The Code of Civil Procedure - 2 | Civil Law for Judiciary Exams PDF Download

A.V. Papayya Sastry & Ors v. Government of A.P. & Ors (2007)

In this case, the court emphasized that courts of law exist to administer justice between parties, and any party approaching the court must do so with clean hands.

Facts

• The appellant owned 18 acres and 39 cents of land in Village Kancharapalem, District Visakhapatnam. The Visakhapatnam Port Trust (Port Trust) sought to acquire the land for public use, specifically for constructing quarters for its employees. The Chairman of the Port Trust sent a requisition to the District Collector for the acquisition of the land. 
• The Estate Manager of the Port Trust took advance possession of the land through private negotiations. Subsequently, the Port Trust requested the state authority to initiate proceedings for land acquisition under the Land Acquisition Act, 1894. The land acquisition was approved by both the Port Trust and the Government of India.
• On 17th February 1976, the Ceiling Act came into force in the state of Andhra Pradesh, covering the Visakhapatnam Urban Agglomeration. The appellants contended that since the land was already in the possession of the Port Trust before the Act came into effect, the provisions of the Ceiling Act should not apply. The Special Officer and Competent Authority, Urban Land Ceiling declared the landowners as 'non-surplus land holders'.
• In response to a query by the Land Acquisition Officer, the Chief Engineer of Port Trust clarified that actual physical possession of the land had not been taken, as the tenant did not vacate the land. The landowners filed a writ petition before the High Court, requesting it to direct the state authorities to complete proceedings under the Land Acquisition Act and pass an award. The High Court instructed the authorities to finalize the proceedings and pass the award within three months.
• Subsequently, a recall application was filed by the state authorities, claiming that fraud had been committed by the landowners, who had suppressed material facts. They argued that the landowners had not actually handed over possession of the land to the Port Trust. The High Court allowed the recall petition, set aside the earlier judgment, and concluded that fraud had occurred. The appellants then challenged the High Court's decision in the Supreme Court.

Issues Involved

• The main issue was whether a judgment or order obtained through fraudulent means or suppression of material facts is binding or not.

Observations

• The Supreme Court reiterated that a judgment, decree, or order obtained through fraud on the court is a nullity and has no legal standing. The Court emphasized that the principle of finality in litigation should not be used as a tool for oppression by dishonest litigants. The Indian judiciary has inherent powers under Section 151 of the Code of Civil Procedure, 1908 (CPC) to recall judgments or orders if they are obtained by fraud. A litigant is obligated to produce all relevant documents in a case, and withholding a vital document to gain an unfair advantage constitutes fraud.
• The Court noted that if fraud is evident and criminal proceedings are initiated, and the High Court recalls an order to pass an appropriate decision, it cannot be considered a miscarriage of justice that warrants interference by the Supreme Court under Article 136 of the Constitution of India, 1950. The Supreme Court declined to intervene in this case.
• The Supreme Court quoted Chief Justice Edward Coke: "Fraud avoids all judicial acts, ecclesiastical or temporal." This means that a judgment or order based on fraud, regardless of whether it is from the first court or the final court, must be treated as a nullity by all courts, whether superior or inferior. Such judgments can be challenged at any time, in any court, through appeal, revision, writ, or even in collateral proceedings.

Conclusion

• Fraud is considered an extrinsic collateral act that invalidates all judicial acts, whether they are in rem (against a thing) or in personam (against a person).

