SWADESHI POLYTAX LIMITED v. V. K. GOEL — 1987 DIGILAW 213 (DEL)

S. S. CHADHA, J. ( 1 ) THIS appeal under S. 10 of the Delhi High Court Act, 1966, is directed against the order dt. Feb. 2, 1987 passed by G. C. Jain, J. dismissing an appeal under R. 4, Chap. II of the Delhi High Court (Original Side) Rules, 1967, against the order of the Registrar dt. Nov. 14, 1986 directing that certified copies of the proxies be supplied to the plaintiff in the Suit as per the rules. ( 2 ) IN order to appreciate the preliminary objection that the appeal is not maintainable it is necessary to state certain facts. M/s Swadeshi Polytex Limited (hereinafter referred to as the Company), defendant No. 2 in the suit/appellant before us, is a public limited company duly incorporated under the Companies Act. Shri V. K. Goel, plaintiff in the suit is a registered shareholder of 50 Equity shares of Rs. 10. 00 each in the Company. The Secretary of the Company issued on 23rd Jan. 1986 a notice for holding of 16th Annual General Meeting of the Company on 15th Mar. 1986 at its registered office. Shri Raghu Raj was appointed as the Chairman of this Annual General Meeting of the Company. Section 176 of the Companies Act gives a right to the members of a company entitled to attend and vote at a meeting to cast their votes by proxy. Some members of the Company executed two instruments of proxies each, appointing proxies which were duly lodged with the Company. The proxies appointed under one set voted for Dr. Rajaram Jaipuria and his nominees. Proxies appointed by the same members under another set voted for Shri Mahendra Swarup and his nominees. The plaintiff raised objections to the proxies and submitted a letter to the Chairman of the meeting in this regard. The objection was that the instrument of proxies by virtue of which the proxies voted in favour of Dr. Rajaram Jaipuria and his nominees were from all over India but had been signed and dt. 13th Mar. 1986. The plaintiff raised objections to the proxies and submitted a letter to the Chairman of the meeting in this regard. The objection was that the instrument of proxies by virtue of which the proxies voted in favour of Dr. Rajaram Jaipuria and his nominees were from all over India but had been signed and dt. 13th Mar. 1986. In other words this dating was not done at the time of the execution of the proxies by the members but was done at the time of submission of proxies to the Company with the object of making these proxies the last proxies of the members and this act amounted to tampering with the original instruments of proxies with the result that the said proxies were liable to be rejected by the Chairman and other scrutinizing officers. It was contended that in case there was more than one proxy by the same member then the matter be investigated to find out which was the last proxy executed by him. The plaintiff by another letter dt. 2nd Apr. 1986 invited the attention of the Chairman that the investigation in terms of Art. 91 of the Articles of Association may be made in this behalf. The Chairman declared the result on Apr. 4, 1986 after taking into account the votes by proxies objected to by the plaintiff. Being aggrieved he filed a suit on Apr. 5, 1986 seeking a decree for declaration that the instrument of proxies executed last shall prevail over those executed earlier regardless of the date mentioned in the instrument of the proxy; a decree for mandatory injunction commanding the defendants to make an enquiry/investigation into the execution/ revocation of the various instruments of proxies and that the results announced of the Poll at 16th Annual General Meeting were invalid and void besides another relief of an injunction restraining the persons declared as Directors of the Company from acting as Directors of the Company. ( 3 ) THE suit came up for admission before a learned single Judge of this Court on Apr. 5, 1986. One of the ex parte orders passed was a direction to the defendants to deposit the proxies in Court on Apr. 7, 1986. The defendants were served in the forenoon of Apr. 7, 1986 and put in appearance in Court. The proxies were not deposited in Court on Apr. 5, 1986. One of the ex parte orders passed was a direction to the defendants to deposit the proxies in Court on Apr. 7, 1986. The defendants were served in the forenoon of Apr. 7, 1986 and put in appearance in Court. The proxies were not deposited in Court on Apr. 7,1986 when the Court directed that the order of the deposit of proxies be complied with by Apr. 9, 1986 and after the proxies are deposited, the same be kept in sealed cover. The defendants moved an application dt. Apr. 9, 1986 under S. 151 of the Civil P. C. being I. A. No. 2351 of 1986, informing the Court the circumstances under which the order of the Court for deposit of the proxies could not be complied with. It was pointed out therein that the Court of Sub-Civil Judge, Ghaziabad in a suit filed by one Shri Mahabir Pershad Dalmia against the Chairman of the Annual ^general Meeting has by an order directed I that the proxies lying with defendant No, 2 ^company should be seized and deposited in the said Court and had appointed a Commissioner to serve the order as well as to seize the proxies, who had served the orders and had seized the proxies. ( 4 ) THE issues in the suit were framed on 19th Aug. 1986. Issue No. 10 is whether