Odeon Builders Pvt. Ltd. v. NBCC (India) Limited

4. In the above background, it is contended that the learned Joint intentional or deliberate. It is contended that the defendant/appellant had every intention to comply with the directions regarding payment of costs in the aftermath of withdrawal of the chamber appeal on 16.01.2020 and to this end, a cheque bearing No.000281 dated 03.02.2020 had also been prepared in the name of the plaintiff. However, the impugned order dated 30.01.2020 directed that the written statement of the defendant be taken off the record since the costs had remained unpaid till the said date. It is further submitted that when the present chamber appeal came up for consideration on 28.02.2020, the aforesaid cheque for Rs.[1] lakh was kept ready for being handed over to the plaintiff. This fact has been specifically referred to in para 19 of the present chamber appeal. Vide order dated 10.05.2022, it was directed by this court as under:- “O.A. 33/2020 A request is made on behalf of Mr. Karunesh Tandon, learned counsel for the plaintiff by Ms. Simran Mulchandani, who submits that the counsel leading her in the matter, is presently in self-isolation.

2. Mr. Jay Savla, learned senior counsel appearing for the defendant submits that OA No. 33/2020 is long-pending, which impugns order dated 30.01.2020 whereby the learned Joint Registrar has taken the written statement off the record for non-payment of costs within time.

3. Senior counsel submits that a cheque for payment of costs is ready and available with him.

4. In view of the above circumstances, without prejudice to the rights and contentions of the plaintiff in relation to O.A. No.33/2020 and without passing any final order as regards the written statement filed by the defendant, let the costs of Rs. 1,00,000/- imposed by the learned Joint Registrar be deposited in the name of the 'Registrar General, Delhi High Court' within 03 weeks from today; with a direction to the a nationalised bank initially for a period of 06 months, to be renewed for the like period from time-to-time, without awaiting any further directions in that behalf, until otherwise directed by the court.

5. Re-notify on 19th September 2022.”

5. Accordingly, the costs of Rs. 1 lakh are stated to have been deposited by the defendant in terms of the aforesaid directions with the Registrar General of this court. In the above backdrop, it is contended that the costs imposed vide order dated 18.11.2019 be released to the plaintiff and the impugned order dated 30.01.2020 whereby the written statement of the defendant has been ordered to be taken off the record for non-payment of the said costs, be set aside.

6. The present appeal has been opposed by the learned counsel for the plaintiff. Learned counsel for the plaintiff has questioned the maintainability of the appeal. Further it has been contended that the impugned order was perfectly justified in view of non-payment of costs by the defendant within the prescribed time period, especially in the backdrop of the conduct on behalf of the defendant in filing its written statement with inordinate delay as noticed in the order dated 30.01.2020.

7. Having given my anxious consideration to the matter, I am of the view that the present appeal deserves to be allowed. The reasons are enumerated hereunder:- Maintainability of the present O.A.

8. The present OA is a creature of Rule 5 of Chapter II of the Delhi High Court (Original Sides) Rules, 2018, which provided as under:-

9. The aforesaid rule is pari materia with Rule 4 of Chapter II the Delhi High Court (Original Side) Rules, 1967 which provided as under:-

10. In the context of the aforesaid Rule 4, it has been held by Division Bench of this court in Akash Gupta vs. Frankfinn Institute of AIR Hostess Training[2]; as under:-

13. Section 7 empowers Delhi High Court to make rules in respect of practice and procedure before it for the exercise of its ordinary original civil jurisdiction. The words “practice and procedure” are very wide and will include the power to regulate and specify the method by which the Court will conduct its proceedings, while dealing with and disposing of various applications. “Practice and procedure” will also include providing for an appeal against an order passed by a Rule 4 has not been questioned and challenged.

14. It may also be mentioned here that in case it is held that an order passed by the Registrar under Rule 3 is not appealable under Rule 4 to a Judge in Chamber, an aggrieved person may be required to file a Special Leave Petition, if it is not a “judgment”. Such interpretation in our opinion should be avoided.”

