Alex Jewellery Pvt Ltd & Ors vs Rolex Sa
2014 Latest Caselaw 974 Del

       THE HIGH COURT OF DELHI AT NEW DELHI
%                                      Judgment delivered on: 21.02.2014

+      FAO(OS) 83/2014 & CM No. 2601/2014

ALEX JEWELLERY PVT LTD & ORS                             .... Appellants

                                        versus
ROLEX SA                                                 ..... Respondent
Advocates who appeared in this case:
For the Appellant     : Mr P.R. Aggarwal and Mr Mohit Sharma
For the Respondent    : Mr Sanjay Jain, Senior Advocate with Ms Charu
                        Mehta, Ms Ruchi Jain, and Mr Sarfaraz Ahmad
CORAM:-
HON'BLE MR. JUSTICE BADAR DURREZ AHMED,
ACTING CHIEF JUSTICE
HON'BLE MR. JUSTICE SIDDHARTH MRIDUL
                     JUDGMENT

BADAR DURREZ AHMED, ACJ (ORAL)

1. The present appeal has been filed against the order dated 28.10.2013 passed by a learned Single Judge of this Court in I.A. No.16257/2013 in CS (OS) No.41/2008. The appellants herein were defendants before the learned Single Judge. They had filed the said IA No.16257/2013 under Order IX Rule 7 CPC seeking the setting aside of the order dated 30.11.2012 passed earlier by the learned Single Judge whereby the said defendants were directed to be proceeded ex parte.

2. The learned Single Judge permitted the defendants to participate in the Suit from that stage onwards, but declined to set the clock back and consequently, did not permit the defendants to cross-examine PW-1 or to

lead their evidence, as the matter had already been set for final arguments and part-arguments of the plaintiff had been advanced.

3. The defendants are aggrieved by the said order. The learned counsel for the respondent pointed out that in the previous hearing on 10.02.2014, the respondent had raised preliminary objections with respect to the maintainability of this appeal. He stated that the order dated 28.10.2013 is an order rejecting the appellants/defendants‟ application under Order IX Rule 7 CPC and the same has not been shown to be appealable under Order XLIII Rule 1 CPC. The learned counsel for the respondent placed reliance on the Supreme Court‟s decision in the case of Arjun Singh v. Mohindra Kumar and other: AIR 1964 SC 993.

4. On the other hand the learned counsel for the appellants submitted that although the impugned order dated 28.10.2013 is not an appealable order listed under Order XLIII Rule 1 CPC, the appeal would, all the same, be maintainable under Section 10 of the Delhi High Court Act, 1966. He submitted that the impugned order dated 28.10.2013 would fall within the meaning of the word "judgement" as appearing in Section 10 of the Delhi High Court Act, 1966. For this proposition he placed reliance on the Supreme Court decision in the case of Shah Babulal Khimji v. Jayaben D. Kania and another: AIR 1981 SC 1786. In that decision, the Supreme Court was considering the Letters Patent of the Bombay High Court. The Supreme Court considered the meaning of the word "judgment" appearing in the said Letters Patent. The learned counsel for the appellants submitted that a Full Bench of this court in the case of Jaswinder Singh, Geetanjali Singh and another v. Mrigendra

Pritam Vikramsingh: 196 (2013) DLT 1 (FB) held that Section 10 was analogous to the provisions of the Letters Patent which was analysed by the Supreme Court in Shah Babulal Khimji (supra) and that the expression "judgment" used in Section 10 of the Delhi High Court Act, 1966 would have the same meaning as the word "judgment" discussed in Shah Babulal Khimji (supra). Consequently, it was submitted that the present appeal was maintainable, inasmuch as, according to the learned counsel for the appellants the order dated 28.10.2013, whereby the appellants‟ / defendants‟ application under Order IX Rule 7 CPC was rejected to the extent that they were not permitted to re-open the proceedings from the date on which the court had directed that the said appellants / defendants be proceeded against ex-parte, was in the nature of an order which would qualify as a "judgment".

5. Order IX Rule 7 CPC reads as under:-

"ORDER IX - APPEARANCE OF PARTIES AND CONSEQUENCE OF NON-APPEARANCE Rule 7. Procedure where defendant appears on day of adjourned hearing and assigns good cause for previous non-appearance.-- Where the Court has adjourned the hearing of the suit ex parte, and the defendant, at or before such hearing, appears and assigns good cause for his previous non- appearance, he may, upon such terms as the Court directs as to costs or otherwise, be heard in answer to the suit as if he had appeared on the day fixed for his appearance."

