Whether decree is executable when appeal is remanded?

IN THE HIGH COURT OF CALCUTTA

G.A. No. 1463 of 2001

Decided On: 08.10.2002

Appellants: Kanchan Udyag Ltd.
Vs.
Respondent: McDowell and Co. Ltd.

Hon'ble Judges/Coram:
K.J. Sen Gupta, J.

Civil - remand Order - Sections 2 and 47 of Code of Civil Procedure, 1908 - whether during pendency of appeal can decree executable - appeal pending before Apex Court and after hearing remanded back to High Court for fresh decision - respondent contention that during pendency of appeal appellant can not execute decree - admittedly no stay Order passed either by Apex Court or by High Court - appellant liable for execution of decree.

Citation: AIR2003Cal207

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 2nd December, 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 14th December, 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 MANU/SC/0432/2000 : [2000]245ITR360(SC) and also Chapter XVII, Rule 10 of the Original Side Rules and contends that it is futile to contend in view of the remand order of the Supreme Court and the trial Court the doctrine of merger of decree has to be applied in this case. His contention is that the decree is still subsisting and it remains operative and that is why the Supreme Court has remanded the appeal. The Supreme Court did not reverse the decree and order of the learned trial Judge. The judgment and order of the Appellate Court by which the decree and order passed by the learned trial Judge has been set aside by the Apex Court. The only decree, which is operative, is the judgment and decree of the learned trial Judge and until and unless stay of operation of the aforesaid judgment and decree is granted by the Appellate Court execution of the same is matter of course.

6. Mr. Hirak Mitra, Senior Advocate submits that doctrine of merger of decrees in this case is squarely applicable, as judgment and decree passed by learned trial Judge has merged with the judgment and order of the Apex Court on disposal of both the SLPs of both the parties. The Apex Court while disposing both the SLPs finally, has not affirmed the judgment and order of the learned trial Judge.

7. It is not disposal of the SLPs at the threshold, but after granting leave to prefer the Special Leave Petitions themselves were disposed of by the aforesaid judgment and order.

8. The appellate Court while disposing of the appeal, either affirms the decree appealed against dismissing the appeal or set aside or modifies. In this case the Supreme Court though set aside the judgment and decree of the First Appellate Court, has not restored the judgment and decree of the trial Court, nor has it affirmed it.

9. In view of the aforesaid position it cannot be said that the judgment and decree of learned trial Judge has become operative and executable.

10. In other words, he contends, in view of the aforesaid order of remand by the Apex Court without recording the affirmation of the decree passed by the learned trial Judge, the present application for execution cannot be proceeded with as there is no executable and/or operative decree. In support of his submission he has placed reliance on the same judgment namely MANU/SC/0432/2000 : [2000]245ITR360(SC) and a decision reported inMANU/MH/0111/1953: AIR1953Bom214 .

11. His further contention is that there is no certified copy of the decree and order of the Apex Court though there is a provision under Order XIII; Rule 356 of the Supreme Court Rules for supply of the same. It is mandatory provision under the Original Side Rules as well as the Code of Civil Procedure that certified copies of both the decree must be annexed. In support of his submission he has relied on following decisions of the Supreme Court reported in MANU/SC/0071/1962 : [1963]2SCR563 , MANU/SC/0390/1974 : [1975]1SCR394 , MANU/SC/0432/2000 : [2000]245ITR360(SC) . He has sought reliance on judgment of the learned single Judge of this Court reported in 2001 (2) CHN 226. He has drawn my attention to annotation of Section 36 of Mullah's Civil Procedure Code (Act V of 1908).

12. Having heard respective contention of the learned Counsels and considering the material it appears core point arises in this matter is as to whether in view of remand order passed for hearing the appeal de novo, by Apex Court, the decree passed by the learned single Judge of this Court is executable or not.

13. The law recognizes that decree if not obeyed is always executable, unless it is set aside or stay of operation thereof has been granted by the competent Court, including appeal Court even during pendency of the appeal. In this case admittedly when the appeal was pending before the Division Bench of this Court no stay of operation of the decree was there, nor any application for execution was made, despite having no stay order, Though, Mr. Hirak Mitra contends that the decree ex facie is so bad that at one point of time the Division Bench of this Court started hearing the appeal Itself without considering the application for granting stay expeditiously leaving aside all other matters. But I do not find any record to gather what promoted the appeal Court earlier to decide the appeal expeditiously. What was in the mind of the learned Judges at the time of dealing with the application and appeal Itself, is neither germen nor relevant under the law to reckon with in this execution application. Therefore, this contention does not cut any ice on the question of execution of the decree.