Haridas Das v. Smt. Usha Rani Banik, 2006

Facts

• Kalipada Das (respondent No. 1 in the review petition) was the original owner of the suit property.
• On 19th August 1982, he entered into an oral agreement with the appellant and received an initial payment of Rs. 14,000 towards the total agreed price of Rs. 46,000 for the sale of his portion of the suit property, which had a dwelling house.
• On the same day, possession of the suit property was handed over to the appellant with a promise that a sale deed would be executed within three years.
• On 23rd August 1982, the appellant paid an additional sum of Rs. 31,000, leaving only a nominal sum of Rs. 1,000 to be paid at the time of execution of the sale deed.
• As the time for executing the sale deed approached, the appellant discovered that Kalipada Das was attempting to sell part of the property to Chunnilal Deb and mortgage another part to the Housing Board of Karimganj. He also began threatening the appellant with dispossession of the property.
• The appellant paid the remaining Rs. 1,000 and demanded the execution of the sale deed.
• Due to the threats of dispossession, the appellant filed a Title Suit seeking confirmation of possession and an injunction to prevent Kalipada Das from selling the property to any third party.
• The suit was initially dismissed for default but later restored by the learned Munsif.
• The appellant then filed Title Suit No. 1 of 1986 (re-numbered as 13/90) for the specific performance of the sale agreement and for the execution of the sale deed.
• During the pendency of the suit, Kalipada Das executed a sale deed in favor of Usha Rani Banik (Respondent No. 1), while the appellant retained possession of the property.
• The appellant immediately filed Title Suit No. 2 of 1987 seeking the cancellation of the sale deed, asserting that it was illegal, fraudulent, and void.
• Respondent No. 1 also filed Title Suit No. 22/87 to declare her title based on the sale deed.
• The trial court ruled in favor of the appellant, canceling the sale deed executed in favor of Usha Rani Banik.
• Respondent No. 1 appealed, and the District Judge allowed the appeal, setting aside the trial court’s decree.
• The appellant filed Second Appeal No. 12 of 1993 before the High Court, which allowed the appeal, restoring the decree from Title Suit No. 2 of 1987.
• The High Court held that no leave under Order II Rule 2 of CPC was obtained in Title Suit No. 201 of 1985 and thus Title Suit No. 1 of 1986 was barred by the provisions of Order II CPC.
• The appellant then approached the Supreme Court through a civil appeal.

Issue Involved

• Whether the High Court erred in reviewing the order in the second appeal.

Observations

• The court examined Section 114 of CPC to determine the scope of review.
• Order 47 of CPC specifies the grounds for review, permitting a rehearing upon discovering a mistake or error manifest on the records.
• The court noted that the rule distinguishes between errors attributable to the applicant and those related to the inherent correctness of judicial action.
• The court emphasized that a failure to exhaust all aspects of a case or weak arguments does not justify a rehearing.
• Explanation to Rule 1 of Order 47 precludes reviews based on subsequent superior court decisions.
• Applying these principles, the court concluded that the High Court erred in granting the review petition as the grounds for review were not supported by the facts.

Conclusion

• The Supreme Court set aside the judgment passed by the High Court in the review petition and restored the judgment and order passed in Second Appeal.

ONGC Ltd. v. State Bank of India (2000)

• This case involves a dispute over the leave to defend in a summary suit.

Facts

• ONGC (the appellant) hired a consortium, M/s. Saipem SPA/Snamprogetti of Italy, to build a network of undersea pipelines called the Gas Lift Pipelines.
• The contract required completion by 30th April 1991, with liquidated damages set at 3% of the contract price for each month of delay, capped at 10% of the total contract price.
• The contractor was required to provide a bank guarantee covering these liquidated damages, equivalent to 10% of the contract price, four months before the completion date.
• If the contractor failed to provide the guarantee on time, ONGC could encash the performance guarantee.
• After a delay of 306 days, ONGC assessed the liquidated damages and asked the contractor to extend the bank guarantee for six additional months.
• ONGC also asked the State Bank of India (the respondent) to renew the guarantee, warning that failure to do so would lead to encashment.
• The bank refused, saying it depended on a counter guarantee from an Italian bank and was awaiting fund realization.
• Displeased with the bank's refusal, ONGC filed a summary suit under Order XXXVII of the Code of Civil Procedure, 1908, in the High Court of Mumbai.
• The High Court granted the bank unconditional leave to defend, citing issues such as lack of specification in the demand for damages and ongoing arbitration proceedings in Italy.