6. On a plain reading of the above provision it is apparent that after the court adjourns the hearing of the suit ex-parte, the defendant, at or before the next date of hearing, can appear and assign good cause for his

previous non-appearance. If he does so, the court may, upon such terms as it directs as to costs or otherwise, hear the defendant in answer to the suit as if he had appeared on the date fixed for his appearance. In other words, if the court is of the opinion that the defendant had good cause for his previous non-appearance then the court could hear the defendant as if he had appeared on the day on which he was to appear and on which the court adjourned the hearing of the suit ex-parte. This, obviously, means that the clock would be set back to that date and the proceedings which took place on the date of the adjourned hearing till the date the defendant showed good cause could be re-opened.

7. It is an admitted position that the impugned order dated 28.10.2013 is an interlocutory order and that it is not appealable under Order XLIII Rule 1 CPC. The only thing to be seen is whether the impugned order can fall within the meaning of the word "judgment" as appearing in Section 10 of the Delhi High Court Act, 1966. Section 10(1) of the Delhi High Court Act, 1966 reads as under:-

"Section 10. Powers of Judges - (1) Where a Single Judge of the High Court of Delhi exercises ordinary original civil jurisdiction conferred by sub-section (2) of Section 5 on that Court, an appeal shall lie from the judgment of the Single Judge to a Division Court of that High Court."

(emphasis supplied)

8. It is apparent from the above provision that where a Single Judge of this court exercises ordinary original civil jurisdiction conferred by virtue of Section 5(2), an appeal would lie from a "judgment" of a Single Judge to a Division Bench of this court. In Shah Babulal Khimji

(supra), the Supreme Court was concerned with the meaning of the word "judgment" as appearing in the Letters Patent for the High Court of Judicature at Bombay. The Supreme Court observed that there could be three kinds of judgments - (1) a final judgment; (2) a preliminary judgment; and (3) intermediary or interlocutory judgment. In this context the Supreme Court explained the nature and kind of each of these three categories of judgments as under:-

"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 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 Sec. 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 a vital right of the defendant and must, therefore, be construed to be a judgment so as to be appealable to a 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."

(underlining added)

9. The learned counsel for the appellant submitted that the impugned order dated 28.10.2013 fell within the category of intermediary or interlocutory judgments. But we note that in Shah Babulal Khimji (supra) itself it has been pointed out that an interlocutory order, to qualify as an intermediary or interlocutory judgment, would have to possess the characteristics and trappings of finality in that, the orders would have to adversely affect a valuable right of the party and decide an important aspect of a trial in an ancillary proceeding. Furthermore, for an order to be called a judgment, its adverse effect on the party concerned would have to be direct and immediate rather than indirect or remote.

10. We also note that in Shah Babulal Khimji (supra) the Supreme Court observed as under:-

"115. Thus, in other words 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. Similarly, orders passed by the trial Judge deciding question of 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."

(underlining added)

11. From the above extract it is apparent that every interlocutory order cannot be regarded as a judgment and only those orders could 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. What is also important is the observation of the Supreme Court that all interlocutory orders cannot be regarded as judgments because the grievance with regard to interlocutory orders can be corrected by the appellate court in appeal against the final judgment.

12. We shall now refer to the Supreme Court decision in the case of Arjun Singh (supra) which was strongly relied upon by the learned counsel for the respondent. In that case, the Supreme Court had considered the provisions of Order IX Rule 7 CPC specifically. The Supreme Court also considered the fact that there could be various kinds of interlocutory orders. One class of interlocutory orders would be where the orders do not decide any matter in issue arising in the suit nor put an end to the litigation. The Supreme Court felt that an order rejecting the re-opening of proceedings under Order IX Rule 7 CPC would fall within this category and by doing so the Supreme Court observed that the refusal of the court to permit the defendant to set the clock back does not attain finality inasmuch as the same can canvassed in the appeal from the decree that may be passed and could be dealt with by the appellate court. In other words, the Supreme Court categorically held that an order of the kind which is impugned in the present proceedings did not attain finality nor decided any matter of moment. In that sense, the impugned order under Order IX Rule 7 CPC cannot be regarded as a judgment. The Supreme Court had also observed that an order under Order IX Rule 7 CPC, in its essence, is directed to ensure the orderly conduct of the

proceedings by penalizing improper dilatoriness calculated merely to prolong the litigation. It does not put an end to the litigation nor does it involve the determination of any issue in controversy in the suit.

