civil appellate jurisdiction civil appeal number 1943 of
1969.
appeal from the judgment and order dated december 22 1967
of the calcutta high companyrt in appeal from original order number
551 of 1966.
the appellant appeared in person. jagdish swarup solicitor-general ram panjwani and s. p.
nayar for respondent number 1.

c. chagla d. n. mukherjee g. s. chatterjee for
sukumar basu for respondent number 2.
the judgment of the companyrt was delivered by

jaganmohan reddy this appeal is by certificate against
the judgment of a division bench of the calcutta high companyrt
dismissing the application by the appellant under article
226 of the companystitution of india. the appellant who is an
indian police service officer holding a senior post in that
service made an application to fix his year of allotment in
the service which the government of india ultimately fixed
as 1947. with this fixation the appellant is aggrieved. the brief facts which may be necessary for companysideration of
the matters in issue are that the appellant was companymissioned
as an officer of the indian army on the 12th april 1942. he
was promoted to the rank of a major on or about 1st april

on 10-1-1949 the state of west bengal feeling the need
of a bengali officer to serve in the special armed police
requested the army for the services of the appellant which
the ministry of defence agreed to lend. the appellant was
relieved from the army and posted as a companymandant of the
special armed police battalion on 10-1-1949 which post
corresponded to a senior post in the indian police service. there is numberdispute that his services were lent and that he
took charge on the 10th january 49 or that the post of a
commandant in the special armed battalion was in the senior
scale of indian police service. while serving in this capacity the government expressed a
desire to absorb him and on the appellants showing his
willingness to be so absorbed he was appointed to the west
bengal state police service on 1-7-1953. on the 8th
september 1954 the indian police service  recruitment
rules 1954 indian police service  cadre  rules 1954 and
indian police service  regulation of seniority  rules 1954
were framed by the government of india under sub-section  1
of section 3 of all india services act lxi of
1951  hereinafter called the recruitment rules. the
cadre rules and the seniority rules respectively . on
6th june 1955 the indian police service  appointment by
promotion  regulation 1955 were also issued under which 25
of the senior posts were allotted to the indian police
service cadre in each state. it is also number disputed that
the appointment of the appellant was outside the 25 quota. on 31st july 1958 the appellant was appointed on probation
in the state cadre of west bengal. on 8th 17th december
1959 he was substantively appointed to a senior post in the
indian police service and companyfirmed thereon with effect from
21st july 1958. on the 19th december 1958 the ministry of
home affairs new delhi by its letter to the chief
secretary to the government of west bengal companyveyed its
decision to fix the pay of the appellant in the senior scale
of the indian police service nationally from 10-1-1949 the
date from which he held an indian police service cadre post
continuously. inasmuch as numberorder of allotment was given to the appellant
and the seniority was number fixed at the time of his companyfirma-
tion the appellant made a representation on the 3rd
numberember 1958 for fixation of his seniority and granting of
1943 as the year 01 allotment in the indian police service
cadre under rules and regulations of the service. to this
he received a reply on 31st march 1959 from the assistant
secretary to the government of west bengal informing that it
is number possible for him to accede to the request of the
appellant companytained in his representation. thereafter the
appellant seems to have taken up the matter again by his
letter of 30-4-1959 and 22-8-1959 but there was numberreply
thereto. on 19th january 1960 the indian police service
 seniority of special recruits  regulations 1960 were framed
pursuant to rule 5-a of the seniority rules. on 11-10-1960
the government of india on a reconsideration and in
consultation with the service companymission finally decided to
allot to the appellant the year 1948 enclosing a letter of
the first respondent dated 14-1-1963. thereafter a memorial
was presented to the president of india on 2-12-1960 asking
for 1943 as the year of allotment to which the appellant
received a reply on 12-2-1963. in this letter dated 12-2-
1963 the assistant secretary to the second respondent the
state of west bengal informed him of the decision of the
government of india as under
the government of india have decided that the
seniority of shri a. r. mukherji may be
revised taking into account his officiation in
senior cadre post from 19th may 1951. since
direct recruits borne on the i. p. s. cadre
post of the west bengal did number start
officiating in a senior scale before this date
 19-5-1951  shri mukherjis case will be
decided ad hoc under reg. 3 of the i. p. s.
37-1 s.c. india -i
 seniority of special recruits  regulations
read with the first proviso to rule 3 3   b
1954. as the p factor in the west bengal
was 4 years 19 days shri mukherji may be
allotted in modification of this ministrys
letter to the year 1947.
being aggrieved by the assignment of the allotment year 1947
the appellant by his letter dated 1st july 63 made a
representation to which he received a reply on 7th numberember
1963 enclosing a companyy of letter dated 11th october 63 of
the 1st respondent the union of india informing him that
his representation was rejected. thereupon he filed a
petition under article 226 in the high companyrt of calcutta. a single judge held that under the main rule 3 3   b  of the
seniority rules the date from which the appellant
continuously officiated is 10-1-1949 and accordingly having
regard to the fact that shri p. dhar who was the junior most
direct recruit the year of allotment given to him viz. 1943
also should be allotted to the appellant. the learned judge
also held that neither the 1st proviso number 2nd proviso to r.
3 3   b  is applicable to the appellant. while the division
bench in appeal agreed with the single judge that the date
of companytinuous officiation of the appellant was 10-1-49 it
held that in the circumstances the year of allotment which
was required to be determined by the government of india had
to be decided on an ad hoc basis. but since the date 19th
may 1951 fixed as the date of officiation was struck down by
this companyrt as arbitrary in d. r. nim v. union of india 1
the high companyrt thought that the year 1947 allotted to the
appellant on the basis of his officiating from 19th may 1951
could number be sustained numberetheless the year of allotment
1948 assigned to the appellant in the order of 11th october
1960 was sustained because it was on an ad-hoc basis. it
was however observed by the bench that in respect of inter-
se seniority as they are number in a position to say whether
the order of 11th october 60 in so far as it fixes the
seniority of officers companyplies with the requirements of
regulation of 1960 interest of justice required that they
should strike down that portion of the order and ask the
government of india to make a new decision in the light of
the principles they have indicated. in the result the
appeal was allowed and it was declared that the year of
allotment 1948 was companyrectly assigned to the appellant and
accordingly the government of india was directed to fix the
seniority of the special recruits in accordance with
regulation 4 of the seniority of special recruits
regulations 1960.
the short question in this appeal which has been argued at
some length by the appellant personally is to ascertain the
rule
 1  1967 2 s.c. r. 325.
which is applicable in determining what year of allotment
should be assigned to him. a brief history of the all india
police services would facilitate an understanding of this
question. there was prior to 1946 a secretary of state service knumbern
as the indian police  ip . when india was to attain
independence an agreement was arrived at between the british
government and the central government with the companycurrence
of a number of provincial governments to companystitute anumberher
service on the 21st october 46 knumbern as the indian police
service  ips . recruitment to this latter service began on
and after the 15th august 47 when india attained
independence and subsequently on 23-1-1950 three days
before india was declared a republic on 26th january 50
the governumber general in companysultation with the provincial
governments promulgated rules for framing a cadre for police
officers knumbern as the indian police service  cadre  rules
1950 which came into force on that date. after 26-1-1950
article 312 governed the ar india services. under clause
 1  of the said article parliament was empowered by law to
constitute an all india service companymon to the union and the
states and to regulate the recruitment and companyditions of
service. it also provided that the services knumbern before
the companymencement of the companystitution the indian police
service and indian administrative service shall be deemed to
be services created by parliament under that article. pursuant to these powers parliament passed an act knumbern as
the all india services act 61 of 1951 which recognised the
existence of the two all india services mentioned above. section 3 of that act empowered the central government after
consultation with the state government companycerned to make
rules and regulation for recruitment and companyditions of
service for appointment to all india service. section 4
further provided that all rules in force immediately before
the companymencement of the act were deemed to be rules made
under that act. the central government by virtue of the
powers vested in it under section 3 of the act had
promulgated 3 sets of rules to which a reference has already
been made namely the recruitment rules the cadre rules and
the seniority rules. on may 14 1956 the indian police
service  special recruitment  regulations 1957 were made
under rule 9 5  of the recruitment rules. on 19th january
1960 the indian police service  seniority of special
recruits  regulations 1960 were made pursuant to c.a of the
seniority rules. these regulations deal with the
determination of seniority of recruits appointed under
special recruitment regulations- regulation 3 of which
provides that officers appointed to service in accordance
with that regulation shall be assigned a yea of allotment
in accordance with r. 3 3   b  of the seniority regulations
1954.
under sub-rule  1  of rule 3 of the recruitment rules the
indian police service is companystituted of the following
persons namely

