Bombay High Court
Indian Bank vs Sks Power Generation ... on 20 December, 2022
Bench: K.R. Sriram, Kamal Khata
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMMERCIAL APPEAL NO. 161 OF 2022
IN
SUMMONS FOR JUDGMENT NO. 43 OF 2021
ALONG WITH
INTERIM APPLICATION (L) NO. 31167 OF 2021
ALONG WITH
INTERIM APPLICATION (L) NO. 31198 OF 2021
ALONG WITH
INTERIM APPLICATION (L) NO. 14361 OF 2022
Indian Bank .. Applicant/Appellant
v/s.
SKS Power Generation (Chhattisgarh) Ltd. .. Respondent
...
Mr. Prakash Shinde a/w. Ms. Niyati Merchant, Mr. Yash Dhruva and Mr.
Harsh Sheth i/by MDP & Partners for applicant / appellant.
Mr. Venkatesh Dhond, Senior Advocate a/w. Mr. Rohan Kelkar, Ms.
Vinodini Srinivasan, Ms. Poorva Garg and Mr. Simon Mascarenhas i/by
Mulla & Mulla and Cragie Blunt & Cadre for respondent.
...
CORAM : K. R. SHRIRAM &
KAMAL KHATA, JJ.
DATED : 20TH DECEMBER, 2022.
904.comap.161.22doc
SNS
P.C. :
1. The order impugned in this appeal grants the appellant
conditional leave to defend the suit. Operative part reads as under:
" i] Leave to defend is granted to the Defendant subject to depost
of a sum of Rs.57,30,00,000/- along with interest @ 9% p.a. from
19th November, 2019 till the date of deposit in the Court, within a
period of five weeks from today.
ii] If the aforesaid deposit is made within the stipulated period,
this suit shall be transferred to the list of Commercial Causes and
the defendant shall file written statement within a period of four
weeks from the date of deposit;
iii] If the conditional order of deposit is not complied with
within the aforesaid stipulated period, the plaintiff shall be entitled
to apply for an ex-parte decree against the defendants after
obtaining a non-deposit certificate from the Prothonotary and
Senior Master of this Court.
iv] Summons for Judgment stands disposed of accordingly."
2. At the outset Mr. Dhond appearing for respondent raised
preliminary objection on the maintainability of this appeal. Mr. Dhond
relied upon judgment of this Court disposing 4 Commercial Appeals in
Skil-Himachal Infrastructure & Tourism Ltd. and Others v/s. IL&FS
Financial Services Ltd.1 to submit that an appeal from an order granting
conditional leave to defend in a summons for judgment in a commercial
suit is not maintainable in view of Section 13 of the Commercial Courts
Act.
1 2022 SCC OnLine Bom 3152
904.comap.161.22doc
SNS
3. This appeal is an appeal from an order granting conditional leave
to defend in a summons for judgment in a commercial suit that
respondent had filed against appellant.
4. Paragraph nos. 44 to 53 of Skill-Himachal Infrastructure (supra)
reads as under:-
"44. In the Supreme Court decision in Kandla Export Corporation,
Section 13 was addressed like this. First, that Section 13(1) of the
CC Act is in two parts. The main provision deals with appeals
from judgments, orders and decrees to the Commercial Division
of the High Court. To this, the proviso is an exception. Second, the
proviso must be construed harmoniously with the main provision,
not in derogation of it. It operates in the same field. If main
provision is in clear language, the proviso cannot be used to
'interpret' the main part, or to exclud -- let alone by implication
-- any part of the main provision; except, of course, if the proviso
plainly contemplates such an exclusion. Under the proviso,
appeals against orders are restricted to those orders under Order
43 of the CPC, and Section 37 of the Arbitration Act. Therefore, no
appeal lies to the Commercial Appellate Division against any
order not specifically listed in Order 43 of the CPC (or an order
not under Section 37 of the Arbitration Act).13
45. An order of conditional leave under Order 37 of the CPC is
not enumerated in Order 43. It is an order, not a decree.
Therefore, following Kandla Exports and Shailendra Bhadauria,
such an order is not appealable under the CC Act.
46. Finally, there is the decision of division bench of this court in
Kakade Construction which reviewed the previous decisions
including Kandla Exports, Shailendra Bhadauria and Sushila
Singhania. The appeals arose from an order appointing a Court
Receiver of certain property. That order was made on a Chamber
Summons in execution of a consent arbitral award. Once again,
the division bench held that the appeal was not maintainable.
