2002 Supreme(SC) 588

2002(4) Supreme 631
SUPREME COURT OF INDIA
(From Orissa High Court)
M.B. Shah and B.N. Agrawal, JJ.
Government of Orissa —Appellant
versus
M/s. Ashok Transport Agency & Ors. —Respondents
Civil Appeal No. 3209 of 2002
(Arising out of SLP (C) No. 6192 of 2001)
Decided on 30-4-2002
Counsel for the Parties :
For the Appellant : Altaf Ahmed, Additional Solicitor General, Mrs. Kirti Renu Mishra, Advocate.
For the Respondents : B.A. Mohanty, Sr. Advocate, Ashok Mathur, Ms. Mamta Tripathi, Harshvardhan Jha, Anukul Chandra Pradhan and Shiv Sagar Tiwari, Advocates.

Very Important Point
An ex-parte decree passed against a company which was during pendency of suit was taken over by State Government through an ordinance, but Government was not made party to suit, can be executed against the State Government.
This view requires consideration by a larger Bench in view of conflicting view by Shah J. on page 399.

Headnote:[Editorial Note : We have published Judgment of M.B. Shah, J. in 2002(4) Supreme 399. At that time dissenting Judgment of B.N. Agrawal, J. was not available (see Editorial Note on p. 400) so it was not published. Now it is made avialable so it is published. Reader may read it in continuation of 2002(4) Supreme 399. Inconvenience caused is ­regretted].

       Civil Procedure Code, 1908—Order XXII Rules 3, 4, 7, 8 and 10, Section 47—Procedure in case of assignment before final order in suit—Orissa Mining Corporation (Acquisition and Transfer of Charge Chrome Division) Ordinance, 1991—Charge Chrome Division of Orissa Mining Corporation stood transferred to Orissa Government w.e.f. date of ordinance—Suit by respondent against Charge Chrome Division of Orissa Mining Corporation for recovery of money—On 24.9.1991 defendant company was taken over by Government of Orissa by Orissa Ordinance—Neither respondent-plaintiff made Government of Orissa as a party in suit nor defendant tried it nor Government of Orissa applied to be impleaded as party—Defendant did not press after filing of written statement—Ex-parte decree passed on 12.11.1991 against defendant company only—But later plaintiff-respondent learned about merger of defendant company in Government of Orissa so execution filed both against defendant company and Government of Orissa—Government of Orissa objected under Section 47 C.P.C.—Trial Court rejected—Upheld by Orissa High Court—Appeal against to Supreme Court—Heard by two Judges—Whether an ex-parte decree passed against a company which was pendente lite taken over by State Government­ by an ordinance but not made a party to suit can be executed against the State Government? (Yes, per B.N. Agrawal, J.)—(No by M.B. Shah, J.)—Conflicting views—Matter to be listed before a larger Bench—Case law referred.

       Held : In my view, the question posed is no longer res integra as the same is concluded by a two Judge Bench decision of this Court in the case of Dhurandhar Prasad Singh v. Jai Prakash University and others, 2001(6) SCC 534, in which sitting with G.B. Pattanaik, J., I have delivered the judgment laying down law that in such an eventuality, decree would not be nullity and can be executed against the successor-in-interest of the defendant-judgment debtor even though it was not impleaded party to the suit. As I see, the decision in the case of Dhurandhar Prasad Singh (supra) answers the question against the appellant whereas it appears that in the opinion of my learned Brother, the ratio laid down in the said case supports the contention of learned counsel appearing on behalf of the appellant. Ordinarily, in such an eventuality, the case should be referred to a larger bench but in view of the detailed judgment prepared by my learned Brother, I have no option but to record note of dissent enumerating therein my reasoning therefor. According to me, for a comprehensive judgment and to clarify the point in issue, it would be useful to refer to various paragraphs from the judgment of this Court delivered by me in the case of Dhurandhar Prasad Singh (supra) which may be stated hereinafter. (Para 5)

       The present case is squarely covered by the aforesaid decision of this Court in the case of Dhurandhar Prasad Singh (supra) and the same in my view cannot be distinguished and does not require reconsideration as there is nothing to doubt correctness of law laid down therein. (Para 29)

       Held also : From a bare perusal of the aforementioned provisions of the Ordinance, it would be plain that liability of the Charge Chrome Division in the suit upon its being taken over became liability of the Government of Orissa and is enforceable against it. Ordinance lays down that if a suit is pending against the Charge Chrome Division or in relation to its properties, both of which have vested in the Government of Orissa, under the provisions of Ordinance, the same shall neither abate nor be discontinued nor in any manner prejudicially affected by reason of vesting and transfer under the Ordinance. Such a provision that the suit shall not abate, be discontinued or in any manner prejudicially affected by reason of devolution of interest during its pendency has not been explicitly made in Order 22 Rule 10 of the Code like Section 4(5) of the Ordinance, but the same is implicit therein. Both the provisions lay down that in case there is devolution of interest during the pendency of a suit under Order 22 Rule 10 of the Code as well as Section 4(5) of the Ordinance, the suit may be continued by or against the person upon whom the interest has devolved. A successor-in-interest may challenge validity or otherwise of a decree passed against the predecessor-in-interest without impleading the successor-in-interest upon whom the interest has devolved during the pendency of the suit, by filing a properly constituted suit or taking any other remedy available under law on the ground that the original defendant absented himself from the proceeding of the suit after appearance and filing written statement as he had no longer any interest in the subject of dispute or did not purposely take interest in the proceeding or colluded with the adversary or any other ground permissible under law as such a challenge would make the decree voidable and not void much less ab initio so as to make it nullity. If a question that a decree is voidable is allowed to be raised under Section 47 of the Code, the same would amount to opening the doors for unscrupulous litigants to take second round of litigation as a result of which lis can never attain any finality. In the case on hand, it has nowhere been stated in the objection that the Government of Orissa had no knowledge of pendency of the present suit. It has also not been stated that the original defendant after appearance and filing written statement in the suit did not take interest in the proceeding as by virtue of devolution it lost interest therein or there was some purpose behind it or it colluded with the adversary but the ground has been simply taken that the Government of Orissa has not been brought on the record, therefore, the decree passed against the predecessor-in-interest cannot be enforced against it even though, the interest has devolved upon the Government of Orissa during the pendency of the litigation. In my view, in the present case, on the ground taken in the objection, it cannot be said that the decree is even voidable much less void or void ab initio. Therefore, the Government of Orissa is precluded from challenging its validity or otherwise even by filing a separate suit much less taking objection under Section 47 of the Code. Consequently I, hold that it was rightly found in the impugned orders that the decree was enforceable against the Government of Orissa and no interference with the orders impugned is called for. Accordingly, the appeal fails and the same is dismissed. In the circumstances, there shall be no order as to costs. (Paras 33 and 34)