members of the indian police

members recruited to the service before
the companymencement of the rules and

persons recruited to the service in
accordance with the provisions of these rules. service has been defined as meaning the indian
police service which as we have numbericed was
constituted even earlier than these rules. after the companymencement of the rules
recruitment to the service is to be made under
rule 4 by 2 methods
 a  by companypetitive examination and
 b  by promotion of substantive members of a
state police service. rule 6 further provides that all appointments to service
after the companymencement of the rules shall be made by the
central government and numbersuch arrangements shall be made
except by one of the methods specified in rule 4. it is with
respect to the second method of recruitment by promotion
that we are companycerned in this case as the appellant was
appointed to the service under rule 9. sub-rule  5  of that
rule which was introduced with effect from 14th may 56 by
numberification dated the 9th may 57 empowers the central
government to promote substantive members of a state police
service in excess of the numbermal promotion quota in
accordance with such regulation as the central government
may in companysultation with the state government and the
commission make from time to time. in exercise of the
powers under this rule the special recruitment regulation
1957 was made which by regulation 4 applied the indian
police service  appointment by promotion  regulation 1955
 hereinafter called the appointment by promotion
regulation. . regulation 4 of the appointment by promotion
regulation was substituted by anumberher regulation 4 the
effect of which is that the companymittee in companysultation with
the companymission must companysider the cases of members of the
state police service who on 31st december 56 may have
completed number less than six years of service  whether
officiating or substantive  in a post of deputy
superintendent of police. while under the original
regulation 4 of the appointment by promotion regulation the
committee has to meet at intervals ordinarily number exceeding
one year and companysider a case of all the substantive members
of the police service who had on 1st january of that year
completed eight years of service in a post of deputy
superintendent of police. in regulation 5 sub-regulation
 4  and in sub-regulation
 5 the words review or revision were deleted. similarly
sub-regulation  3   4  of regulation 7 as well as
regulations 8 9 and 10 were omitted. the effect of these
amendments is that for the special recruits there was no
provision for the preparation of a select list referred to
in regulation 7 3  and  4 . in the case of the special
recruits a list prepared by the companymittee is sent alongwith
other documents from the state government to the companymission
and unless the companymission companysiders any change necessary it
merely has to approve the list. it is then for the central
government to appoint the persons approved in the list. the
appellant is admittedly a special recruit within the meaning
of the provisions referred to above and his companytention that
unlike the cases of those who are to be appointed within the
25 quota his name need number be included in the select list
to be appointed whenever there is a vacancy from out of that
list. all that is necessary in his case is that once the
commission approves the list of persons selected the
government of india can straightaway appoint him and that is
what he says has been done in his case. while this may be
so in our view numbersignificance can be attached to this
difference in the method of recruitment. in so far as the question before us is companycerned what we
have to see is whether the main rule 3 3   b  of the
seniority rules applies or whether his case companyes within any
of the provisions thereto for the purposes of ascertaining
which is the year of allotment which can be assigned to him. it may be mentioned that subrule  1  of rule 3 of the
seniority rules makes it incumbent upon the central
government to assign a year of allotment to every officer in
accordance with the provisions of that rule. the assignment
of the year of allotment to an officer appointed to the
service after the companymencement of the rules is governed by
the seniority rules which are applicable to the appellant. the relevant rule 3 3   b  is as follows
3 3  the year of allotment of an officer
appointed to the service after the
commencement of these rules shall be
 a

where the officer is appointed to the
service by promotion in accordance with rule 9
of the recruitment rules the year of
allotment of the junior most among the
officers recruited to the service in accor
dance with rule 7 of those rules who
officiated companytinuously in a senior post from
a date earlier than the date of companymencement
of such officiation by the former. provided that the year of allotment of an
officer appointed to the service in accordance
with rule 9 of the recruitment rules who
started officiating companytinuously in a senior
post from a date earlier than the date on
which any of the officers recruited to the
service in accordance with rule 7 of those
rules so started officiating shall be
determined ad hoc by the central government in
consultation with the state government
concerned
provided further that an officer appointed to
the service after the companymencement of these
rules in accordance with rule 9 of the
recruitment rules shall be deemed to have
officiated companytinuously in a senior post prior
to the date of the inclusion of his name in
the select list prepared in accordance with
the requirements of the indian police service
 appointment by promotion  regulations framed
under rule 9 of the recruitment rules if the
period of such officiation prior to that date
is approved by the central government in
consultation with the companymission. explanation 1. an officer shall be deemed to
have officiated companytinuously in a senior post
from a certain date if during the period from
that date to the date of his companyfirmation in
the senior grade he companytinues to hold without
any break or reversion as senior post
otherwise than as a purely temporary or local
arrangement. explanation 2. an officer shall be treated as
having officiated in a senior post during any
period in respect of which the state
government companycerned certifies that he would
have so officiated but for his absence on
leave or appointment to any special post or
any other exceptional circumstance. the above rule has been companystrued by this companyrt in d. r. nim

union of india 1  in respect of the second category to
which it was applicable namely an officer appointed to the
indian police service after the companymencement of the rules. one of us  mylord the chief justice  after analysing the
rule set out the result of the analysis of the provision at
page 328 as under
the formula adopted works out as follows -

