RAMANLAL SHANTILAL Vs. CHUNILAL DAMODARDAS

JUDGEMENT

(1.) This is an appeal from an order made by the learned Chamber Judge on a summons taken out by the defendants in a summary suit for leave to defend, in which the learned Judge directed that the defendants on depositing in Court a sum of Rs. 5,000 by a date named therein should have leave to defend and that the suit should thereupon be transferred to the list of commercial causes, and in default of the defendants depositing the said sum of Rs. 5,000 within the time aforesaid the chamber summons should be dismissed, and in that event the defendants should pay the costs of the chamber summons.

(2.) The first point taken on appeal is a preliminary point that no appeal lies under Clause 15 of the Letters Patent. We have recently considered that clause, and putting it shortly, the view which has always prevailed in this Court since the decision in Miya Mahomed V/s. Zorabi (1909) 11 Bom. L.R. 241 is that any order affecting the merits of the question between the parties by determining some right or liability is a judgment within Clause 15 of the Letters Patent, but an order which merely regulates the procedure in a suit is not such a judgment. If one looks only to the form of the order under appeal, I think it may be said only to regulate the procedure in the suit; but Mr. Coltman, who appears for the appellants, says that we must read that order in connection with Order XXXVII, Rule 2, of the Civil Procedure Code, and see what the actual effect of the order is. Order XXXVII, Rule 2, Sub-rule (1), before it was amended, provided in effect that all suits upon bills of exchange, hundis or promissory notes might be instituted as summary suits, That Sub-rule has been amended by this Court under Section 122 of the Code by increasing the number of suits to which it applies, and for the present purpose it is enough to say that all suits in which the plaintiff seeks to recover a debtor a liquidated demand under a contract express or implied are included in Order XXXVII, Rule 2, Then Sub-rule (2) of Rule 2 of Order XXXVII provides that in any case in which the plaint and summons are in the forms referred to in Sub-rule (1), the defendant shall not appear and defend the suit unless he obtains leave for defending the suit, and in default of his obtaining such leave or of his appearance and defence in pursuance thereof, the allegations in the plaint shall be deemed to be admitted and the plaintiff shall be entitled to a decree. Then follows the form of the decree to which the plaintiff is to be entitled. Mr. Desai on behalf of the respondents in support of the preliminary objection points out that Sub-rule (2) of Rule 2 of Order XXXVII has not been amended to fit in with the amendment in Sub-rule (1). That is so, but on the other hand, we must clearly read Sub-rule (2) in the light of the amendment in Sub-rule (1), and I think the provision in Sub-rule (2) which provides that all the allegations in the plaint shall be deemed to be admitted by the defendant applies to all actions coming within the amended Sub- rule (1). Whether the latter part of Sub-rule (2) dealing with the decree to which the plaintiff is to be entitled applies to any action except one founded on a bill of exchange, hundi or promissory note may be doubtful. But, however that may be, it seems to me to be clear that the effect of Order XXXVII, Rule 2, is that if the Judge refuses leave to defend, or gives leave to defend on terms which the defendant is not able to comply with, the result is that the plaint is taken to be admitted, and the plaintiff is entitled to an order on that basis. Rule 208 of the rules of this High Court provides how the plaintiff is to obtain his order. He is to set the case down for hearing before the Chamber Judge, but having done that it seems to me that the making of the order will automatically follow in view of the provision of Rule 2 of Order XXXVII, that all the allegations in the plaint are to be taken as admitted.

(3.) Mr. Desai, however, says that we must look at this matter as one of form and that the order refusing leave to defend is a mere interlocutory order regulating procedure, and that it is not the final order giving judgment for the plaintiff, and therefore no appeal lies. The point came before this Court in the case of Madanlal V/s. Kedarnath where two appeals were presented, one from an interlocutory order giving leave to defend on the terms of the defendant making a deposit of Rs. 30,000 in Court, and the other from the final order passed in the suit, and this Court held that the appeal lay against the final order, and that on that appeal it was open to the defendant; to challenge the interlocutory order; and in that view the Court held that it was not necessary to consider whether an appeal would lie from the interlocutory order. Now the result which must follow from the procedure adopted in that case seems to me to be somewhat unfortunate. If in a summary suit in which leave to defend is refused and in consequence decree follows as a matter of course in favour of the plaintiff and there is an appeal against the decree, it is obvious that the Court of Appeal cannot go into the merits of the suit, because the merits have not been tried, and all that the defendant can do in such a case is to challenge the interlocutory order. But in the meantime the plaintiff, having got his final decree, may have levied execution, and it may be too late for practical purposes for the defendant to challenge the interlocutory order. If in substance an appeal lies from an interlocutory order refusing- leave to defend by the process of challenging the order on an appeal from the final order, it is obviously more convenient that there should be a right of appeal direct from the interlocutory order. I think we must look at the substance of this matter and consider what the real effect of the order is, having regard to the provisions of Order XXXVII, Rule 2, and I think we ought to hold that the effect of the order is to determine the rights between the parties, since in substance it entitles the plaintiff to the order claimed in the plaint, That being so, I think such an order is technically a judgment within the meaning of Clause 15 of the Letters Patent.