Sayed Street vs Kadam Marg on 24 March, 2009

Bombay High Court
Sayed Street vs Kadam Marg on 24 March, 2009
Bench: S.A. Bobde, A.A. Sayed
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             IN THE HIGH COURT OF JUDICATURE AT BOMBAY
               ORDINARY ORIGINAL CIVIL JURISDICTION
                   APPEAL NO.1003 OF 2005




                                                                     
                                 IN
                   NOTICE OF MOTION NO.2404 OF 2004
                            IN




                                             
                   SUMMARY SUIT NO.3164 OF 2001

     M/s. Dev Sha Corporation
     a registered partnership firm,
     carrying on business at 12/14, Kazi




                                            
     Sayed Street, 2nd floor,
     Masjid Bunder, Mumbai-400 009                       ..Appellants
            V/s
     Shree Ram Mills Ltd.
     a company incorporated under




                                   
     the provisions of the Companies
     Act, 1956 and having its
     registered office at Ganpatrao

     Mumbai- 400 013
                      
     Kadam Marg, Lower Parel,
                                                         ..Respondents

     Shri J.P. Sen with M.A.          Shah i/b A.G.         Shah for the
                     
     Appellants

     Shri G. Joshi with Ms Pratibha Mehta i/b                 Little
     and Co. for the Respondents

                        CORAM ;     S.A.BOBDE AND
      


                                    A.A.SAYED, JJ.

DATE : 24TH MARCH, 2009

ORAL JUDGMENT (PER S.A.BOBDE, J.)

1. This appeal is preferred by the plaintiffs

against the judgment of the learned Single Judge

dated 17-6-2005 setting aside the exparte decree

passed in his favour in a suit under Order 37 Rule 4

of Code of Civil Procedure.

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2. Shri Joshi, the learned Counsel for the

respondents has raised a preliminary objection to the

tenability of the appeal on two grounds. (a)

According to the learned Counsel for the respondents,

there is no provision in the Code of Civil Procedure

including Order 43, for an appeal from an order

setting aside a decree in a summary suit. Further,

such an order not being a judgment, an appeal does

not lie from it under Clause 15 of the Letters Patent

of this Court. (b) the appeal is not tenable because

the appellants
ig have received the benefits of the

order setting aside exparte decree by accepting costs

imposed on the respondents thereby and are therefore,

not entitled to maintain the appeal in view of law,

laid down by the Supreme Court in Bhau Ram V. Baij

Nath Singh and others, reported in AIR 1961 S.C.

1327.

3. The appellants sued the respondents for a sum

of Rs. 5,94,597.99. On 14-1-2002 the Summons for

Judgment was served on them. On 3-6-2003, the Court

granted conditional leave to the respondents to

defend the suit on deposit of sum of Rs.

5,94,597.99, within a period of 4 weeks. On 6-2-2004

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the Court passed an exparte decree against the

respondents on failure to deposit the amount.

4. On 31-07-2004 a warrant of attachment was

issued. This was stayed on 30-8-2004, on the

respondents depositing a sum of Rs. 21,91,675/-.

5. The respondents then took out the notice of

motion for setting aside the order granting

conditional leave to defend the suit dated 6-3-2003

and exparte decree dated 6-2-2004. The learned Trial

Judge declined to set side the order granting

conditional leave to defend the suit but however

granted the other prayer and set aside the exparte

decree and granted extension of time to deposit the

amount as ordered earlier. The plaintiffs have filed

the present appeal against this order.

6. As regards the first objection to

maintainability there is no doubt that the order

setting aside a decree under order 37 Rule 4 of the

Code of Civil Procedure is not appealable under Order

43 Rule 1 of CPC. However, it appears that such an

order setting aside a decree under Order 37 Rule 4

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has been held to be a judgment within the meaning of

clause 15 of the Letters Patent. In Shah Babulal

Khimji V. Jayaben D. Kania and another,
another
reported in

1981 SC 1786. The Supreme Court observed as follows:

“Similarly, suppose the trial Judge passes an
order setting aside an exparte decree against

the defendant, which is not appealable under
any of the clauses of Order 43, Rule 1 though
an order rejecting an application to set aside
the decree passed exparte falls within Order
43, Rule 1, clause (d) and is appealable, the

serious question that arises is whether or not
the order first mentioned is a judgment within
the meaning of Letters Patent. The fact,

however, remains that the orders setting aside
the exparte decree puts the defendant to a
great advantage and works serious injustice to
the plaintiff because as a consequences of the

order, the plaintiff has now to contest the
suit and is deprived of the fruits of the
decree passed in his favour. In these
circumstances, therefore, the order passed by
the trial Judge setting aside the exparte
decree vitally affects the valuable rights of

the plaintiff and hence amounts to an
interlocutory judgment and is therefore,

appealable to a larger Bench.”

Though the aforesaid observation are in respect of an

order under order 9 Rule 13 we are of the view that

they apply with equal force to an order setting aside

the decree under order 37 Rule 4. We therefore, hold

that an order setting aside a decree whether on the

ground that it is exparte or otherwise is a judgment

within the meaning of clause 15 of the Letters Patent

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of this Court and is therefore appealable under that

clause.

