Mr. Rakesh Bhhatia & Ors vs Mr. Pramod Sharma & Ors
2009 Latest Caselaw 2708 Del

     *IN THE HIGH COURT OF DELHI AT NEW DELHI

     +       R.A.No.253/09 with IA No.8652/09 & IA No.8653/09 in
                           CS(OS)1225/2008


%                                         Date of decision: 20.07.2009

 MR. RAKESH BHHATIA & ORS.                                  .......         Plaintiffs
                             Through: Mr. P.V. Kapoor, Sr. Advocate with Mr.
                                      Sachin Chopra, Mr. Kamal Bansal &
                                      Ms. Chetna, Advocates.

                                       Versus

MR. PRAMOD SHARMA & ORS                                        ....... Defendants
                             Through:     Mr. Ajay K. Jain, Advocate for
                                          Defendant No.3.
                                          Ms. Nasreen Hasan, Advocate for
                                          Defendants No.4,5&7.
                                          Mr. A.K. Singh with Mr. S.K. Singh,
                                          Advocates for Defendants No.1,2,6&8.


CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1.     Whether reporters of Local papers may
       be allowed to see the judgment?       Yes

2.     To be referred to the reporter or not?              Yes

3.     Whether the judgment should be reported
       in the Digest?                                             Yes


RAJIV SAHAI ENDLAW, J.

1. The application for review entails inter-aila the question of

very maintainability of review after unconditional withdrawal of an

appeal preferred against the order sought to be reviewed.

2. Review is sought of certain portions of the Order dated 21st

April, 2009 disposing of the application of the plaintiffs/applicants

under Order 39 Rule 1&2 of the CPC. The plaintiffs/applicants

instituted the suit for permanent injunction restraining the

defendants from selling certain shares of the plaintiff No.6 company.

It is the case of the plaintiffs/applicants that the said shares were

pledged/placed as security with the defendants for the loan advanced

by the defendants to the plaintiffs. The defendants claim to be the

purchaser of the shares. Interim relief of restraining the defendants

from dealing with the shares was claimed. Vide order dated 21st

April, 2009 the said application of the plaintiffs for interim relief was

allowed, subject to the condition of the plaintiffs within 45 days

depositing in this court the loan amount with interest at the rate

pleaded by the plaintiffs, till the date of deposit, and further subject

to the plaintiffs filing an undertaking in this court, to, in the event of

failing in their case making good to the defendants the loss, if any,

suffered by the defendants owing to the interim order aforesaid, and

calculated on the difference between the sale price of the shares as

on 11th July, 2008 and on the date of final decision of the suit. In the

review grievance is made to allowing interest till the date of deposit

and to the other condition of filing an undertaking.

3. The plaintiffs preferred an appeal being FAO(OS) No.252/2009

against the said order. The said appeal came up before the Division

Bench of this court on 3rd July, 2009 when the following order was

made:-

"After some arguments, learned senior counsel for the Appellant seeks leave to withdraw the Appeal. He, however, submits that the time for compliance of the order passed by the Vacation Judge, pertaining to deposit of Rs.75 lakhs with interest be extended upto14.7.2009. The time is extended accordingly.

Dismissed as withdrawn."

4. It may be stated that the plaintiffs had filed IA No.7844/2009 in

the suit seeking extension of time to deposit in terms of the order

dated 21st April, 2009, on the ground that they had instituted the

appeal aforesaid but the said appeal was likely to be listed in the first

week of July, 2009. The said application came up before the Vacation

Judge of this court on 5th June, 2009 when the time for deposit was

extended till 6th July, 2009.

5. The application for review being otherwise barred by time is

accompanied with IA No.8652/2009 for condonation of delay and IA

No.8653/2009 for exemption from filing the certified copy of the

order dated 21st April, 2009.

6. Section 114 of the CPC inter-alia allows review of decree or

order or judgment "from which no appeal has been preferred". The

same is the language of order 47 Rule 1 (1) (a). In view of the said

provisions and in view of M/s Kabari Pvt. Ltd. Vs. Shivnath Shroff

AIR 1996 SC 742 and Hari Singh Vs. S. Seth AIR 1996 Delhi 21

(DB), at the very outset query as to the maintainability of the review

was raised.

