
appearing on behalf of the appellants in both appeals would
submit that there is no merit in the arguments of Mr. Kadam. Dr.
Saraf would submit that the present objection is to the
jurisdiction of this Court to entertain and try the suit. The
objection may be to the territorial jurisdiction, but, nonetheless
such an objection, if upheld, brings an end to the suit. It brings an
end to the proceedings and the suits in this Court, completely and
finally. If such an objection is overruled, then, the decision in
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that behalf is appealable. It is appealable because it is a decision
by which the appellants are aggrieved. When the objection has
not been upheld it would force them to face the trial in the suit or
other proceedings. They would be forced to submit to the
jurisdiction of this Court. It is precisely that which they are
resisting. In the circumstances, this is not a case of any and
every decision being challenged, but a decision of this Court
which is a "judgment" impugned in these appeals. The finding on
territorial jurisdiction of this Court has a vital bearing and it is
not as if that will not prejudicially affect the rights of the
appellants. Since the objection is negatived, the jurisdictional
issues are concluded and finally. In the circumstances, both
would contend that this is an appealable order.
19 Additionally, Mr. Kirpekar brings to our notice a
Division Bench judgment of this Court in the case of Ferani Hotels
Pvt. Ltd. v. Nusli Neville Wadia & Ors. in Appeal No.817 of 2010
along with Appeal No.806 of 2010 decided on 19th July, 2012.
20 He would contend that section 9-A has been inserted
in the statute book, namely, the Code of Civil Procedure, 1908, by
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a Maharashtra amendment. That enables the Court to rule upon
an issue of jurisdiction, raised in a suit of the present nature, at a
preliminary stage. The adjudication of that issue should not be
postponed till the trial of the suit is the object and purpose in
inserting section 9-A in the Code of Civil Procedure. Such a
provision is salutary. That equally has a laudable object and
purpose. The trial on the issue of jurisdiction need not be
postponed and that issue should not necessarily be tried at the
hearing of the suit. Order XIV of the Code of Civil Procedure and
Rule 2 thereof and Section 9-A operate at different stages. Thus, a
preliminary issue of jurisdiction, according to counsel, need not
await trial till the suit in which it is raised is ready for hearing.
The adjudication therein should be done at the earliest stage and
when the Court is considering the plaintiffs application for grant
of interim injunction / relief. If at that stage the issue can be
considered, postponing the consideration of the interim relief
application, then, such an objection or preliminary issue under
section 9-A having been decided one way or the other would
result in rendering of a judgment. That judgment finally
adjudicates or concludes the issue of jurisdiction. It is not
relevant as to what is the outcome thereof. So long as that issue
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is of jurisdiction, then, that has a vital bearing on the controversy
in the suit. The adjudication thereof terminates the proceedings
and the suit itself one way or the other. In the circumstances, he
would submit that we should not take a restricted view of the
right of appeal which is created by Act 4 of 2016 and vesting in
the present set of litigants.
21 Dr. Saraf, in all fairness, has brought to our notice two
judgments of this Court on the point.
22 The first is rendered by a Division Bench of Hon'ble
Mr. Justice A.V. Mohta and Mr. Justice G.S. Kulkarni in the case
of Hubtown Limited vs. IDBI Trusteeship Service Ltd . reported in
2017 4 BCR 310 and another rendered by a Division Bench
presided over by His Lordship Hon'ble Mr. Justice V.M. Kanade
(as His Lordship then was) and Her Ladyship Swapna S. Joshi in
the case of Smt. Sushila Singhania & Ors. vs. Bharat Hari
Singhania in Commercial Appeal No.41 of 2016 together with
other appeals decided on 29th March, 2017.
23 Dr. Saraf would submit that a careful perusal of these
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two judgments would denote that there is a clear departure from
the view taken in Hubtown which is earlier in point of time. The
latter Division Bench judgment in the case of Smt. Sushila
Singhania rendered by V.M. Kanade, J. records in the opening
paragraph and while noting down the arguments, the reliance on
Hubtown, on the point of maintainability of the appeal. However,
without adverting to the findings and conclusions in Hubtown,
the Division Bench proceeds to rule on the issue of
maintainability of the appeal in Smt. Sushila Singhania's case.
The observations are directly contrary or divergent to that of the
earlier Division Bench in Hubtown. Therefore, judicial discipline,
according to Dr. Saraf, demands that either we go by the earlier
ruling in the case of Hubtown and uphold the right of appeal or if
we are of the view that the latter judgment refers to and attempts
to distinguish or departs from the view taken in Hubtown, then,
an authoritative pronouncement is required at the hands of a
larger Bench. Resultantly, we must refer the issue of
maintainability of this appeal to a larger Bench.
24 In that Dr. Saraf would place reliance on a Division
Bench judgment to which one of us (S.C. Dharmadhikari, J.) was
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a party and rendered in the case of Shri Prakash Gobindram
Ahuja vs. Ganesh Pandharinath Dhonde & Ors. in Appeal from
Order No.256 of 2013 decided on 4th October, 2016.
25 Our attention has also been invited to two judgments
of the Hon'ble Supreme Court on this point, namely, (2016) 6 SCC
391 in the case of Commissioner of Central Excise, Indore vs.
Grasim Industries Limited and (1998) 4 SCC 270 in the case of
Gaurav Jain and Anr. vs. Union of India. These are essentially on
the point of judicial discipline and a latter Division Bench being
confronted with the earlier view directly adjudicating a identical
point or issue before it, then, it should resort to either referring
the matter to a larger Bench if it is not in a position to agree with
the view taken in the earlier judgment or it must render a
definitive finding that the judgment which is ordinarily binding
on it is per incuriam and, therefore, has no binding effect.
26 It can only be ignored in such an eventuality is the
submission.
27 Before we proceed, we must notice as to how the issue
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of maintainability of appeals under Act 4 of 2016 has been dealt
with in Hubtown and Smt. Sushila Singhania.
28 In Hubtown the preliminary objection to the
maintainability of the appeal was not raised by the senior counsel
appearing for the respondents. The respondents had consented
to hearing the appeal on merits. However, the Division Bench
thought it fit to hear the counsel appearing for parties on
maintainability as it was of the opinion that the said issue goes to
the root of the matter. According to the Division Bench, there is a
confusion prevailing and particularly in the Registry of this Court
as to the transfer of pending Summary Suits (Suits filed under
Order XXXVII, Code of Civil Procedure, 1908) because of the Act
4 of 2016.
29 A Summary Suit was filed by the respondent-plaintiff -
IDBI in that appeal seeking a decree. During pendency of that
Summary Suit, Act 4 of 2016 intervened. Thereafter, the
Commercial Courts Act having been notified, the Commercial
Division and Commercial Appellate Division were constituted in
this Court on 4th January, 2016. The learned Judge who was
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hearing the Summary Suit continued to be nominated as a
Commercial Division of this Court and he was assigned to hear all
Summary Suits, including the subject Summary Suit. A
Summons for Judgment in that Suit was argued by parties on
merits before the Commercial Division and was reserved for
orders on 14th January, 2016. On 13th May, 2016, pending the
final order in the Summons for Judgment, the captioned
Summary Suit was formally transferred to the Commercial
Division of this Court alongwith several other suits and
proceedings. The order impugned in that appeal had been passed
granting conditional leave to defend the suit. On 12 th July, 2016,
the appeal in Hubtown's case was filed as a commercial appeal.
On 29th July, 2016, the appeal was heard finally, by consent, on
merits at the admission stage and the matter was closed for
orders.
30 It was noted by the Division Bench that after the Act 4
of 2016 was brought into effect, it would have to address itself on
the issue of maintainability of the appeal though it was not raised
as a preliminary issue and though there was no objection in that
regard. Thus the issue of maintainability was not directly arising
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for consideration as it was not raised specifically by the parties.
However, the Court noted the factual background and that the
Summons for Judgment were disposed of and the aggrieved
defendant was in appeal.
31 The Court, therefore, addressed the issue of
jurisdiction by referring to in paragraph 5, the Act 4 of 2016 and
the definitions therein. Thereafter, in the paras relied upon
before us, it traced the history of the legislation, namely, Act 4 of
2016 and referred to the scheme of the Act and the arrangement
of the Chapters therein.
32 In paragraph 20, the Court noted that the jurisdiction
of the Commercial Appellate Division as provided in Chapter II
and specifically section 13 provides that the Commercial
Appellate Division of a High Court has jurisdiction to hear appeals
from decisions, judgments or decrees passed by the Commercial
Division of that High Court or by Commercial Courts within the
local limits the jurisdiction of the High Court. In paragraphs 20
to 25 and part of 26 and paragraph 27, the Court held as under :
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"20. The jurisdiction of the Commercial Appellate
Division as provided in Chapter II and specifically
Section 13 provides that the Commercial Appellate
Division of a High Court has jurisdiction to hear
Appeals from decisions, judgments, orders or decrees
passed by the Commercial Division of that High Court
or by Commercial Courts within the local limits of the
jurisdiction of the High Court.
21. After giving due consideration to the
provisions of Section 13(1) read with Section 13(2) it
is apparent that it provides that Appeals will lie to the
Commercial Appellate Division against the decision of
the Commercial Court or Commercial Division. The
words "decision", "Judgment", "Order" "decree" as
such are not defined. It is defined and elaborated
under the CPC. From Section 13(1) it follows that it
includes "judgment" or "order" and read with
Sections 8, 13(2) it includes "decree" of the
Commercial Court or Commercial Division. However,
it is specifically mentioned in proviso to Section 13(1)
that such orders as enumerated in Order XLIII of CPC
should be the order against which an Appeal against
order is maintainable under Section 13. Further the
proviso contemplates that an Appeal would lie against
appealable order under Section 37 of the Arbitration
and Conciliation Act, 1996. Section 13(2) has
restricted the Appeals even for Section 13 of the
Commercial Courts Act by rider that "no Appeal
shall lie from any order or decree of a Commercial
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Division or Commercial Court other than in
accordance with the provisions of this Act.". This is
also with "notwithstanding" clause under Section
13(2) whereby, it is mandated that "notwithstanding
anything contained in any other law for the time
being in force or Letters Patent of High Court".
22 Therefore, taking into consideration
the overall provisions and intent of Section 13(1) and
(2) which provides the specific orders against which
an Appeal can be filed in such commercial matters.
The Appeal under Section 13 is maintainable, once
the Suits, Petitions Applications and Appeals are
transferred and treated as commercial disputes
having specified value, where the learned Commercial
Division Judge has taken the decision and/or passed
the "judgment" and/or "order" or "decree". It is
relevant to note that under Section 21 of the
Commercial Courts Act, it is mandated and reinforced
that the provisions of the Commercial Courts Act will
prevail over the provisions of other Act. Therefore, an
Appeal under Section 13 of the Commercial Courts
Act is maintainable against the
decision/judgment/order or decree, if it falls within
the ambit of the provisions of the Commercial Courts
Act. This includes that the subject matter must be
commercial dispute having valuation of more than
one crore and falls within the territorial and
pecuniary jurisdiction of the respective Court and/or
Division and/or subject to the specific provisions like
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the Arbitration and Conciliation Act, read with the
special statutes and the provisions so required,
referred under umbrella of "commercial dispute" so
defined.
23 Appeal against any final decision
include the judgment so passed by the Commercial
Court and/or Commercial Division the proviso to
Section 13(1) will not be applicable to such
decision/judgment, as the proviso refers to "orders".
The reference to "orders" in the opening portion of
Section 13(1) would relate to the application of the
proviso to sub-section (1). However, the opening
portion of sub-section (1) (words prior to the proviso)
clearly use the words "decision", "judgment" and
"order". Therefore, the ambit of this part of sub-
section (1) is quite broader when it comes to appeals
arising out of orders other than the category of orders
falling under order XLIII of the CPC. Therefore, an
Appeal under Section 13(1), even if there is an order,
but which has a tinge or colour of judgment as laid
down by the Hon'ble Supreme Court in Shah Babulal
Khimji v. Jayaben D. Kania & anr and Midnapore
Peoples' Co-op. Bank Ltd. (supra), the Appeal under
Section 13 against such order being a "judgment"
within the meaning of CPC, is maintainable. The
provisions of CPC (amended and unamended) are
applicable to the Commercial Courts Act's
proceedings. The term "Judgment" was not even
defined under the Letters Patent Act. In the summary
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suit, though it is an interlocutory order of granting
Defendants conditional leave to defend such
summary suit, as it directly affects and loses the
valuable rights of the Defendant without giving full
opportunity and as transferred and as heard by the
learned Commercial Division Bench/Judge, the
Commercial Appeal against such "Judgment" is
maintainable. Therefore, we are of the view that
there is no reason to hold that the Commercial Appeal
as filed is not maintainable.