Key Issues

• Can a confirmed bank guarantee be interfered with by the court?
• Does the encashment of an unconditional bank guarantee depend on resolving disputes?
• What impact does the counter guarantee have in this situation?

Supreme Court Observations

• The Supreme Court noted that the bank's request for an injunction was based on the possibility that the counter guarantee could become unenforceable due to an injunction from the Italian court.
• However, after examining the relevant regulations, the court concluded that these issues would not prevent payment under the bank guarantee.
• The High Court was found to have made a significant error by granting the bank leave to defend.

Conclusion

• The Supreme Court overturned the High Court's decision and rejected the bank's request for leave to defend.
• The appeal by ONGC was upheld, allowing them to proceed with encashing the bank guarantee.

Bhanu Kumar Jain v. Archana Kumar, 2005

• This case is significant regarding the setting aside of ex-parte decrees under the Civil Procedure Code (CPC).

Facts 

• Shri N N Mukherjee owned a property and passed away, leaving behind his wife, Smt. Suchorita Mukherjee, his son, Shri P P Mukherjee (the plaintiff), and his daughter, Smt. Archana Kumar (the defendant).
• The family followed the Dayabhag School of Hindu Law.
• In 1976, the plaintiff filed a partition suit.
• The defendants submitted their written statements in response.
• Surender Nath Kumar, husband of Smt. Archana Kumar, also filed a written statement and a counterclaim regarding a mortgage related to the property.
• The defendants did not attend court on several occasions, leading to an ex-parte hearing.
• On October 30, 1985, the defendants sought to set aside the order for an ex-parte hearing, which was rejected.
• A preliminary decree for partition was issued on November 1, 1985, favoring the plaintiff.
• The plaintiff later transferred his rights to Bhanu Kumar, the appellant in this case.
• The defendants appealed to the High Court, arguing against the ex-parte decree and its validity.
• The High Court overturned the ex-parte decree, prompting an appeal to the Supreme Court.

Legal Issues

• Does the dismissal of an application under Order 9 Rule 13 of the CPC prevent the right to appeal under Section 96 of the CPC?

Supreme Court Observations

• The Supreme Court noted that Order XI, Rule 7 allows a defendant to be heard if the ex-parte order was made before fully hearing the case.
• If the case was heard completely and adjourned for judgment, this rule does not apply.
• Section 96(2) allows appeals against ex-parte decrees for reasons like insufficient evidence.
• Order XI, Rule 13 permits defendants to challenge ex-parte orders by showing valid reasons for not appearing.
• Defendants can pursue an appeal and Rule 13 relief simultaneously, but if the appeal fails, Rule 13 cannot be used afterward.
• A defendant’s right to appeal should not be restricted by public policy, even if there are risks of conflicting judgments.
• The High Court must assess the arguments based on the existing records, regardless of any perceived flaws in the reasoning.

Conclusion

• The Supreme Court allowed the appeal, set aside the High Court's judgment, and sent the case back to the High Court for a merit-based consideration.

Saleem Bhai v. State of Maharashtra, AIR 2003 SC 759

This case pertains to the rejection of plaint, which is a crucial matter in civil litigation.

Facts

• The respondents, acting as plaintiffs, filed suits in 2002 contesting certain judgments and decrees.
• The eighth appellant sought the dismissal of these suits under Order VII Rule 11 of the Code of Civil Procedure, 1908 (CPC), claiming that the plaints were without merit.
• In response, the respondents filed an application under Order VIII Rule 10 CPC and another under Section 151 CPC, requesting the court to decide the application under Order VII Rule 11 before proceeding with other matters.
• The trial judge dismissed the application under Order VIII Rule 10 and Section 151 CPC, instructing the appellant to file a written statement.
• The appellant challenged this order through revision petitions to the High Court, which upheld the trial court's decision.
• The present appeals question the correctness of the High Court's ruling.

