MANHARLAL MANILAL SHAH Vs. OFFICIAL LIQUIDATOR

JUDGEMENT

(1.) This is an application for leave to appeal to the Supreme Court against a decision of this Court given on 18th June 1968 in O. J. Appeal No. 2 of 1968. (Manharlal v. The Rajratna N. Mills Co. Ltd. X G L. R. 180) The applicant seeks leave to appeal under Article 133(1) clauses (b) and (c) of the Constitution and the question is whether he is entitled to leave under either of these two clauses. The applicant is a creditor of a company called Rajratna Naranbhai Mills Company Ltd. By an order dated 26th July 1967 the company was ordered to be compulsorily wound up and the Official Liquidator was appointed liquidator of the company. The company owned a textile mill and it therefore became necessary in the winding up For realising the assets of the company to sell the land buildings plant machinery stores and other assets comprised in the textile mill. The Official Liquidator after obtaining the direction of the Company Judge advertised sale of the assets of the company and pursuant to the advertisement so given several offers were received by the Official Liquidator before the time stipulated In the advertisement. The sealed envelopes containing the offers were opened by the Company Judge on 23rd April 1968. The Official Liquidator thereafter made a report to the Company Judge and on the report the Company Judge made an order dated 25tb April 1968 directing that the offer of the second respondent be accepted subject to the fulfilment of certain conditions with which we are not concerned In this application. The applicant thereupon preferred an appeal in this Court challenging the order passed by the Company Judge sanctioning the sale in favour of the second respondent. When the appeal reached hearing before us a preliminary objection was taken by the learned advocate appearing on behalf of the second respondent against the maintainability of the appeal by the applicant. The ground on which the preliminary objection was based was that the applicant was not entitled to maintain the appeal. A three-fold answer was sought to be given to the preliminary objection on behalf of the applicant. It was urged In the first place that the applicant being a creditor of the company was aggrieved by the order sanctioning the sale at an Inadequate price and as an aggrieved person he was entitled to challenge the order In appeal. It was contended in the alternative that in any event the applicant must be regarded as a party to the proceeding since he had appeared at the hearing of the winding up petition as a supporting creditor and he was therefore entitled to prefer the appeal as a party to the proceeeding. Lastly it was argued that even if the applicant be not regarded as a party to the proceeding he was still entitled to prefer an appeal with leave of the Court and such leave should be granted to him. All the three answers made on behalf of the applicant were rejected by us and we held in a judgment delivered on 18th June 1968 that the applicant was not a party to the appeal as of right and though he could certainly prefer the appeal with leave of the Court there was no reason why leave should be granted to him and we accordingly decided that the applicant was not entitled to maintain the appeal and the appeal was liable to be dismissed with costs. We did not go into the merits of the grounds raised by the applicant in support of the appeal since we thought it unnecessary to do so in the view taken by us that the appeal was not maintainable by the applicant. It is against this decision that the applicant seeks leave to appeal under Article 133(1) clauses (b) and (c).