13. Furthermore, the proceeding is of a very summary nature and that is evident from the fact that, as contrasted with Order IX Rule 9 CPC or Order IX Rule 13 CPC, no appeal is provided against the action of the court under Order IX Rule 7 CPC in refusing to set back the clock. The court observed that it is manifest from the Code of Civil Procedure that no finality attaches to the determination of an application under Order IX Rule 7 CPC.

14. The relevant observations of the Supreme Court in Arjun Singh (supra) to the above effect are as under:-

"They are interlocutory in the sense that they do not decide any matter in issue arising in the suit, nor put an end to the litigation. The case of an application under O.IX R.7would be an illustration of this type. If an application made under the provisions of that rule is dismissed and an appeal were filed against the decree in the suit in which such application were made, there can be no doubt that the propriety of the order rejecting the reopening of the proceeding and the refusal to relegate the party to an earlier stage might be canvassed in the appeal and dealt with the appellate Court. In that sense, the refusal of the Court to permit the defendant to "set the clock back" does not attain finality."

"15. The scope of a proceeding under O.IX R.7 and its place in the scheme of the provisions of the Code relating to the trial of suits was the subject of consideration in (1955) 2 SCR 1: ((S) AIR 1955 SC 425). Dealing with the meaning of the words "the Court may proceed ex parte" in O.IX, R.6(1)

(a) Bose, J. speaking for the Court said:

"When the defendant has been served and has been afforded an opportunity of appearing, then if he does not appear, the Court may proceed in his absence. But, be it noted, the Court is not directed to make an ex parte order. Of course the fact it is proceeding ex parte will be recorded in the minutes of its proceedings but that is merely a statement of the fact and is not an order made against the defendant in the sense of an ex parte decree or other ex parte order which the Court is authorised to make. All that rule 6 (1) (a) does is to remove a bar and no more. It merely authorizes the Court to do that which it could not have done without this authority, namely to proceed in the absence of one of the parties." Dealing next with the scheme of the Code, the learned Judge pointed out that the manner in which the court could thereafter proceed i.e. after R. 6(1) (a) was passed would depend upon the purpose for which the suit stood adjourned and proceeded:

"If it is for final hearing, an ex parte decree can be passed, and if it is passed, then O.IX, R.13 comes into play and before the decree is set aside the Court is required to make „an order to set it aside‟. Contrast this with R.7 which does not

require the setting aside of what is commonly, though erroneously, known as "the ex parte order". „No order is contemplated by the Code and therefore no order to set aside the order is contemplated by either‟ (Italics (here into „ ‟) ours) and referring to the effect of the rejection of application made under O.IX, R.7, he added:

"If a party does appear on the day to which the hearing of the suit is adjourned, he cannot be stopped from participating in the proceedings, simply because he did not appear on the first or some other hearing. But though he has the right to appear at an adjourned hearing, he has no right to set back the hands of the clock. Order IX, R.7 makes that clear. Therefore, unless he can show good cause, he must accept all that has gone before and be content to proceed from the stage at which he comes in."

That being the effect of the proceedings, the question next arises what is the nature of the order if it can be called an order or the nature of the adjudication which the Court makes under Order IX, Rule 7? In its essence it is directed to ensure the orderly conduct of the proceedings by penalizing improper dilatoriness calculated merely to prolong the litigation. It does not put an end to the litigation nor does it involve the determination of any issue in controversy in the suit. Besides, it is obvious that the proceedings is of a very summary nature and this is evident from the fact that as contrasted with O. IX, R.9 or O. IX, R.13, no appeal is provided against action of the Court

under O. IX, R.7, "Refusing to set back the Clock".

(underlining added)

15. We are of the view that applying the principles of the Supreme Court decisions in Shah Babulal Khimji (supra) as also the specific decision in the case of Arjun Singh (supra), the impugned order dated 28.10.2013 would not qualify as a "judgment" within the meaning of Section 10(1) of the Delhi High Court Act, 1966. That being the case, the learned counsel for the respondent is right in his submission that the present appeal is not maintainable.

16. The appeal is dismissed but there shall be no order as to costs.

BADAR DURREZ AHMED, ACJ

SIDDHARTH MRIDUL, J

FEBRUARY 21, 2014 SU