"Summary Suit" and "Summary Judgment"-
24 The conceptual position of "summary
suit" as contemplated under Order XXXVII of CPC
and its specific provisions are governed as per the
original provisions of CPC. The amended CPC, in view
of Section 16 of the Commercial Courts Act inserted
the provision for a "summary judgment", through
Order XIII-A which is made applicable to the classes
of Suits (commercial suits) which required to be
decided by the Commercial Division/Court. It
prescribes the procedure and stages for application
for summary judgment. This also includes and
provides the powers of a Commercial Judge to pass
conditional order including for evidence for hearing of
summary judgment. We are concerned with Order
XIII-A, Rule 1(3) of CPC, whereby it is specifically
provided "notwithstanding anything to the contrary,
"an application" for summary judgment under this
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Order shall not be made in a Suit in respect of any
commercial disputes that is originally filed as a
summary suit under Order XXXVII.". Therefore, once
the summary suit as originally filed, prior to the
commencement of the and as now transferred, being
commercial dispute matter, the original procedure as
provided under Order XXXVII shall be applicable to
such summary suits. The parties are not entitled to
prayer for summary judgment under XIII-A in view of
the specific provision so referred above. This also
means that the judgments and the issue so decided in
summary suit shall for all purposes be governed by
the CPC, even after such suits are as suits. The
Commercial Division Judge is required to follow the
original C.P.C. And is required to keep in mind the
position in law revolving around all the facets of
summary suits. The provisions of Section 13,
therefore, is required to be interpreted and/or
considered accordingly, when any decision is given by
the Commercial Division/Court in such summary
suit. The proviso to Section 13(1), will not affect the
maintainability of such Appeal so filed against such
order/judgment passed by the Commercial
Division/Court in such summary suit.
proviso has extinguished, expressly and/or by
necessary intentment the Appeal against the order
passed by the Commercial Judge in summary suit
granting the Defendant conditional leave to defend a
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summary suit is unacceptable. Section 13 itself
contemplates that an Appeal is maintainable against
the decision/judgment or order which has effect of
"judgment", though it falls outside the purview of
Order XLIII as observed above.
26. ... ... ... ... The Commercial Courts Act or
special Statute, if empowers, the Appellate Division
Court to deal with the Appeal against the
Judgment/order passed by the Commercial Division
or the Commercial Court, the bar so submitted of
proviso to Section 13(1) is not applicable in each and
every matter specifically when the subject matters
are commercial disputes as defined under the
Commercial Courts Act and are also governed by the
Special Act/Statute other than the CPC. The specific
provisions/ Statute/ Act will prevail as substantial
rights, if are created over the provisions of Order
XLIII CPC, as provided in proviso to Section 13(1) of
the Commercial Courts Act.
Filing of Appeal under Section 13 of the Commercial
Courts Act, cannot be occluded-
27 Section 13 Scheme itself provides Appeal
against decision which includes judgment/order
passed by the Commercial Division/Court. There is no
provision of revision against the interlocutory order
in view of bar of Section 8. Section 8 further clarifies
that only Appeal against such order is available
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subject to Section 13 proviso. Even the issue of
jurisdiction or such challenge. Therefore, the
aggrieved parties have no option but to file Appeal
against the decision/order. The Appellate Court,
however, may or may not entertain appeal against
the order or interlocutory order, in view of proviso to
Section 13(1). But filing of Appeal under Section 13,
in our view, cannot be occluded. The Appeal against
any decision of any Commercial Division/Court is
maintainable. To entertain or not is the Appellate
Court's power and the jurisdiction depends upon the
facts and circumstances of the case."
33 Dr. Saraf would submit that the Division Bench, on an
analysis of the provisions of Act 4 of 2016, has ruled that firstly
the provisions of section 13 are required to be interpreted and/or
considered accordingly and particularly bearing in mind that the
Commercial Division Judge is required to follow the original Code
of Civil Procedure. He is required to keep in mind the position in
law revolving around all the facets of summary suits for the
judgment and the issue so decided in Summary Suits shall, for all
purposes, be governed by the Code of Civil Procedure even after
they are transferred as commercial suits. Therefore, Dr. Saraf
would submit that the submission canvassed that section 13
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proviso has extinguished expressly and/or by necessary
intendment the appeal against the order passed by the
Commercial Judge granting the defendant conditional leave to
defend a Summary Suit is not acceptable. Section 13 itself
contemplates that an appeal is maintainable against the
judgment and order which has the effect of judgment though it
falls outside the purview of order XLIII as observed by the
Division Bench. Dr. Saraf has laid great emphasis on these
conclusions and equally that the bar of the proviso to section
13(1) is not applicable in each and every matter specifically
when the subject of the Act 4 of 2016 is commercial disputes as
defined therein. They are also governed by the Special Act /
Statute other than the Code of Civil Procedure. In such
circumstances, he relied upon the above reproduced portion from
paragraph 26 and the conclusion drawn in paragraph 27. Dr.
Saraf would submit that this decision holds that an appeal against
any decision of any Commercial Division / Court is maintainable
and to entertain the appeal at all or not is the appellate court's
power and jurisdiction. That depends upon the facts and
circumstances of each case.
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34 In the second judgment rendered in Smt. Sushila
Singhania, the appeal arose from an order passed by a learned
single Judge. What had transpired was that there was a
partnership firm and during the course of business, differences
arose between the partners. A deed of dissolution was executed
and the firm was dissolved. A supplemental agreement was also
executed. The parties agreed to partition and distribution of the
immovable properties of the firm amongst themselves.
35 Since there was some dispute regarding distribution,
an arbitration suit was filed by the respondent No.1 to 6 for
appointment of an arbitrator under section 20 of the then
Arbitration Act, 1940. The suit was initially dismissed on the
ground of limitation. The matter travelled upto the Supreme
Court and thereafter, the dispute was referred to a sole arbitrator
for arbitration. The sole arbitrator made an award on 4 th August,
2008. He directed partition and distribution of the various
immovable properties of the firm amongst the partners. The
award of the learned arbitrator was challenged in a petition
under section 34 of the Arbitration & Conciliation Act, 1996 and
the petition challenging the said award was dismissed by this
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Court. An appeal therefrom under section 37 of the Arbitration &
Conciliation Act, 1996, was dismissed on 8 th March, 2013. The
Award became executable as a decree.
36 Since the Award was not enforced, in the sense the
distribution did not take place, an Execution Application No.2006
of 2015 under Order XXI of the Code of Civil Procedure, 1908,
was filed in this Court. The respondent No.16 to the appeal also
filed an Execution Application No.1913 of 2015. A Notice
No.1786 of 2015 was issued under Order XXI Rule 22 of the Code
of Civil Procedure to all parties in the execution application,
calling upon them to show cause why the award was not
executable and why warrant of possession should not be issued.
All the parties filed detailed reply to the Notice. The appellant -
Sushila and others opposed and resisted the execution of the
award on the ground that the obligations of the groups in the
award were joint, interlinked and interconnected and to be
executed and complied with simultaneously.
37 From the record it appears that such an objection was
turned down and an order was made to that effect. It was that
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order which came to be challenged in appeal before the Division
Bench.
38 A preliminary objection was raised to the
maintainability of the appeal on the ground that orders which are
passed in execution proceedings are not decrees of Commercial
Courts and Commercial Division nor are they orders which are
specifically enumerated in sub-section (1) of section 13.
Therefore, the appeals are not maintainable.
39 On the other hand, the appellants argued that the
right of appeal is not restricted either to decrees or orders which
are specifically enumerated in the proviso, but would lie also
against decisions of the Commercial Courts or Commercial
Division which have the effect of attaining finality and even
against such a decision, appeal would be maintainable. The
argument further was that the order passed in execution
proceedings is in the nature of a final order affecting substantive
rights of the appellants and, therefore, these appeals are
maintainable.
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40 In dealing with such objection and ruling upon it, the
Division Bench made the following observations to which our
attention was specifically invited by Dr. Saraf. Those
observations are to be found in paragraphs 72 to 75 and
paragraphs 81 to 84 and they read as under :
"72 However, when the final Act was passed, it is
apparent that the exclusion of the provisions of the
Letters Patent are to be found in sub-section (2). The
said sub-section (2) also starts with a non-obstante
clause - notwithstanding anything contained in any
other law -meaning thereby either CPC, Arbitration
Act or the Letters Patent or any other law, no appeal
would lie from any order or decree of a Commercial
Division or a Commercial Court otherwise than in
accordance with the provisions of this Act.
73 Apart from reasons which we have given
hereinabove, and in addition to that while deciding
the question as to whether "decision" includes
"judgment" and "decree", it will have to be considered
whether the word "decision" has to be used in narrow
sense or in a broad sense i.e. whether the word
"decision" will have to be read only as a "decree" or
wider meaning has to be given viz that of "decree",
"judgment" and "order" which conclusively decides
rights of the parties. Though the Letters Patent Act is
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not applicable as it has been expressly excluded
under sub-section (2), it will be necessary to briefly
see how the word "judgment" has been interpreted by
the Apex Court. The word "judgment" is narrowly
treated under Section 2 of the CPC. When the said
question came up for consideration before the
Supreme Court in Shah Babulal Khimji (supra), the
Supreme Court in paras 112 and 113 of its judgment
gave a wider meaning and held that those orders
which conclusively decide right of parties could be
held to be appealable under the Letters Patent
Appeal, though the word "judgment" is narrowly
construed in the CPC. The Apex Court in Shah
Babulal Khimji (supra) did not give narrow meaning
to the said word "judgment" and, therefore, held that
the orders which conclusively decide right of parties,
even if they are not appealable under Section 104 or
Order XLIII, an appeal would lie under the Letters
Patent.
74 The vexed question is whether similar
meaning should be given to the word 'decision' as is
found in sub-section (1) of Section 13.
75 The question which fell for consideration
before the Apex Court in Tirumalachetti Rajaram vs.
Tirumalachetti Radhakrishnayya Chetty and Others ,
was as under:
"If the appellate decree passed by the High Court
makes a variation in the decision of the trial
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court under appeal in favour of a party who
intends to prefer an appeal against the said
appellate decree, can the said decree be said to
affirm the decision of the trial court or not under
Article 133(1) of the Constitution?"
............
81 From the above decisions it can be seen that
the words and phrases previously interpreted by the
Courts have to be used in aid to interpretation of later
statute. The word "decision" therefore in this context
would mean a final decision in the entire suit and
therefore a decree.
82 Mr. Tulzapurkar, the learned Senior Counsel
appearing on behalf of the Appellants has relied upon
the definition of the word "decision" given in Black's
Law Dictionary (9th Edition) and has contended that
"decision" would include an order which finally
determines rights of the parties.
83 It is well settled that definition given by a
dictionary cannot override the interpretation made
by the Court in the context of its meaning as used in
the statute and therefore the said submission is
unacceptable. It is a settled position in law that
dictionary is a secondary and external aid to
interpretation of statute and cannot be relied upon
when a direct meaning/definition has been in use in
law and/or defined specifically in a statute. It has to
be noted here that the term "decision" was a part of
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the Code of Civil Procedure 1882 (Section 596) which
was later incorporated in Section 110 of the CPC
which is now deleted and is also used in Article 133 of
the Constitution of India.
84 From the judgments referred to hereinabove,
it is clear that it has been consistently held that the
term "decision" appearing in three provisions means
decision of the suit. The definition of "decision" and
"judgment" in Black's Law Dictionary is therefore
contrary to the settled law in India."
41 Dr. Saraf would also rely upon paragraph 93 to submit
that the Division Bench in Smt. Sushila Singhania (supra) was of
the view that heading of section 13 deals with Appeals from
Decrees and the proviso carves out an exception in respect of the
orders which are specifically enumerated in section 37 of the
Arbitration Act against which an appeal can be filed. The word
"decision" therefore, will have to be interpreted to mean a decree.