7. The senior counsel for the plaintiffs/applicants has drawn

attention to Badrunnisha Mohammad Sikadar Vs. Keshiben

Jethalal Parmar 2000 AIHC 3589: MANU/GJ/0233/2000 wherein a

single judge of the Gujarat High Court relying upon Thakur Singh

Vs. Dinanath Sah AIR 1937 Pat 528 held that withdrawal of the

appeal must be treated as if it had never been preferred within the

meaning of Order 47 Rule 1 of the CPC and in view thereof held that

it cannot be contended that review application is not maintainable

for the reason of appeal having been preferred against the order

sought to be reviewed. Reference in the said judgment is also made

to Balling Vithaling Sakharpekar Vs. Shri Devasthan Fund

(1931) 33 BOMLR 378 containing the observation that if a litigant

who has filed an appeal wishes to apply for a review he may do so if

he first withdraws his appeal; when there is no appeal on record he

is entitled to the benefit of a fiction that none has been preferred.

The Bombay High Court however held that the fiction was not

available to the applicant in that case since an appeal in that case

was actually on record. The senior counsel for the

plaintiffs/applicants thus contended the review to be maintainable in

the present case and also made submissions on merits of the review

application. He also relied upon the judgment of the Patna High

Court in Thakur Singh (Supra).

8. Per contra, the counsels for defendants referred to:-

a. Thungabhadra Industries Ltd. Vs. The Govt. of

Andhra Pradesh AIR 1964 SC 1372 holding that the

crucial date for determining whether or not the terms of

Order 47 Rule 1(1) are satisfied is the date when the

application for review is filed; if on that date no appeal

has been filed it is competent for the court hearing the

petition for review to dispose of the application on merits

notwithstanding the pendency of the appeal, subject only

to this, that if before the application for review is finally

decided the appeal itself has been disposed of, the

jurisdiction of the court hearing in the review petition

would come to an end;

b. M/s Kabari Pvt. Ltd. (Supra) holding that the

underlying principle involved in Order 47 Rule 1 (1)(a) is

that before making the review application no superior

court has been moved for getting self same relief so that

for the self same relief two parallel proceedings before

two forums are not taken;

c. Hari Singh (Supra) in which the Division Bench of this

court held that there is no distinction between the

disposal of appeal in limine or after notice or between

the disposal of appeal with reasons and one without

reasons; the dismissal of an appeal in limine precludes

the court from whose order the appeal is preferred, from

entertaining an application for review of the decree

because it cannot be said in such a case that no appeal

has been preferred within the meaning of Section 114

and Order 47 Rule 1 CPC; that a review application filed

before an appeal is preferred cannot be taken up for

consideration in case appeal against the judgment or

order sought to be reviewed has been disposed of in

limine before the review is disposed of;

d. U.P. Avas Evam Vikas Parishad Vs. Ravi Kumar

Anand AIR 1995 SC 2076 holding that the High Court

could not have re-opened the matter by way of a review

petition when it was not permitted by the Supreme Court

in Special Leave Petitions preferred against the order

reviewed and effect of which review if permitted would

be to disturb the finality of the earlier decision;

e. Sree Narayana Dharma Sanghom Trust Vs. Swami

Prakasananda AIR 1996 Kerala 203 holding that where

the Special Leave Petition is dismissed by the Supreme

Court, the order of the High Court merges with that of

the Supreme Court and review by the High Court is not

permissible;

       f.     M.     Ramanamma            Vs.    Commissioner         of   Survey

              Settlement           &      Land         Records,       Hyderabad

MANU/AP/0159/2000: 2000 AIHC 1851 where a Division

Bench of the Andhra Pradesh High Court held that where

the revision filed against the order of Board of Revenue

was dismissed and the very same contentions were

considered by the Government, the earlier order of the

Board of Revenue merges with the later order of the

Government and it would not be open to again review the

order by the Board of Revenue, more so when the higher

authority confirmed the order; the principle of merger

was held to apply.