(2.) So far as clause (c) of Article 133(1) is concerned we are clearly of the view that this is not a fit case for appeal to the Supreme Court within the meaning of that clause. But the applicant is on firmer ground when he invokes clause (b) of Article 133(1) in support of his application for leave. Article 133(1) clause (b) provides that an appeal shall lie to the Supreme Court from any judgment decree or final order in a civil proceeding in the territory of India if the High Court certifies that the judgment decree or final order involves directly or indirectly some claim or question respecting property of the amount or value not less than Rs. 20 0 and where the judgment decree or final order appealed from affirms the decision of the Court immediately below the High Court must also further certify that the appeal involves some substantial question of law. Now admittedly the appeal from the order of the Company Judge sanctioning the sale in favour of the second respondent was a civil proceeding and the decision of the appeal indirectly involved some claim or question respecting property of the amount or value not less than Rs. 20 0 But the question is whether the decision of the appeal amounted to a judgment decree or final order within the meaning of Article 133(1) for it is only if the decision of the appeal could be said to be a judgment decree or final order within the meaning of that Article that an appeal could lie to the Supreme Court under clause (b) of that Article. Now it is well settled that the word judgment in Article 133(1) does not have the meaning given to it in the Code of Civil Procedure but it means a final judgment. The question which therefore arises for consideration is whether the decision of the appeal was a final judgment or order the word decree being clearly inapplicable. Now what is a final judgment or order is no longer a matter of doubt or controversy. There are several decisions of the Supreme Court dealing with the question as to when a decision can be said to be a final judgment or order but it is not necessary to refer to all of them since the latest decision of the Supreme Court on the point namely Mohanlal v. State of Gujarat A.I.R. 1968 S.C. 733: IX G.L.R. 536 exhaustively discusses this question. The main judgment in that case was delivered by Shelat J. and he divided the cases where this question may arise into two classes: one class comprising cases where the impugned orders were passed in appeals or revisions from orders in the original or main proceedings and the other class comprising cases where the impugned orders were made in proceedings independent of the original or main proceedings. So far as the first class of cases is concerned the learned Judge pointed out that the test applied in decided cases was whether the impugned order disposed of the original proceeding: if it did the order would be final; if it did not and the proceeding was alive yet to be tried the order would not be final. The learned judge referred to the decision of the Privy Council in Abdul Rahman v. D. K. Cassim 60 P.C. 76 and pointed out that the test applied in that case was that the finality must be a finality in relation to the suit: if after the order the suit is still a live suit in which the rights of the parties have still to be determined no appeal lies against it and applying this test the Privy Council held that an order of remand was not a final order since it kept the entire case undecided. The learned Judge also relied on the decision of the Supreme Court in Sardar Syedna Taher Saifuddin Saheb v. State of Bombay A.I.R. 1958 S.C. 253 and observed that the same test was applied by the Supreme Court in taking the view that the appeal before it was not maintainable as the impugned order disposed of a preliminary issue regarding the validity of the Bombay Prevention of Excommunication Act 1949 but did not decide the rest of the issues In the suit . The learned Judge then proceeded to discuss the second class of cases and pointed out that a different test would have to be applied to orders made in proceedings independent of the original or main proceedings. The test formulated by the learned Judge in regard to this class of cases was that where there is a proceeding independent of the original proceedings between the parties:

(3.) Now so far as the present case is concerned it clearly and indubitably falls within the first class of CaseS referred to by the Supreme Court in Mohanlals case since the impugned order was made by us in appeal preferred against the decision of the Company Judge. The test which has therefore to be applied is the test formulated in regard to the first class of cases namely whether the impugned order had the effect of keeping the original proceedings alive yet to be tried or whether it was final in so far as the original proceeding was concerned. Now there can be no doubt that the impugned order finally disposing of the appeal put an end to the proceeding for sanction of sale and after the impugned order the proceeding for sanction of sale did not remain a live proceeding in which the rights of the parties had still to be determined: nothing further remained to be done in respect of that proceeding. It is no doubt true that the appeal was dismissed on a preliminary objection that the applicant was not entitled to maintain it and on that view we did not examine the merits but that makes no difference for whatever be the ground on which the appeal was disposed of the effect of the decision was to finally dispose of the proceeding. In order that an order disposing of a Proceeding may be a final order it is not necessary that it should determine the merits of the dispute between the parties. It is enough if it finally disposes of the proceeding whether on a preliminary objection or otherwise. The test is: what is the nature and effect of the order and not what is the ground on which the order is made. The question we have to ask ourselves is: does the order keep the original proceeding alive yet to be tried or does it put an end to that proceeding. This in fact was the test applied by the Supreme Court even in regard to the second class of cases. Referring to the decision of the Supreme in State of Orissa v. Madan Gopal A.I.R. 1952 S. C. 12 Shelat I. pointed out in Mohanlals case that though the order disposing of the writ petition did not determine the rights of the parties and was ex facie interlocutory in character it was yet a final order in view of the fact that with these orders the petition was disposed of finally and nothing further remained to be done in respect of the petition . The order made on the writ petition was held to be a final order because It had the effect of finally disposing of the writ petition.