Issue Involved

• Whether an application under Order VII Rule 11 CPC should be decided based solely on the allegations in the plaint, making the filing of the written statement by the defendant unnecessary and irrelevant.

Observation

• Upon examining the relevant legal provisions, the court noted that for deciding an application under Order VII Rule 11 CPC, the relevant facts are those stated in the plaint.
• The trial court can exercise this power at any stage of the suit, and the written statement filed by the defendant is irrelevant at this stage.
• The court found that the trial court’s order, upheld by the High Court, lacked proper jurisdictional exercise and had procedural flaws.

Conclusion

• The court allowed the appeals, setting aside the common order and remitting the cases back to the trial court to decide the application under Order VII Rule 11 CPC based solely on the plaint's allegations.
• No costs were awarded in these civil appeals.

Sangram Singh v. Election Tribunal, AIR 1955 SC 425

The Supreme Court heard an appeal under a certificate of fitness, as per Article 133(1)(c) of the Constitution, arising from the High Court of Rajasthan, which dealt with an ex-parte decree in an election petition.

Facts

• Bhurey Lal filed an election petition under Section 100 of the Representation of the People Act, 1951 against the appellant, Sangram Singh, seeking to annul his election.
• On the scheduled hearing date, the appellant and his three lawyers failed to appear, prompting the Tribunal to proceed with the case ex-parte.
• Bhurey Lal and two witnesses were examined, followed by five additional witnesses the next day, after which the case was adjourned.
• When one of the appellant's lawyers appeared on the new hearing date, the Tribunal refused him participation, citing that the proceedings had already been conducted ex-parte.
• The appellant then applied to set aside the ex-parte order under Order 9 Rule 13 of the Code of Civil Procedure, 1908 (CPC).
• The Tribunal rejected the application, stating that the appellant failed to provide sufficient reason for his absence between 17th March and 19th March 1953.
• The appellant filed a writ petition under Article 226 of the Constitution in the High Court of Rajasthan, which resulted in a stay on further proceedings before the Tribunal.
• On 17th July 1953, the High Court dismissed the writ petition on two grounds:
  • The Tribunal was the appropriate authority to assess the sufficiency of reasons for absence.
  • The appellant's counsel showed gross negligence by not attending the hearing on the specified date.
• After five months, the High Court issued a certificate under Article 133(1)(c), allowing the appellant to appeal to the Supreme Court.

Issues Involved

• Whether the Tribunal was correct in denying the appellant's counsel the right to appear and participate after the adjourned hearing date?
• Whether there were sufficient grounds for the High Court to exercise its jurisdiction under Article 226 of the Constitution?

Observations

• The Supreme Court ruled that the Tribunal's decision to refuse the appellant's counsel the opportunity to participate after he appeared was unjustified.
• The Court emphasized that the appellant's counsel's failure to provide a justifiable reason for not appearing between 17th and 19th March 1953 should not have prevented him from participating in further proceedings.
• The Court found the grounds provided satisfactory for setting aside the Tribunal's order under Order IX Rule 13 of the CPC.

Conclusion

• The Supreme Court set aside the Tribunal’s order and directed the Election Commission to reconstitute a new tribunal to hear the case.

Mahant Ram Dass v. Mahant Ganga Dass 1961 SCR (3) 763

This case revolves around the inherent powers of the civil court to ensure justice is served.

Facts of the Case

• The appellant filed a title suit claiming his nomination as the Mahant of Moghal Juan Sangat.
• The trial judge dismissed the suit in 1947.
• The appellant appealed to the High Court, which ruled in his favor in 1951, but with a condition to pay court fees for possession of properties.
• The case was sent back to the lower court to determine the value of the property and the amount of fees to be paid.
• After reviewing the Subordinate Judge’s report, the High Court ordered the appellant to pay the deficit court fees, which the appellant was unable to afford.
• Despite requesting an extension of time, the High Court refused.
• The appellant’s review application was also dismissed.
• The appellant then sought a certificate of appeal from the High Court, which was granted, and subsequently, he approached the Supreme Court with the present appeal.