9. The counsels for the defendants have also referred to other

judgments on the scope of review and on condonation of delay in

applying for review but it is not felt necessary to burden this order

with the same. The counsels for the defendants have also

distinguished the judgment of the Gujarat High Court aforesaid. It is

pointed out that in that case the Appellate Court had held that if the

facts pointed out and urged in appeal were presented to the trial

court in a review application, the applicant may be able to persuade

the court to review the order impugned in the appeal and for this

purpose withdrawal of the appeal was allowed.

10. The senior counsel for the plaintiffs/applicants has rejoined

with the contention that none of the judgments aforesaid deal with

the case of withdrawal of the appeal and argued that there can be no

merger of the order sought to be reviewed with the order of the

Appellate Court because there was no decision on merits. There is

also considerable controversy as to whether the appeal was

withdrawn for the reason of preferring the review application. While

the senior counsel for the plaintiffs/applicants contends it to be so,

the counsels for the defendants urged that the plaintiffs/applicants

having failed to satisfy the Appellate Court on the admissibility of

appeal, withdraw the same. It is also contended that the appellants

had sought extension of time from the Appellate Court for

"compliance" of the order sought to be reviewed and are now not

entitled to apply for review thereof.

11. I find the language of Section 114 and Order 47 Rule 1 (a) of

the CPC to be unambiguous. The same contains a bar to the

maintainability of the review if an appeal has been "preferred"

against the order sought to be reviewed. It is note worthy that the

bar is not to the disposal of the appeal but to preference of an

appeal. "Prefer" has been defined in Black's Law Dictionary, 6th

Edition as "to bring before, to prosecute, to try, to proceed with, to

give advantage, priority, to select for first payment, as to prefer one

creditor over others." The Shorter Oxford Dictionary, 6th Edition

defines "Prefer" as first in status, rank etc.; it is also defined as put

in front or before. Thus, literally speaking, an appeal would be

preferred, the moment it is instituted and mere institution of appeal

would bar the review.

12. The Supreme Court in Manik Lal Majumdar Vs. Gouranga

Chandra Dey (2005) 2 SCC 400 while relying on the aforesaid

dictionary meaning of "Prefer", interpreted the same occurring in

Section 20 of Tripura Buildings Lease and Rent Control Act as not

barring the institution of the appeal but barring the prosecution

thereof. The Rent Act in that case prohibited a tenant from

preferring an appeal without making the requisite deposit of rent.

The Supreme Court gave a purposive meaning to the word "Prefer"

for the reason that if the said word was held to be barring the very

institution of the appeal, the appeal may become time barred by the

time the requisite deposit could be made.

13. The purposive interpretation however in relation to Section

114 and Order 47 Rule 1 (1) (a) is to vest the choice in the person

aggrieved by the order, to either prefer an appeal or if the grievance

is within the ambit of review, a review application.

The legislative intent appears to have been against the aggrieved

person pursuing two remedies.

14. Even if the definition of "Prefer" as adopted by the Supreme

Court is to be applied i.e. it means prosecuting the appeal and not

merely instituting the same in the facts of the present case it cannot

be said that the plaintiffs/applicants did not prosecute the appeal.

15. In this regard, reference may also be made to Commissioner

of Income Tax (Central) Vs. B.N. Bhattacharjee AIR 1979 SC

1725 where it was held that preferring an appeal means more than

formally filing it, but effectively pursuing it; if a party retreats before

the contest begins it is as good as not having entered the fray. In

that case, there was a bar to the settlement commission's jurisdiction

if an appeal had been preferred; though appeals had been filed but

withdrawn before the application for settlement was made. The

Supreme Court held that the word "Preferred" is a word of dual

import, it's semantics depend on the scheme and the context. It's

import must help, not hamper the object of the enactment even if

liberty with language may be necessary.