42 Dr. Saraf would submit that this view of the Division
Bench in Smt. Sushila Singhania directly conflicts with that of the
Division Bench in Hubtown. A preliminary issue of
maintainability of appeal in Hubtown was decided and thus the
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challenges were similar. However, in Hubtown, the conclusion
that is reached in paragraph 93 in Smt. Sushila Singhania has
been specifically not reached and thus there is a divergence in the
conclusion of the two Division Benches, particularly when the
judgment in Smt. Sushila Singhania's case does not refer to
Hubtown beyond noting the reliance thereon while setting down
the submissions of the parties. Smt. Sushila Singhania being a
latter judgment, we should either ignore it for it has not explained
and examined the earlier view. If we are of the view that there is
a conflict or divergence in views, the matter is required to be
referred to a larger Bench in terms of judicial discipline.
43 In that, we are taken through the scheme of the law of
precedents and particularly what is a binding precedent and what
is the judicial discipline required when binding decisions or
precedents are brought to the notice of the single Judge and
Division Benches of this Court and if they wish to disagree
therewith. Any disagreement or difference of opinion being noted
and set down thereafter should result in judicial discipline being
followed, according to Dr. Saraf.
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44 Looked at from this angle, according to him, this
appeal should be held to be maintainable and taken up for
consideration on merits.
45 Before we give our opinion, it would be advisable to
independently go through the scheme of Act 4 of 2016. Though it
is noted extensively in both the judgments above, it is better that
we refer it so as to appreciate the arguments of Dr. Saraf.
46 It is an Act to provide for the constitution of
Commercial Courts, Commercial Division and Commercial
Appellate Division in the High Courts for adjudicating commercial
disputes of specified value and for matters connected therewith
or incidental thereto. Chapter I contains preliminary provisions
and therein appears section 2. What we have is a Commercial
Appellate Division being defined in section 2 clause (a) to mean
the Commercial Appellate Division in a High Court constituted
under sub-section (1) of section 5. "Commercial Court" means
the Commercial Court constituted under sub-section (1) of
section 3. Then comes the definition of the terms "Commercial
dispute" and "Commercial Division" appearing in section 2
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clauses (c) and (d) of these definitions and they read as under :
"2. Definitions.- In this Act, unless the context
otherwise requires,-
(a) .........
(c) "commercial dispute" means a dispute
arising out of--
(i) ordinary transactions of merchants,
bankers, financiers and traders such as those
relating to mercantile documents, including
enforcement and interpretation of such
documents;
(ii) export or import of merchandise or
services;
(iii) issues relating to admiralty and maritime
law;
(iv) transactions relating to aircraft, aircraft
engines, aircraft equipment and helicopters,
including sales, leasing and financing of the
same;
(v) carriage of goods;
(vi) construction and infrastructure contracts,
including tenders;
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(vii) agreements relating to immovable
property used exclusively in trade or commerce;
(viii) franchising agreements;
(ix) distribution and licensing agreements;
(x) management and consultancy agreements;
(xi) joint venture agreements;
(xii) shareholders agreements;
(xiii) subscription and investment agreements
pertaining to the services industry including
outsourcing services and financial services;
(xiv) mercantile agency and mercantile usage;
(xv) partnership agreements;
(xvi) technology development agreements;
(xvii) intellectual property rights relating to
registered and unregistered trademarks,
copyright, patent, design, domain names,
geographical indications and semiconductor
integrated circuits;
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(xviii) agreements for sale of goods or provision
of services;
(xix) exploitation of oil and gas reserves or
other natural resources including
electromagnetic spectrum;
(xx) insurance and re-insurance;
(xxi) contracts of agency relating to any of the
above; and
(xxii) such other commercial disputes as may be
notified by the Central Government.
Explanation. --A commercial dispute shall not cease
to be a commercial dispute merely because---
(a) it also involves action for recovery of
immovable property or for realisation of monies
out of immovable property given as security or
involves any other relief pertaining to
immovable property;
(b) one of the contracting parties is the State
or any of its agencies or instrumentalities, or a
private body carrying out public functions;
(d) "Commercial Division" means the
Commercial Division in a High Court constituted
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under sub-section (1) of section 4;"
47 Then we have the term "specified value" defined
section 2 sub-section (1) clause (i). In relation to a commercial
dispute it shall mean the value of the subject matter in respect of
a suit as determined in accordance with section 12 which shall
not be less than rupees one crore or such higher value as shall be
notified by the Central Government. Sub-section (2) of section 2
clarifies that the words and expressions used and not defined in
this Act, but defined in the Code of Civil Procedure, 1908, and the
Indian Evidence Act, 1872, shall have the same meanings
respectively assigned to them in that Code and the Act. Chapter
II deals with Constitution of Commercial Courts, Commercial
Divisions and Commercial Appellate Divisions. Section 3 deals
with Constitution of Commercial Courts and by sub-section (1)
the State Government shall, after consultation with the
concerned High Court, by notification, constitute such number of
commercial courts at District level, as it may deem necessary for
the purpose of exercising the jurisdiction and powers conferred
on those courts under the Act 4 of 2016. The proviso to section 3
sub-section (1) states that no commercial court shall be
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constituted for the territory over which the High Court has
ordinary original civil jurisdiction.
48 Sub-section (2) of section 3 says that the State
Government shall, after consultation with the concerned High
Court, specify, by notification, the local limits of the area to which
the jurisdiction of a commercial court shall extend and may, from
time to time, increase, reduce or alter such limits. Sub-section
(3) of section 3 states that the State Government shall with the
concurrence of the Chief Justice of the High Court appoint one or
more persons having experience in dealing with commercial
disputes to be the Judge or Judges of a commercial court from
amongst the cadre of higher judicial service in the State. Section
4 provides for Constitution of Commercial Division of High Court.
It is apparent from sub-section (1) that in all High Courts having
ordinary civil jurisdiction, the Chief Justice of the High Court
may, by order, constitute Commercial Division having one or
more Benches constituting of a single Judge for the purpose of
exercising the jurisdiction and powers conferred on it under this
Act. There again, the Chief Justice shall nominate such Judges of
the High Court who have experience in dealing with commercial
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disputes to be Judges of the Commercial Division.
49 Section 5 provides for constitution of Commercial
Appellate Division and following the Notification under sub-
section (1) of section 3 or under sub-section (1) of section 4, the
Chief Justice of the concerned High Court shall, by order,
constitute Commercial Appellate Division having one or more
Division Benches for the purpose of exercising the jurisdiction
and powers conferred on it by the Act. There again, the
nomination of Judges experienced in dealing with commercial
disputes is contemplated by sub-section (2) of section 5. Sections
6 and 7 read as under :
"6. Jurisdiction of Commercial Court. - The
Commercial Court shall have jurisdiction to try all
suits and applications relating to a commercial
dispute of a Specified Value arising out of the entire
territory of the State over which it has been vested
territorial jurisdiction.
Explanation.-- For the purposes of this section, a
commercial dispute shall be considered to arise out of
the entire territory of the State over which a
Commercial Court has been vested jurisdiction, if the
suit or application relating to such commercial
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dispute has been instituted as per the provisions of
sections 16 to 20 of the Code of Civil Procedure, 1908
(5 of 1908).
7. Jurisdiction of Commercial Divisions of
High Courts.- All suits and applications relating to
commercial disputes of a Specified Value filed in a
High Court having ordinary original civil jurisdiction
shall be heard and disposed of by the Commercial
Division of that High Court:
Provided that all suits and applications
relating to commercial disputes, stipulated by an Act
to lie in a court not inferior to a District Court, and
filed or pending on the original side of the High Court,
shall be heard and disposed of by the Commercial
Division of the High Court:
Provided further that all suits and
applications transferred to the High Court by virtue of
sub-section (4) of section 22 of the Designs Act, 2000
or section 104 of the Patents Act, 1970 (39 of 1970)
shall be heard and disposed of by the Commercial
Division of the High Court in all the areas over which
the High Court exercises ordinary original civil
jurisdiction."
50 A perusal of these provisions would indicate as to how
the commercial court shall have jurisdiction to try all suits and
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applications relating to a commercial dispute of a specified value
arising out of the territorial jurisdiction of the State over which it
has been vested territorial jurisdiction.
51 We do not refer to the Explanation to section 6, but
section 7 defines the jurisdiction of Commercial Division of High
Courts and there, all suits and applications relating to
commercial dispute of a specified value filed in a High Court
having ordinary original civil jurisdiction shall be heard and
disposed of by the Commercial Division of that High Court.
Broken into parts, it would mean all suits and applications
relating to commercial disputes of a specified value filed in High
Court having ordinary original civil jurisdiction shall be heard
and disposed of by the Commercial Division of that Court. The
proviso to this section 7 would indicate as to how all suits and
applications relating to commercial disputes stipulated by the Act
would lie in a court not inferior to a District Court and filed or
pending on the original side of the High Court, shall be heard and
disposed of by the Commercial Division of the High Court and
further all suits and applications transferred to the High Court by
virtue of certain provisions of the Act in the second proviso to
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section 7 shall be heard and disposed of by the Commercial
Division of the High Court in all areas over which it has ordinary
original civil jurisdiction.
52 Section 8 enacts a bar against a Revision Application
or Petition against an interlocutory order. That section is equally
important for our purpose for it rules out the maintainability of a
Revision Application or Petition against any interlocutory order
of a Commercial Court, including an order on the issue of
jurisdiction, and any such challenge subject to the provisions of
section 13, shall be raised only in an appeal against the decree of
the Commercial Court.
53 The argument, therefore, is that this provision being
subject to section 13, it is only a Revision Petition which will not
lie and shall not be entertained against any interlocutory order
of a Commercial Court, including on the jurisdiction, but this
provision being subject to section 13, that does not rule out the
right of maintainability of an appeal. Even if this section is as
above, no construction on section 13 should be placed with the
aid and assistance of section 8 of the Act 4 of 2016 so as to
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whittle down or dilute the right of appeal. Further, the
requirement is that this section will not throw light on the
maintainability of the appeal from an order of the above nature
and passed by a Judge exercising power and authority as
Commercial Division of a High Court. At best, a Revision Petition
or application is ruled out against any interlocutory order of a
Commercial Court.
54 Then follows section 9 which transfers a counter
claim in a commercial dispute of specified value. There,
notwithstanding anything contained in the Code of Civil
Procedure, in the event that a counter claim filed in a suit before
a civil court relating to a commercial dispute is of specified value,
such suit shall be transferred by the civil court to the Commercial
Division or Commercial Court, as the case may be, having
territorial jurisdiction over such suit. Sub-section (2) of section 9
enables the Commercial Appellate Division of the High Court
exercising supervisory jurisdiction over the civil court in its
discretion to withdraw the suit on the application of the parties in
the event sub-section (1) of section 9 is not complied with.
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55 Then, section 10 sets out the jurisdiction in respect of
arbitration matters and sections 10 and 11, for our purpose, read
as under :
"10. Jurisdiction in respect of arbitration
matters.- Where the subject-matter of an arbitration
is a commercial dispute of a Specified Value and-- (1)
If such arbitration is an international commercial
arbitration, all applications or appeals arising out of
such arbitration under the provisions of the
Arbitration and Conciliation Act, 1996 that have been
filed in a High Court, shall be heard and disposed of by
the Commercial Division where such Commercial
Division has been constituted in such High Court.
(2) If such arbitration is other than an
international commercial arbitration, all applications
or appeals arising out of such arbitration under the
provisions of the Arbitration and Conciliation Act,
1996 that have been filed on the original side of the
High Court, shall be heard and disposed of by the
Commercial Division where such Commercial Division
has been constituted in such High Court.
(3) If such arbitration is other than an
international commercial arbitration, all applications
or appeals arising out of such arbitration under the
provisions of the Arbitration and Conciliation Act,
1996 that would ordinarily lie before any principal
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civil court of original jurisdiction in a district (not
being a High Court) shall be filed in, and heard and
disposed of by the Commercial Court exercising
territorial jurisdiction over such arbitration where
such Commercial Court has been constituted.
