CPC Case Brief – Khanna v. Dillon (Section 115)

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FACTS: The appellant and the respondent entered into a partnership to do business as Construction Engineers but in February 1956 they agreed to dissolve it. It was agreed that the respondent was to take over all the assets and liabilities of the partnership and keep the appellant indemnified from all liability. Later on, a suit was filed by the appellant for dissolution of partnership and rendition of accounts. That suit ended in a compromise which provided that all realizations of the old partnership would be converted into cash and placed in joint account in the name of the two partners before being paid towards the liabilities of the partnership. The respondent filed two suits against the appellant for recovery of certain amounts on the allegation that the appellant had taken that amount as loan. The defense of the appellant was that as the money was still in the joint name of the two partners and he had taken the money from the joint account, suits between the two partners were not maintainable.

TRIAL JUDGE: in preliminary issues raised in the suits the trial Judge held that the suits were not maintainable, but instead of dismissing the suits there and then, he set them down for a future date.

REVISION PETITIONS FILED: Against the findings of the trial Judge, revision petitions were filed in the High Court under s. 115 of the Code of Civil Procedure. The High Court set aside the orders passed by the Trial judge and held that the suits could not be held as not maintainable.

APPEAL AGAINST HC JUDGMENT: The appellant appealed by special leave. The appellant challenged the order of the High Court on the ground that the order of the trial Judge did not amount to “a case which has been decided” within the meaning of s. 115 of Code of Civil Procedure, that the decrees which may be passed in the suits being subject to appeal to the High Court, the power of the High Court was by the express terms of s. 115 excluded, and that the orders of the trial Judge did not fall within any of the three clauses (a), (b) and (c) of s. 115.

SUPREME COURT: The High Court was right in setting aside the order passed by the trial Judge and in holding that without investigation as to the respective claims made by the parties by their pleadings on the matters in dispute, the suits could not be held as not maintainable. The decision of the trial Judge affected the rights and obligations of the parties directly. It was the decision on an issue relating to the jurisdiction of the court to entertain the suit filed by the respondent. The decision attracted cl. (c) of s. 115 of the Code of Civil Procedure.

REVISIONAL JURISDICTION OF THE HC: High Court is not bound to interfere merely because the conditions are satisfied. The interlocutory character of the order, existence of another remedy to the aggrieved party by way of appeal from the ultimate order or decree in the proceeding or by a suit, and the general equities of the case being served by the order made are all matters to be taken into account in considering whether the High Court even in cases where the conditions which attract the jurisdiction exist, should exercise its jurisdiction.

Revisional jurisdiction of the high Court may be exercised irrespective of the question whether ;an appeal lies thereto from the ultimate decree or order passed in the suit or not. The expression “in which no appeal lies thereto” does not mean that it excludes the exercise of the revisional jurisdiction when an appeal may be competent to the High Court from the final order. If an appeal lies against the adjudication directly to the -High Court or to another court from the decision of which an appeal lies to the High Court, it  has          no power to exercise  its  revisional jurisdiction against the adjudication, but where the decision itself  is not  appealable to the High Court directly  or    indirectly, exercise  of the revisional jurisdiction by the High  Court would not be deemed excluded.

A decision of the subordinate Court is amenable to the revisional jurisdiction of the High Court unless that jurisdiction is clearly barred by a special law or an appeal lies therefrom.

The decision of the trial Judge was erroneous because he denied himself the jurisdiction of holding that the suits were not maintainable. The fact that he did not dismiss the suits and did not draw up decrees for that purpose, was itself an exercise of jurisdiction with material irregularity, if not also illegality. In so far as the parties were concerned, the suits were no longer live suits as the decision had put an end to them. The word “case” in s. 115 does not mean a concluded suit or proceeding but each decision which terminates a part of the controversy involving a matter of jurisdiction.

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