the proxies in favour of Shri Rajaram Jaipuria and his nominees dt. Mar. 13, 1986 had been executed by the shareholders concerned on the same date, i. e. Mar. 13, 1986, if no (not?) whether the said proxies were invalid? This issue also covered the question whether the proxies bearing the later date would not prevail over a proxy bearing an earlier date. Issue No. 11 is whether the shareholders who had given proxs in favour of Dr. Rajaram Jaipuria and his nominees had also given proxies in favour of Shri Mahinder Swarup and his nominees, and if so whether the proxies given in favour of Dr. Rajaram Jaipuria and his nominees would stand revoked on that ground? Issue No. 12 is whether some of the shareholders who had given proxies in favour of Dr. Rajaram Jaipuria and his nominees had revoked those proxies, if so when and to what effect? ( 5 ) THE suit was being made ready for trial. Rajaram Jaipuria and his nominees would stand revoked on that ground? Issue No. 12 is whether some of the shareholders who had given proxies in favour of Dr. Rajaram Jaipuria and his nominees had revoked those proxies, if so when and to what effect? ( 5 ) THE suit was being made ready for trial. The plaintiff moved an application under O. XIII, R. 10 of the Civil P. C. praying to the Court to send for the records of the suit pending in the Court of Sub-Civil Judge, Ghaziabad being Suit No. 329 of 1986 and inspect and/or permit the plaintiff to inspect the same and also to send for the proxies deposited in the court of Sub-Civil Judge, Ghaziabad in Suit No. 329 of 1986 and inspect and/or permit the plaintiff to inspect the same. G. C. Jain J. by the order dt. Sept. 26, 1986 observed that it could not be disputed that the proxies alleged to have been filed in that case are relevant documents for the purpose of the disposal of the case and he, therefore, directed that the file of Suit No. 329 of 1986 pending in the Court of Shri Kartar Singh, entitled m. P. Dalmia v. Raghuraj be summoned in accordance with the rules. The clerk of that Court brought the summoned file of the suit together with the documents in two sealed trunks. The sealed envelope containing the judicial file was returned but the clerk was directed to deliver the documents contained in the sealed trunks containing the proxies to the office of this Court. The trunks containing the documents were deposited. Directions as to preparation of inventory etc. were given. ( 6 ) THE plaintiff then moved an application under S. 151 of the Civil P. C. being I. A. No. 6171/86, for obtaining the certified copies of the documents. The plaintiff submitted that the proxies and other documents including revocation letters, which are lying in two trunks, are necessary and relevant for the purpose of disposing of the suit and that the plaintiff requires certified copies of all these documents in order to refer to them and to demonstrate that the election of defendants 3 to 6 is illegal and invalid. The learned single Judge directed that the matter be listed before the learned Registrar on Nov. 14, 1986 for orders. The Registrar by the order dt. Nov. The learned single Judge directed that the matter be listed before the learned Registrar on Nov. 14, 1986 for orders. The Registrar by the order dt. Nov. 14, 1986 directed that the certified copies be supplied as per rules within one week from that date and the application was disposed of accordingly. ( 7 ) THE defendants challenged the validity of the order of the Registrar dt. Nov. 14,1986 by way of an appeal under R. 4 of Chap; II of the Delhi High Court (Original Side) Rules, 1967. The contention of the counsel was that a copy of only a judicial record could be granted in the manner prescribed by R. 1 of Chap. 5-B of the Rules and Orders of the Punjab High Court, Vol. V, as applicable to Delhi, to any person who is legally entitled to receive it. The submission was that the term judicial record or record used in those rules meant the record of the suit only and did not include in its ambit the record of the suit pending in Ghaziabad Court which had been summoned by this Court and therefore copies of the documents, which were part of the case pending in Ghaziabad Court, could not be given. G. C. Jain J. in the order under appeal observed that there may be merit in the contention raised by learned counsel for the appellant, however, he did not like to go into details but expressed the opinion that the order made by the learned Registrar does not affect the right of the appellant and that moreover, to prove his case, the plaintiff was required to produce the copies of the instant proxies. He did not find any justification for interference in the order of the Registrar and dismissed the appeal. ( 8 ) SHRI C. M. Oberoi, the learned counsel for the appellant submits that so far as the record of Ghaziabad Court is concerned, the plaintiff is a stranger to the suit in Ghaziabad Court and as a stranger he cannot obtain the copies of a judicial record during the pendency of the case and has a very limited right to obtain copies of the judicial record after disposal. Undisputedly the said proxies did not form part of the record of the suit pending in this Court. Reliance is placed on Punjab High Court Rules and Orders, Vol. Undisputedly the said proxies did not form part of the record of the suit pending in this Court. Reliance is