11. Bar of jurisdiction of Commercial
Courts and Commercial Divisions. -
Notwithstanding anything contained in this Act, a
Commercial Court or a Commercial Division shall not
entertain or decide any suit, application or
proceedings relating to any commercial dispute in
respect of which the jurisdiction of the civil court is
either expressly or impliedly barred under any other
law for the time being in force."
56 A reading thereof would denote that the Act also
enacts provisions so as to deal with the jurisdiction in respect of
arbitration matters and then creates a bar, in the sense
notwithstanding anything contained in the Act 4 of 2016, a
Commercial Court or Commercial Division shall not entertain or
decide any suit, application or proceedings relating to any
commercial dispute in respect of which the jurisdiction of the civil
court is either expressly or impliedly barred under any other law
for the time being in force. Then Chapter III contains section 12
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and section 12 sets down by sub-section (1), the specified value of
the subject matter of the commercial dispute in the suit, appeal or
application and that should be determined in the manner set out
in sub-section (1) clauses (a) to (e). By sub-section (2), the
aggregate value of the claim and counter claim, if any, as set out
in the statement of claim and counter claim, if any, in an
arbitration of a commercial dispute shall be the basis for
determining whether such arbitration is subject to the
jurisdiction of a Commercial Division, Commercial Appellate
Division or Commercial Court, as the case may be. Then, sub-
section (3) of section 12 is important and reads as under :
"12. Determination of Specified Value.-
(1) .... .... ...
(3) No appeal or civil revision application under
section 115 of the Code of Civil Procedure, 1908, as
the case may be, shall lie from an order of a
Commercial Division or Commercial Court finding
that it has jurisdiction to hear a commercial dispute
under this Act"
57 Then come sections 13 and 14 appearing in Chapter
IV and they read thus :
"13. Appeals from decrees of Commercial
Courts and Commercial Divisions. - (1) Any
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person aggrieved by the decision of the Commercial
Court or Commercial Division of a High Court may
appeal to the Commercial Appellate Division of that
High Court within a period of sixty days from the date
of judgment or order, as the case may be: Provided
that an appeal shall lie from such orders passed by a
Commercial Division or a Commercial Court that are
specifically enumerated under Order XLIII of the
Code of Civil Procedure, 1908 as amended by this Act
and section 37 of the Arbitration and Conciliation Act,
1996. (2) Notwithstanding anything contained in any
other law for the time being in force or Letters Patent
of a High Court, no appeal shall lie from any order or
decree of a Commercial Division or Commercial Court
otherwise than in accordance with the provisions of
this Act.
14. Expeditious disposal of appeals. - The
Commercial Appellate Division shall endeavour to
dispose of appeals filed before it within a period of six
months from the date of filing of such appeal."
58 Before we refer to them in detail, what we have are
the provisions of Chapter-V dealing with transfer of pending
cases, but the Chapter itself is titled as "Transfer of Pending
Suits". Then, what we have by Chapter VI are Amendments to
the Provisions of the Code of Civil Procedure, 1908, and the
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provisions of the Code of Civil Procedure, in their application to
any suit in respect of a commercial dispute of a specified value,
stand amended in the manner as specified in the schedule. By
sub-section (2) of section 16, the Commercial Division and the
Commercial Court shall follow the provisions of the Code of Civil
Procedure amended by this Act, namely, Act 4 of 2016 in the trial
of a suit in respect of commercial dispute of a specified value and
by sub-section (3) where any provision of any rule of the
jurisdictional High Court or any amendment to the Code of Civil
Procedure, 1908 by the State Government is in conflict with the
provisions of the Code of Civil Procedure, 1908, as amended by
this Act, the provisions of the Code of Civil Procedure as amended
by this Act shall prevail.
59 Chapter VII contains Miscellaneous provisions
enabling collection and disclosure of data by Commercial Courts,
Commercial Divisions and Commercial Appellate Divisions
(section 17). Power of the High Court to issue directions is
conferred by section 18 and infrastructural facilities by section
19. By section 20, training and continuous education is
contemplated and by the State Government in consultation with
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the High Court establishing necessary facilities providing for
training of Judges. Section 21 gives the Act an overriding effect
and reads thus :
"21. Act to have overriding effect. - Save as
otherwise provided, the provisions of this Act shall
have effect, notwithstanding anything inconsistent
therewith contained in any other law for the time
being in force or in any instrument having effect by
virtue of any law for the time being in force other
than this Act."
60 Section 22 gives power to remove difficulties and
section 23 titled Repeal and savings repeals the Ordinance
preceding the Act by sub-section (1) but says notwithstanding
such repeal, anything done or any action taken under the said
Ordinance shall be deemed to have been done or taken under the
corresponding provision of this Act. The Schedule need not be
referred to for our purpose.
61 Thus, there is a Commercial Court which has to be
constituted at District level. Then, there is a constitution of
Commercial Division of High Court and constitution of a
Commercial Appellate Division following which the jurisdiction of
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the Commercial Court and Commercial Division of the High Court
has been set out. These are, therefore, courts which are pre-
existing and which have otherwise a power to try the suits and
applications. After the Act 4 of 2016, they are to be constituted
as Commercial Courts at District level and within the High Court
having ordinary ordinary civil jurisdiction, the Act contemplates
constitution of Commercial Division of High Court and
Commercial Appellate Division.
62 Section 13 and the preceding provisions together with
those following the same would have to be read together and
harmoniously to arrive at a conclusion as to whether the right of
appeal and conferred by section 13 is as wide as contended by Dr.
Saraf or restricted as alleged by Mr. Kadam.
63 Before that, we must dispose of one argument and
which has been heavily pressed into service by the appellants as
also the respondents. Mr. Kadam would submit that sub-section
(2) of section 13 is opening with a non obstante clause. The
sweep of this non obstante clause is so wide that it states that
overrides any other law for the time being in force or Letters
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Patent of a High Court. Therefore, an appeal would lie from any
order or decree of a Commercial Division or a Commercial Court
only within the four corners of the Act 4 of 2016 and the
appellate power would not be available to impugn or challenge
any and every decision even if it is styled as a judgment. Dr.
Saraf would submit that despite such a non obstante clause and
given its scope, the tests laid down by the Hon'ble Supreme Court
in the case of Shah Babulal Khimji vs Jayaben D. Kania & Anr.,
AIR 1981 SC 1786 still hold the field. So long as that which is
challenged is a decision amounting to a judgment and on par with
that contemplated by clause 15 of the Letters Patent to be an
appealable one, this Act and section 13 should be construed as
not taking away a right of appeal against the same is the
argument of Dr. Saraf.
64 Shah Babulal Khimji was a case which arose from this
Court. In that, a Bench of three Judges of the Hon'ble Supreme
Court was called upon to decide as to whether an order passed in
appeal by a Division Bench of this Court and, to be precise,
dismissing the appeal on the ground that it was not maintainable,
which appeal arose from the order of a learned single Judge, was
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correct in law. In the sense the Division Bench held that the
appeal is not maintainable because the impugned order was not a
judgment within the meaning of clause 15 of the Letters Patent.
65 The Hon'ble Supreme Court ruled that the appeal
before the Division Bench was maintainable and the Division
Bench should have entertained and decided it on merits.
66 There, the plaintiff-appellant filed a suit on the
original side of the Bombay High Court for specific performance of
a contract and prayed for an interim relief by appointing a
Receiver of the suit property and injuncting the defendant from
disposing of the suit property during the pendency of the suit.
This relief was sought by filing of a Notice of Motion. That Notice
of Motion was dismissed by a learned single Judge. The plaintiff-
appellant filed an appeal before the High Court which dismissed it
as being not maintainable.
67 The High Court found that the appeal was not
maintainable because the order of the learned single Judge was
not a judgment as contemplated by clause 15 of the Letters
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Patent. The Hon'ble Supreme Court, in paragraph 5, enumerated
the substantial questions of law and which were, inter alia,
touching the scope, ambit and meaning of the word 'judgment'
and particularly in the context of those High Courts which have
ordinary original civil jurisdiction depending on valuation of the
suit or the action.
68 The Supreme Court then traced the interpretation of
the word 'judgment' appearing in the Letters Patent of several
High Courts and after a survey of these decisions, noting the rival
contentions, inter alia, that the provisions of section 104 read
with Order XLIII Rule 1 of the Code of Civil Procedure do not
impose any bar and thus by virtue of these provisions, the order
impugned falls squarely under clauses (r) and (s) of Order XLIII
Rule 1 of the Code of Civil Procedure, 1908, and, therefore, is
appealable to a Division Bench. Even if the Court holds that the
Letters Patent was a special law overriding the Code of Civil
Procedure the power of appeal thereunder against an order is in
no way inconsistent with clause 15 of the Letters Patent. Section
104 merely provides an additional remedy and confers a new
jurisdiction on the High Court without at all interfering with or
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overriding the existing provisions of the Letters Patent. Then,
there are other contentions and which are noted against the
submissions of the appellant. In paragraph 15, the Hon'ble
Supreme Court dealt with the first point relating to applicability
of section 104 read with Order XLIII Rule 1 of the Code of Civil
Procedure,1908, and thereafter concluded as under :
"20 To begin with, it is not disputed that a Trial
Judge has to follow the entire procedure laid down by
the Code of 1908 starting from the presentation of the
plaint right up to the delivery of the judgment. The
only difference in the assumption of jurisdiction by
the High Court is that a suit of a particular valuation
has to be instituted in the High Court rather than in
the District court. Secondly, it is indisputable that any
final judgment that the Trial Judge passes deciding
the suit one way or the other amounts to a decree and
under the provisions of the Letters Patent an appeal
lies to a larger Bench which normally is a Division
Bench as provided for under the Rules made by
various High Courts. Thirdly, the Letters Patent itself
does not define the term 'judgment' and has advisedly
not used the word 'decree' in respect of any judgment
that may be given by the Trial Judge. Section 5 of the
Code of 1908 may be extracted thus:
"5. Application of the Code to Revenue Courts:
(1) Where any Revenue Courts are governed by
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the provisions of this Code in those matters of
procedure upon which any special enactment
applicable to them is silent the State
Government may, by notification in the Official
Gazette, declare that any portions of those pro
visions which are not expressly made applicable
by this Code shall not apply to those Courts, or
shall only apply to them with such modifications
as the State Government may prescribe.
(2) "Revenue Court" in Sub-section (1) means a
court having jurisdiction under any local law to
entertain suits of other proceedings relating to
the rent, revenue or profits of land used for
agricultural purposes, but does not include a
Civil Court having original jurisdiction under
this Code to try such suits or proceedings as
being suits or proceedings of a civil nature "
21 The importance of this section is that
wherever the provisions of the Code of Civil
Procedure are sought to be excluded by any special
enactment which may be silent on the point, the State
Government can by notification apply the provisions
of the Code to Revenue courts. A bare perusal of this
section would clearly reveal that excepting Revenue
courts all other Civil courts would normally be
governed by the provisions of the Code of Civil
Procedure in the matter of procedure. Section 4(1) of
the Code of 1908 which is a saving provision clearly
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provides that in the absence of any specific provision
to the contrary the provisions of the Code does not
limit or affect any special or local law. Thus, the test
contained in s. 4 is not applicable in the instant case
because even if the Letters Patent of the High Court
be deemed to be a special law as contemplated by s. 4,
the provisions of s. 104 do not seek to limit or affect
the provisions of the Letters Patent.
22 This now takes us to s. 104 of the Code of
1908, the relevant portion of which may be extracted
thus:-
"104.(1) An appeal shall lie from the following
orders, and save as otherwise expressly
provided in the body of this Code or by any law
for the time being in force, from no other orders:-
(a) to (f) annulled;
(ff) an order under section 35-A
(g) an order under section 95;
(h) an order under any of the provisions of this
Code imposing a fine or directing the arrest or
detention in the civil prison of any person except
where such arrest or detention is in execution of
a decree;
(1) any order made under rules from which an
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appeal is expressly allowed by rules:
(2) No appeal shall lie from any order passed in
appeal under this section."