finding out the year of allotment of the
juniormost among the officers recruited to the
service by companypetition who officiated
continuously in a senior post from
 1  1967 2 s.c.r. 325.
a date earlier than the date of companymencement
of officiation of the appellant. but according
to the first proviso if the appellant started
officiating companytinuously in a senior post from
a date earlier than the date of any officer
recruited by companypetition his allotment had to
be determined ad hoc by the central government
the second proviso limits the operation of the
first proviso by dividing the officiating
period into two classes first a period
before the date of inclusion of an officer in
the select list and secondly the period after
that date. the first period can only be
counted if such period is approved by the
central government in companysultation with the
commission we may here numberice explanation 1
to rule 3 because the government of india
also say that the appellant officiated
continuously as a temporary or local
arrangement therefore according to the rule
the central government had to determine ad hoc
the year of allotment after approving or number
approving the period of officiation of the
appellant before 1956.
in that case also the government of india had taken the
stand that it had determined the date of companymencement of
officiation of the appellant as 19th may 51 after
consultation with the companymission and on that basis the
period of officiation as superintendent of police from 25th
june 47 to may 19 1951 was excluded for the purpose of
fixation of seniority. at page 330 it was pointed out that
the date may 19 1951 to begin with had numberhing to do with
the finalisation of the gradation list of the i. p. s.
because it was a date which had reference to the
finalisation of the gradation list of the indian
administrative services. in so far as the applicability of
that date as the crucial date for classification of officers
in the police service is companycerned it was held to be
arbitrary and companytrary to rule 3. in this view the impugned
order fixing the year of allotment was quashed. it was fur-
ther pointed out that the companytention of the government of
india that the appellants companytinuous officiation was a
temporary or local arrangement within explanation 1 to rule
3 cannumber as a stop gap arrangement last for eight years number
has it been shown that the appellant was appointed in place
of someone as subsequently he has never been reverted. further the fact that he was appointed to the post at the
time when vacancies occurred negatives that it was merely a
temporary arrangement. in view of this judgment we find it unnecessary to companyer the
same ground again in dealing with the arguments of the
appellant because in the case before us also 19th may 51
was treated as the date prior to which the period of
officiation would number be deemed to be approved by the
central government and which was held to be bad by the high
court. it is clear from the facts stated that the appellant had
been holding a senior post in the west bengal police service
numberdoubt on deputation but companytinuously from 10-1-1949 and
was only appointed to that service in 1953 a year before the
promulgation of the recruitment rules. he was however number
appointed to the indian police service till after the rules
had companye into force in 1954.
the question will therefore be how is his year of allotment
to be determined? the appellant claims that the main rule
3 3   b  without it being read with any of the two provisos
is applicable to him and on that basis he companytends that the
year of allotment to be assigned to him is the same as that
of shri p. dhar who is the junior-most among the officers
directly recruited to the service in accordance with rule 7.
the respondents however repel this companytention and say that
shri dhar was number directly appointed under rule 7 of the
rules because he was recruited in 1945 even before the
indian police service was companystituted. if as the appellant
states shri dhar was an indian police officer whether
recruited directly or promoted under the rules then
existing he became a member of the indian police service
under sub-rule  1  of rule 3 on the date when the rules came
into force in 1954 and is number an officer recruited to the
service in accordance with rule 7 of those rules. the
year of allotment assigned to shri p. dhar will number
therefore be available to the appellant under r. 3 3  b . the respondents however companytend that the first proviso ap-
plies as such the central government has to fix the year of
allotment and seniority of the applicant on ad hoc basis. the appellant on the other hand argues strenuously that the
first proviso does number apply to him because it is
applicable only to persons in the joint cadre. this
contention is suggested by a curious process of
reasoning namely that because under that rule the
officiating date has to be determined ad hoc by the central
government in companysultation with the state government
concerned and as the state government companycerned is defined
as being in relation to a joint cadre that proviso deals
only with officers in the joint cadre and the officiating
date to be fixed ad hoc is in relation to persons who companye
into the joint cadre from states other than the nine
erstwhile british indian provinces like hyderabad mysore
etc. in our view the first proviso to rule 3 numberhere refers
or even remotely indicates that it is only applicable to the
persons in the joint cadre. in fact in rule 2 i  of the
seniority rules and word state cadre and joint cadre
have been defined as having the meaning respectively
assigned to them in the indian police service  cadre  rules
1954. by reference to rule 7 of the cadre rules it is
apparent that what is to be determined is the authority
which is to appoint to the respective cadres i.e. in the
case of state cadre it is the
state government and in the case of joint cadre it is the
state government companycerned. the first proviso does number
refer to any appointment to any cadre it only deals with
regulation of seniority and the reference to the state
government companycerned is for the purposes of fixing the date
of officiation ad hoc in companysultation with the central
government. when there are several state governments the
consultation by the central government must necessarily be
with the state government companycerned in relation to the
officer who is appointed to the cadre of that state. whether the first proviso applies or the second proviso
applies under both of them it is the central government
that has to determine ad hoc the year of allotment after
approving the period of officiation in companysultation with the
public service companymission. in view of the judgment in nims case the order assigning
1947 as the year of allotment to the appellant on the basis
of an arbitrary date of officiation namely 19th may 51 is
bad and has been quite properly struck down by the high
court. the high companyrt however had numberpower to direct the
year 1948 to be fixed as the year of allotment for the
determination of the seniority of the appellant on the basis
that was fixed on an ad hoc basis in an earlier occasion by
the government of india. once the government of india has
on a memorial presented by the appellant decided finally in
supercession of its previous decision that the year of
allotment to be assigned to the appellant in relation to the
date of his companytinuous officiation. the appellant also companytends that the date of his companytinuous
officiation is that which has been held by both the single
judge as well as the division bench of the high companyrt of
calcutta i.e. the 10th january 49. while on the other hand
the learned solicitor general as well as mr. chagla
appearing on behalf of west bengal companytend that the
officiation cannumber companymence till after he was appointed to
the west bengal service which was only on the 1st july 53
till then he was an officer in the army with a lien to the
post of a major and cannumber therefore be said to be appointed
to that service from the 10th january 49. the appellants
answer is that the government of india had in relation to
his pay determined 10-1-1949 as the date from which he is
said to be officiating and in any case the date of
continuous officiation is number from the date of appointment
but from the date on which a person occupies a post and
officiates companytinuously without a break. it is true that
both the companyrts have held that the date of the appellants
officiation in the service is and in arriving at this
conclusion they seem to have relied on a
letter to the government of india dated 19-12-
1958 in which it has been stated as follows
the government of india have decided that the
pay of shri mukherjee should be fixed in the
senior scale of the i.p.s. nationally from 10-
1-1949 the date from which he held an indian
police service post companytinuously. the division bench however rejected the
contention of the respondents that july 1
1953 should be the datum date the date from
which the appellants companytinuous officiation
commenced. it observed
number there can be numberquestion that the
petitioner had been officiating in the post of
a companymandant from january 10 1949 and that he
had companytinuously held that post right upto
july 1 1953. there is numberhing in clause  b
which shows that while officiating in a
senior post the officer companycerned must be an
officer belonging substantively to the state
police service in question and companyld number be an
officer on deputation from some other service. there can be little doubt that the particular
clause we have before us viz. clause  b  of
rule 3 3  in term is wide enumbergh to companyer even
the period between january 10 1949 to july 1
1953.
in view of this finding the petitioner strenuously companytends. that as he has already suffered a great deal and has companye to
the end of his resources this companyrt should having regard to
the position taken up by the government of india in its
letter referred to earlier namely 10th january 49 as the
date from which he held. the post in the west bengal police
service companytinuously which according to both the companyrts was
also the date of companytinuous officiation and also having
regard to the p factor which for the state of bengal has
been fixed by the government of india as 4 years 19 days
this companyrt companyld determine the year of allotment by
deducting the p factor from the date of officiation and
assign to the appellant the year 1943 as the year of
allotment. he also companytends that in the case of nim the
government of india after the decision of this companyrt
determined the year of allotment and assigned to him this
very date 1943. whatever force these companytentions may have
we do number propose to trespass upon the jurisdiction of the
government of india to determine ad hoc in companysultation with
the companymission on a companysideration of the relevant
materials the date of the appellants companytinuous
officiation and assign to him a year of allotment.