Issue Involved

• Whether the enlargement of time should have been granted to the appellant for paying the deficit court fees?

Observations

• The Supreme Court observed that time should have been extended if a sufficient cause was shown and particularly when petitions were made to exercise the court's inherent powers.
• The Supreme Court set aside the earlier High Court order, including the dismissal of the appeal and suit, and granted the appellant two months’ time to pay the deficit court fees.

Conclusion

• The Supreme Court allowed the appeal, stating that the High Court had committed a grave error.

Indian Bank v. Maharashtra State Cooperative Marketing Federation Ltd, AIR 1998 SC 1952

This case examines the application of the bar under Section 10 of the Code of Civil Procedure, 1908 (CPC) to a summary suit filed under Order 37 of the CPC.

Facts

• The bank initiated a summary suit under Order 37 of CPC against the Federation, claiming a decree of Rs 4,96,59,160, alleging it was recoverable via a Letter of Credit.
• The Federation contested the suit, arguing that it had already filed a lawsuit against the bank for the same recovery amount, prior to the initiation of the summary suit, and therefore Section 10 of CPC (Res Sub Judice) should apply.
• A judge from the Bombay High Court ruled that Section 10 applied only to regular suits, not to summary suits filed under Order 37 of CPC.
• Dissatisfied with this decision, the Federation appealed to the Division Bench of the High Court, which interpreted the term "trial" under Section 10 more broadly, deciding it also applied to summary suits.
• The Federation then appealed to the Supreme Court against the order of the Division Bench of the Bombay High Court.

Issues Involved

• Whether Section 10 of the Civil Procedure Code bars the continuation of a summary suit under Order 37 of the CPC.

Observations

• The Supreme Court observed that the primary purpose of Section 10 is to prevent two parallel lawsuits with similar issues from being adjudicated in different jurisdictions, which could lead to conflicting judgments.
• The Court discussed both provisions, highlighting the distinction:
  • Section 10 is a broad provision aimed at staying the trial of a suit where there is already another pending suit with the same matter.
  • Order 37 pertains specifically to summary suits, aiming for a quicker resolution of certain types of disputes.
  • The Court emphasized the importance of a harmonious interpretation of both provisions to ensure their individual objectives are not undermined.
  • It was opined that Section 10 does not automatically apply to summary suits. The term "trial" in the context of a summary suit should not be interpreted to include the entire process from the filing of the suit. Instead, it should apply once the defendant has been permitted to contest the suit.
• The Court clarified that the summary suit may proceed up to the stage of hearing the summons for judgmentand delivering judgment in favor of the plaintiff if:
  • The defendant has not applied for leave to defend, or
  • If the application for leave to defend has been refused, or
  • If the defendant fails to comply with the conditions of leave granted to defend.

Conclusion

• The Supreme Court set aside the Division Bench's order of the Bombay High Court, agreeing with the single judge's decision that Section 10 does not apply to summary suits under Order 37.
• Consequently, the SC allowed the appeal of the bank.

Santosh Kumar v. Bhai Mool Singh, AIR 1958 SC321

This case discusses the concept of leave of court under Order XXXVII of the Civil Procedure Code (CPC) for defending summary suits.

Facts

• The plaintiff filed a summary suit based on a cheque for Rs. 60,000, which was dishonored by the bank.
• The defendants sought permission to defend themselves under Rule 2 of Order XXXVII of the CPC, but the trial judge refused their request.
• The judge acknowledged that the defendants raised a triable issue, but stated they did not demonstrate that their defense was bona fide.
• The plaintiff's appeal to the Delhi Circuit Bench was dismissed, leading them to approach the Supreme Court with a Special Leave Petition (SLP).