14. However, I accept the argument of Mr. Mitra that it is the decree when any appeal was preferred, of the appellate Court which is to be executed and on this point citations supplied by Mr. Mitra, reported in MANU/SC/0702/1999 : AIR2000SC10 , MANU/SC/0432/2000 : [2000]245ITR360(SC) , 2001 (2) CHN 226, MANU/MH/0111/1953 : AIR1953Bom214 , are undeniably relevant. The aforesaid decisions of Supreme Court as well as Bombay High Court have discussed on the question of doctrine of merger of decrees. In the Supreme Court decision reported in MANU/SC/0390/1974 : [1975]1SCR394 , while deciding the question of applicability of Section 17(D) of the West Bengal Premises Tenancy Act it was held that the amended Section 17(D) of the West Bengal Premises Tenancy Act was not applicable in view of the fact that the eviction decree reached its finality on affirmation of trial Court's Court by Appeal Court after commencement of the aforesaid Section 17(D), The said Section is applicable in case of the decree passed before the aforesaid amendment came into force. Though the trial Court passed the decree before the amendment came into force as the decree passed by the trial Court was taken to appeal Court and on disposal of the appeal it was held that it is the decree of the appellate Court nor the trial Court, which should be taken into account for all purposes not only for execution but also for its enforceability. In that context the question of doctrine of merger of the decree was discussed. In paragraph 14 of the aforesaid judgment it was observed as follows (at Page 1382) :

"The juristic justification of the doctrine of merger may be sought in the principle that there cannot be at one and the same time more than one operative order governing the same subject matter. Therefore, the judgment of an inferior Court, if subjected to an examination by the superior Court, ceases to have existence in the eye of law and is treated as being superceded by the judgment of the superior Court. In other words the judgment of the inferior Court loses it identity by its merger with the judgment of the superior Court."

15. In the decision reported in MANU/SC/0432/2000 : [2000]245ITR360(SC) . it has been held amongst others in paragraph 12 as follows (at Page 2592) :

"The logic underline the doctrine of merger is that there cannot be more than one decree or operative orders governing the same subject matter at given point of time when decree or order passed by inferior Court, Tribunal or authority was subjected to a remedy available under the law before a superior forum then, though the decree or order under challenge continues to be effective and binding, nevertheless its finality to be in jeopardy. Once the superior Court has disposed of the lis before it either way: whether decree under appeal is set aside or modified or simply confirms it is the decree or order of the superior Court, Tribunal or authority which is the final binding and operative decree or order wherein emerges the decree or order passed by the Court. Tribunal or authority below. However, doctrine is not of universal or unlimited application. The nature of jurisdiction exercised by the superior forum and the content or subject matter of challenge later which could have been laid shall have to be kept in view."

16. Learned single Judge of this Court while discussing the various authorities on the subject in the aforesaid decision reported in 2000 (1) CHN 226 has held amongst others that :

"............once the appeal is decided it is the appeal Court's decree which can only be executed inasmuch the decree appealed against merges in the appeal Court's decree...."

17. In view of the aforesaid settled position of the law now it has to be examined as to whether the judgment and order of the Apex Court passed on two SLPs can be treated to be a decree or not. Mr. Hirak Mitra's contention is that the Supreme Court has reversed the decree of the 1st Appellate Court which in its turn reversed the decree of the learned trial Judge, has not affirmed the decree of the learned trial Judge hence it is not executable at all. So I think it would be appropriate to quote the text of the order of the Supreme Court.

"Special leave granted.

After hearing the Counsel for the parties, we are of the opinion that the High Court instead of setting aside the order of the trial Court and remanding the case for a fresh trial, ought to have decided the appeal on merits on the basis of the evidence and the pleadings on record. This the High Court has not done.

These appeals are, accordingly, allowed, the impugned judgment dated 18th May, 2000 of the High Court is set aside and the High Court is directed to hear the appeals on merits."