11. As such, the dispensation/right created under Rule 4, being a creature of the rules framed under Section 7 of the Delhi High Court Act, 1996 was upheld. It was held that an appeal would lie against an order made by the Procedure, Delhi High Court Act, 1996 or the Letters Patent.

12. In Sreyas Sripal v. Upasana Finance Ltd[3]., a judgment rendered by a Division Bench of Madras High Court, it was held that the learned Registrar (the Master in the Madras High Court) while dealing with matters in exercise of powers delegated to him under the Original Side Rules was acting as a delegate of the court itself and that the relevant provision in the Original Side Rules which provides appeal therefrom was really in the nature of a Revision/Review. The said conclusion was arrived at in the context of examining the issue as to whether a second appeal before the Division Bench of the Court would be barred under Section 100-A of the Code of Civil Procedure. The said judgment was relied upon by the Division Bench of this court in the case of Rahul Gupta vs. Pratap Singh & Ors[4]. wherein it was held as under:- “23. In view of the above, would it be correct to consider an appeal under Rule 4 of the said Rules as an appeal in the true sense? In our view, the answer to the said question would be in the negative. This is so because an authority cannot sit in appeal against an order which has been passed in exercise of its jurisdiction, albeit by its delegate. At best the power exercised by the Single Judge under Rule 4 of the O.S. Rules is a power to review and re-examine orders passed by the 4 of the O.S. Rules is a misnomer as an appeal under Rule 4 of chapter II of the O.S. Rules, could certainly not be considered as an appeal but a mere re-examination/review of the order passed by the (2007) 4 CTC 161 2013 (139) DRJ 379 [DB]: ILR (2014) 1 Delhi 270 the Madras High Court in Sreyas Sripal v. Upasana Finance Ltd. (supra), whereby, on the basis of similar reasoning, that Court has also concluded that the court did not exercise powers of appeal, against an order of a Master, under Order XIV Rule 12 of the Madras High Court Original Side Rules. Accordingly, the bar under Section 100A of the Code was not applicable and appeals before a Division Bench, against an orders passed by Single Judges, were maintainable. The relevant extract of the said judgement is quoted below:—

It can be noticed that neither the judgment of the Division Bench of the Madras High Court nor the aforesaid judgment of Division Bench of this court impinged upon the exercise of powers under Rule 4 of Delhi High Court (Original Side) Rules, 1967.”

13. In Rahul Gupta (supra) the Division Bench of this court also considered its prior decision in Akash Gupta (supra) and held as under:-

14. A subsequent judgment of the Division Bench of this court in D & H India Ltd. vs. Superon Schweisstechnik India Ltd[5]., while examining the maintainability of an appeal, filed before a Division Bench, pursuant to an order passed under Rule 5 of Chapter II of the Delhi High Court (Original Side) Rules, 2018, expressed doubt about the correctness of Rahul Gupta (supra) on the aspect relating to maintainability of an appeal against an order passed by a Single Judge under Rule 5 before a Division Bench of the High Court/ Commercial Appellate Division of the High Court. However, even in D & H India Ltd. (supra) it was held as under:-

15. In Kandla Export Corporation and Anr. vs. OCI Corporation and Anr[6]., the Supreme Court interpreted Section 13 of the Commercial Courts Act for the purpose of considering the scope of an appeal contemplated

2018 SCC Online Del 4390 before a Commercial Appellate Division against the orders passed by the Commercial Division/Commercial Court. However, there was no occasion in the said judgment to consider the scope, validity and ambit of the relevant provisions under the Delhi High Court (Original Side) Rules, 2018 which provides for an appeal, as contemplated under Rule 5 of Chapter-II of the Delhi High Court (Original Side) Rules, 2018 against an order passed by the

16. Subsequently, in Odeon Builders Pvt. Ltd. vs. NBCC (India) Limited[7] the Division Bench of this court expressed doubts about the correctness of the judgment of the Division Bench in D & H India (Supra) inasmuch as it did not consider the judgment of Supreme Court in Kandla Export Corporation (supra). Again however, the issue as to the ambit and validity of Rule 5 of Chapter-II of Delhi High Court (Original Sides) Rules, 2018 did not arise for consideration at all in that case.