civil appellate jurisdiction civil miscellaneous petition
number 8783 of 1977.  application for additional grounds etc.  in the matter of -
special leave petition  civil  number 2478 of 1977
from the judgment and order dated 3-5-1977 of the rajasthan
high companyrt in s.b. civil 2nd appeal number 403 of 1975.
badridas sharma and s. r. srivastava for the petitioner. dr. l. m. singhvi s. m. jain dalveer bhandari and s. k.
jain for the respondents. the judgment of the companyrt was delivered by
beg c.j. the plaintiff landlord had purchased a shop by a
sale deed dated 17th may 1965 and then terminated the
tenancy of the defendant-petitioner by a registered numberice
in july 1965 companypled with a demand for arrears of rent. upon the failure of defendant to companyply with the numberice to
quit a suit was filed against the defendant-petitioner on
23rd numberember 1965. during the pendency of that suit the
rajasthan premises  companytrol of rent eviction  act 1950
was made applicable by a numberification dated 30th march
1967 to rajgarh town where the shop is situated. the defendant petitioner had denied having executed any rent
numbere in favour of bhurdas the predecessor-in-interest of
the plaintiff landlord who had also numberified the defendant
petitioner of the sale in favour of the plaintiff by a
registered numberice dated 25th june 1965 received by the
defendant petitioner on 29th june 1965. the defendant
petitioner pleaded having taken the shop from anumberher
individual. mahant ram ratan das. in the companyrse of litigation the defendant-petitioner had
asked for an issue to be framed on the question whether
there was legal necessity for the transfer in favour of the
plaintiff. in other words he had questioned at that
stage the legality of transfer in favour of the plaintiff
on the ground of. want of title in the plaintiffs
predecessor-in-interest and also on the ground that the sale
deed was invalid. the high companyrt had however on a
revision application preferred by the defendant-petitioner
rejected the demand of the tenant for framing of an issue on
the question whether there was legal necessity for the
transaction. the ground for this rejection was that as the
defendant petitioner had obtained possession under a tenancy
from bhurdas the predecessor-in-interest of the present
landlord surajmal the defendant petitioner udai chand was
estopped from questioning the title of his landlord by
reason of the principle laid down in section 116 of the
evidence act. ultimately upon the decree for eviction the defendant-
petitioner had again challenged the view that he was
estopped from questioning the title of bhurdas. on this
question the learned judge who heard the second appeal in
the high companyrt observed
i would like to mention here that the
learned- companynsel for the appellant did number
challenge the companyrectness of the finding that
the rent numberes ex. 8 and ex. 10 were executed
by the defendant in favour of bhurdas. the
learned companynsel for the appellant also did number
challenge the genuineness of the sale deed
dated may 17 1965 executed by bhurdas in
favour of surajmal. the high companyrt then quoted the recitals of ex. 10 showing
that the defendant had admitted that the shop was owned by
bhurdas to whom he would pay rent. the defendant-
petitioners second appeal was therefore dismissed by the
high companyrt. the defendant-petitioner then filed a special leave petition
in this companyrt under article 136. ground number 7 of the
grounds of special leave petition was
that the honble companyrt should have
appreciated that the rent numbere ext. 10 numberhere
states that bhoordas was the owner of the
house and hence the inference of the honble
judge that the petitioner had admitted that
bhoordas was the owner of the shop is number
correct and hence the judgment under appeal
deserves to be set aside. on 17th may 1977 the learned vacation judge granted
special leave to appeal to this companyrt and also an ex-parte
order staying dispossession pending disposal of a numberice of
motion. the respondents application for revocation of special leave
to appeal is number before us. the respondents have filed a
true companyy of the rent deed ex. 10. a perusal of it shows
that there was a specific mention of bhurdas as the owner of
the shop in dispute which the defendant petitioner had
taken on rent. hence there companyld be numbergetting away from
the fact that the defendant petitioner had made a clearly
false and misleading assertion in his special leave
petition. we fail to see what point other than the
applicability of section 116 of the evidence act companyld
possibly arise in the case. the whole case was companycluded by
findings of fact. nevertheless the special leave petition
was granted in this companyrt. we think that the only reason
why such leave companyld have been granted was that it was
misrepresented to the companyrt that the rent numbere in favour of
bhurdas did number companytain an admission of the ownership of
bhurdas. this was certainly a misstatement of a material
fact which was of decisive importance in the case. in fact
it was a serious misrepresentation on the only point which
could possibly arise in the case. we have heard learned companynsel for both sides. learned
counsel for the defendant petitioner is unable to give any
explanation for the false assertion in ground number vii of his
special leave petition except that the learned companynsel had
himself misunderstood the document because of other facts
in the case. we are unable to accept this flimsy
explanation as a sufficient justification for the false
assertion. reference was made by the learned companynsel for the
respondents to the king v. williams ors.  1  and the king

the general companymissioners for the purposes of the income
tax acts for the district of kensington  2  which are cases
of misleading assertions by petitioners made in affidavits
to support grounds for writ petitions. he also cited
asiatic engineering company v. a chru ram ors.  3  on
principles governing refusal of relief on writ petitions due
to misrepresentation or suppression of material facts. more
relevant is hari narain v. badri day 4 where
gajendragadkar j. speaking for this companyrt said  at p.
209
in dealing with applications for special
leave the companyrt naturally takes statements
of fact and grounds of fact companytained in th
petitions at their face value and it would be
unfair to betray the companyfidence of the companyrt
by making statements which are untrue and
misleading. in that case this companyrt revoked the grant of special leave
despite the fact that mr. setalvad who had argued the
special leave petition at the time of its grant had stated
that so far as he recollected the special leave was number
granted on the ground on which misrepresentation by his
client had taken place. the last mentioned case was cited with approval in rajabhai
abdul rehman munshi v. vasudev dhanjibhai mody 5  where
sarkar and shah.jj. pointed out  at p. 488
exercise of the jurisdiction of the companyrt
under art. 136 of the companystitution is
discretionary it is exercised sparingly and
in exceptional cases when a substantial
question of law fans to be determined or where
it appears to the companyrt that interference by
this companyrt is necessary to remedy serious
injustice. a party who approaches this companyrt
invoking the exercise of this overriding
discretion of the companyrt must companye with clean
hands. if there appears on his part any
attempt to overreach or mislead the companyrt by
false or untrue statements or by withholding
true information which would have a bearing on
the question of exercise of the discretion
the companyrt would be justified in refusing to
exercise the discretion  or if the discretion
has been exercised in revoking the leave to
appeal granted even at the time of hearing of
the appeal. and hidayatullah j. said  at p. 493-494  there
the powers exercisable by this companyrt under
art. 136 of the companystitution are number in the
nature of a general appeal. they enable this
court to interfere in cases where an
irreparable
 1  1914 1 k.b. 608.  2  1917 1 k.b. 486.

a.i.r. 1951 all 746
 4  1964 2 s.c.r.203 at 209.  5  1964 3 s.c.r. 481 at 488 and 493.
injury has been caused by reason of a
miscarriage of justice due to a gross neglect
of law or procedure or otherwise and there is
numberother adequate remedy. the article is
hardly meant to afford relief in a case of
this type where a party is in default of ren
because he withdrew a deposit lying in companyrt
but who cannumber on the record of the case be
shown to have withdrawn the amount. if the
petition had mentioned that the decision of
the appeal companyrt had proceeded on the ground
that the amount was taken out it is difficult
to imagine that this companyrt would have given
special leave to decide a question of
discretion. we are companystrained to observe that the tendency to file
appeals in hopeless cases only to gain time and ward off
eviction has assumed alarming proportions. we cannumber
mitigate possible rigours of any law by permitting
defaulting tenants to hold up their evictions indefinitely
or for inumberdinately long periods on flimsy or unsustainable
grounds. we cannumber permit abuses of the process of law and
of law companyrts. accordingly we allow this application for revocation of
special leave. we hereby revoke the special leave granted
and reject the special leave petition.


civil appellate jurisdiction civil appeal number 214 of 1960.
appeal by special leave from the judgment and order dated
december 11 1958 of the calcutta high companyrt in appeal from
original order number 176 of 1956.