23 Thus by the force of S.104 all appeals as
indicated in the various clauses of order 43 Rule 1
viz. (a) to (w) would lie to the appellate court. Section
105 clearly provides that no appeal shall lie from any
order of a Court made in the exercise of its original or
appellate jurisdiction except according to the
procedure laid down by the Code. The relevant part of
S. 105 (1) may be extracted thus:
"105. (1) Save as otherwise expressly provided
no appeal shall lie from any order made by a
Court in the exercise of its original or appellate
jurisdiction; but where a decree is appealed
from, any error, defect or irregularity in any
order, affecting the decision of the case, may be
set forth as a ground of objection in the
memorandum of appeal."
24 Finally, order, 49 Rule 3 expressly exempts
matters contained in clauses (1) to (6) of Rule 3 from
the operation of the extraordinary original civil
jurisdiction of the chartered High Courts, that is to
say, the jurisdiction conferred on the High Court by
the Letters Patent. The relevant portion of this
provision may be extracted thus:
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"O. 49 ... ... ... ... ...
3. The following rules shall not apply to any
Chartered High Court in the exercise of its
ordinary or extraordinary original civil
jurisdiction, namely:- (1) Rule 10 and Rule 11,
clauses (b) & (c), of order VII;
(2) Rule 3 of order X;
(3) Rule 2 of order XVI;
(4) Rules 5, 6, 8, 9, 10, 11, 13, 14, 15, and 16 (so
far as relates to the manner of taking evidence)
of Order XVIII;
(5) Rules 1 to 8 of order XX; and
(6) Rule 7 of order XXXIII (so far as relates to
the making of a memorandum); and rule 35 of
order XLI shall not apply to any such High Court
in the exercise of its appellate jurisdiction"
25 It may be pertinent to note that although a
number of rules have been exempted from the
operation of the Code, order 43 Rule 1 and the clauses
thereunder have not been mentioned in any of these
clauses.
26 Thus, a combined reading of the various
provisions of the Code of Civil Procedure referred to
above lead to the irresistible conclusion that S. 104
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read with order 43 Rule 1 clearly applies to the
proceedings before the Trial Judge of the High Court.
Unfortunately, this fact does not appear to have been
noticed by any of the decisions rendered by various
High Courts."
69 The Court, in paragraph 28 expressed its agreement
with the appellants' senior counsel that in the instant case,
section 104 read with Order XLIII Rule 1 does not, in any way,
abridge, interfere with or curb the power conferred on the trial
Judge by clause 15 of the Letters Patent. What they do is to give
an additional remedy by way of an appeal from the orders of the
trial Judge to a larger Bench. Indeed, if this is the position, then
the contention of the respondent that section 104 will not apply
to internal appeals in the High Court cannot be countenanced. In
fact, the question of application of the Code of Civil Procedure to
internal appeals in High Court does not arise at all because the
Code of Civil Procedure merely provides for a forum and if Order
XLIII Rule 1 applies to a trial Judge, then, the forum created by
the Court would certainly include a forum within the High Court
to which appeals against the judgment of a trial Judge would lie.
Therefore, the Supreme Court rejected the argument that Order
XLIII Rule 1 cannot apply to internal appeals of the High Court.
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Then, the Hon'ble Supreme Court refers to some of the provisions
of the old Code and the judgments, including the judgments of the
Privy Council interpreting the same. Then, in paragraphs 32 and
33, the Court enumerates as to how section 104 provides for
additional or supplementary remedy by way of an appeal. After
referring to the Letters Patent of this Court, the Hon'ble Supreme
Court, in paragraph 43, concludes that the judgment of the three
Judges of the Hon'ble Calcutta High Court furnishes a complete
answer to the arguments of the respondent that Order XLIII Rule
1 will have no application to internal appeals in the High Court
under the provisions of the Letters Patent. Then, what we find is
the Supreme Court turning its attention to the second limb of the
argument of the appellant that even assuming that Order XLIII
Rule 1 does not apply to the High Court so far as the trial Judge of
the said court is concerned, there can be no doubt that the orders
indicated in various clauses of Order XLIII Rule 1 possess the
attributes and incidents of a final order which conclusively decide
a particular issue so far as the trial Court is concerned. After
noting the arguments of the appellants' senior counsel on this
point, in paragraph 55, the Supreme Court referred to the
decision in the case of Radhey Shyam vs. Shyam Behari Singh
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(1970) 2 SCC 405, and in paragraph 57 concluded that on a
parity of reasoning an order refusing to appoint a Receiver or
grant injunction and similar orders mentioned in various clauses
of Order XLIII Rule 1 fall within the tests laid down by this Court
of being a judgment.
70 The Hon'ble Supreme Court noticed the contrary view
as to what could be termed as a judgment and within the meaning
of clause 15 of the Letters Patent. After noticing all these views,
the Hon'ble Supreme Court concludes as under :
"78 Thus after considering the arguments of
counsel for the parties on the first two limbs of the
questions, our conclusions are :-
(1) That there is no inconsistency between
Section 104 read with Order 43 Rule 1 and the
appeals under the Letters Patent and there is
nothing to show that the Letters Patent in any
way excludes or overrides the application of
Section 104 read with Order 43 Rule 1 or to
show that these provisions would not apply to
internal appeals within the High Court.
(2) That even if it be assumed that order 43
Rule I does not apply to Letters Patent appeals,
the principles governing these provisions would
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apply by process of analogy.
(3) That having regard to the nature of the
orders contemplated in the various clauses of
Order 43 Rule 1, there can be no doubt that
these orders purport to decide valuable rights of
the parties in ancillary proceedings even though
the suit is kept alive and that these orders do
possess the attributes or character of finality so
as to be judgments within the meaning of clause
15 of the Letters Patent and hence, appealable to
a larger Bench.
(4) The concept of the Letters Patent
governing only the internal appeals in the High
Courts and the Code of Civil Procedure having no
application to such appeals is based on a serious
misconception of the legal position."
71 In paragraph 79, the Supreme Court considered an
equally important question as to whether despite its finding that
section 104 read with Order XLIII Rule 1 applies to Letters
Patent and all orders passed by a trial Judge under clauses (a) to
(w) would be appealable to the Division Bench, there would still
be a large number of orders passed by a trial Judge which may
not be covered by Order XLIII Rule 1. The question then was
under what circumstances orders passed by a trial Judge not
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covered by Order XLIII Rule 1 would be appealable to the Division
Bench. In such cases, the import, definition and the meaning of
the word 'judgment' appearing in clause 15 assumes a real
significance and a new complexion because the term 'judgment'
appearing in the Letters Patent does not exclude orders not
falling under the various clauses of Order XLIII Rule 1. The
vexed controversial question was what is the real concept and
purport of the word 'judgment' used in clause 15 of the Letters
Patent. The paragraphs thereafter are devoted to the
consideration and examination of this question and issue and
thereafter the judgments on the point have been exclusively
noted, rendered by several High Courts and equally by the
Hon'ble Supreme Court. The nature of the orders which have
been termed as judgment are then considered and what is heavily
relied upon before us are the conclusions in paragraph 113. That
paragraph reads as under :
"113 Thus, under the Code of Civil Procedure, a
judgment consists of the reasons and grounds for a
decree passed by a court. As a judgment constitutes
the reasons for the decree it follows as a matter of
course that the judgment must be a formal
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adjudication which conclusively determines the
rights of the parties with regard to all or any of the
matters in controversy. The concept of a judgment as
defined by the Code of Civil Procedure seems to be
rather narrow and the limitations engrafted by sub-
section (2) of section 2 cannot be physically imported
into the definition of the word 'judgment' as used in
clause 15 of the Letters Patent because the Letters
Patent has advisedly not used the terms 'order' or
'decree' anywhere. The intention, therefore, of the
givers of the Letters Patent was that the word
'judgment' should receive a much wider and more
liberal interpretation than the word 'judgment' used
in the Code of Civil Procedure. At the same time, it
cannot be said that any order passed by a Trial Judge
would amount to a judgment; otherwise there will be
no end to the number of orders which would be
appealable under the Letters Patent. It seems to us
that the word 'judgment' has undoubtedly a concept of
finality in a broader and not a narrower sense. In
other words, a judgment can be of three kinds :.
(1) A final judgment - A judgment which decides
all the questions or issues in controversy so far as the
Trial Judge is concerned and leaves nothing else to be
decided. This would mean that by virtue of the
judgment, the suit or action brought by the plaintiff is
dismissed or decreed in part or in full. Such an order
passed by the Trial Judge indisputably and
unquestionably is a judgment within the meaning of
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the Letters Patent and even amounts to a decree so
that an appeal would lie from such a judgment to a
Division Bench.
(2) A preliminary judgment - This kind of a judgment
may take two forms - (a) where the Trial Judge by an
order dismisses the suit without going into the merits
of the suit but only on a preliminary objection raised
by the defendant or the party opposing on the ground
that the suit is not maintainable. Here also, as the suit
is finally decided one way or the other, the order
passed by the Trial Judge would be a judgment finally
deciding the cause so far as the Trial Judge is
concerned and therefore appealable to the larger
Bench. (b) Another shape which a preliminary
judgment may take is that where the Trial Judge
passes an order after hearing the preliminary
objections raised by the defendant relating to
maintainability of the suit, e.g., bar of jurisdiction, res
judicata, a manifest defect in the suit, absence of
notice under Section 80 and the like, and these
objections are decided by the Trial Judge against the
defendant, the suit is not terminated but continues
and has to be tried on merits but the order of the Trial
Judge rejecting the objections doubtless adversely
affects a valuable right of the defendant who, if his
objections are valid, is entitled to get the suit
dismissed on preliminary grounds. Thus, such an
order even though it keeps the suit alive, undoubtedly
decides an important aspect of the trial which affects
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a vital right of the defendant and must, therefore, be
construed to be a judgment so as to be appealable to
larger Bench.
(3) Intermediary or Interlocutory judgment-Most of
the interlocutory orders which contain the quality of
finality are clearly specified in clauses (a) to (w) of
Order 43 Rule 1 and have already been held by us to
be judgments within the meaning of the Letters
Patent and, therefore, appealable. There may also be
interlocutory orders which are not covered by Order
43 Rule 1 but which also possess the characteristics
and trappings of finality in that, the orders may
adversely affect a valuable right of the party or decide
an important aspect of the trial in an ancillary
proceeding. Before such an order can be a judgment
the adverse effect on the party concerned must be
direct and immediate rather than indirect or remote.
For instance, where the Trial Judge in a suit under
Order 37 of the Code of Civil Procedure refuses the
defendant leave to defend the suit, the order directly
affects the defendant because he loses a valuable
right to defend the suit and his remedy is confined
only to contest the plaintiff's case on his own evidence
without being given a chance to rebut that evidence.
As such an order vitally affects a valuable right of the
defendant it will undoubtedly be treated as a
judgment within the meaning of the Letters Patent so
as to be appealable to a larger Bench. Take the
converse case in a similar suit where the trial Judge
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allows the defendant to defend the suit in which case
although the plaintiff is adversely affected but the
damage or prejudice caused to him is not direct or
immediate but of a minimal nature and rather too
remote because the plaintiff still possesses his full
right to show that the defence is false and succeed in
the suit. Thus, such an order passed by the Trial
Judge would not amount to a judgment within the
meaning of clause 15 of the Letters Patent but will be
purely an interlocutory order. Similarly, suppose the
Trial Judge passes an Order setting aside an exparte
decree against the defendant, which is not appealable
under any of the clauses of Order 43 Rule 1 though an
order rejecting an application to set aside the decree
passed exparte falls within Order 43 Rule l clause (d)
and is appealable, the serious question that arises is
whether or not the order first mentioned is a
judgment within the meaning of Letters Patent. The
fact, however, remains that the order setting aside
the ex-parte decree puts the defendant to a great
advantage and works serious injustice to the plaintiff
because as a consequence of the order, the plaintiff
has now to contest the suit and is deprived of the
fruits of the decree passed in his favour. In these
circumstances, therefore, the order passed by the
Trial Judge setting aside the ex parte decree vitally
affects the valuable rights of the plaintiff and hence
amounts to an interlocutory judgment and is
therefore, appealable to a larger Bench."