placed on Punjab High Court Rules and Orders, Vol. V, Chapter 5-B, which are applicable to this Court. Under it a party can obtain a copy of the judicial record but it is urged that he has no right to obtain copies of documents that form part of the record of the file of Civil Judge, Ghaziabad. Rule 1, Chapter 5-B does not permit, urges the counsel, the issue of copies of the record of Ghaziabad Court by this Court. Another submission is that in the scheme of Companies Act, 1956 there is no provision for any member or shareholder to obtain copies of proxies lodged with the Company or the specimen signatures of the shareholders maintained with the Company. There is only a very limited right of inspection granted to a shareholder in connection with the proxies lodged with the Company after issue of three days notice to it and such a right does not entitle, says the counsel, any shareholder to obtain copies of the proxies or the signatures or the writings thereon. ( 9 ) MR. P. P. Malhotra, the learned counsel for the contesting respondent No. 1 has raised a preliminary objection to the maintainability of the appeal. Under Delhi High Court (Original Side) Rules, 1967, Chap. II, R. 4 an appeal is provided to a Judge in Chamber, from an order passed by Registrar. It is urged that the order passed by the learned single Judge was passed while exercising the appellate powers and by virtue of sub-sec. (2) of S. 104 read with 0. 43, R. 1 of the Civil P. C. no appeal can lie from any order in appeal under the said section. Assuming that the provisions of S. 104 of the Civil P. C. are inapplicable and the appeal is under S. 10 of the Delhi High Court Act, 1966, then the submission is that the order under appeal is not a judgment as the order does not determine any right or liability of the appellant. The order of the learned single Judge is also supported on merits. ( 10 ) SECTION 10 of the Delhi High Court Act, 1966 provides that where a single Judge of the High Court of Delhi exercises ordinary civil jurisdiction conferred by sub-sec. The order of the learned single Judge is also supported on merits. ( 10 ) SECTION 10 of the Delhi High Court Act, 1966 provides that where a single Judge of the High Court of Delhi exercises ordinary civil jurisdiction conferred by sub-sec. (2) of S. 5 on that Court, an appeal shall lie from the judgment of the single Judge to a Division Bench of that High Court. Under S. 5 jurisdiction is vested in the High Court of Delhi in respect of the territories for the time being included in the Union Territory of Delhi for all such original, appellate and other jurisdictions, as under the law in force immediately before the appointed day, is exercisable in respect of the said territories by the High Court of Punjab. Under sub-sec. (2), notwithstanding anything contained in any law for the time being in force, the High Court of Delhi is also vested in respect of the Said territories ordinary original civil jurisdiction in every suit of the value of which exceeds Rs. one lakh. The question of construction of S. 10 (1) read with S. 5 (2) of the Delhi High Court Act was decided by a Full Bench of this Court in University of Delhi v. Hafiz Md. Said, AIR 1972 Delhi 102. The question arose as to what interpretation is to be given to the expression judgment in S. 10 (1) of the said Act. One view advanced was that the word judgment should be given the same meaning which has been given by various High Courts while interpreting their Letters Patent. The Full Bench did not agree with this view because of various reasons given in the judgment. One is that the construction of the word judgment in the Letters Patent by the various High Courts did not yield any consistent or uniform meaning of it. The Full Bench also held that : keeping the historical perspective and the long years for which appeals on the original side were only maintainable either against a decree or against orders enumerated under O. 43, R. 1, the legislature could not have intended that those orders which were not appealable when passed by the subordinate Judge prior to Nov. 1, 1966 when the jurisdiction vested in the High Court of Delhi, should suddenly become appealable. 1, 1966 when the jurisdiction vested in the High Court of Delhi, should suddenly become appealable. In para 44 it is held : "our conclusion, therefore, is that an appeal under S. 10 ( 1) of the Act against the order of a single Judge in the exercise of ordinary original civil jurisdiction to a Division Bench lies only in those cases where an order is a judgment as defined in Code. In other words apart from the orders which have the force of the decree, appeals will, therefore, lie only against those orders passed by the single Judge which are mentioned in S. 104 read with O. 43, R. 1 of the Code and no appeal will lie against other orders which are outside these two provisions. " ( 11 ) THE Supreme Court in "jugal Kishore Paliwal v. S. Sat Jit Singh", (1984) 1 SCC 358 have expressed that this decision is no longer good law in view of the decision in the case of "shah Babulal Khimji v. Tayaben", (1981) 4 SCC 8 : AIR 1981 SC 1786 . Paragraph 115 at page 1816 of the above referred decision was extracted : "thus in other words every interlocutory order cannot be regarded as a judgment but only those orders would be judgments which decide matters of moment or