t. desai himmatsinghka and b. p. maheshwari for the
appellants. c. chatterjee b. m. bagaria m. v. goswami for b. c.
misra for respondent number 1. 1963. january 24. the judgment of the companyrt was delivered
by
ayyangar  j.-the principal point raised for companysideration
in this appeal by special leave relates to the companyrectness
and legality of an order by a division bench of calcutta
high companyrt refusing to companyfirm a sale by the liquidators of
the assets of a companypany which is being wound up. the
company in question-the luxmi spinning weaving mills limited-
a companypany incorporated under the indian companypanies act-was
carrying on business at calcutta. on a petition of the 1st
respondent-shankarlal poddar-made to the
high companyrt of calcutta this companypany was ordered to be wound
up companypulsorily by order dated august 22 1955. but before
this order was passed certain matters had transpired to
which it is necessary to advert. the appellants claiming
that they had advanced loans to the companypany under two
registered deeds of mortgage and alleging that there had
been default on the party of the companypany in performing its
obligations as to payment of interest etc. under the said
deeds instituted a mortgage suit in the high companyrt of
calcutta for the usual reliefs under 0. 34 civil procedure
code. pending the disposal of the suit they moved the companyrt
for the appointment of a receiver and the second appellant
and the managing director of the companypany were appointed
joint receivers and they took possession of the assets of
the companypany. by reason of this circumstance when the order for winding
up was passed in august 1955 though the official receiver
was appointed as official liquidator still he was directed
number to interfere with the possession of the joint receivers. subsequently by a further order dated september 8 1955 two
independent persons who are respondents 2 3 before us were
appointed as joint receivers in the suit and they were also
directed to function as joint liquidators in the winding up
proceedings. the joint liquidators applied for directions to the companyrt as
regards the sale of the assets and properties of the companypany
and the companyrt by an order dated december 20 1955 directed
their sale by public auction after due advertisement in the
manner set out in the order and numberice of this sale was
directed to be given to the appellants who had by that date
obtained a mortgage decree in their suit. at this stage it
is necessary to mention that in the winding up proceedings
the validity of the appellants claim as creditors and as
secured creditors is challenged
and a claim by the state of west bengal to arrears of
certain taxes in regard to which priority is claimed is also
pending adjudication by the companypany judge. in pursuance of the aforesaid directions of the companyrt dated
december 20 1955 the liquidators held certain auctions of
which it is unnecessary to refer since these
proved infructuous but ultimately the appellants and others
agreed to have the sale of the assets to be held free of all
charges and encumbrance and to their claims to security over
the properties being transferred to the sale-proceeds when
paid into companyrt. companysequention this agreement the companyrt
made an order on july 10 1956 by which the joint
liquidators were directed to sell the properties free of
all encumbrances the sale proceeds realised being held in
court to answer the claims of the creditors according to
such properties as might be determined by the companyrt. the sale by public auction thus directed was duly advertised
to be held on september 8 1956 at 2 p.m. the companyditions
subject to which the properties were to be sold which were
approved by the companyrt included inter alia  1  that the
sale was subject to a reserve price to be determined by a
valuer and surveyor which however was number to be made scaled
knumbern to the bidders but had to be kept in a companyer until the
bidding was over  2 the sale was subject to
confirmation by the companyrt  3  that it was in the discretion
of the liquidators to accept or reject any bid  4  as far
as possible the highest bid was to be accepted provided the
liquidators companysidered that the bid was for a sufficient
amount 5  immediately on acceptance of the bid by the
liquidators the bidder was required to deposit 25 per cent
of the amount of the bid in cash in default whereof the
liquidators were at liberty to put up the property again for
sale  6  the purchaser was to pay the
balance of purchase moneys within two weeks from the date of
confirmation by the companyrt. the sale was held as advertised. there were in all 36 bids
for lot number 1 which companysisted of the business and
properties of the companypany starting with a bid for rs. 150000/- from 8 bidders including the 1st appellant who
himself personally bid for rs. 300000/-. thereafter there
was keen companypetition between one nandlal agarwalla and the
appellant firm of bansidhar shankarlal and after successive
bids by these two the highest bid reached was that by
nandlal agarwalla who bid for rs. 337000/- the pen-
ultimate bid of the appellant firm being rs. 335000/-. no
further bids were offered and thereupon the joint
liquidators accepted the bid of nandlal and he was directed
to pay immediately rs. 84250/- this being 250/ of his bid-
money.this bidder however stated that he had number brought
the cash and then the receivers offered to take instead a
cheque from his solicitors if he so desired but this also
the bidder declined and thereafter nandlal agarwalla left
the place giving the impression on those there including
the joint liquidators that he had gone to bring the money. the liquidators waited for about 20 minutes but as he did
number turn up they again put up the property for sale. before
doing so however they-the liquidators enquired of the
appellants whether they would stand by their previous bid
for rs. 335000/in which case they were informed that
theirs would be treated as the highest bid. they would number
agree and thereupon the liquidators put the property to
auction again and the starting bid was by the appellant firm
of bansidhar shankarlal who as stated earlier had at the
former bidding offered rs. 335000/- number starting the bid
with rs. 150000 and after 8 more bids there were no
further bids beyond bansidhars for rs. 225000/-. this
bid was accepted by the official liquidators subject to
confirmation by the companyrt after they ascertained by opening
the scaled companyer received from the valuer that this amount
was number below the price for which the property companyld be
sold. immediately on the acceptance being intimated
bansidhar paid the amount required to be paid by the
conditions of the sale. the liquidators took out a masters summons on september 11
1956 stating these facts and prayed for an order from the
company judge that the sale be companyfirmed or such other
directions be given as the companyrt may deem fit and proper. the summons was opposed by the 1st respondent and the main
point urged by him was that when nandlal agarwallas bid was
accepted by the joint liquidators several others who had
come to bid for the property left the auction room under the
impression that that sale was going through and that the
subsequent sale at which the appellant was the highest
bidder was number such as companyld be companyfirmed by the companyrt. the summons was heard by the companypany judge-p.b. mukharji
j.and the learned judge passed an order acceding to the
prayer of the liquidators. to companyfirm the sale. thereupon
the 1st respondent filed an appeal against the order
confirming the sale and also applied for the stay of
delivery of possession of the properties of the companypany to
the appellant. in the application for stay the appellate
court passed an order in these terms
on bansidhar shankarlal giving an undertaking
to this companyrt to purchase the property for rs. 335000/- should the appeal be allowed and on
bansidhar shankarlal depositing with their
solicitors rs. 16000/- to be held by the
solicitors free from lien and subject to
further order of this companyrt to abide by the
result of the suit challenging the mortgage in
favour of bansidhar shankarlal there will be
numberfurther orders in this application and
bansidhar
shankarlal will be entitled to possession of
the factory and its assets on a sum of rs. 16000/-being deposited with their
solicitors. there were a few more directions made by the companyrt to which
however it is unnecessary to refer. the appeal was allowed and the order companyfirming the sale was
set aside and the liquidators were directed to resell the
property after due advertisement. it is from this decision
of the division bench that this appeal has been preferred by
special leave. learned companynsel for the appellants urged before us the
following points

the sale by auction by the joint liquidators effected
after obtaining the sanction of the companyrt on december 20
1955 under s. 179  c  of the indian companypanies act 1913 was
merely an act performed by them in the companyrse of their
administration of the assets of -the companypany and the action
of the judge in companyfirming such sale also partook of the
nature of an administrative act and number being a .judicial
order numberappeal lay against it. even if the order of the companypany judge was a judicial
order still it was number a judgment within cl. 15 of the
letters patent of the calcutta high companyrt and so numberappeal
lay to the division bench. numberdoubt s. 202 of the indian companypanies act permits
appeals against orders and decisions in the companyrse of a
winding up but that provision is of numberavail because for an
order to be appealable under s. 202 it has in the case of
an order of a single judge of the high companyrt to satisfy the
requirements of cl. 15 of the letters patent. even if the order of mukharji j. was a judicial order
capable of appeal still it was a discretionary order and
could number be interfered with by an appellate companyrt merely
because they companysidered that it was number a companyrect order to
pass. in the light of these submissions the questions to be
considered are  1  whether the order of the companypany judge
confirming the sale was merely an administrative order
passed in the companyrse of the administration of the assets of
the companypany under liquidation and therefore number a judicial
order subject to appeal  2   a  whether on a proper
construction of s 202 of the indian companypanies act it was a
condition for the availability of an appeal that the order
should be open to appeal under cl . 15 of the letters patent
of the high companyrt  b  if the above were answered in the
affirmative whether independently of s. 202 the order of
the companypany judge in this case amounted to a judgment within
cl 15 of the letters patent and  3  -whether the appellate
court acted improperly in interfering with the order of the
learned companypany judge. we shall deal with these points in that order.  1  first as
to the scheme of the relevant provisions under the companypanies
act. section 179 of the companypanies act 1913 specifies the
powers of the official liquidator. it enacts to quote only
the words material for the present appeal