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72 Thus, the reliance by Dr. Saraf on these paragraphs
overlooks the further pertinent observation of the Hon'ble
Supreme Court, namely, that a trial Judge may pass a number of
orders whereby some of the various steps to be taken by the
parties in pursuance of the suit may be of routine nature. While
other orders may cause inconvenience to one party or the other
and for illustration, an order refusing an adjournment, an order
refusing to summon an additional witness or document, an order
refusing to condone delay in filing documents after the first date
of hearing, an order of costs to one of the parties for its default or
an order exercising discretion in respect of a procedural nature
against one party or the other. Such orders are purely
interlocutory and cannot constitute judgments because it will
always be open to the aggrieved party to make a grievance of the
orders passed against the party concerned in the appeal against
the final judgment passed by the trial Judge. Thus, all the
interlocutory orders cannot be regarded as judgments, but only
those orders would be judgments which decide matters of
moment or affect vital and valuable rights of the parties and
which work serious injustice to the party concerned. Similarly,
orders passed by the trial Judge deciding question of
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admissibility or relevancy of a document also cannot be treated
as judgments because the grievance on this score can be
corrected by the appellate court in appeal against the final
judgment.
73 In paragraph 116, the Hon'ble Supreme Court gave
instances of an interlocutory order which amounts to exercise of
discretion and which may yet amount to a judgment within the
meaning of clause 15 of the Letters Patent. There, the illustration
of an amendment being allowed or including a cause of action or
relief as a result of which a vested right of limitation accrued to
the defendant is taken away and rendered nugatory. Though the
order is purely discretionary and interlocutory in nature, the
order contains the attributes and characteristics of finality and
must be treated as a judgment within the meaning of the Letters
Patent. Then, in paragraph 117, the Supreme Court deals with a
case of an amendment being allowed at the instance of the
plaintiff to add a particular relief or take an additional ground
inconsistent with the pleas taken by him, but is not barred by
limitation and does not work serious injustice to the defendant
who would have ample opportunity to disprove the amended plea
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taken by the plaintiff at the trial. This would be a simple
interlocutory order without containing any quality of finality and
would, therefore, not be a judgment within the meaning of clause
15 of the Letters Patent.
74 Therefore, the instances cited as illustrations, were
termed as not exhaustive tests. These are then multiplied by
reference to several orders which could be passed and thereafter,
the Hon'ble Supreme Court concludes that the term 'judgment' as
interpreted and the tests laid down for its interpretation would
bring an end to the controversy.
75 Thus, the supporting or concurring judgments in this
case may be elaborating or amplifying the essential conclusions
further, but what we find is that in all these concurring views
what has been enumerated is that an exhaustive or
comprehensive definition of 'judgment' as contemplated in clause
15 of the Letters Patent cannot be properly given and it will be
wise to remember that in the Letters Patent itself there is no
definition of the word 'judgment'.
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76 Dr. Saraf has argued before us that this judgment of
the Hon'ble Supreme Court would continue to bind us irrespective
of the language of sub-section (2) of section 13 whereas, by sub-
section (1) of section 13, according to Mr. Kadam, what could be
appealable is exhaustively set out. Mr. Kadam would submit that
any person aggrieved by the decision of the Commercial Court or
Commercial Division of a High Court may appeal to the
Commercial Appellate Division of that High Court from the date of
the judgment or order, as the case may be, and the proviso says
that an appeal shall lie from such orders passed by a Commercial
Division or a Commercial Court that are specifically enumerated
under Order XLIII of the Code of Civil Procedure as amended by
Act 4 of 2016 and 37 of the Arbitration & Conciliation Act, 1996.
If, according to Mr. Kadam, we apply and follow what is
enumerated in Shah Babual Khimji and import the tests applied
and evolved for interpreting the word 'judgment', that would
mean we ignore sub-section (2) of section 13 completely and
introduce a right of appeal as provided in the Letters Patent of a
High Court but that cannot be taken into consideration at all for
the purposes of deciding as to whether the present appeal is
maintainable. According to Mr. Kadam, the non obstante clause
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in sub-section (2) would denote that no appeal shall lie from any
order or decree of a Commercial Division or Commercial Court
otherwise than in accordance with the provisions of this Act 4 of
2016.
77 Since Mr. Kadam has referred to the Code of Civil
Procedure, we would have to refer to some of its provisions.
78 Mr. Kadam would submit that the word 'decree' is
defined therein and this definition cannot be ignored for this very
word has been inserted in section 13. He would submit that the
word 'decree' is defined to mean not only the formal expression of
an adjudication, but which so far as regards the Courts
expressing it conclusively determines the rights of the parties
with regard to all or any of the matters and controversy in the
suit and may be either preliminary or final. It shall be deemed to
include in the later part, the rejection of a plaint and the
determination of any question within section 144, but shall not
include any adjudication from which an appeal lies as appeal from
an order or any order of dismissal for default. Hence, so long as a
decision is not partaking the character of a "decree" or "order" as
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defined in section 2, clause (14) of Code of Civil Procedure not
restricted only to the formal expression of any decision of a civil
court, but that which is not a decree, then, these definitions have
a great bearing, along with section 2(9) of the Code of Civil
Procedure, which defines 'judgment' to mean the statement given
by the Judge on the grounds of decree or order, on the issue
before us. Dr. Saraf, however, would submit that the word decree
as defined includes preliminary or final and as far as a
preliminary decree is concerned, he would rely on section 97 and
to submit that where any party aggrieved by a preliminary
decree passed after the commencement of the Code of Civil
Procedure does not appeal from such decree, he shall be
precluded from disputing its correctness in any appeal which
may be preferred from the final decree.
79 Dr. Saraf has gone as far as contending that the
impugned order is in the nature of a preliminary decree and on
the point of jurisdiction. What this argument overlooks is
whether it conclusively determines the rights of the parties with
regard to all or any of the matters in controversy in the suit. The
argument further is that because this is a ruling on jurisdiction of
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the Court insofar as the defendants / appellants are concerned,
that concludes the matter in controversy inasmuch as they would
have to submit to the territorial jurisdiction of this Court.
80 Even after Shah Babulal Khimji and whether every
order passed is a judgment or not, in a reported decision in the
case of Employer in Relation to Management of Central Mine
Panning and Design Institute Ltd. vs. Union of India & anr. , a two
Judge Bench of the Hon'ble Supreme Court had to deal with
somewhat identical issue. That decision reported in AIR 2001 SC
883 notes clause 10 of the Letters Patent of the Patna High Court
which is identically worded to clause 15 of the Letters Patent of
the Bombay High Court and some other High Courts and in
paragraphs 10, 11, 12, 13 and 14 of this judgment the Hon'ble
Court analyses the same as under :
"10 The above analysis of Clause 15 of the
Letters Patent will equally apply to Clause 10 of the
Letters Patent of Patna. It follows that an appeal shall
lie to a larger Bench of the High Court of Judicature at
Patna from a judgment of one judge of the said High
Court or one judge of any Division Court pursuant to
Article 225 of the Constitution of India. The following
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categories of judgment are excluded from the
appealable judgments under the first limb of Clause
10 of the Letters Patent:
(i) a judgment passed in exercise of appellate
jurisdiction in respect of a decree or order made in
exercise of appellate jurisdiction by a court subject to
superintendence of the said High Court in other words
no letters patent appeal lies to the High Court from a
judgment of one judge of the High Court passed in
second appeal;
(ii) an order made by one judge of the High Court
in exercise of revisional jurisdiction; and
(iii) a sentence or order passed or made in
exercise of power under the provisions of Section 107
of Government of India Act, 1915 (now Article 227 of
the Constitution of India) or in exercise of criminal
jurisdiction.
11 From the above discussion, it is clear that
from all judgments except those falling under the
excluded categories, an appeal lies to the same High
Court.
12 The next question which needs to be
considered is, what does the expression 'judgment'
mean? That expression is not defined in Letters
Patent. It is now well-settled that definition of
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'judgment' in Section 2(9) of Code of Civil Procedure,
has no application to Letters Patent. That expression
was interpreted by different High Courts of India for
purposes of Letters Patent. In Asrumati Debi Vs.
Kumar Rupendra Deb Raikot, 1953 SCR 1159 : (AIR
1953 SC 198) a four-Judge Bench of this Court
considered the pronouncements of the High Court of
Calcutta in Justices of the Peace for Calcutta Vs.
Oriental Gas Co. (1872) 8 Beng. LR. 433, the High
Court of Rangoon in Dayabhai Vs. Murugappa
Chettiar (1935) ILR. 13 Rang. 457 : (AIR 1935
Rangoon 267), the High Court of Madras in Tuljaram
Vs. Alagappa (1912) ILR. 35 Mad. 1, the High Court
at Bombay in Sonebai Vs. Ahmedbhai (1872) 9 Bom.
HCR 398 (FB) as also the High Court at Nagpur, the
High Court at Allahabad and Lahore High Court and
observed as follows:
"In view of this wide divergence of judicial
opinion, it may be necessary for this Court at
some time or other to examine carefully the
principles upon which the different views
mentioned above purport to be based and
attempt to determine with as much definiteness
as possible the true meaning and scope of the
word 'judgment' as it occurs in clause 15 of the
Letters Patent of the Calcutta High Court and in
the corresponding clauses of the Letters Patent
of the other High Courts."
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13 Such an exercise was undertaken by a three-
Judge Bench of this Court in Shah Babulal Khimji Vs.
Jayaben D. Kania 1981 (4) SCC 8 : (AIR 1981 SC
1786), Fazal Ali, J. speaking for himself and
Varadarajan, J. after analysing the views of different
High Courts, referred to above, observed as follows:
"The intention, therefore, of the givers of the
Letters Patent was that the word 'judgment'
should receive a much wider and more liberal
interpretation than the word 'judgment' used in
the Code of Civil Procedure. At the same time, it
cannot be said that any order passed by a Trial
Judge would amount to a judgment; otherwise
there will be no end to the number of orders
which would be appealable under the Letters
Patent. It seems to us that the word 'judgment'
has undoubtedly a concept of finality in a
broader and not a narrower sense."
It was pointed out that 'judgment' could be of three
kinds:
(1) A final judgment. - in this category falls a
judgment by which suit or action brought by the
plaintiff is dismissed or decreed in part or full;
(2) A preliminary judgment.- this category is
sub-divided into two classes:
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(a) where the Trial Judge by an order dismisses
the suit, without going into the merits of the suit, only
on a preliminary objection raised by the
defendant/respondent on the ground of
maintainability;
(b) where maintainability of the suit is objected
on the ground of bar of jurisdiction, e.g., res judicata,
a manifest defect in the suit, absence of notice under
Section 80 and the like; and
(3) Intermediary or interlocutory judgment.- in
this category fall orders referred to in clauses (a) to
(w) of Order 43 Rule 1 and also such other orders
which possess the characteristic and trappings of
finality and may adversely affect a valuable right of
the party or decide an important aspect of the trial in
an ancillary proceeding.
Elucidating the third category, it is observed:
"Every interlocutory order cannot be regarded
as a judgment but only those orders would be
judgments which decide matters of moment or
affect vital and valuable rights of the parties and
which work serious injustice to the party
concerned."
14 In the instant case, we are concerned with
the last mentioned category. From the above
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discussion, it follows that to determine the question
whether an interlocutory order passed by one judge of
a High Court falls within the meaning of 'judgment' for
purposes of Letters Patent the test is : whether the
order is a final determination affecting vital and
valuable rights and obligations of the parties
concerned. This has to be ascertained on the facts of
each case."
81 Thus, the Hon'ble Supreme Court concludes that the
word 'judgment' is not defined in the Letters Patent and the
definition of 'judgment' in section 2(9) of the Code of Civil
Procedure has no application to the Letters Patent. Thereafter, it
refers to Shah Babulal Khimji and lays down the relevant test.
Thus, to determine the question whether an interlocutory order
passed by one Judge of High Court falls within the meaning of
judgment for purposes of Letters Patent must be determined by
the test whether that order is a final determination affecting vital
and valuable rights and obligations of the parties and which
causes serious injustice to the parties concerned. However, this
has to been ascertained on the facts of each case.
