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1990 Supreme(Cal) 202

High Court Of Calcutta
A. M. BHATTACHARJEE
KRISHAN KUMAR AGARWALA - Appellant
Versus
RESERVE BANK OF INDIA - Respondent
Matter 2328  Of  1989
Decided On : 05/08/1990

Advocates Appeared:
HIRAK MITRA, INDIRA BANERJI, N.N.Gupta, R.K. KHANNA, S.PAL CHAUDHARY

The provisions of Article 226 (3) of the Constitution are mandatory and result in automatic vacation of ex parte interim orders if the application for vacation is not disposed of within the specified period.

Headnote:

ARTICLE 226 - AUTOMATIC VACATION OF INTERIM ORDERS - EX PARTE INTERIM ORDERS - VACATION ON GROUNDS OTHER THAN CHANGE OF CIRCUMSTANCES OR UNDUE HARDSHIP - MANDATORY NATURE OF ARTICLE 226 (3) - FOREIGN EXCHANGE REGULATION ACT, 1973 - PERMISSION OF RESERVE BANK OF INDIA - JUDICIAL REVIEW - LIMITED GROUNDS - IRREPARABLE INJURY AND BALANCE OF CONVENIENCE AND INCONVENIENCE.

Fact of the Case:

The petitioner, claiming to be the owner of 100 shares in Titagarh Jute Factory, filed a writ petition challenging the permission granted by the Reserve Bank of India (RBI) to respondent No. 4, Mr. R. J. Brealey, for the acquisition of equity and preference shares in the company. An ex parte interim order of injunction was granted, restraining the respondents from giving effect to the RBI's permissions. The respondents filed an application for vacation of the interim order, arguing that it had automatically stood vacated under Article 226 (3) of the Constitution, which provides for automatic vacation of ex parte interim orders if the application for vacation is not disposed of within a specified period.

Finding of the Court:

The court held that the provisions of Article 226 (3) are mandatory and that the ex parte interim order had automatically stood vacated on the expiry of the specified period. However, the court also held that the petitioner could still seek a fresh interim order if sufficient grounds were shown.

Issues: 1. Whether the provisions of Article 226 (3) are mandatory and result in automatic vacation of ex parte interim orders if the application for vacation is not disposed of within the specified period? 2. Whether the petitioner has made out a case for grant of a fresh interim order, despite the automatic vacation of the ex parte interim order.

Ratio Decidendi: 1. The court interpreted Article 226 (3) as providing for mandatory automatic vacation of ex parte interim orders if the application for vacation is not disposed of within the specified period. The court reasoned that the clear language of the provision, which states that the interim order "shall stand vacated," indicates that the provision is mandatory and not merely directory. 2. The court found that the petitioner had not made out a case for grant of a fresh interim order. The court noted that the petitioner had failed to show any irreparable injury or inconvenience that would result from the denial of the interim order, and that the petitioner had not made out a prima facie case of mala fide, non-application of mind, or injury to national interest in the grant of permission by the RBI.

Final Decision: The court held that the ex parte interim order had automatically stood vacated under Article 226 (3) and that the petitioner had not made out a case for grant of a fresh interim order. The court accordingly discharged the interim order.

A. M. BHATTACHARJEE, J.


( 1 ) IN this application filed by the respondents for vacation of the ex parte interim order of injunction issued against them, the two questions that have arisen for consideration are - (a) whether the ex parte interim order has automatically stood vacated on the ground of the application for vacation not having been disposed of within the period specified in Clause (3) of Article 226, and (b) whether on the facts acrd circumstances and the relevant law on the point, the order, if still in operation, should be discharged or otherwise altered, or, if the order is no longer in operation, a fresh interim order is warranted.

( 2 ) WHERE an interim order has been made after giving the party affected an opportunity of being heard, such an order isordinarilynot to be discharged or varied unless such discharge or variation has been necessitated by a change in the circumstances or unless the Court is satisfied that the order has caused undue hardship. But when such an interim order has been made ex parte without giving the party affected an opportunity of being heard, the aggrieved party is entitled to object to its continuance and to ask for its vacation or variation on any ground available under the facts and the law and not merely on the ground of any change of circumstances or the order causing undue hardship. This principle has now been expressly enacted in the second Proviso to Rule 4 of Order 39 of the Code of Civil Procedure by the Amendment Act of 1976 and even though the provisions of the Code do not apply ex proprio vigore to the proceedings under Article 226, the principle contained in the Proviso is so eminently reasonable as to warrant universal application. The respondents, therefore, in this case, are entitled to ask for vacation on the ground that such order ought not to have been made under the facts and the law.

( 3 ) AS to the first question, namely, automatic vacation of an ex parte interim order on the ground of non-disposal of an application for its vacation within the period specified in Article 226 (3), Mr. Pal, the learned counsel for the petitioner, has urged several grounds against such automatic vacation and has argued the matter with admirable dexterity.

( 4 ) MR. Pal has firstly urged that clause (3) itself, inserted by way of substitution by the Constitution (Forty-Fourth Amendment) Act, 1978, is ultra vires the Amending powers of Parliament under Article 368 of the Constitution, as by the provisions of Clause (3), one of the basic features of the Constitution has been affected which Parliament cannot do in view of the majority decisions in Kesavananda Bharati, AIR 1973 SC 1461. Mr. Pal has urged that the power of Judicial Review is one of the basic features of the Constitution as clearly ruled by the Supreme Court in Indira Nehru Gandhi, AIR 1975 SC 1590 and Clause (3) of Article 226 has affected that power of Judicial Review.

( 5 ) THE power of this Court to issue ex parte interim orders in furtherance of the main relief prayed in a petition under Article 226 neither was nor is a creature of Article 226, or any other provisions of the Constitution and therefore cannot be a "feature" far less a 'basic feature', of the Constitution, and, therefore if the power is no such feature, basic or otherwise, of the Constitution, the provision of Clause (3) providing for the automatic vacation of an interim order, if the application for its vacation remains undisposed of for certain period, cannot be said to affect or alter any feature or the structure of the Constitution.

( 6 ) MR. Pal has also urged that by providing for such automatic vacation of interim orders, passed by the Court under the provisions of Clause (3), Parliament has clearly exercised a Judicial jurisdiction not vested in it under the Constitution. The contention must be rejected as without any substance. Laws relating to administration of justice and the procedure for such administration are clearly matters within












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