powers of official liquidator. the
official liquidator shall have power. with
the sanction of the companyrt to do the following
things -
 a
 b
 c  to sell the immovable and movable
property of the companypany by public auction or
private companytract with power to transfer the
whole thereof to any person or companypany
or to sell the same in parcels
though s. 180 which reads

discretion of official liquidator.-the
court may provide by any order that the
official liquidator may exercise any of the
above powers without the sanction or
intervention of the companyrt
makes provision for eliminating the need for the sanction of
the companyrt required for action by the official liquidator
tinder s. 179 as such a power was number exercised in this
case this section may be left out of account. section 183
of the act makes provision for the exercise of companytrol by
the companyrt over the liquidator and sub-s.  3  enables the
official liquidator to apply to the companyrt for directions in
relation to any particular matter arising in the winding up. section 184 of the act requires the companyrt to cause the
assets of the companypany to be companylected and applied in
discharge of its liabilities. on the basis of these provisions we shall proceed to
consider whether the companyfirmation of the sale was merely an
order in the companyrse of administration and number a judicial
order. the sale by the liquidator -as of companyrse effected
in the companyrse of the realisation of the assets of the
company and for the purpose of the amount realised being
applied towards the discharge of the liabilities and the
surplus to be distributed in the manner provided by the act. it would also be companyrect to say that when a liquidator
effects a sale he is number discharging any judicial function. still it does number follow that every order
of the companyrt merely for the reason that it is passed in the
course of the realisation of the assets of the companypany must
always be treated  as merely an administrative one. the
question ultimately depends upon the nature of the order
that is passed. an order according sanction to a sale
undoubtedly involves a discretion and cannumber be termed
merely a ministerial order for before companyfirming the sale
the companyrt has to be satisfied particularly where the
confirmation is opposed that the sale has been held in
accordance with the companyditions subject to which alone the
liquidator has been permitted to effect it and that even
otherwise the sale has been fair and has number resulted in any
loss to the parties who would ultimately have to share the
realisation. the next question is whether such an order companyld be
classified as an administrative order. one thing is clear
that the mere fact that the order is passed in the companyrse of
the administration of the assets of the companypany and for
realising those assets is number by itself sufficient to make
it an administrative as distinguished from a judicial
order. for instance the determination of amounts due to
the companypany from its debtors which is also part of the
process of the realisation of the assets. of the companypany is
a matter which arises in the companyrse of the administration. it does number on that account follow that the determination of
the particular amount due from a debtor who is brought
before the companyrt is an administrative order. it is perhaps number possible to formulate a definition which
would satisfactorily distinguish in this companytext between
an administrative and a judicial order. that the power is
entrusted to or wielded by a person who functions as a companyrt
is number decisive of the question whether the act or decision
is administrative or judicial. but we companyceive that an
administrative order would be one which is directed
to the regulation or supervision of matters as distinguished
from an order which decides the rights of parties or companyfers
or refuses to companyfer rights to property which are the
subject of adjudication before the companyrt. one of the tests
would be whether a matter which involves the exercise of
discretion is left for the decision of the authority
particularly if that authority were a companyrt and if the
discretion has to be exercised on objective as
distinguished from a purely subjective companysideration it
would be a judicial decision. it has sometimes been said
that the essence of a judicial proceeding or of a judicial
order is that there should be two parties and a lis between
them which is the subject of adjudication as a result of
that order or a decision on an issue between a proposal and
an opposition. numberdoubt it would number be possible to
describe an order passed deciding a lis before the
authority that it is number a judicial order but it does number
follow that the absence of a lis necessarily negatives the
order being judicial. even viewed from this narrow
standpoint it is possible to hold that there was a lis
before the companypany judge which he decided by passing the
order. on the one hand were the claims of the highest
bidder who put forward the companytention that he had satisfied
the requirements laid down for the acceptance of his bid and
was companysequently entitled to have the sale in his favour
confirmed particularly so as he was supported in this
behalf by the official liquidators. on the other hand there
was the 1st respondent and number to speak of him the large
body of unsecured creditors whose interests even if they
were number represented by the 1st respondent the companyrt was
bound to protect. if the sale of which companyfirmation was
sought was characterised by any deviation from the
conditions subject to which the sale was directed to be held
or even otherwise was for a gross undervalue in the sense
that very much more companyld reasonably be expected to be
obtained if the sale were properly held in view
of the figure of rs. 337000/- which had been bid by
nandlal agarwalla it would be the duty of the companyrt to
refuse the companyfirmation in he interests of the general body
of creditors and this was the submission made by the 1st
respondent. there were thus two points of view presented to
the companyrt by two companytending parties or interests and the
court was called upon to decide between them. and the deci-
sion vitally affected the rights of the parties to property. in this view we are clearly of the opinion that the order of
the companyrt was in the circumstances a judicial order and
number an administrative one and was therefore number inherently
incapable of being brought up in appeal. the next point for companysideration is whether even if
this was a judicial order numberappeal lay from it under s. 202
of the indian companypanies act unless the order amounted to a
judgment within cl. 15 of the letters patent of the calcutta
high companyrt. section as follows

appeals from orders.-re-hearings of
and appeals from any order or decision made
or given in the matter of the winding up of a
company by the companyrt may be had in the same
manner and subject to the same companyditions in
and subject to which appeals may be had from
any order or decision of the same companyrt in
cases within its ordinary jurisdiction. it was submitted that assuming the order of the companypany
judge was an order or decision made or given in the matter
of the winding up of a companypany by the companyrt the last words
of the section subject to the same companyditions in and
subject to which appeals may be had from any order or
decision of the same companyrt in cases within its ordinary
jurisdiction restricted the right of appeal companyferred by
the 1st limb of the section to those which might be
preferred under cl. 15 of the letters patent in the case of
a judgment of a
single judge of the high companyrt. in support of this
submission learned companynsel relied on the decision of the
calcutta high companyrt in madan gopal daga v. sachindra nath
sen  1 - it was there held that an order made in the winding
up of a companypany by a single judge of a high companyrt in order
to be appealable under s. 202 must satisfy the requirements
of cl. 15 of the letters patent viz. that it must be a
judgment within the meaning of that clause. c. c. ghose
j. rejected the companystruction that the words same manner and
subject to the same companyditions occurring in s. 202 were
merely a reference to the procedure to be observed as
regards the manner of filing an appeal or the forum to which
the appeal lay and number the substantive right to prefer an
appeal. buckland j. who agreed with ghose j. companysidered
that though the word manner might refer to the procedure
for filing an appeal the word companyditions companyld number be
given any such limited meaning but would import a reference
to the limitation on the right to appeal itself as laid down
in cl. 15 of the letters patent where the order appealed
from was that of a judge of the high companyrt. it must be
mentioned that in the appeal number before us the objection
that numberappeal lay from the order of mukherji j. was raised
before the bench but the learned judges rejected it on the
ground that the order of the learned judge was a judgment
within cl. 15 of the letters patent and so appealable under
that provision. this interpretation of the scope of s. 202 of the companypanies
act has number been accepted by several other high companyrts. the
leading case in support of the other view is bachharaj
factories limited v. the hiraji mills limited 2 . the learned
judges were dealing with an appeal against an order of the
company judge adjourning a petition for winding up in order
to enable certain shareholders to file a suit for a
declaration that certain debentures were number valid in law. the
 1   1927  i.l.r. 55 cal. 262.

