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1992 Supreme(Bom) 354
IN THE HIGH COURT OF BOMBAY
B.N. Srikrishna, J.
The Industrial Credit and Investment Corporation of India Ltd.
and another.... Plaintiffs.
Versus
Sharad Khanna and others.... Defendants.
Chamber Summons No. 439 of 1992 in Sum. Suit No. 1935 of 1989, decided on 27-7-1992.
Advocates appeared :
Anil Diwan with N.G. Thakkar and T.K. Cooper i/by M/s. Mehta and Girdharlal, for defendants.
S.H. Doctor with Y.B. Pandya i/b. M/s. Pandya and Poonawala, for plaintiffs to show cause.
Headnote:Sections 15 and 34-Jurisdictioo-Distioction between order passed by court having and inherent jurisdiction-Courts erroneous award of interest on interest not non-est or nullity-Court becomes no Coram non-judice.
A situation where a statute mandates that Court of plenary jurisdiction to do or not to do something and the Court breaches the mandate, cannot be educated with a situation where the Court inherently lacks jurisdiction to adjudicate upon the subject-matter of the dispute or with the case of a special forum of limited jurisdiction acting out of bounds of its jurisdictional limits. The former results in an erroneous decree; the latter in a decree which is a nullity.
It is difficult to agree with the contention the Counsel for the defendants that if a Court, while exercising jurisdiction under Section 34, awards interests on the aggregate of the principal sum plus interest, it would be an exercise lacking in inherent jurisdiction and not one merely of an erroneous exercise within its jurisdiction. A Court, which otherwise has jurisdiction to entertain a dispute, equally his jurisdiction to decide it erroneously. The remedy, in such a situation, is by way of appeal, if one is provided, or other constitutional one. If there is no resort to them or, as in the instant case, the resort to them draws a blank, the order of the Court becomes final and it is not capable of being ignored on the ground of its being non-est or a nullity. The Court, in such a situation, cannot and does not become coram non-judice.
2. The facts leading to the present chamber summons indicate the considerable legal ingenuity which has gone into avoiding the day of reckoning. They are:
(a) The plaintiffs are financial institutions, which had advanced large sums of money to a Company known as Krimpex Synthetics Ltd., of which the defendants are Directors. While the first plaintiffs had advanced a sum of Rs.87 lacs, the second plaintiffs had advanced a sum of Rs.58 lacs. Usual agreements for compounding the interest were entered into between the said Company and the two plaintiffs. The loans were advanced not only against security of the plant, machinery, building and land of the said Company, but were also collaterally guaranteed by personal guarantees given by the defendants in the capacity of Directors of the said Company. The Company defaulted in making payment, and the plaintiffs became entitled, under their respective agreements, to enforce their debts forthwith. The plaintiffs filed a suit against the principal debtor-company on the basis of the mortgage- deeds and they also filed a summary suit, being Summary Suit No.1935 of 1989, against the present defendants, based upon the guarantees.
(b) The details of the amounts claimed in the summary suit have some relevance, and, therefore, they need to be set out.
(i) The first plaintiffs claimed a sum of Rs.1,11,30,538/- in the suits, the break-up of which was as under:-
Rs.
Principal sum 87,00,000.00
Simple Interest 21,13,486.00
Compound Interest 2,98,999.00
Other costs (Liquidated Damages) 18,053.00
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1,11,30,538.00
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(ii) The second plaintiffs claimed a total sum of Rs.73,98,866/-, which comprised the following:
Rs.
Principal Outstanding 58,00,000.00
Simple Interest 13,93,347.00
Compound Interest 1,93,784.00
Liquidated Damages 11,735.00
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73,98,866.00
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(c) The plaintiffs also prayed for further interest at the rate of 12% per annum from the date of filing of the suit until payment of both the said sums.
(d) Summonses for judgment were taken out against the defendants. By an order dated 16th January, 1990, Variava, J., granted leave to the defendants to defend the suit, conditional upon depositing Rs.50 lacs within a period of six months. The defendants appealed against the said order granting them conditional leave, and their Appeal No.567 of 1990, was summarily dismissed on 25th June, 1990, by the Division Bench (Mukherjee, C.J., and Bharucha, J.).
(e) On 20th July, 1990, the Prothonotary Senior Master certified that the deposit, as required under the order of Variava, J., had not been made.
(f) In the meanwhile, the plaintiffs had carried an appeal under Art. 136 of the Constitution of India to the Supreme Court of India, and the said appeal came to be dismissed by the Supreme Court on 26th July, 1990, wherein the Supreme Court made only a modification in the order to the effect that the defendants were permitted to furnish Bank Guarantee in the sum of Rs.50 lacs, instead of depositing the said amount, within 8 weeks from the date of the said order, i.e., 26th July, 1990.
(g) The defendants failed to furnish the Bank Guarantee within the period prescribed by the Supreme Court.
(h) The plaintiffs obtained a Certificate of the Prothonotary dated 12th October, 1990, to this effect, and moved the learned Chamber Judge for an exparte decree.
(i) On 5th November, 1990, the learned Chamber Judge (Agarwal, J.) made an order granting a decree as prayed, together with costs quantified at Rs.10,001/-. A further order was made by the learned Chamber Judge on 7th October, 1991, for the issue of certified copy of the decree expeditiously.
(j) When the decree was to be drawn up and certified, the