7. This takes us to the next objection pertaining

to tenability viz. that the appeal is not tenable

because the appellants have received the benefits

under order setting aside the exparte decree and are

therefore, not entitled to file this appeal. There

is no dispute that the learned Judge imposed costs of

Rs. 15,000/- while setting aside an exparte decree

and extending
ig the time to deposit the amount. The

order was passed on 17-6-2005. The respondents

tendered a cheque dated 27-6-2005 under a letter

dated 28-6-2005. There is no dispute that the letter

alongwith the cheque has been received by the

appellant. The appellants retained the cheque

without demur and without raising any objection and

filed an appeal on 17-8-2005 i.e. after a period of

about two months. The appeal was placed before a

Division Bench of this Court. The Court admitted the

appeal on 1st December,2005. Apparently, since an

objection was raised by the respondents that the act

of accepting the cheque and filing the appeal amounts

approbation and reprobation the appellant returned

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the cheque under letter 29-11-2005. Apparently the

cheque was sent back by the respondents and the

appellants have retained the cheque since then. Shri

Joshi, the learned Counsel for the respondents

submitted that it is a settled law that it is not

permissible to approbate or repprobate by adopting

one part of the order and refusing another part, when

the order is intended to take effect in its entirety.

The Supreme Court in Bhau Ram V. Baij Nath Singh and

others,
others reported in AIR 1961 S.C. 1324, observed as

follows:-

“In support of his contention, learned Counsel
has relied upon the well-known case of Tinkler
v. Hilder, (1849) 154 ER 1176 and other cases
which follow that decision or which proceed on
the same reason as that in Tinkler’s case,
(1849) 154 ER 1176. Those decisions are :

Banku Chandra v. Marium Begum, 21 Cal WN 232
: (AIR 1917 Cal 546 )(SB); Ramendramohan V.

Keshabchandra, ILR 61 Cal 433: (AIR 1934 Cal

554); Mani Ram V. Beharidas, (S) AIR 1955
Raja 145; Veeraswami Pillai V.

Kalyanasundaram Mudaliar, AIR 1927 Mad 1009;
Venkatarayudu V. Rama Krishnayya, AIR 1930

Mad 268 and Pearce v. Chaplin, (1846) 115 ER
1483.

“The two English decisions just referred to
and some of the Indian decisions were
considered in AIR 1930 Mad 268. Dealing with

them Venkatasubba Rao, J., observed as
follows:

“What is the principle underlying these
decisions? when an order shows plainly that

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it is intended to take effect in its entirety
and that several parts of it depend upon each
other, a person cannot adopt one part and

repudiate another. For instance, if the Court
directs that the suit shall be restored on the
plaintiff paying the costs of the opposing

party, there is no intention to benefit the
latter, except on the terms mentioned in the
order itself. If the party receives costs,
his act is tantamount to adopting the
order……..According to Halsbury this rule

is an application of the doctrine ‘that a
person may not approbate and reprobate’ (13
Halsbury, para 508)….In other words, to
allow a party, who takes a benefit under such
an order, to complain against it, would be to

permit a breach of faith.”

It

case
may

that

be noted that Their Lordships held

the benefit that was received
in

by
that

the

appellants was of withdrawing the pre-emption price

and that such a benefit was not de hors the decree

and therefore, the appellant could not be denied the

statutory right to appeal. However, there is no

doubt that Their Lordships approved the statement of

law that parties are not entitled to take a benefit

such as receiving costs which would tantamount to

adopting the order and then challenging the order.

8. Shri Sen the leaned Counsel for the

appellants, submitted that the appellants cannot be

said to have received the benefits under the order,

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merely because they have accepted the cheque.

According to the learned Counsel the appellants,

could be said to have received the benefits only if

they had encashed the cheque, apart from accepting.

It is not possible to accept the contention of Shri

Sen. The intention of the parties in such a matter

is crucial. It is clear that the respondents paid

the costs imposed on them by way of a cheque which

the appellants accepted and retained without demur.

There was absolutely no attempt on the part of the

appellant

to return the said cheque. In fact, they

proceeded to file an appeal about two months after

receiving the costs by way of cheque. It is obvious

that the appellants intended to receive the benefits,

and in fact did so, under the order setting aside the

exparte decree. That apart, there seems to be little

doubt that receiving a cheque amounts to a

conditional acceptance of payment. In Commissioner

of Income Tax,Bombay South v. Messers Ogale Glass

Works Ltd.,
Ltd
reported in AIR 1954 SC 429, the Supreme

Court relied on Byles on Bills, 20th Edition P. 23

and the position is summarised pithily as follows:-

“A cheque, unless dishonoured, is payment.”

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Accordingly their Lordships concluded as follows:-

” In the case before us none of the cheques

has been dishonoured on presentation and

payment cannot, therefore, be said to have

been defeated by the happening of the

condition subsequent, namely dishonour by

non-payment and that being so there can be no

question, therefore, that the assessee did not

receive
ig payment by the receipt of the

cheques.”

The payment thus takes effect from the delivery of

the cheque but may be defeated for failure of the

condition i.e., non payment on maturity. We thus

have no hesitation in coming to the conclusion that

the appellants have received the benefits of the

order and by accepting the cheque towards the costs

of Rs.15,000/- from the respondents and therefore,

are not entitled to maintain the appeal in view of

the observations of the Supreme Court in Bhau Ram V.

Baij Nath Sing and others, reported in AIR 1961 S.C.

.

1327.

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9. In the result the appeal is dismissed. There

shall be no order as to costs.

(S.A.BOBDE, J.)

( A.A. SAYED, J.)

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