82 Precisely this is what the Division Bench in Hubtown
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also held. It may have not referred to the very provisions, but
eventually the reference to the same was in the context of
consideration of issue of maintainability of the appeal. The issue
arose from the order under appeal in that case. The order under
appeal in that case was that of a conditional leave to defend a
summary suit. In the very scheme of Order XXXVII such an
order is contemplated. So long as there is a leave to defend, the
summary suit cannot be defended and such leave can be
conditional or unconditional. If that leave is granted conditionally
so long as these conditions are not complied with, there is no
right to defend. The suit then cannot be defended by the
defendant. If these conditions were styled as onerous or
excessive or the discretion in imposition of the same is labelled as
arbitrary or capricious taking away a valuable right, then, the
appeal is held to be maintainable. That is irrespective of whether
section 13 and the decision contemplated as far as sub-section (1)
is concerned together with its proviso circumscribes or restricts
the right of appeal and by sub-section (2) exhausts it. Therefore,
assuming that the non obstante clause is there, what the Division
Bench holds is that the decision to be appealable or not must meet
the test of being a judgment and the word 'judgment' must be
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construed in the light of the further test laid down in the Supreme
Court judgment. Hence, if there is an adjudication conclusively
determining the rights of the parties to all or any of the matters
in controversy in the suit, whether the order is deciding matters
of moment which works serious injustice to the party concerned
was left to be decided on a case to case basis. In Smt. Sushila
Singhania, however, the Division Bench had to rule upon the
maintainability of the appeal and which appeal challenged an
order during the course of the execution proceedings. By their
very nature, the proceedings were of execution and the award of
the arbitrator could have been executed in terms of the
Arbitration & Conciliation Act, 1996, as if it were a decree of the
court. The scheme of the Code of Civil Procedure and the
adjudication of rights contemplated thereby was, therefore,
extremely relevant for deciding the maintainability of the appeal.
The right to appeal could not be claimed and that is how it was
claimed even in matters of execution or enforcement of the award
of the arbitrator as if it were a decree of a civil court. It is in the
backdrop of all this that the Court ruled that the appeal would not
be maintainable and held it to be incompetent.
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83 We do not think that we must answer the larger
question posed for our consideration and particularly whether
there is any conflict in the two views. Even if one were to assume
that Dr. Saraf can rely upon the view taken in Hubtown's case and
also some of the provisions of the Code of Civil Procedure like
section 97, what we feel is that the impugned order does not
conclude the issue of jurisdiction, in the sense it is not to the
detriment of the defendants. If the court holds that it has
territorial jurisdiction to entertain and try the suit it may as well
proceed to dismiss it on merits. If the suit is decreed, then,
against such a final decree an appeal is always competent and
maintainable within the meaning of sub-section (1) of section 13.
In such an appeal, the ground of this Court's territorial
jurisdiction can very well be raised. The salutary purpose and
which is served by ensuring expeditious disposal of commercial
suits can be harmonized, therefore, in the facts and
circumstances of the present case by holding that the order
under challenge is not of a conclusive nature going by the tests
laid down above. What we have seen and for that purpose is even
in the Code of Civil Procedure, a provision like section 105 has
been enacted. That follows section 104 which enumerates the
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order from which the appeal lies and in section 105, which opens
with the words "Save as otherwise expressly provided, no appeal
shall lie from any order made by a court in the exercise of its
original or appellate jurisdiction, but where a decree is appealed
from, any error, defect or irregularity in any order, affecting the
decision of the case, may be set forth as a ground of objection in
the memorandum of appeal. Then, by sub-section (2) it says that
where any party aggrieved by an order of remand from which an
appeal lies does not appeal therefrom, he shall thereafter be
precluded from disputing its correctness. Outlining the ambit and
scope of his power, a judgment of the Hon'ble Supreme Court in
the case of Shiv Shakti Cooperative Housing Society vs. Swaraj
Developer reported in AIR 2003 SC 2434 notes that it relates to
appealable as well as non appealable orders. The section
contemplates two things (1) regular appeal from decree and (2)
the provision relating to grant of objection relating to interim
order. Thus, in an appeal in terms of section 96 having regard to
section 105, it is also permissible for an appellant to raise a
contention as regards correctness or otherwise of an
interlocutory order passed in the suit subject to the conditions
laid down therein. In paragraph 31 of this judgment, the Hon'ble
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Supreme Court held thus :
"31. In Section 2, the expressions 'decree' and
'order' have been defined in clauses (2) and (14)
respectively. It is to be noted that it matters little that
the judgment is styled as an "order". If, in fact, it
fulfills the conditions of the definition under Section
2(2), it is a decree and becomes appealable. Orders
that are not appealable are, generally speaking, those
which are procussual i.e. interlocutory or incidental
orders regulating proceedings but not deciding any of
the matters of controversy in the suit. Order 43 deals
with the "appeals from orders". These appeals lie
under Section 104 of the Code. The said Section deals
with appeals from orders and specifies the orders
from which appeals can lie. Sub-sec. (2) of S. 104 says
that no appeal shall lie from any order passed in
appeal under the said Section. Section 104 and Order
43 Rule I contain a full list of appealable orders. An
order which amounts to a decree within S. 2(2) does
not fall within S. 104 and the only applicable section
is section 96. Clauses (a) to (f) of S. 104 were omitted
by Arbitration Act 1940. Section 105 relates to other
orders. It, inter alia, relates to any order i.e. so
appealable as well as non-appelable orders. It is in the
nature of a prohibition stipulating that save as
otherwise expressly provided, no appeal shall lie from
any order made by a Court in exercise of original or
appellate jurisdiction; but where a decree is appealed
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from, any error, defect or irregularity in any order,
affecting the decision of the case, may be set forth as a
ground of objection in the memorandum of appeal.
Sub-sec. (2) deals with case of remand. This section,
in fact, contemplates two things i.e. (1) regular appeal
from decree; and (2) the provision relating to grant of
objection relating to interim order. Order 43 Rule 1 is
an integral part of S. 104."
84 Even otherwise, in the larger interest of judicial
discipline and certainty, we have carefully perused the two
judgments, one in Hubtown and another in Smt. Sushila
Singhania.
85 As we have already held above, Hubtown was an
appeal arising from an order passed by the learned single Judge
granting conditional leave to defend a Summary Suit. The
Hon'ble Division Bench deciding Hubtown also had before it a
judgment of the Hon'ble Supreme Court in the case of Midnapore
Peoples' Co-op. Bank Ltd. & Ors. vs. Chunilal Nanda & Ors.
reported in AIR 2006 SC 2190. After referring to the Act 4 of
2016, and particularly Summary Suits and unamended Code of
Civil Procedure, 1908, the Court proceeded to consider the
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scheme of Commercial Courts Act in paragraphs 15, 16 and 17.
Then, in paragraph 20, the Division Bench in Hubtown analysed
section 13 and concluded that appeals will lie to Commercial
Appellate Division against the decision of the Commercial Court
or Commercial Division. With greatest respect, though the
Division Bench referred to section 13(1) of the Act 4 of 2016,
that provides for an appeal to the Commercial Appellate Division
of the High Court against the decision of the Commercial Court or
Commercial Division of a High Court by any person aggrieved.
That is how the Division Bench in Hubtown concluded that these
words, namely, 'decision', 'judgment', 'order', 'decree' as such are
not defined. Some of them are defined and elaborated in the Code
of Civil Procedure, 1908. The observations in paragraph 21
would indicate that the Division Bench held that the language of
section 13(1) is such that it includes judgment or order and read
with sections 8, 13(2), it includes decree of the Commercial Court
or Commercial Division. Then, in the proviso below sub-section
(1) of section 13, it is stated that an appeal shall lie from such
orders passed by a Commercial Division or Commercial Court
that are specifically enumerated under Order XLIII of the Code of
Civil Procedure, 1908, as amended by the Act 4 of 2016 and
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section 37 of the Arbitration & Conciliation Act, 1996. Thus, it is
apparent that the difference between the language in sub-section
(1) and that of the proviso was very much present to the mind of
both Division Benches deciding Hubtown and Smt. Sushila
Singhania. Their understanding of section 13(2) was that other
than the Act 4 of 2016, insofar as the matters covered by that
enactment are concerned, no appeal shall lie from any order or
decree of a Commercial Division or a Commercial Court,
otherwise than in accordance with the provisions of Act 4 of
2016. The Division Bench in Hubtown, therefore, concluded that
where the Commercial Division has taken a decision and/or
passed the judgment and/or order or decree, an appeal will lie.
That is how paragraph 22 in Hubtown reads. In paragraph 23,
the Division Bench says that appeal against any final decision,
including judgment by the Commercial Court and/or Commercial
Division will not invite the proviso as the proviso refers to orders.
The reference to orders in the opening portion of sub-section (1)
of section 13 would relate to the application of the proviso to sub-
section (1). However, the opening portion of sub-section (1)
(words prior to the proviso) uses the words 'decision', 'judgment'
and 'order'. This part of the provision is quite broad when it
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comes to appeal arising out of the orders other than the
categories of orders falling under Order XLIII of the Code of Civil
Procedure, 1908. Thus, so long as it is an order, but which has a
tinge or colour of judgment, then, an appeal under section 13(1)
would be maintainable. The provisions of the Code of Civil
Procedure (amended and unamended) are applicable to
Commercial Courts Act proceedings. The term 'judgment' was not
defined even in the Letters Patent. Therefore, even if it is an
interlocutory order of granting defendants conditional leave to
defend a Summary Suit as it directly affects and loses the
valuable right of the defendant without giving full opportunity,
that order is appealable. It is a judgment.
86 In Smt. Sushila Singhania the Division Bench framed
the questions for consideration in paragraph 23 and in questions
2, 3 and 4, the issue of maintainability of appeals under section
13 of the Act 4 of 2016 was summed up. The discussion in that
regard starts from paragraph 30 and the Division Bench
concludes that there is no separate provision of appeal against
execution of an Award passed in Arbitration proceedings and,
therefore, the word 'decision' will have to be dealt with
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accordingly. That is because in section 37 of the Arbitration &
Conciliation Act, 1996, which sets out that orders against the
appeals can be filed, it was noticed that no appeal has been
provided against an order passed in execution proceedings.
Then, the Division Bench proceeded to consider the doctrine of
precedents and from paragraph 53, it discussed the ambit and
scope of an appeal which can be filed under section 13(1) from
the orders which are passed in proceedings for execution of an
award. That is how section 13 was interpreted and it was held
that the proviso to sub-section (1) of section 13 cannot be said to
be an additional enactment providing for an appeal against the
orders, but it restricts the orders against which appeals can be
filed. The interpretation sought to be placed by the appellants on
the provision was rejected because it was held that it would be
contrary to section 37 of the Arbitration & Conciliation Act, 1996
and to the provisions of the Commercial Courts Act. That is how
the provision came to be interpreted. The Court, therefore,
rejected the argument that it is not possible to read something
more in the word 'decision' to mean that it also includes orders
which are not otherwise appealable. It is in that context the
Hon'ble Division Bench in Smt. Sushila Singhania concluded that
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restricted meaning has to be assigned to the word 'judgment'
appearing in section 13 (1) and it will not be possible to expand
the meaning of this word as has been done in the Letters Patent
by virtue of the judgment of the Hon'ble Supreme Court in
Shah Babulal Khimji (supra). However, all the observations
made from paragraphs 56 onwards relate to the facts and
when the arbitral proceedings had concluded, the Award was
brought for execution, the orders passed in such proceedings
were held not to be appealable in the light of the specific
provisions of section 37 of the Arbitration & Conciliation Act,
1996, which is referred to in sub-section (1) of section 13
proviso. Hence, the aid and assistance of Letters Patent was not
allowed to be taken. More so, when it is overridden by sub-
section (1) of section 13. Our conclusion is supported by the
observations in paragraph 70 of Smt. Sushila Singhania. We have
also perused the further paragraphs, namely, paragraphs 72 and
73. The word 'decision' will have to be read only as a decree or
wider meaning has to be given to that term or word was then
considered and then, certain Supreme Court judgments are
referred in paragraphs 73, 75, 76 and 77. The Hon'ble Division
Bench then concluded that the word 'decision' in this context
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would mean a final decision in the entire suit and, therefore, a
decree. The construction as proposed by the appellant in that
case based on the dictionary meaning of this word was expressly
rejected. Finally, in paragraph 93, it was concluded that the word
'decision', therefore, will have to be interpreted to mean a decree.
