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2016 Supreme(Del) 2035

IN THE HIGH COURT OF DELHI AT NEW DELHI
S. RAVINDRA BHAT & DEEPA SHARMA, JJ.
FORMOSA PLASTICS CORPORATION USA - Appellant
Vs.
ASHOK CHAUHAN & ORS. - Respondents
EFA (OS) 41/2011 & 42/2011, C.M.Nos.19745/2011, 2335, 7501, 7502, 20611, 20612 & 20628/2012 & 19747/2011, 2336, 7503, 7504, 20616, 20617, 20629/2012 & 13202/2016
Decided On : 18-05-2016

Advocates Appeared:
For the Appellant :Mr. Arvind K. Nigam, Sr. Advocate with Ms. Diya Kapur and Ms. Manjira Das Gupta, Advocates for appellants in both matters.
For the Respondent:Mr. Krishnan Venugopal, Sr. Advocate with Mr. Tanmay Mehta, Mr. A.P. Singh, Mr. Rajan Chawla and Mr. Gautam Chauhan, Advocates for respondents in both matters.

The main legal point established in the judgment is that orders are appealable if they decide matters of moment and affect vital and valuable rights of the parties. The court also emphasized the maintainability of the application for recall of the order under Section 151 CPC and the reservation of the decision on whether sufficient cause was shown for the delay in filing the recall application.

Headnote:

Appealability - Execution Proceedings - Order XXI Rule 105, 106 - The court held that the orders dated 31.03.2011, 02.08.2011, and 20.09.2011 are appealable as they decide matters of moment and affect vital and valuable rights of the parties. The court relied on the Supreme Court's decision in Shah Babulal Khimji vs Jayaben D. Kania & Anr., AIR 1981 SC 1786 to determine the appealability of the orders.

Fact of the Case:

The appellant, Formosa Plastics, sought execution of a decree of the Chancery Division of the UK High Court under Section 44A of the Code of Civil Procedure (CPC). The execution proceedings were dismissed for non-appearance, and subsequent applications for recall and review were rejected. The respondents objected to the maintainability of the appeal and the delay in filing the appeals.

Finding of the Court:

The court found that the orders were appealable as they decided matters of moment and affected vital and valuable rights of the parties. The court also held that the order dismissing the execution proceedings was not conclusive and the application for recall of the order under Section 151 CPC was maintainable. The court reserved the decision on whether sufficient cause was shown for the delay in filing the recall application.

Ratio Decidendi: The court held that the orders were appealable as they decided matters of moment and affected vital and valuable rights of the parties. The court also determined that the order dismissing the execution proceedings was not conclusive and the application for recall of the order under Section 151 CPC was maintainable. The court reserved the decision on whether sufficient cause was shown for the delay in filing the recall application.

Final Decision: EFA 41/2011 was allowed, and EFA 42/2011 was allowed to the extent indicated. The matter was remanded to the single judge to decide whether sufficient cause was shown for the delay in filing the recall application. The single judge was requested to hear and dispose of the matter expeditiously.

JUDGMENT :

S.RAVINDRA BHAT, J.

1. This judgment will dispose of two appeals; the first impugns an order dated 31.03.2011 (EFA 42/2011); the second (EFA 41/2011) impugns two orders - dated 02.08.2011 and 20.09.2011. The first order dismissed an execution petition (EP 38/1998); the other two orders rejected the application for recall of that order, under Section 151, and the review of the order rejecting the recall application.

2. The facts briefly are that the appellant (hereafter “Formosa Plastics”) is a foreign decree holder; it sought execution of a decree of the Chancery Division of the UK High Court, dated 24.10.1997, under Section 44A of the Code of Civil Procedure (CPC). The proceeding was registered as EP 38/1998. The execution proceedings were pending for a considerable period of time; the respondent/judgment debtor had filed applications, contending that the proceeding was not maintainable; he sought its rejection. Since some of those applications (EA 525/1999 and EA 569/1999) were pending, the Court permitted withdrawal of another similar application (EA 538/2010), on 08.10.2010. While so, the matter was heard partly on 15.11.2010 by Justice V.K. Shali. It was adjourned to 16th December, 2010. On that date, the judge was on leave; consequently the proceedings were adjourned to 31.03.2011. On the later date, the execution proceedings were listed before Justice J. R. Midha. Though the arguments in the matter were heard partly by Justice Shali, the matter was listed before Midha, J. There was no appearance on behalf of Formosa Plastics; the learned judge therefore, dismissed the execution petition.

3. Formosa Plastics filed an application for recall of the order dismissing the execution proceedings, for non-appearance. The application and other connected applications were posted before yet another learned judge, i.e A.K. Pathak, J. On 02.08.2011, the said learned judge dismissed the application for recall of the order, dismissing the execution petition, holding that it was time barred beyond the thirty day prescribed time limit, under Order XXI Rule 105, Civil Procedure Code (“CPC”) and therefore barred in law. Formosa Plastic’s application for review was also dismissed by order dated 20.09.2011.

4. At the outset, counsel for the respondents had objected to the maintainability of the present appeal on two counts; that the order refusing to recall the order rejecting the execution for non-appearance and an order refusing to review such order are not appealable. It was contended on behalf of the respondents that such orders are not of the kind that are based on any determination of fact-appreciation; consequently they do not fall within the description of “appealable” orders. Counsel relied upon the judgment of the Supreme Court in Shah Babulal Khimji vs Jayaben D. Kania & Anr., AIR 1981 SC 1786. It is secondly urged that this Court should not condone the delay in the filing of the present appeals especially with respect to the order dated 31.03.2011. Besides, it is urged that the filing of the appeal itself is suspect because the case set up by Formosa Plastics is that one Mark Palay was in correspondence with its local counsel. Mark Palay’s authorization was never shown to the Court much less established. In the circumstances, whether he could have permitted the filing of an application for recall of the order of dismissal in default and whether the present appeal itself could have been filed is questionable.

5. Counsel for the appellant made his submissions on the maintainability and the merits of both appeals. It is firstly submitted that the Supreme Court in Shah Babu Lal Khimji (supra) itself envisions circumstances whereby seemingly innocuous orders can result in prejudice or be termed as those leading to momentous consequences to an aggrieved litigant. Pointed reference was made to certain passages in Shah Babu Lal Khimji (supra) in support of the submission, especially paragraphs 106, 111, 112, 113, 114, 115 & 119. Lea




























































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