1. Recovery suit — Appointment of Receiver — Determination of monthly royalty for properties — Appeal against royalty rate. (Para 2 , 3 , 4 , 5 )
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1999 Supreme(SC) 1177
SUPREME COURT OF INDIA
S.R.Babu : S.Saghir Ahmad
Manubhai J.Patel
Versus
Bank Of Baroda
Case No. : 5912 of 1999
Date of Decision : 10/8/99
Important Points
A court must resolve preliminary objections concerning the maintainability of an appeal, specifically whether an order qualifies as a "judgment" under the Letters Patent, before proceeding to decide the merits or passing interim orders.
Subject
Civil Law - Procedural Law
Act Referred
Headnote
(A) Letters Patent - Maintainability of Appeal - Preliminary objection regarding whether an order constitutes a "judgment" within the meaning of Letters Patent - Division Bench failed to decide the preliminary objection before passing an interim order on the merits of the case - Such failure affects the ends of justice. (Paras 6 and 7)
Facts of the case:
A financial institution filed a suit for recovery of principal and interest. A Single Judge appointed a Receiver for certain residential and commercial properties and fixed a monthly royalty. The institution sought an enhancement of the royalty, which was dismissed by the Single Judge. On appeal to a Division Bench, an interim order was passed increasing the royalty amount. The appellants challenged this order, raising a preliminary objection that the original order was not a "judgment" under the Letters Patent and therefore the appeal was not maintainable.
Findings of Court:
The Division Bench, before proceeding to determine the amount of royalty, ought to have decided the preliminary objection as to the maintainability of the appeal. Since this was not done, the ends of justice suffered.
Issues: Whether the Division Bench was justified in passing an interim order on the merits of the appeal without first deciding the preliminary objection regarding the maintainability of the appeal under the Letters Patent.
Ratio Decidendi: When a specific preliminary objection regarding the maintainability of an appeal is raised, the court must determine that issue before proceeding to the merits of the case or passing interim orders to ensure the ends of justice are met.
Result: Appeal allowed.
Facts of the case:
A financial institution filed a suit for recovery of principal and interest. A Single Judge appointed a Receiver for certain residential and commercial properties and fixed a monthly royalty. The institution sought an enhancement of the royalty, which was dismissed by the Single Judge. On appeal to a Division Bench, an interim order was passed increasing the royalty amount. The appellants challenged this order, raising a preliminary objection that the original order was not a "judgment" under the Letters Patent and therefore the appeal was not maintainable.
Findings of Court:
The Division Bench, before proceeding to determine the amount of royalty, ought to have decided the preliminary objection as to the maintainability of the appeal. Since this was not done, the ends of justice suffered.
Issues: Whether the Division Bench was justified in passing an interim order on the merits of the appeal without first deciding the preliminary objection regarding the maintainability of the appeal under the Letters Patent.
Ratio Decidendi: When a specific preliminary objection regarding the maintainability of an appeal is raised, the court must determine that issue before proceeding to the merits of the case or passing interim orders to ensure the ends of justice are met.
Result: Appeal allowed.
Legal Category Hierarchy
Table of Contents
2. Maintainability of appeal against an order of a Single Judge — Whether such order constitutes a judgment under Letters Patent. (Para 6 )
3. Preliminary objections regarding the maintainability of an appeal should be decided before the court determines the merits of the interim relief. (Para 7 )
4. Preliminary objections concerning the maintainability of an appeal must be adjudicated prior to the determination of substantive interim orders. (Para 7 )
5. Interim order set aside — Appeal allowed — High Court directed to decide maintainability and merits — Royalty payable at trial judge's rate. (Para 8 , 9 )
6. When should a court address a preliminary objection regarding the maintainability of an appeal?
The court ought to decide the preliminary objection as to the maintainability of the appeal before proceeding to determine the substantive merits or fixing interim amounts. (Para 7 )
7. What is the criterion for the maintainability of an appeal against a Single Judge's order under Letters Patent?
An appeal is maintainable only if the order passed by the Single Judge constitutes a judgment within the meaning of the Letters Patent. (Para 6 )
(1) LEAVE granted.
(2) THIS appeal is directed against the order dated 15-4-1998 passed by the Bombay High Court by which the High Court, while admitting the appeal from the order of the Single Judge, passed an interim order directing the appellants to pay royalty at a rate higher than the rate fixed by the Single Judge.
(3) IT may be stated that Bank of Baroda had filed a suit against the appellants who were arrayed as Defendants 1 and 2 in that suit, for recovery of the principal amount of rupees one crore together with interest accrued thereon totalling to one crore fifty-three lakhs, in the Bombay High Court. The learned Single Judge, by his order dated 16-6-1996, appointed the Receiver of the High Court of Bombay as the Receiver of the two residential flats Nos. 201 and 202, Shalimar Apartments, Cumballa Hill, Bombay and two offices bearing Nos. 29 and 32, Kala Bhavan, Mathew Road, Bombay. The Receiver by order dated 14-3-1997 determined the amount payable by the appellants as monthly royalty for Flat No. 201 (Rs. 45,000), Flat No. 202 (Rs. 50,000) and for Office No. 29 (Rs 55,000).
(4) THE Bank not feeling satisfied with the above order took out Chamber Summons No. 671 of 1997 before the Single Judge of the Bombay High Court for enhancement of the monthly amount of royalty in respect of Flats Nos. 201 and 202 and Office No. 29. The Single Judge, by his order dated 25-9-1997, dismissed the chamber summons and confirmed the order passed by the Receiver.
(5) BANK of Baroda, thereafter, filed an appeal before the Division Bench against the order dated 25-9-1997 passed by the Single Judge and on 15-4- 1998, while admitting the appeal, the Division Bench passed the impugned order by which the royalty amount has been fixed at rupees one lakh for each of these properties payable by the appellants to the Receiver.
(6) ALTHOUGH, the impugned order is an interim order passed by the Division Bench of the Bombay High Court and this Court does not usually entertain any appeal by special leave against an interim order, but since it has been contended by the learned counsel appearing on behalf of the appellants that the appellants had also raised a preliminary objection before the Division Bench that the order passed by the Single Judge was not a "judgment" within the meaning of Letters Patent and, therefore, an appeal was not maintainable, we have, having regard to the other circumstances of the case, granted leave and entertained this appeal.
(7) SINCE the question about the maintainability of the appeal against the interim order, passed by the Single Judge of the Bombay High Court, was specifically raised on behalf of the appellants in the High Court, the Division Bench before proceeding to determine the amount of royalty, ought to have decided the preliminary objection as to the maintainability of the appeal. This having not been done, the ends of justice, we feel, have suffered.
(8) CONSEQUENTLY, the order dated 15-4-1998, passed by the Division Bench, is set aside and the appeal is allowed. The Division Bench of the High Court may now proceed to dispose of the objection raised by the appellants as to the maintainability of the appeal. It will be open to the High Court, at the same time, to dispose of the whole of the appeal on merits. Meanwhile, the appellants shall pay the royalty amount at the rate fixed by the trial Judge.
(9) WE request the High Court to dispose of the appeal within six months.