i.l.r.  1955  bom. 550
company judge made the order under s. 170 of the companypanies
act which provides that on hearing a petition for winding up
the companyrt may dismiss or r adjourn the hearing companyditionally
or unconditionally or make any interim order etc. a
preliminary objection was taken to the hearing of the appeal
on the ground that the order from which the appeal was
preferred was number a judgment within the meaning of cl. 15 of
the letters patent and therefore numberappeal lay. it was
urged that under s. 202 the right of appeal companyferred was
subject to the same companyditions to which appeals might be
had from the decision of the companyrt in cases within its
ordinary jurisdiction and since the said companydition was number
fulfilled the appeal was incompetent. chagla c. j.
repelled this companytention and pointed out that the companyrts
which dealt with winding up petitions and to whose orders s.
202 applied were number merely the high companyrts but also the
district companyrts. if the companystruction of the section on
whose companyrectness the preliminary objection was based were
upheld it would mean that in the case of an order made by a
district companyrt the appealability of that order would be
dependent on its satisfying the companyditions of appeal for
decisions laid down under the civil procedure companye. under
the companye orders or decisions are classified into two
heads-decrees and orders. whereas an appeal lies by virtue
of s. 96 of the companye against every decree which is defined
in s. 2 of the companye only certain types of orders under
particular provisions of the companye which are listed in s. 104
are capable of appeal and done others. it was number in
dispute that very few of the orders passed in a winding up
would amount to decrees within the companye. there was numberdoubt
either that most of the orders or decisions in winding up
would number be companyprehended within the class of appealable
orders specified in s. 104 or 0. 43. r. i. if therefore the
contention of the respondent were accepted it would mean
that in the case of orders passed by the district companyrts
appeals would lie only against what would be decrees under
the companye as well as appealable orders under s. 104 and 0.43.
r.1 and very few of the orders passed in the companyrts of the
winding up would fall within these categories. on the other
hand the expression judgment used in cl. i 5 is wider. the learned judge pointed out that the position would
therefore be that a decision rendered or an order passed by
a district companyrt would number be appealable because the
conditions laid down by the civil procedure companye were number
satisfied yet an exactly identical order or decision by the
judge of the high companyrt would be appealable because it might
constitute a judgment within cl.15. the learned judge
therefore rejected a companystruction which would have meant
that the same orders passed by district companyrts and by a
single judge of a high companyrt would be subject to different
rules as to appealability. the learned judge observed that
the right of appeal was companyferred by the 1st limb of s. 202
and that the second limb merely dealt with the procedural
limitations of that appeal. he further pointed out that the
expression order or decision used in s. 202 itself
indicated that the order or decision was number merely
procedural in character but that which affected the rights
and liabilities of parties. the learned judge referred to
the decisions in madan gopal daga v. sachindra nath sen  1
and the cases following it and expressed his dissent with
the reasoning which found favour with the judges of the
calcutta high companyrt. the decision in bachhraj factories
ltd.  2  was later followed by the same companyrt in western
india theatres limited v. ishwarbhai somabhai patel  3 . we
find ourselves in agreement with the view here expressed. madan gopal daga  1  proceeds wholly on the meaning which
could be attributed to the word companyditions in the
expression subject to the companyditions occurring in s.202
and does number take into account the companytext in which s. 202
was designed to operate and particularly the fact that more
than one grade of companyrt each governed by different rules as
to the nature of the decision
 1   1927  i.l.r. 55 cal. 262.  2  i.l.r.  1955  bom 550.

i.l.r.  1959  bom. 295
which would enable an appeal to be preferred companyld be vested
with jurisdiction under the act. when by the proviso to s.3
of the indian companypanies act 1913 the indian legislature
enabled jurisdiction to be vested in district companyrts so as
to be companystituted the companyrt having jurisdiction under the
act knumberledge must be imparted to it that the district
courts and the high companyrts functioned under different
statutory provisions as regards rights of appeal from their
orders and decisions. besides it would also be fair to
presume that they intended to prescribe a uniform law as
regards the substantive right of appeal companyferred by s. 202.
it companyld number therefore be that an identical order if passed
by one class of companyrt having jurisdiction under the act
would be final but that if passed by anumberher companyrt vested
with identical powers and jurisdiction would be subject to
an appeal. there is also one anumberher aspect from which the problem
could be viewed. taking first the provisions of the civil
procedure companye which would govern the orders passed by
district companyrts it would be seen that apart from decrees
which are appealable by reason of s. 96 of the companye
orders are appealable in accordance with s. 104. that
section after enumerating certain orders which are made
appealable companytains a residuary clause  i  companyferring a
right of appeal in respect of any order made under rules
from which an appeal is expressly allowed by rules-and the
rule referred to is 0. 43. r. 1. number under s. 122 of the
code each of the high companyrts is vested with power to make
rules to annul alter or add to all of any of the rules in
the 1st schedule. in exercise of this power high companyrts
have in respect of the civil companyrts subject to their
appellate jurisdiction made alterations and additions in the
rules including those in 0. 4 3. r. 1 . either extending or
restricting the right of appeal companyferred by the companye as
originally enacted. the question that arises on this
state of circumstances is whether the legislature when it
enacted s. 202 of the companypanies act intended that the right
of appeal should vary from state to state depending on the
particular rule in force in that state by reason of the
exercise by the high companyrt of its power under s. 122 civil
procedure companye. the anumberaly created by the companystruction urged by learned
counsel for the appellant does number stop here. even taking
the case of the high companyrts themselves the companystruction of
the word companydition as including the appealability of the
decision would lead to rather strange results. the relevant
words of s. 202 are
subject to the same companyditions to which
appeals may be had from any order or decision
of the same companyrt in cases within its ordinary
jurisdiction-ordinary jurisdiction and number
  ordinary original jurisdiction. the question that would arise is as to what is meant by
ordinary jurisdiction of the companyrt. plainly the words
would only exclude jurisdiction vested in the companyrt by
special statutes as distinguished from the statutes
constituting the companyrt. undoubtedly in the case of a high
court the limits of whose jurisdiction are governed by its
letters patent the letters patent would determine what the
ordinary jurisdiction is. but that letters patent is number
immutable and has been the subject of several alterations. thus when the companypanies act was passed in 1913 an appeal
lay from every judgment of a single judge of the high
court. but in march 1919 it was amended so as to exclude
the rights of appeal from judgment passed in exercise of
revisional jurisdiction and in exercise of the power of
superintendence under s. 107 of the government of india act
1915. there can be numberdoubt either that the exercise of
revisional or supervisory jurisdiction is as much ordinary
jurisdiction of the high companyrt as its original or appellate
jurisdiction and it cannumber be that there has been any
alteration in the law as regards the appealability of
dccisions of a high companyrt under s. 202 of the companypanies act
by reason of the amendment of the letters patent. again
the letters patent were amended in january 1928 when
appeals against decisions in second appeals were made
subject to the grant of leave by judges rendering such
decisions. if the decision in a second appeal were in the
exercise of ordinary jurisdiction and there can be no
controversy about it then the companystruction of s. 202 of the
companies act in relation to a high companyrt which is the
primary companyrt exercising jurisdiction under the companypanies
act  vide s. 3  1  of the act  would lead to anumberalous
results as judgments or decisions rendered in different
types of cases though all of them are in the exercise of
ordinary jurisdiction are subject to different companyditions
as regards appealability. we thus agree with chagla c. j.
that the second part of the section which refers to the
manner and the companyditions subject to which appeals may be
had merely regulates the procedure to be followed in the
presentation of the appeal and of hearing them the period
of limitation within which the appeal is to be presented and
the forum to which the appeal would lie and does number
restrict or impair the substantive right of appeal which has
been companyferred by the opening words of that section. we
also agree with the learned judges of the bombay high companyrt
that the words order or decision occurring in the 1st part
of s. 202 though wide would exclude merely procedural
orders or those which do number affect the rights or
liabilities of parties. learned companynsel for the appellant
did number suggest that if this test were applied the order of
the learned companypany judge would be an order or decision
merely of a procedural character from which numberappeal lay. on the footing that we accepted the companystruction of s. 202
of the companypanies act which found
favour with the learned judges of the calcutta high companyrt in
madan gopal daga  1  that in order to be appealable the
decision must satisfy the test of being a judgment within
cl. 15 of the letters patent of the high companyrt learned
counsel submitted to us elaborate arguments as to what was
comprehended within the expression r judgment in cl. 15 of
the letters patent and invited us to hold that the order of
mukharji j. companyfirming the sale was number a judgment and that
the decision of the learned judges in the judgment number under
the appeal that it was a judgment was erroneous. there
has been very wide divergence of opinion between the several
high companyrts in india as to the companytent of the expression
.judgment occurring in cl. 15 of the letters patent. this companyflict of opinion was referred to by this companyrt in
asrumati devi v. kumar rupendra deb raikot  2  and in
state of uttar pradesh v. dr. vijay anand. maharaj  3
where after setting out the cleavage of views on the
question by the several high companyrts the points as to the
proper companystruction of the word was left open for future
decision when the occasion required. we companysider that that
occasion has number arisen before us either since in view of
the companystruction which we have adopted of s. 202 of the
indian companypanies act the scope of the expression judgment
in the letters patent does number call for examination or final
decision. the next companytention put forward was this. the learned
company judge had a discretion to companyfirm or number to companyfirm
the sale. in order that the discretion might be properly
exercised the official liquidators had placed every meterial
fact in the masters summons which they filed and every one
of those facts had been companysidered by the learned judge. if after companysidering those facts the learned judge thought
that it was a fit case in which the sale companyld be companyfirmed
it was number open to an appellate companyrt to interfere with that
order merely because on its
 1   1927  i. l. r. 55 cal.262  2  1953 s.c.r. 1159.  3  1963 1 s.c.r. 1.
appreciation of the facts it would have refused companyfirmation
and directed a fresh sale. learned companynsel further
submitted that if the companypany judge had applied his mind to
the facts and every fact was before him the order passed in
the exercise of his discretion companyld be interfered with only
if any relevant facts were disregarded or if the order was
arbitrary or capricious or if the appellate companyrt companysidered
that there has been a miscarriage of justice and his
submission was that on the facts of this case numbersuch
infirmities attached to the order companyfirming the sale. before companysidering the objection in this form it would be
proper to examine whether the liquidators were within their
power in proceeding with the sale after nandlal agarwalla
failed to turn up after an .appreciable interval. the power
of the liquidators in this behalf was according to the
learned companynsel for the appellant derived from cl. 5 of the
conditions of sale which reads -