904.comap.161.22doc
SNS
47. The appellants rely on paragraph 10 of a decision of a
Division Bench in Resilient Innovations Private Limited v Phonepe
Private Limited.14 This arose from an order in a commercial suit,
which permitted the plaintiff to withdraw the suit with certain
liberty. The argument before the court was that the appeal was
maintainable under Section 13 since the order permitting a
withdrawal was a 'judgment' and a 'decree' within the meaning
of the CC Act. In paragraphs 17 to 23, the division bench dealt
with the submission before it. It held that the word 'judgment' in
Section 13 takes its meaning from the definition in Section 2(9) of
the CPC. We agree. In paragraph 22, the Division Bench held that
an appeal from a decree does lie under Section 13. That again is
correct. What was rejected was the submission that a 'decree' for
the purpose of Section 13 of the CC Act is 'more restrictive' than a
decree under the provisions of the CPC. Again, we agree with the
Resilient Innovations Division Bench. We do not see how this
decision in any way assists the Appellants. The binding decisions
to which we have referred do not seem to have been considered
or applied in Resilient Innovations.
48. We are unable to see the distinction that Dr Tulzapurkar and
Mr Dhond draw between these cited and binding decisions that
hold the field and the present order. Hubtown held that an appeal
from an order of conditional leave to defend in a Summons for
Judgment was maintainable. Shailendra Bhadauria held that
Hubtown was no longer good law; i.e., that an appeal does not lie
from an order of conditional leave to defend on a Summons for
Judgment. This really should be the end of the matter. Indeed,
every argument that Dr Tulzapurkar and Mr Dhond make,
including the submissions that an appeal lies against a 'judgment',
has been negatived in Shailendra Bhadauria. That was the earlier
view in Hubtown and Siqmarq Technologies; both have been held
in Shailendra Bhadauria not to be good law.
49. As we have noted above, Mr Dhond's submission
unacceptably enlarges the scope of appeals even beyond what the
CPC intends. It is inconceivable that the CC Act would expand the
scope of appeals even beyond the CPC. There is nothing
904.comap.161.22doc
SNS
whatsoever to support this. We also cannot see the logical basis or
foundation for Dr Tulzapurkar's submission that even though
there may not be a 'decree' properly so called, a judgment in and
of itself, i.e., the statement of reasons, should be deemed to be
some sort of a decree and should be held to be appealable.
50. We accept Dr Saraf's formulations on all four grounds. First,
that plain language of Section 13 must be followed. Second, that
there is no material to indicate that the 2018 amendment was
conceived as an enlargement of the appellate jurisdiction. Third,
that all previous applicable decisions of this court and of the
Supreme Court, not one of them distinguished by the Appellants,
are binding on this court on any principles of doctrines of stare
decisis. Fourth, that the Appellants' rights are not in fact in any
way determined.
51. The last point requires emphasis once again because we find
much substance in it. This is where Dr Saraf says that the
defendants have a choice either to await the outcome of the suit
subject to fulfilment of the condition of deposit, or to not follow
the condition of deposit, suffer a decree and then come in appeal.
It is no answer for the appellants to say that if they come in
appeal, they will be forced to deposit. As he points out, the
condition in a Summons for Judgment as also a condition for stay
of a decree would be deposit not payment. There is a material
difference. Further there is a Maharashtra amendment to Order
XLI Rule 1 of the CPC which specifically allows the court to
exercise its discretion to dispense with the deposit or security
where it deems fit and for sufficient cause even in an appeal
against a money decree. None of these rights are taken away. It is
impermissible, he therefore says, to inject a further right of appeal
simply because there is an order of conditional deposit on a
Summons for Judgment.
52. Our conclusions are:
52.1 An appeal from an order granting conditional leave to
defend in a Summons for Judgment in a Commercial Summary
Suit is not maintainable in view of Section 13 of the Commercial
Courts Act.
904.comap.161.22doc
SNS
52.2 No appeal under Clause 15 of the Letters Patent is
maintainable under Section 13 of the Commercial Courts Act, i.e.,
in a Commercial Suit.
52.3 Section 13 of the Commercial Courts Act permits only
appeals (i) against decrees; (ii) against oders specifically
enumerated in Order 43 of the Code of Civil Procedure, 1908;
and (iii) under Section 37 of the Arbitration Act.
53. For these reasons, we hold that none of these appeals are
maintainable. All four are dismissed. Under the CC Act, ordinarily
costs would have had to be imposed; if not, reasons are required.
Since these appeals have been argued on a question of law, we
decline to make an order of costs."
5. The judgment in Skil-Himachan Infrastructure (supra) squarely
applies to the facts of this case. Therefore we hold that this appeal is not
maintainable.
6. Appeal dismissed.
7. Mr. Dhond is pressing for costs. Under the Commercial Courts
Act, ordinarily, cost have to be imposed and if not, reasons are required
to be given. Though, the appeal came to be filed before the judgment in
Skil-Himachan Infrastructure (supra) was delivered, law was laid down
by the court before this appeal was taken up by hearing. Appellant could
have withdrawn the appeal but the appellant chose not to.
8. In the circumstances we impose cost of Rs.10,00,000/- to be paid
within four weeks from the date this order is uploaded.
904.comap.161.22doc
SNS
9. Consequently all interim applications disposed.
(KAMAL KHATA, J.) (K.R. SHRIRAM, J.)
904.comap.161.22doc
SNS