affect vital and valuable rights of the parties and which work serious injustice to the party concerned. Similarly, orders passed by the trial Judge deciding question of admissibility or relevancy of a document also cannot be treated as judgments because the grievance on this score can be corrected by the appellate court in appeal against the final judgment. " ( 12 ) IN Shah Babu Lal s case ( AIR 1981 SC 1786 ) (supra) it was expressed that a Judgment can be of three kinds, a final judgment, a preliminary judgment and intermediaryorin. terlocutoryjudgment. The word judgment has undoubtedly a concept of finality in a broader and not a narrower sense. In respect of intermediary or interlocutory judgment it was expressed : "most of the interlocutory orders which contain the quality of finality are clearly specified in clauses (a) to (w) of O. 43, R. 1 and have already been held by us to be judgments within the meaning of the Letters Patent and, therefore, appealable. There may also be interlocutory orders which are not covered by 0. There may also be interlocutory orders which are not covered by 0. 43, R. 1 but which also possess the characteristics and trappings of finality in that, the orders may adversely affect a valuable right of the party or decide an important aspect of the trial in an ancillary proceeding. Before such an order can be a judgment the adverse effect on the party concerned must be direct and immediate rather than indirect or remote. For instance, where the trial Judge in a suit under 0. 37 of the Civil P. C. refuses the defendant leave to defend the suit, the order directly affects the defendant because he loses a valuable right to defend the suit and his remedy is confined only to contest the plaintiffs case on his own evidence without being given a chance to rebut that evidence. As such an order vitally affects a valuable right of the defendant it will undoubtedly be treated as a judgment within the meaning of the Letters Patent so as to be appealable to a larger Bench. Take the converse case in a similar suit where the trial Judge allows the defendant to defend the suit in which case although the plaintiff is adversely affected but the damage or prejudice caused to him is not direct or immediate but of a minimal nature and rather too remote because the plaintiff still possesses his full right to show that the defence is false and succeeds in the suit. Thus, such an order passed by the trial Judge would not amount to a judgment within the meaning of Cl. 15 of the Letters Patent but will be purely an interlocutory order. Similarly, suppose the trial Judge passes an order setting aside an ex parte decree against the defendant, which is not appealable under any of the clauses of O. 43, R. 1 though an order rejecting an application to set aside the decree passed ex parte falls within O. 43, R. 1, cl. (d) and is appealable, the serious question that arises is whether or not the order first mentioned is a judgment within the meaning of Letters Patent. (d) and is appealable, the serious question that arises is whether or not the order first mentioned is a judgment within the meaning of Letters Patent. The fact, however, remains that the order setting aside the ex parte decree puts the defendant to a great advantage and works serious injustice to the plaintiff because as a consequence of the order, the plaintiff has now to contest the suit and is deprived of the fruits of the decree passed in his favour. In these circumstances, therefore, the order passed by the trial Judge setting aside the ex parte decree vitally affects the valuable rights of the plaintiff and hence amounts to an interlocutory judgment and is therefore, appealable to a larger Bench. " ( 13 ) WE may recall that the relief claimed in the suit is on the allegations that the instrument of proxies in favour of proxies who voted for Dr. Rajaram Jaipuria and his nominee, which were counted, were illegal and invalid and instruments of proxies by virtue of which votes were cast in favour of Shri Mahindra Swarup and his nominee, which were disallowed, were valid. The proxies are thus material and relevant documents for the purpose of the disposal of the suit. The learned single Judge in the order under appeal had upheld the order made by the Registrar for supply of certified copies as per rules and expressed that it does not affect the right of the appellant. In our view he is perfectly justified in saying so. The learned single Judge had by an ex parte order made on April. 5, 1986 directed the defendants to deposit the proxies in Court on 7th Aprl. 1986 and on the next date, i. e. April. 7, 1986 directed in the presence of counsel for the parties that the order of deposit of proxies be complied with by Aprl. 9, 1986. The appellant moved an application dt. Aprl. 9, 1986 under S. 151 of the Civil P. C. being LA. 1986 and on the next date, i. e. April. 