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2002 Supreme(Cal) 662

High Court Of Calcutta
KALYAN JYOTI SENGUPTA
KANCHAN UDYAG LTD. - Appellant
Versus
MCDOWELL AND CO.LTD. - Respondent
G. A.  1463  Of  2001
Decided On : 10/08/2002

The doctrine of merger of decrees does not apply when the Supreme Court remands a case to the appeal court for fresh hearing. In such cases, the trial court decree remains operative and executable.

Headnote:

EXECUTION OF DECREE - REMAND ORDER - APPLICABILITY OF DOCTRINE OF MERGER OF DECREES - EXECUTABILITY OF TRIAL COURT DECREE - APPOINTMENT OF RECEIVER - JURISDICTION OF COURT.

Fact of the Case:

Plaintiff obtained a money decree against the defendant company in 1999. The defendant appealed the decree, but there was no stay of operation granted. The appeal court set aside the trial court's decree and remanded the case for fresh hearing. Both parties filed SLPs in the Supreme Court, which disposed of the SLPs by directing the appeal court to hear the appeal de novo. The plaintiff then filed an application for execution of the trial court decree.

Finding of the Court:

1. The doctrine of merger of decrees applies when an appeal court sets aside or modifies a trial court decree. In such cases, the trial court decree merges with the appeal court decree, and the latter becomes the operative decree for the purposes of execution. 2. However, in this case, the Supreme Court did not affirm or set aside the trial court decree. Instead, it remanded the case to the appeal court for fresh hearing. Therefore, the doctrine of merger of decrees does not apply, and the trial court decree remains operative and executable. 3. The plaintiff is entitled to execute the trial court decree, as there is no stay of operation granted by the Supreme Court or the appeal court. 4. The court has jurisdiction to appoint a Receiver over the defendant company's work in progress, as the defendant has a place of business within the court's jurisdiction.

Issues: 1. Whether the doctrine of merger of decrees applies in this case, where the Supreme Court remanded the case to the appeal court for fresh hearing. 2. Whether the trial court decree is executable, despite the remand order passed by the Supreme Court. 3. Whether the court has jurisdiction to appoint a Receiver over the defendant company's work in progress.

Ratio Decidendi: 1. The doctrine of merger of decrees applies when an appeal court sets aside or modifies a trial court decree. In such cases, the trial court decree merges with the appeal court decree, and the latter becomes the operative decree for the purposes of execution. However, in this case, the Supreme Court did not affirm or set aside the trial court decree. Instead, it remanded the case to the appeal court for fresh hearing. Therefore, the doctrine of merger of decrees does not apply, and the trial court decree remains operative and executable. 2. The plaintiff is entitled to execute the trial court decree, as there is no stay of operation granted by the Supreme Court or the appeal court. 3. The court has jurisdiction to appoint a Receiver over the defendant company's work in progress, as the defendant has a place of business within the court's jurisdiction.

Final Decision: The court allowed the plaintiff's application for execution of the trial court decree and appointed a Receiver over the defendant company's work in progress.

KALYAN JYOTI SENGUPTA, J.

( 1 ) THIS is an application for the execution of the money decree for a sum of Rs. 4 crores and odd passed by the learned single Judge of this Court, though the decree on being upset by the Appeal Court, reached up to Apex Court at one stage and ultimately on remand the decree is under scrutiny again before the appeal Court. To elaborate the aforesaid position the fact is narrated shortly :-THE applicant herein, got the above decree against the defendant-judgment-debtor Mcdowell and Company Limited on 2/12/1999. Against the decree an appeal was preferred, however, as it appears from the records that there was no stay of operation of the decree of the learned trial Judge even at the admission stage. Mr. Hirak Mitra, learned Senior Advocate contends while resisting this application that decree itself is ex facie so bad that at one stage the appeal Court presided over by the Hon'ble Justice Mrs. Ruma Pal (as His Lordship then was) was pleased to start the hearing of the appeal expeditiously and it was the intention of Their Lordships that no formal order of stay of operation of the decree was required as the appeal was being heard on day- to-day basis. Unfortunately, it could not be concluded because of elevation of Mrs. Justice Pal to Apex Court. Thereafter this appeal was heard by another Bench presided over by Justice V. K. Gupta (as His Lordship then was) sitting with Justice Molay Kumar Basu and this was finally heard on 18th May when the judgment was delivered. During this period the plaintiff did not take out execution application, although there was no stay of operation of the decree. The appeal Court, however, setting aside the judgment and decree passed by learned trial Judge remanded the same for fresh hearing as it was felt by Their Lordships that there was no sufficient evidence to pass decree.

( 2 ) THEREAFTER, both the parties filed two separate SLPs against the same judgment and decree. It was the grievance of the judgment-debtor in the SLP amongst others that the First Appellate Court should not have been contended with setting aside the decree and remanding the matter but ought to have dismissed the suit altogether. Whereas the decree-holder-plaintiff, countered and ventilated its grievance in the SLP that Division Bench ought not to have set aside the decree and remanded the matter, rather it ought to have affirmed the decree passed by learned trial Judge. The Supreme Court not only admitted both the SLPs but disposed of the same by a common judgment dated 14/12/2001. By this judgment and order the Apex Court seems to have listened to and allowed the partial prayer of both the parties and directed the First Appellate Court to hear the appeal Court itself de novo, after setting aside the order and judgment of the 1st Appellate Court. While passing the aforesaid order the Apex Court observed that the appeal Court itself ought to have decided the matter on the basis of the material and evidence made available to them on records and ought not to have remanded the matter.

( 3 ) IT is an admitted position that the appeal is still pending after being remanded. At no point of time there was any application for stay of operation of the judgment and decree passed by the learned trial Judge. It is also an admitted position, previously there was no attempt to make any application for execution of the decree either.

( 4 ) NOW the plaintiff for execution in various mode of assistance has taken out this application, sought for in the tabular statement.

( 5 ) MR. Bachawat, learned Senior Counsel appearing with Mr. Surana, learned Counsel submits that in the aforesaid admitted factual position there is no embargo for this Court to proceed with the execution of the decree. There is no order either from the Supreme Court, or from the Appellate Court staying operation of the decree. He has drawn my attention to the judgment of the Supreme Court reported in AIR 2000 SC 2587 and also Chapter XVII, Rule
































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