18. The legal contention of Mr. Mitra cannot be disputed in principle. It will appear from the aforesaid judgment and order of the Supreme Court that the same was not rendered at the stage of admission of the SLPs but after the SLPs were admitted on final hearing. It was rendered therefore, at the second stage of the SLP and the two matters were finally decided. The effect of decision after admission of the SLP has been discussed and decided in the decision reported in MANU/SC/0432/2000 : [2000]245ITR360(SC) (supra) in its paragraph 43 amongst others (at Page 2602):

"once the leave to appeal has been granted the appellate jurisdiction of the Supreme Court has been invoked the order passed in appeal would attract the doctrine of merger; the order may be of reversal, modification or merely affirmation."

19. It is clear from the language of the Supreme Court judgment and order that the judgment of Division Bench of this Court was set aside and the appeal was remanded to the First Appellate Court for fresh hearing. It is passed neither in affirmation of the decree of the trial Court in expressed terms; nor any stay of operation of the decree of the trial Court has been granted. Logically, the appeal has been restored in the same position as if it were before.

20. I am unable to accept the contention of Mr. Mitra that this order of the Supreme Court is a decree so as to have its applicability. The judgment and order on the SLPs in order of remand as it appears from the provision of Order XLI, Rule 23 read with Order XLIII. Rule 1 of the Code of Civil Procedure. In this case to apply principle of merger there must be decree of the Supreme Court and the aforesaid order cannot partake of the character of the decree. The order of remand does not decide anything else rather it is sent for the decision to the subordinate Court. It is needless to mention that there is a distinction between decree and order. The definition of the decree provided in the Civil Procedure Code in its Section 2(ii) is as follows ;

"decree" means the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be either preliminary or final. It shall be deemed to include the rejection of a plaint and the determination of any question within Section 144, but shall not include-

(a) any adjudication from which an appeal lies as an appeal from an order, or

(b) any order of dismissal for default.

21. Thus it is clear that order of remand is not covered by the definition of the decree rather it excludes. I find that order of remand is an appealable order under the provisions of Order XLII, Rule 1, Clause (u) of the said Code.

22. Therefore the Supreme Court judgment and order cannot be a decree. The logical conclusion would be that the earlier appellate Court decree of reversal has been set aside and quashed and the appeal has been sent back for hearing with the decree of the learned trial Judge.

23. I am unable to persuade myself with the argument of Mr. Mitra that decree of trial Court is not in existence in view of the order of remand. Non-existence of the decree as urged by Mr. Mitra is apparently absurd, for there would not have been any cause for the Supreme Court to remand for hearing of the appeal. Unless there is a decree question of deciding the appeal does not and cannot arise. It is absurd to suggest that for the purpose of hearing of the appeal the decree would be operative, whereas for execution purpose it is kept in abeyance in view of the order of remand, the law cannot be applied discriminatingly in the same context.

24. Mr. Bachawat has rightly stated that the operation of the decree has not been suspended by the Supreme Court nor even by the appeal Court earlier though the appeal is pending meaning thereby the decree has been put in jeopardy but the decree has now become executable.

25. The irresistibly logical conclusion would be in my view that the. decree is now executable. If I accept the logic of Mr. Mitra that because of the order of remand of Supreme Court stay of operation of the decree has now become automatic, is wholly absurd and the same will defeat the mandatory provision of the other portion of the law as Order XLI Rule 5 of the said Code provides for granting stay of operation of the decree by the appellate Court. It appears, from the aforesaid provision namely, Sub-rule (3) of Rule 5 of Order XLI that no order of stay of execution shall be granted unless the Court making it is satisfied that substantial loss may result to the party applying for stay of execution unless the order is meant; that the application has been made without unreasonable delay and the security has been given by the applicant for the due performance of such decree or order as may ultimately be binding upon him. Again Sub-rule (5) of Rule 5 of Order XLI provides in the event appellant fails to make deposit or furnish security the Court shall not make an order staying execution of the decree.

26. Therefore, the intention of the Legislature is very clear in case of stay of execution of the decree the deposit of the decreetal amount or for furnishing security in lieu thereof is condition precedent. The judgment of the Court unless expressly provided for specific remedy, cannot be read and applied to defeat the expressed provision of the law. If this being done then such an order in my view will be nullity. Besides, I cannot grant such relief Indirectly, which is not allowable under the law directly. Therefore, I hold accepting the contention of Mr. Bachawat that it is the decree of the learned Trial Judge as no stay thereof in operation, is now executable.