7, 1986 directed in the presence of counsel for the parties that the order of deposit of proxies be complied with by Aprl. 9, 1986. The appellant moved an application dt. Aprl. 9, 1986 under S. 151 of the Civil P. C. being LA. No. 2351/86, in which it was stated that the registered office of the Company is at Ghaziabad where the proxies and records have been kept and where the annual general meeting had taken place and that the Secretary of defendant No. 2 Company Shri Anil Jhala had gone to Ghaziabad that morning with a view to collect proxies in order to have the same deposited in this Court and sealed (Emphasis supplied ). The inability to file the proxies was then expressed as the same had been seized by a Commissioner appointed by the Court of Sub-Civil Judge, Ghaziabad. The appellant had thus expressed his willingness to deposit the proxies in this Court. In the grounds of appeal in this Court the stand of the appellant is that the proxies form part of the record of the civil suit of Ghaziabad Court, and similarly it would have formed part of record of this Court, if filed. It is not disputed that if the appellant had deposited the proxies in this Court, the plaintiff would be entitled to obtain certified copies. We see no prejudice to the appellant if the copies are obtained out of the summoned record because it was filed in Ghaziabad Court and not in this Court. ( 14 ) SECTION 176 of the Companies Act, 1956 provides that any member of the Company entitled to attend and vote at a meeting at the Company shall be entitled to appoint another person (whether a member or not) as his proxy to attend and vote instead of himself. Sub-section (7) of S. 176 provides that every member entitled to vote at a meeting of the company or on any resolution to be moved thereat shall be entitled during the period beginning twenty-four hours before the time fixed for the commencement of the meeting and ending with the conclusion of the meeting, to inspect the proxies lodged at any time during the business hours of the Company, provided not less than three days notice in writing of the intention so to inspect is given to the Company. The statutory provisions make it clear that the proxies deposited with a Company are open to inspection and there is no secrecy either in the signatures or in the other particulars contained in the instrument of proxy. A proxy can at any time be revoked. As a rule a proxy is not revoked unless written notice of the revocation has been received by the Company. The case of the plaintiff is that the proxies executed in favour of Dr. Rajaram Jaipuria and his nominees had been revoked by execution of later proxies by the same person. The proxies or their certified copies is a vital document for the disposal of the suit. The issue of certified copies can cause no prejudice except that the appellants may want to withhold the documentary evidence from the Court at the trial. The direction of the issue of certified copies by the Registrar and upheld by the learned single Judge under orders in appeal makes no decision affecting the merits of the suit. It does not affect any vital or valuable right of the appellant except the procedural irregularity, if any, of issuing certified copies of documents contained in the summoned record of the suit in which the plaintiff is not a party. ( 15 ) THE learned single Judge had exercised the power and discretion under O. XIII, R. 10 of the Civil P. C. for summoning the records from the Ghaziabad Court. The plaintiff had shown in the application supported by an affidavit for calling of the record that those documents are material and he had also shown that he could not obtain a duly authenticated copy of the record or such portion thereof and that the production of the original record is necessary for the purposes of justice. The appellant has no grievance against that order and it has become final. The production of the record has been found necessary for the purposes of justice. The plaintiff could not obtain duly authenticated copy of the record from Ghaziabad Court. At the trial the proxies will be scrutinised and referred to in oral evidence because of the issues framed in the suit. The proxies may be admitted into evidence and their certified copies will have to form part of the record of the suit in this Court. The ordinary copies prepared at the trial by the witness may be objectionable. At the trial the proxies will be scrutinised and referred to in oral evidence because of the issues framed in the suit. The proxies may be admitted into evidence and their certified copies will have to form part of the record of the suit in this Court. The ordinary copies prepared at the trial by the witness may be objectionable. The learned single Judge has done substantial justice between the parties. His order does not decide any aspect of the trial or even an ancillary proceeding in the suit. The issue of certified copies does not adversely affect any right of the Company who is appellant before us. The Company should on the contrary assist in the ascertaining and determining by the Court whether the election to the Board of Directors is legal and valid or not. We cannot comprehend even remote prejudice to the Company by the impugned order. Applying the ratio of the Shah Babulal s case ( AIR 1981 SC 1786 ) (supra) that every order cannot be regarded as a judgment but only those orders would be judgments which decide matters of moment or affect vital and valuable rights of the parties and which work serious injustice to the party concerned. We find that the order under appeal cannot be treated as a judgment within the meaning of S. 10 (1) of the Delhi High Court Act. ( 16 ) WE leave the other question open for decision in an appropriate case. The appeal is not maintainable and is hereby dismissed with no order as to cost.