immediately on acceptance of the bid by
the.joint receivers and liquidators subject to
clause i hereof such bidder shall deposit 25
percent of the amount of such bid with the
joint receivers and liquidators in cash in
default where of the joint receivers and
liquidators will be at liberty to put up the
property again for sale. we might add that this is the only clause under which on a
sale becoming abortive the liquidators were empowered to
continue the sale without a fresh advertisement. it would
be seen that this clause requires the bidder whose bid is
accepted to deposit immediately 25 of the id amount. in
the companytext of the fact that transpired in the present
case the significance of -the word immediately would become
clear. if on the failure of nandlal to make the
deposit immediately the liquidators had proceeded to hold a
fresh auction it would be apparent that all those who had
come there to bid would still be there but what happened
was that the liquidators gave time to nandlal to go home in
the expectation that he would companye back with the amount
required to be deposited. in the circumstances it was number
unnatural that the persons who had gathered there to bid
were under the impression that he would bring the money and
make the deposit and as a matter of fact the narration of
facts by the liquidators in their masters summons clearly
shows that they themselves were under this impression. in
the circumstances the companytinued presence of the bidders
there manifestly served numberpurpose and several of them
therefore left the place and went away. the bidding list
which is annexure a to the petition of the liquidators
showed that new india transport company which had bid up to rs
255000/- babulal bhagwandas who bid up to rs. 2.75000/-
and chabildas agarwal who went up to rs. 285000/- were number
there when the second auction was held. the result
therefore was that when after waiting for about 20 minutes
the liquidators companytinued the auction several had left and
the appellant was able to become the highest bidder for the
price of rs. 225.000/-. this feature of the case was
missed by the i earned companypany judge and forms the basis of
the decision of the division bench. we would go further and
add that on a proper companystruction of companydition 5 the
liquidators were number entitled to proceed with the sale in
the circumstances that happened because of the interval of
time they granted to nandlal to make the deposit which gave
the impression to those who gathered there that there would
be numberfurther auction on the same date at which they were
entitled to bid. learned companynsel for the appellant referred
us to the fact that one s.k. chakrabarti who in the first
auction had bid up to rs. 298000/- was present at the
resumed auction and that he bid then only for rs. 200000/-
and that
this feature of the resumed auction was number numbericed by the
learned judges in appeal. we companysider that this is number a
very relevant circumstance for a decision of the question
either as regards the power of the liquidators to hold the
fresh sale without advertisement or whether the sale at the
resumed auction had been at an undervalue. it is possibly
profitless to speculate how or why it happened that persons
who half an hour earlier had been willing to bid for much
larger figures suddenly permitted the appellant to become
the purchaser for rs. 225000/- . it may be mentioned that
at the resumed bidding there were only six bidders of whom
three had number bid at the earlier auction at all though
apparently they were present-shantilal bansidhar power
machinery companystruction company and relay companyporation. besides
these three there were only two others-mahabir prasad who
had earlier bid for rs. 210000/- and number companytented himself
with a bid for rs. 190000/-and s.k. chakraborty who though
originally thought that the property was worth having for
rs. 298000/number refused to go beyond rs. 200000/-. these
facts show that if those others who had gathered there at
the beginning of the auction but who left the place under
the impression that nandlal would make the required payment
had companytinued there the appellants bid for rs. 225000/-
would number have been the highest bid. we companysider therefore
the learned judges of the division bench were justified in
considering that the sale to the appellant ought number to have
been companyfirmed. there was one further point made by learned companynsel that
when the learned judges allowed the appeal of the respondent
they should number have directed a resale of the property by a
fresh auction but should have companyfirmed the sale to the
appellants at the price of rs. 335000/- which was the
amount of their bid at the first auction. the basis of this
argument was the undertaking which
they gave at the time of the disposal of the application for
interim stay pending the hearing of the appeal. we have
already extracted the terms of that undertaking. it is number
easy to find any legal basis for this argument. it is true
that in the event of the appeal being allowed the companyrt
might have possibly with the companysent of the 1st respondent
before us insisted upon the appellant taking the property
for rs. 335000/- but that surely cannumber give the
appellants any legal right to insist that the property be
sold to them. it was a companydition for the grant of the
indulgence of stay and by numberstretch of language companyld that
be read as implying that the appellants had a right to
purchase the property. it is true that the appellants have
made a grievance about this matter in the application for
leave to this companyrt as well as in the statement of the case
but that hardly improves the position. this matter may also be looked at from a slightly different
point of view. immediately nandlal failed to turn up on
september8 1956 the liquidators enquired of the appellants
whether they were willing that their penultimate bid be
treated as the highest bid and they be declared purchasers. this offer was refused as apparently they were satisfied
that they would be able to get the property for a much less
sum. thereafter the liquidators took out a masters summons
seeking sanction of the companyrt for the sale to them for rs. 225000/-. the appellants supported that application. in
other words they wanted that the companyrt should companyfirm the
sale to them for rs. 225000/- and that was the order which
they obtained from the learned companypany judge. it was only
when the appeal. was filed and an application for stay was
moved before the appellate companyrt by the 1st respondent here
that the offer which is embodied in the undertaking was.