17. As is evident from the aforesaid, none of the aforesaid judgments derogate from the right created under Rule 5 of Chapter-II of the Delhi High Court (Original Sides) Rules, 2018, in terms of which any person aggrieved by an order made by Registrar under Rule 3 of the said Chapter can file an appeal against the same to the “Judge in Chambers”.

18. The position was further explicitly clarified by a judgment of the Coordinate Bench of this court in Maja Cosmetics vs. Oasis Commercial (P) Ltd[8].,; wherein it has been held as under:- “18. Section 13 is as under: -

13. Appeals from decrees of Commercial Courts and Commercial Divisions-(1) Any person aggrieved by the decision of the Commercial Court or Commercial Division of a High Court may appeal to the Commercial Appellate Division of that High Court within a period of sixty days from the date of judgment or order, as the case may be: Provided that an appeal shall lie from such orders passed by a Commercial Division or a Commercial Court that are specifically enumerated under Order XLIII of the Code of Civil Procedure, 1908 as amended by this Act and section 37 of the Arbitration and Conciliation Act, 1996. (2) Notwithstanding anything contained in any other law for the time being in force or Letters Patent of a High Court, no appeal shall lie from any order or decree of a Commercial Division or Commercial Court otherwise than in accordance with the provisions of this Act.” and needs no elucidation.

19. The same nowhere refers to a Chamber Appeal which is a creation of the Delhi High Court (Original Side) Rules, 1967 framed in exercise of powers under Section 7 of the Delhi High Court Act, 1966 and under Sections 122 and 129 of the CPC.

20. The High Court, vested with ordinary original civil jurisdiction in suits, value of which exceeds Rupees Two Crores, for the sake of expeditious disposal of such suits, in exercise of powers under Section 7 of the Delhi High Court Act, enabling it to make rules and orders with respect to practise and procedure for the exercise of its ordinary original civil jurisdiction, has devised a practice/procedure of certain powers of the Court to be exercised by Joint Registrars (Judicial) and which post is occupied by the Additional District Judges on deputation and of an Appeal against the orders of the Joint Registrar to the „Judge in Chambers‟. One such power which the Joint Registrar (Judicial) is empowered to exercise, is to decide applications for enlargement of time.

21. There is nothing in the Commercial Courts Act, to make the said practise/procedure inapplicable to disposal of commercial suits and there is no bar to such a Chamber Appeal. Section 13(2) of the Commercial Courts Act supra, commencing with a non obstante clause only bars appeals, otherwise than as provided therein, against the order or decree of Commercial Court/Commercial Division and not the Chamber Appeal under the Delhi High Court Act and the Delhi High Court Rules.

22. In the absence of any bar, it cannot be said that the Chamber Appeal does not lie.” [emphasis supplied]

19. Reliance being placed by the learned counsel for the plaintiff on the judgment of a Division Bench of this court in Odeon Builders Pvt. Ltd. Vs. NBCC (India) Ltd & Ors[9]., is misplaced inasmuch as in the said case this court was not concerned with a Chamber Appeal against the order passed by the concerned Registrar but was concerned with an intra-court appeal from an order passed by a single judge/Commercial Division to the Commercial Appellate Division of the High Court. As such, the observations in the said judgment are completely inapplicable to the present case. As noticed in Maja Cosmetics (supra), the present appeal being a creature of Rule 5 of Chapter II of the Delhi High Court Rules read with Section 7 of the Delhi High Court Act does not derogate from, and cannot be construed to be inconsistent with Section 13 of the Commercial Courts Act.