87 Then, the answers to each of the questions framed, in
paragraph 102, have also been perused by us.
88 In whichever way one looks at this issue, we are not
able to agree with Dr. Saraf that there is any divergence or
difference in the opinion on what is appealable, irrespective of the
nomenclature under section 13(1) of the Act 4 of 2016 for what
both judgments hold, according to us, are that the term 'decision'
cannot be interpreted to mean any and every order by styling it
as a judgment. It is that decision, which satisfies the tests
referred by us above and which tests can also be culled out from
the definition of the term 'decree' as appearing in section 2(2) of
the Code of Civil Procedure, which would be appealable. Thus,
decree means the formal expression of an adjudication but sub-
section (2) of section 2 does not stop here and says further that
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which, so far as regards the Court expressing it, conclusively
determines the rights of the parties with regard to all or any the
matters in controversy in the suit and may be either preliminary
or final, it shall be deemed to include what falls in the latter part
of this definition and exclude what is excluded by clauses (a) and
(b) of sub-section (2) of section 2. Then, the definition ends with
an explanation and says that a decree is preliminary when
further proceedings have to be taken before the suit can be
completely disposed of. It is final when such adjudication
completely disposes of the suit and it may be partly preliminary
and partly final. That which is not a decree is an order and it
is apparent from the definition of this word appearing in section 2
sub-section (14) of the Code of Civil Procedure. Therefore, we do
not think that there is a difference or divergence in the opinion of
the two Division Benches on the right of appeal, its
maintainability or the ambit and scope of that power as
enumerated in section 13(1) of the Act 4 of 2016. Our
conclusions are also reinforced by the decisions of the Hon'ble
Supreme Court of India on the ambit and scope of the word
"appeal" and the power in relation thereto. Suffice it to say that
all these judgments have not been noticed by either the counsel
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appearing before us or the Hon'ble Division Benches deciding
"Hubtown" and "Sushila"'.
89 In the case of Mithailal Dalsangar Singh & Ors. vs.
Annabai Devram Kini & Ors. (2003) 10 SCC 691 : AIR 2003 SC
4244, the Hon'ble Supreme Court though considering the
expression 'judgment' appearing in clause 15 of the Letters
Patent made some pertinent observations. Paragraphs 12, 13,
14, 15 and 16 of this judgment read as under :
"12 We are also of the opinion that the Letters
Patent appeal against the order setting aside the
abatement of the suit was not maintainable. What is a
'judgment' within the meaning of Letters Patent came
up for the consideration of this court in Shah Babu Lal
Khimji vs. Behan D. Kangro AIR 1981 SC 1786. It was
held that a decision by a trial judge on a controversy
which affects valuable rights of one of the parties is a
'judgment'. However, an interlocutory order cannot be
regarded as a judgment but only those orders would
be judgments which decide matters of moment or
affect vital and valuable rights of the parties, and
which work serious injustice to the party concerned.
This court further held that there is no inconsistency
between Section 104 read with Order 43 Rule 1 of the
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CPC and the appeals under the Letters Patent. The
Letters Patent do not exclude or override the
application of Section 104 read with Order 43 Rule 1
CPC to internal appeals within the High Court. Even if
it is assumed that Order 43 Rule 1 does not apply to
Letters Patent appeals yet the principles governing
those provisions would apply by a process of analogy.
A perusal of Section 104 read with Rule 1 of Order 43
of the CPC shows that while an appeal is provided
against an order refusing to set aside the abatement
or dismissal of a suit; there is no appeal provided
against an order whereby the abatement or dismissal
of a suit has been set aside. Whether the trial judge
passed an order setting aside an abatement or
allowed substitution of the legal representatives, no
valuable right of parties was decided. The constitution
of the suit was rendered good and the suit proceeded
ahead for being tried on merits. Such an order does
not amount to 'judgment' within the meaning of
Letters Patent. [Underlining ours]
13 The learned counsel for the appellant has
invited attention of the Court to the Full Bench
decision of the Calcutta High Court in Nurul Hoda and
Ors. vs. Amir Hasan and Anr. AIR 1972 Cal 449 and
the Division Bench decisions of the Punjab High Court
in Smt. Chando Devi vs. Municipal Committee, Delhi
AIR 1961 Punjab 424 and of the Bombay High Court
in Maria Flaviana Almeida and Ors. vs. Ramchandra
Santuram Asavie and Ors., AIR 1938 Bombay 408.
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14 In Nurul Hoda & Ors. (supra), Sabyasachi
Mukharji, J. (as His Lordship then was), speaking for
the Full Bench, held that a decision setting aside an
abatement does not in any way effect any right
accrued to the defendant and, therefore, does not
amount to a 'judgment'. No merits, in controversy
between the parties, have been decided; the order
merely reopens the controversy.
15 A Division Bench of the Punjab High Court,
consisting of D. Falshaw and G.L. Chopra, JJ., in Smt.
Chando Devi's case (supra) has held that the order
setting aside the abatement of a suit or appeal is not a
decision which affects the merits of the question
between the parties by determining some right or
liability in the suit. Such an order cannot be regarded
as a deciding a question materially in issue between
the parties and directly affecting the subject matter of
the suit and, therefore, it would not amount to a
'judgment'.
16 In Maria Flaviana Almeida & Ors.'s case
(supra), Chief Justice Beaumont speaking for the
Division Bench observed that an order setting aside
an abatement is really one in procedure. The party
originally had a cause of action which through no
fault of their own came to an end by the death of their
opponent and the effect of setting aside the abatement
is merely to excuse delay in restoring the suit to an
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actionable condition. The Division Bench held that the
order setting aside an abatement does not effect the
merits of the dispute between the parties though it
certainly determines a right and, therefore, does not
amount to a 'judgment'."
90 This judgment has been cited and relied upon in
several cases and matters later on by the Hon'ble Supreme Court.
The distinguishing part in the subsequent judgments or decisions
is not on the meaning of the term 'judgment'. There is one
judgment which must be referred in this context and that is Bhag
Mal alias Ram Bux & Ors. vs. Munshi by LRs & Ors. (2007) 11
SCC 285. In this judgment, it is stated that decision on merits is
not the only test to determine the finality of the same. In another
judgment on the meaning of the term 'judgment', in the case of
Midnapore Peoples' Co-op. Bank Ltd. & Ors. vs. Chunilal Nanda &
Ors. (2006) 5 SCC 399 : AIR 2006 SC 2190 , the expression has
been considered and given a meaning as ascribed by the Division
Bench in Hubtown.
91 Then, we have a judgment by a three Judge Bench in
the case of Subal Paul vs Malina Paul AIR 2003 SC 1928 : (2003)
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10 SCC 361, which has also been later on followed. It has been
followed in the case of Liverpool & London S.P. & I Association
Ltd. vs. M.V. Sea Success 1 & Anr. (2004) 9 SCC 512 . We have
also a judgment of the Hon'ble Supreme Court's five-Bench
judgment in the case of P.S. Sathappan vs. Andhra Bank Limited
& Ors. (2004) 11 SCC 672. In all these cases, the expression
'judgment' has been, not just in the context of clause 15 of the
Letters Patent, but even otherwise understood to mean
something which gives finality or which satisfies the tests laid
down by the Hon'ble Supreme Court as noted above.
92 Similarly, we must also note sub-section (1) of section
13 of the Act 4 of 2016, which provides for an appeal by a "person
aggrieved". In the case of Banarasi & Ors. vs. Ram Phal AIR 2003
SC 1989, this expression was interpreted by the Hon'ble Supreme
Court in the context of sections 96 and 100 of the Code of Civil
Procedure. Section 96, as is evident, provides for an appeal from
an original decree and section 100 provides for second appeal. In
paragraph 8 of this judgment, the Hon'ble Supreme Court held as
under:
"8 Sections 96 and 100 of the CPC make
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provision for an appeal being preferred from every
original decree or from every decree passed in appeal
respectively; none of the provisions enumerates the
person who can file an appeal. However, it is settled
by a long catena of decisions that to be entitled to file
an appeal the person must be one aggrieved by the
decree. Unless a person is prejudicially or adversely
affected by the decree he is not entitled to file an
appeal. See Phoolchand and another v. Gopal Lal
1967 (3) SCR 153; Smt. Jatan Kanwar Golcha v. M/s.
Golcha Properties (P) Ltd., 1970 (3) SCC 573; Smt.
Ganga Bai v. Vijay Kumar and others., (1974) 2 SCC
393. No appeal lies against a mere finding. It is
significant to note that both Sections 96 and 100 of
the CPC provide for an appeal against decree and not
against judgment."
93 Even this view has been relied upon in later
judgments and we would refer to the judgment in the case of
Hardevinder Singh vs. Paramjit Singh & Ors. (2013) 9 SCC 261 .
Thus, even if the word 'decision' is taken to be a decree, the
provisions enabling filing of an appeal and worded like sub-
section (1) of section 13 do not enumerate the categories of
persons who can file an appeal. The significant words and
expressions appearing in section 13(1) and its proviso are " Any
person aggrieved by the decision may appeal ... ... ... from the date
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of judgment or order, as the case may be " and "An appeal shall lie
from such orders passed by a ... ... ... that are specifically
enumerated under Order XLIII of the CPC as amended by this Act
... ... ...". The intent of the legislature is obvious and in the first
part of sub-section (1) it employs the words " a person aggrieved
by the decision may appeal from the date of judgment or order " to
convey that the remedy of appeal may be resorted to, but that will
not be available as of right and whenever that remedy can be
availed of as of right, the words and expressions used in the
proviso convey the same clearly. Then by sub-section (2) it is
stated that no right of appeal is provided otherwise than in
accordance with the provisions of the Act 4 of 2016. The persons
prejudiced or affected by a decision can maintain an appeal but
whether that should be entertained or not depends upon the
nature and effect of that which is appealed against. Whether a
decision is appealable or not depends upon the facts and
circumstances in each case. Once this vital distinction is borne
in mind and so viewed, there is no scope for accepting the
argument of Dr. Saraf in the case before us that though an
objection to the territorial jurisdiction of this Court has been
overruled, that order or the reasoning overruling this objection is
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of the nature enabling the appellant to file an appeal. Neither of
the Division Bench judgments enable filing of an appeal against
such an order.
94 We are, therefore, of the firm view that in the facts
and circumstances of this case, considering the nature of the
order under appeal even if we go by the view taken in Hubtown's
case as also the relevant paragraphs in the case of Smt. Sushila
Singhania, the test would be whether the same concludes the
rights of the parties. That has not concluded the rights, but it has
merely overruled an objection to the territorial jurisdiction of this
Court raised as a preliminary one by the defendants. The
defendant, in the event aggrieved by the final decree, can always,
in one of the grounds of appeal, raise the issue of correctness of
this order as well. For that purpose, we need not entertain this
appeal and prolong the trial. We have noted that the object and
purpose of the Act 4 of 2016 was present to the minds of both
Division Benches and to ensure expeditious disposal of the suits
and applications involving a commercial dispute, the Parliament
had enacted a scheme. We would be defeating and frustrating it
wholly in the event we hold that an order of the present nature
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and impugned in this appeal is an appealable one under sub-
section (1) of section 13. Therefore, upholding the preliminary
objection of Mr. Kadam, we dismiss all these appeals.
95 At this stage Dr. Saraf and Mr. Kirpekar would submit
that the appellants would like to challenge this order in a higher
court and therefore, the Notice of Motion seeking interim relief
should not be heard for a period of eight weeks.
96 Mr. Rohan Kadam appearing for the plaintiff-
respondents opposes this request of Dr. Saraf by urging that now
that this Court has dismissed the appeal, and, therefore, after a
success, the plaintiff should be allowed to apply for interim relief.
97 The application for interim relief has been pending for
more than three years.
98 In the light of the fact that we have applied the tests
laid down by the Hon'ble Supreme Court and which tests have
been extensively referred in the two Division Bench judgments,
we do not think that we should accede to the request of Dr. Saraf
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for that would defeat the mandate of Act 4 of 2016 in ensuring
expeditious disposal of the suits and applications in commercial
disputes. Hence the request is refused.
PRAKASH D. NAIK, J. S.C. DHARMADHIKARI, J.
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