Issue

• Did the defendants present a real issue that warranted permission to defend their case?

Observations

• The Court noted that while Order XXXVII Rule 2 CPC restricts granting leave to defendants, Rule 3(1) requires the court to grant leave when specific conditions are met.
• Discretion exercised by the court must align with natural justice principles.
• The Court emphasized that strict rules should not limit discretion, as understanding the procedure is vital for correct usage of discretion.
• The only reason given for denying the defense was the lack of proof from the defendants, leading to a failure of justice if the case was decided without allowing them to present their evidence.

Conclusion

• The Supreme Court allowed the appeal, set aside the High Court and trial court orders, and directed that the case be sent back for a proper trial of the issues raised by the defendants.

Monohar Lal v. Seth Hira Lal AIR 1962 SC 527

This case deals with Order XXXIX Rule 1 and the inherent powers of the High Court under Section 151 of the Code of Civil Procedure, 1908 (CPC).

Facts

• The appellant and the respondent entered into a partnership in Indore for the purpose of working coal mines at Kajora gram (District Burdwan) and manufacturing cement under the name 'Diamond Industries'.
• The partnership was dissolved through a deed of dissolution dated 22nd August 1945.
• On 18th August 1948, the appellant filed a suit in the Subordinate Court at Asansol against the respondent, claiming Rs. 1,00,000/- for his share in the partnership’s capital and assets, and Rs. 18,000/- as interest for withholding the money or as damages for wrongful detention.
• On 27th October 1948, the respondent filed a petition under Section 34 of the Arbitration & Conciliation Act, 1996 in the Asansol Court, seeking a stay of the suit due to the arbitration clause in the partnership agreement.
• This application was rejected on 20th August 1949.
• The respondent then filed a civil suit in the District Court, Indore, under Sections 10 and 151 CPC.
• The appellant opposed the petition on three grounds:
  • The dissolution deed stated that disputes must be resolved by the Court alone.
  • The Asansol Court suit did not affect the proceedings.
  • The two suits were of different nature, with different subject matter and relief.
• Later, the respondent applied under Section 151 CPC in the Indore Court, seeking an injunction to restrain the appellant from proceeding with the suit in Asansol.
• The District Judge at Indore issued an interim injunction, restraining the appellant from continuing with the Asansol suit, citing violation of the dissolution deed.
• The appellant appealed to the High Court of Madhya Bharat (now Madhya Pradesh), which dismissed the appeal.
• Consequently, the appellant filed an appeal before the Supreme Court of India.

Issues Involved

• Whether the Court can exercise its inherent powers when specific provisions exist in the CPC for granting interim injunctions?
• Did the Court properly exercise its discretion in using its inherent powers, given the facts of the case?

Observations

• The Court noted that Section 151 of the CPC explicitly states that nothing in the Code should limit or affect the inherent power of the Court to make orders essential for justice.
• In light of this clear statement, it is impossible to argue that the CPC provisions limit the inherent power or affect its exercise.
• The inherent power is not granted by the Code but is inherent in the Court’s duty to administer justice.
• The Court further emphasized that Section 151 can be invoked in exceptional situations for which the Code provides no procedure.
• The question of jurisdiction of the Asansol Court over the suit’s subject matter is to be decided by that Court, not the Indore Court.
• The Court observed that the jurisdiction of the Asansol Court is not ousted by the provision in the deed of dissolution, despite the clause that expressed the parties’ preference for resolving disputes in the Indore Court.
• The CPC is not exhaustive, and civil courts are authorized to pass orders necessary for justice or to prevent abuse of the court process, but where an express provision exists to address a specific situation, it must be followed.

Conclusion

• The Court held that the inherent powers under Section 151 CPC cannot be exercised to order an injunction when a specific provision, such as Order XXXIX, exists in the Code for granting temporary injunctions.