Back
IN THE HIGH COURT OF ALLAHABAD
R. N. Gurtu and D. N. Roy, JJ.
KULDIP OIL INDUSTRIES LTD. - Appellant
Versus
CH.PRATAP SINGH - Respondents
First Appeal 7 Of 1948
Decided On : 12/17/1958
CIVIL PROCEDURE CODE, 1908 - ORDER 20, RULE 4(2) - BENGAL, AGRA AND ASSAM CIVIL COURTS ACT, 1887 - SECTION 15 - NEGOTIABLE INSTRUMENTS ACT, 1882 - SECTION 25 - GENERAL RULE (CIVIL) - CHAPTER XX, RULE 19 - EX PARTE DECREE - SETTING ASIDE - CLOSE HOLIDAY - JUDICIAL ACT - VALIDITY - CONSENT OF PARTIES - URGENT NECESSITY - INTERPRETATION.
Fact of the Case:
Plaintiff filed a suit against the defendant company for refund of Rs. 12,500/- paid for purchase of shares, alleging misrepresentation and failure to carry out conditions precedent. Summons was served on the defendant, and an ex parte decree was passed in favor of the plaintiff when the defendant failed to appear on the date fixed for settlement of issues. The defendant filed an application to set aside the ex parte decree, which was dismissed for default.
Finding of the Court:
The court held that the ex parte decree and the subsequent judgment and decree were invalid as the court below erred in exercising its discretion to proceed ex parte on a close holiday without the consent of the parties and without any urgent necessity. The court also found that the judgment of the court below did not fulfill the requirements of Order 20, Rule 4(2) of the Civil Procedure Code, as it did not contain a concise statement of the case, the points of determination, and the reasons for the decision.
Issues: 1. Whether the court below erred in exercising its discretion to proceed ex parte on a close holiday without the consent of the parties and without any urgent necessity? 2. Whether the judgment of the court below fulfilled the requirements of Order 20, Rule 4(2) of the Civil Procedure Code?
Ratio Decidendi: 1. The court held that the court below erred in exercising its discretion to proceed ex parte on a close holiday without the consent of the parties and without any urgent necessity. The court relied on Section 15 of the Bengal, Agra and Assam Civil Courts Act, 1887, which provides that a judicial act done by a civil court on a day specified in the list of close holidays shall not be invalid by reason only of its having been done on that date. However, the court held that the spirit of the section demands that the day in question must be treated as a close holiday and that the court should not have proceeded to pass an order that the case would be disposed of ex parte on that day. The court also relied on Rule 19 of Chapter 20 of the General Rule (Civil), which provides that without the consent of parties and in the absence of urgent necessity, no civil trial shall proceed on a close holiday. The court held that the court below should not have proceeded to record evidence and pronounce judgment on a close holiday, as there was no urgent necessity to do so and the consent of the defendant was not available. 2. The court held that the judgment of the court below did not fulfill the requirements of Order 20, Rule 4(2) of the Civil Procedure Code, as it did not contain a concise statement of the case, the points of determination, and the reasons for the decision. The court held that the judgment was too brief and did not provide any reasoning to support the conclusion that the plaintiff's suit should stand decreed.
Final Decision: The court allowed the appeal, set aside the judgment and decree of the court below, and sent the case back to the court below for disposal in accordance with law and in the light of the observations made in the judgment.
( 2 ) THE case of the plaintiff was that Kuldip Singh, one of the Directors of the defendant company approached the plaintiff early in January, 1946 for the purchase of shares of the defendant company on the distinct understanding, (a) that the plaintiff would be taken in as one of the promoter Director of the company. (b) that the prospectus of the company was very promising and it was being floated without any liability whatsoever; and (c) that it belonged primarily to members of the Ahluwalia Community, to which both the plaintiff and Kuldip Singh belonged and the directorate would invariably consist of the same; that on the basis of the above representation and assurances the plaintiff advanced Rs. 12,500/by cheque on the 8th January 1946 and left the choice of shares to the said Kuldip Singh, that a few days after the plaintiff sent a telegram to the defendant reiterating the bases of the offer of purchase of shares by him, that the said Kuldip Singh by a telegram dated 15-1-1940, informed the plaintiff that he had been accepted as Director and congratulated the plaintiff, that the defendant sent a communication to the plaintiff dated 16-3-1946, purporting to be an allotment letter demanding the balance. e. , Rs. 12,500/- only from the plaintiff, thus intending to complete the transaction of sale of 1. 00 preference shares of Rs. 100/- each, 1,000/- ordinary shares of Rs. 10/- each and 1,000/-, deferred shares of Rs. 5/- each in favour of the plaintiff, that the said kuldip Singh purporting to act on behalf of the defendant sent another communication to the plaintiff dated 25-3-1946 enclosing a form to be filled up and to be returned by the plaintiff to the defendant purporting to be a declaration of consent to act as Director in the defendant company; that in reply the plaintiff wrote to the defendant to send the plaintiff the companys memorandum and regulation before the plaintiff finally made up his mind to become a share-holder or not, that the defendant in. reply sent printed copies of the Memorandum of association Articles and the Managing Agency Agreement without mentioning the names of the subscribers to these documents; that the plaintiff demanded by letters dated 5-4-1946 and 18-4-1946 certain particulars before he could finally decide whether he should become a member of the defendant company: that the particulars required were: (a) the date of in corporation of the company, (b) the prospectus of the company; (c) a certified copy of the resolution co-opting the plaintiff as a director, and that the defendant did not comply with the plaintiffs request made in the above three clauses, but sent a copy of the resolution co-opting his as a director.
( 3 ) THE plaintiff alleged that in consequence of the misrepresentation of Kuldip Singh aforesaid as representing the defendant company and because of failure of the defendant to carry out the conditions precedent on which the plaintiff agreed to purchase the shares of the defendant company and because of misrepresentation made by the defendant company through the said kuldip Singh, the plaintiff finally served a lawyers notice dated 25-5-1946 on the defendant company demanding refund of Rs. 12,500/-, with interest and that the defendant refused to comply with the same.
( 4 ) IN consequence the plaintiff filed the present suit on 18-7-1947 claiming the relief already indicated.
( 5 ) SUMMONSES were caused to be issued in the suit to the defendant and from the endorsed copy thereof, which is on the record, we find that it was served on one Sant Prasad, the Manager and mukhtar-e-am of the defendant company at Ambala on 19-8-19
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
