Span Healthcare Pvt Ltd Vs Vishal Sharma: Interlocutory Orders Cannot Be Deemed As A Judgement Unless They Affect The Rights Of The Parties

DATE OF JUDGEMENT:

16th April 2021

JUDGES:

Justice Jyoti Singh

PARTIES:

• Span Healthcare Private Limited ........... (Petitioner)
• Vishal Sharma ............ (Respondent)

COUNSEL:

• Advocates Aditya Vijay Kumar, Ayushi Kumar, Akshay Bhardwaj ...... (Petitioner)
• Advocate Payal Chandra ....... (Respondent)

SUBJECT: The following order deals with the maintainability of the review petition against an interlocutory order. The review petition was filed by the petitioner under section 115 of CPC against an impugned order which was passed by the trial court on 12th February 2021 giving the defendant unconditional leave to defend the suit.

AN OVERVIEW

1. In the present case, the petitioner filed a suit for seeking to recover a liquidated sum of Rupees 1,11,86,611 under Order XXXVII of CPC which included the principal amount of rupees 82,86,379 + interest calculated @ rate of 14% per annum which amounted to 29,00,232.65p./-
2. The petitioner, in this case, is a company registered under the Companies Act and engaged in the business of healthcare facilities and providing the equipment related to healthcare. Also, this company is an exclusive distributor of ‘Haemonetics’ for the supply of medical items in India. On the other hand, the defendant is a proprietor of a firm called M/s. Mega Care International. The firm is engaged in the business of providing medical equipment, disposables and other like items.
3. An MOU was signed between both the parties I.e. the defendant and the petitioner in the year 2009 – 2010 whereby the petitioner agreed to the supply of ‘Haemonetics’ by granting distributorship to the defendant for 27 months which was subject to extension on mutually agreed terms. However, even though the MOU expired in 2012 the parties continued to carry on the business on mutual understanding until disputes arose between the parties in 2016 when the defendant even after receiving goods on time started to make default in issuing payments.
4. Even though the defendant had acknowledged that the payments were due and payable and even assured the petitioner that the same would be paid but the defendant never did that and several e-mails were exchanged regarding the same between both the parties. Also, the total amount which was around Rupees 1.06 crores to be paid by the defendant was negotiated for a final settlement amount of rupees 50 lakhs which was agreed upon by the petitioner. However, still, the defendant did not pay the final settlement amount which was deducted to half. Hence, the petitioner was left with no option but to file a suit for recovery before a lower court.

ISSUES

The following are the major issues framed by the Delhi High Court:-

1. Whether the present appeal is maintainable?
2. Whether the impugned order granting unconditional leave to defend in a summary suit by a trial court can be called an interlocutory order?

IMPORTANT PROVISIONS

1. The Commercial Courts Act
Section 8 – No petition against any interlocutory order or a civil revision petition shall be entertained.

2. The Constitution of India
Article 227 – Except for a court formed under the Armed Forces, the high courts have superintendence over all the tribunals and courts throughout the territorial jurisdiction which the high court exercises.

3. The Special Courts Act
Section 11 – An appeal shall lie of a special court to the Supreme Court on facts and law as a right from an order, judgement or a sentence except for interlocutory orders.

4. Civil Procedure Code C.P.C
Order XXXVII (37) – Provides for Summary Suit or Summary Procedure

Section 115 – It deals with the revisional jurisdiction of the High courts which states that the high courts can call for any case before it which has been decided by the subordinate courts but no appeal shall lie.

ANALYSIS OF THE JUDGEMENT

1. The learned counsel on behalf of the defendant has raised an objection stating that the impugned order is an interlocutory order and thus under section 8 of the commercial courts act the revision petition is not maintainable. While the counsel representing the petitioner responded to the defendant’s counsel stating that it is maintainable. The counsel of the petitioner explained that once the rights of the parties are determined the order cannot be termed as an interlocutory order. The petitioner’s counsel further reminding the court and stated that many previous judgements of this court have held that such review petitions under section 115 of the Civil Procedure Code are maintainable against an order granting leave to the defendant in a summary suit under Order XXXVII of Civil Procedure Code.

2. The cases on which the counsel of both the parties relied on were-

• Cases relied upon by the Defendant’s counsel

1) Shah Babulal Khimji v. Jaya Ben D. Kania & Others (1981) 4 SCC 8
Relying on this above judgement the counsel asserted that whether the leave granted is conditional/ unconditional or to defend it is deemed to be an interlocutory order.

2) State of Gujarat v. Union of India ( Gujarat HC)
By placing reliance on this judgement the counsel stated that though under article 227 of the Indian Constitution civil revision petition would be maintainable as per the supervisory jurisdiction of the High Court against interlocutory orders of the subordinate courts although there is a bar to entertain a civil revision petition under section 8 of the commercial courts act against the interlocutory orders passed by the trial court.

• Cases relied upon by the petitioner’s counsel
1) Spice Jet Limited v. Arun Kumar (2017) SCC Del. 12712
It was contended by the counsel where an order granted leave to the defendant could be knocked out by a revision petition under section 115 of Civil Procedure Code.

2) Bal Krishna v. Jugal Kishore (J&K HC)
It was asserted by the counsel referring to this case that the petition was maintainable as the order passed by the trial court was in favour of the petitioner and thus on that ground, the order was not an interlocutory order.

3) Netrapal Singh v. Ravinder Kumar Kalyani (Delhi HC)

4) Versatile Commotrade Pvt. Limited v. Maniram Sh. Muniram (Delhi HC)

Relying on both the above cases the counsel contended that the Delhi HC had previously entertained both the revision petitions where the defendant was granted leave to defend under Order XXXVII of the Civil Procedure Code.

3. The court to decide on the question of maintainability of the suit deeply analysed the provisions of section 8 of the act and the court observed that as pointed out in one of the cases it can be said that the review petition can be entertained under article 227 of the Indian Constitution against interlocutory orders passed by the subordinate court or commercial courts.

4. Further deciding on the 2nd issue whether or not the order passed by the trial court is interlocutory or not. The Hon’ble judge said that it is necessary to ascertain the meaning of judgement and referring to the judgement of the Supreme Court in Shah Babulal Khimji case states that there are 3 kinds of judgement – A. Final Judgement, B. Preliminary Judgement, C. Interlocutory or Intermediate Judgement. Here as the issue concerning whether the trial court order is interlocutory or not the court citing an example explains and makes it clear that the order passed by the trial court would not amount to a judgement rather it will solely be interlocutory orders.

5. The court also observed that as per the Supreme Court past judgements an interlocutory order can be appealed on the grounds like – A. Whether they possess characteristics and trappings of final judgement? B. Whether it has adverse effects on the party? C. Is the effect direct/ immediate or is it remote/ indirect? The court also took note of the different case judgements passed by this court and gave many instances of interlocutory orders.

6. The court in its observations noted that the petitioner’s counsel contended that when a trial judge has to decide on the rights of the parties it should be regarded as a judgement as per ‘letters patent.’ However, the court thinks that dismissing this application will not affect the rights of the party. The Hon’ble Court specifies that the rights of the parties shall be decided by the trial court itself. With respect to section 8 and the judgements relied upon the court believes this petition is not maintainable. Thus the court holds that the impugned order is an interlocutory order and so the revision petition stands dismissed.

CONCLUSION

The judgement points out several times through various instances and extensively interprets the term ‘interlocutory orders.’ The verdict clearly states that an interlocutory order should not be deemed as a judgement unless such orders affect the valuable rights of the party or they cause serious injustice to the party.