27. The next contention of Mr. Mitra is that the certified copy of the order of the Supreme Court, which is the final one has not been annexed, is hardly relevant or material in this case. I accept the certified copy of the judgment and order of the Supreme Court would have been mandatorily necessary in view of the Supreme Court Rules 1966 as well as the judgment of this Court reported in MANU/WB/0022/1963 : AIR1963Cal104 wherein, in its paragraph 19 it has been held that the provision of Rule 10 of Chapter XVII of the Calcutta High Court Original Side Rules relating to filing of the certified copy of the decree is an essential requirement when an application for execution is made to the High Court Original Side. This is an expressed rule and a rule of imperative character and is in super-session of the corresponding Rule, contained in Sub-rule 13) of Rule 11 of Order XXI of the said Code. As I have already held it is not the order, which is sought to be executed, but. the decree. Therefore, the certified copy of the judgment and order of the Supreme Court is not at all necessary hence I overrule the contention of Mr. Mitra to the extent as above.

28. Now I have to examine what mode of reliefs has been asked for in this matter. The mode of assistance of this Court asked for is for appointment of Receiver over the work in progress.

29. In my view the relief claimed in prayer (a) and (b) cannot be granted by this Court as the Sub-section (4) of Section 39 of the said Code does not permit to extend the aforesaid mode of assistance by reason of recent amendment by way insertion of Sub-section (4) in Section 39 of the said Code. By this Sub-section the authority of this Court has been excluded as the property which is sought to be executed situated outside the local limits of its jurisdiction. So it is necessary to quote Sub-section (4) of Section 39 of the said Code. .

"3.9. Transfer of decree.-- (1) The Court which passed a decree may, on the application of the decree-holder, send it for execution to another of competent jurisdiction,--

(a) if the person against whom the decree is passed actually and voluntarily resides or carries on business, or personally works for gain within the local limits of the jurisdiction of such other Court, or

(b) if such person has not property within the local limits of the jurisdiction of the Court which passed the decree sufficient to satisfy such decree and has property within the local limits of the jurisdiction of such other Court, or

(c) if the decree directs the sale or delivery of immovable property suitable outside the local limits of the jurisdiction of the Court which passed it, or .

(d) if the Court which passed the decree considers for any other reasons, which it shall record in writing, that the decree should be executed by such other Court.

(2) The Court which passed a decree may of its own motion send it for execution to any sub-ordinate Court of competent jurisdiction.

(3) For the purposes of this section, a Court shall be deemed to be a Court of competent jurisdiction if at the time of making the application for the transfer of decree to it, such Court would have jurisdiction to try the suit in which such decree was passed.

(4) Nothing in this section shall be deemed to authorize the Court which passed a decree to execute such decree against any person or property outside the local limits of its jurisdiction"

30. In another case (Smt. Uma Kanoria v. Pradip Kumar Daga, G. A. No. 3366 of 2002, C.S. No. 132 of 2000) I have held while discussing and considering the aforesaid Sub-section (4), amongst others where the property situates outside the local limits of this Court it shall not execute the decree rather it will transfer for execution of the same to the appropriate Court having jurisdiction over the subject matter.

31. Though, there is an old decision of this Court holding amongst others by appointing Receiver the execution can be levied. However, in view of this amendment the earlier decision of the learned single Judge cannot be held to be good law. Moreover, the earlier Division Bench judgment reported inMANU/WB/0067/1931 has expressly held that in those circumstances this Court cannot have any jurisdiction to grant relief in terms of prayer (a) and (b) of the Column 10 of Tabular Statement.

32. However I find from the cause title of the application admittedly the defendant has its place of business amongst others at Middleton Street Calcutta 700 071. Therefore, the relief in terms of prayer (e) of the Column 10 of the Tabular Statement is granted.

33. Accordingly I pass order in terms of prayer (c) only in this application. So far as other mode of reliefs are concerned it will be open for the decree holder to apply for and/or transfer of the decree for execution of the same before the appropriate Court, where the properties which are sought to be executed.

34. Thus this application is allowed to the extent as above. However, without awarding any cost this time.

35. The learned Advocate appearing for the judgment debtor prays for the stay of operation of this order in terms of prayer (a) and it should be passed. I am of the view that no stay order should be granted in this matter.

36. All parties are to act on an operative portion of this judgment and order on the usual undertaking.

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