16. The order of the Appellate Court in the present case records

that leave to withdraw the appeal was sought by the

plaintiffs/applicants "after some arguments". Thus it cannot be said

that the plaintiffs/applicants did not prosecute the appeal. The

plaintiffs/applicants not only filed the appeal but also engaged a

senior counsel to address the Appellate Court and did address the

Appellate Court in the appeal. It is common for counsels, when find

themselves unable to convince the court, to withdraw the

appeals/matters, to avoid the consequences of dismissal and/or of

adverse findings. Such cases have to be distinguished from cases

where only the mere administrative act of filing of the memorandum

of appeal, may be to save limitation has occurred and where on

further consideration it is deemed appropriate to opt for review; or

where, even though the appeal gets listed before the court but

without arguing/pressing the same, immediately a statement is made

withdrawing the same. In such cases, it cannot be said that an

appeal has been "preferred". Such cases have to be distinguished

from cases where the party takes a chance before the Appellate

Court and being unsuccessful withdraws the appeal. In those cases,

it cannot be said that the appeal has not been prosecuted.

17. Though, I have not found any judgment of this court on the

subject but I find that in a large number of cases viz. Subhash

Behari Lal Vs. Union of India MANU/DE/7203/2007, Dalip Singh

Vs. MCD 140 (2007) DLT 20, Yashwant Singh Negi Vs. Union of

India MANU/DE/2310/2006 & R.K. Singhal Vs. The Engineering

Projects (India) Ltd. MANU/DE/0100/2004, review applications

were preferred after withdrawal of the appeals, but pursuant to

liberty taken from the Appellate Court to prefer review. However, in

the absence of such liberty having been taken from the Appellate

Court, withdrawal of appeal after addressing some arguments would

be a bar to a review. The courts, always pressed for time, allow

withdrawal even after complete arguments, to utilize the time which

would be taken in writing orders of dismissal, for some other case. If

the Appellate Court feels that the appellant has at an initial stage

only of the appeal opted or agreed to apply for review the Appellate

Court would grant such liberty. However, if the time of the

Appellate Court has been taken in attempting to persuade the court

to admit the appeal or to issue notice thereof and only after failing to

do so, withdrawal is sought, the Appellate Court may decline to grant

such liberty to apply for review.

18. In the present case not only does the order of the Appellate

Court not contain any prayer of the plaintiffs/applicants for liberty to

apply for review to this court but seeking extension of time by the

plaintiffs/applicants for compliance with the order of this court

shows that there was no suggestion before the Appellate Court of

applying for review before this court.

19. I thus find the applications for review to be not maintainable.

Even, otherwise according to me, the application for review is barred

by time and no ground in the circumstances aforesaid for

condonation of delay is made out. Even on merits, no case for review

is made out. The objection by the plaintiffs/applicants to the

direction for deposit with interest till the date of deposit is

misconceived. Though, the plaintiffs/applicants had on 20th October,

2008 offered to deposit the money with interest till that date and

which offer was declined by the counsel for the defendants, the

plaintiffs/applicants did not deposit the money in this court. The

principles of Order 21 Rule 1 would apply in such a case. For a party

to cease the running of interest, the party has to deposit the money

in this court. Mere offer would not cease the running of interest in as

much as the money remained in the pocket of the

plaintiffs/applicants. Interest has been awarded at the rate pleaded

by the plaintiffs/applicants themselves and when the

plaintiffs/applicants continued to enjoy the benefit of the monies, no

mistake or error or other reason is found in the order directing

deposit with interest till the date of deposit in this court.

20. Similarly, the other condition was imposed to avoid any injury

to the defendants by the interim order sought by the

plaintiffs/applicants, in the event of the plaintiffs/applicants

ultimately failing in their case. The plaintiffs/applicants claim to be

the majority shareholder of the company whose shares are subject

matter of dispute. The contention of the plaintiffs/applicants of the

defendants rigging the price of the shares with a view to cause

wrongful loss to the plaintiffs/applicants is found to be far fetched

and no ground for review. Resultantly, all the applications are

dismissed. The parties are left to bear their own costs.

RAJIV SAHAI ENDLAW (JUDGE) July 20th, 2009 PP