20. Reliance placed by the learned counsel for the plaintiff on the order passed by a coordinate bench of this court in Odeon Builders Pvt Ltd vs NBCC (India) Limited10, is equally misconceived. In the said case the Chamber Appeal filed by the defendant against the order of the Joint defendant conceding that the appeal is not maintainable11. Later on, the defendant moved an application seeking recall of said order whereby the Chamber Appeal was withdrawn on the ground, inter alia, that the counsel FAO (OS) (COMM) 23/2023 decided on 10.09.2021 CS (COMM) 13/2021 order dated 24.03.2023 Ibid order dated 31.10.2022 had erroneously withdrawn the said appeal, and the same was done without taking any instructions from the defendant. In the said context the court observed that the Chamber Appeal was not maintainable before this Court and refused to recall the said order. The factual matrix of the present case is completely different from the said case inasmuch as the defendant herein does not concede that the appeal is not maintainable. It also appears that the prior decision of this court in Maja Cosmetics (supra), dealing directly on the issue of maintainability of the Chamber Appeal vis-a-vis Section 13 of the Commercial Courts Act, was not cited before the concerned coordinate bench. On Merits

21. It has been rightly contended by the learned senior counsel for the defendant that initially, the defendant sought to assail the order dated 18.11.2019 by filing a chamber appeal being OA No. 5/2020. The said OA came to be dismissed as withdrawn only on 16.01.2020. From the factual conspectus as noticed hereinabove, it is clear that expeditious steps were taken thereafter by the defendant for payment of the requisite costs to the plaintiff. The defendant has placed on record, the relevant rules in the defendant organisation with regard to delegation of powers and the leave application of the concerned director to corroborate the averments made in the present appeal. Importantly, the cheque for Rs. 1 lakh in favour of the plaintiff is stated to have been prepared on 03.02.2020 even prior to filing of the present appeal.

22. It is also noticed that vide order dated 18.11.2019, the reason which impelled the concerned Registrar to condone the delay in filing the written statement was that the written statement was required to be taken on record to meet the ends of justice so as to enable the defendant to contest the suit on merits. In this regard, the Joint Registrar had rightly relied upon the judgment of the Supreme Court in the case of N. Balakrishnan Vs. M Krishnamurthy12, in which the Supreme Court observed as under:-

23. It is also notable that Rule 4 of Chapter VII of the Delhi High Court Rules also clearly contemplates that it is permissible for this court to condone the delay in filing the written statement as long as the outer timeline contemplated therein is not breached subject to burdening the party in delay with cost as may be deemed appropriate. It is notable that the time period granted to the recalcitrant party under the aforesaid rule for payment of costs is within the discretion of this court. As such, it is within the purview of this court to extend the time for payment of the requisite costs if facts and circumstances so warrant. This position has been affirmed by the Supreme Court in the case of Nashik Municipal Corporation vs. R.M. Bhandari and Anr13. In the said case, certain directions had been issued regarding payment of costs as a condition precedent for restoration of an execution petition. The said costs were not paid within the stipulated time. It was held by the Supreme Court that the time granted for payment of costs could be enlarged, if warranted in the facts of the case. While so holding, the Supreme Court relied upon its earlier judgment in the case of Chinnamarkathian vs. Ayyavoo14, in which it has been held as under:-

24. In the present case, the defendant/appellant has shown its readiness and willingness to pay the requisite costs to the plaintiff. As noticed hereinabove, the requisite costs have already been deposited by the defendant/appellant before the Registrar General of this court in terms of the directions contained in the order dated 18.11.2019. In the facts and circumstances, the direction contained in the impugned order dated 30.01.2020 to the effect that the written statement filed on behalf of the defendant/appellant be taken off the record is liable to be set aside. It is ordered accordingly. The costs of Rs. 1 lakh deposited by the defendant/appellant before the Registrar General of this court (included accrued interest thereon) are directed to be released to the plaintiff. Upon release of the said amount, the written statement filed on behalf of the defendant/appellant is directed to be taken on record.

25. The present appeal stands disposed of in terms of the aforesaid directions.

SACHIN DATTA, J. JULY 03, 2023