No need to file appeal against every interlocutory order, it can be challenged in appeal against final decree

Does an interlocutory order becomes final if appeal is not preferred against it?

Is it open to a party to challenge the interlocutory order in an appeal against final decree?

Can appellate court direct the appellant to file revision to challenge the interlocutory order?

Held:

An interlocutory order which had not been appealed from, either because no appeal lay or even though an appeal lay, an appeal was not taken, can be challenged in an appeal from a final decree or order.

In Achal Misra (supra), the High Court had allowed the writ petitions filed by the allottees on the ground, that the landlord not having challenged the original order notifying the vacancy then and there, was precluded from challenging the order notifying the vacancy in revision against the final order or in further challenges to it in the High Court. When the judgment of the High Court came up for consideration before the two learned Judges of this Court, it was noticed, that it could not be said that the question of vacancy, if not challenged by a separate writ petition on its notification, could not be questioned along with the final order, in the revision filed under Section 18 of the Act. It was observed, that the question of vacancy pertained to a jurisdictional fact and can be challenged in the revision filed against the allotment order passed by the District Magistrate. It was further observed, that in case it was found, that there was no vacancy, the order of allotment had to be set aside. As such, the learned two Judges referred the matter to a larger Bench. The learned three Judges in the judgment in Achal Misra (supra) observed thus:

“11. On the scheme of the Act, it is clear that the preliminary step is to declare a vacancy. At this stage, an enquiry has to be made including an enquiry involving at least two respectable neighbours. It is thereafter that the vacancy has to be notified and objections invited. This is followed by either dropping of the proceedings on the objections being upheld that there was no vacancy, or by allotment to a tenant on finding the vacancy, or in ordering a release of the building, in case a landlord was found entitled to have such a release under the Act. Therefore, the notifying of a vacancy is only a step in the process of making an allotment of the building to a tenant.
The Act contemplates that no building should be let out by a landlord except through the process of allotment by the Rent Control Authority. Since the order notifying a vacancy is only a step in passing the final order in a proceeding under the Act regarding allotment, it is clear that the same could be challenged while challenging the final order, unless there is anything in the Act precluding such a challenge or conferring a finality to the order notifying a vacancy. It was held long ago by the Privy Council in Moheshur Sing v. Bengal Govt. [(1859) 7 Moo IA 283] (Moo IA at p. 302) “We are not aware of any law or regulation prevailing in India which renders it imperative upon the suitor to appeal from every interlocutory order by which he may conceive himself aggrieved, under the penalty, if he does not so do, of forfeiting forever the benefit of the consideration of the appellate court. No authority or precedent has been cited in support of such a proposition, and we cannot conceive that anything would be more detrimental to the expeditious administration of justice than the establishment of a rule which would impose upon the suitor the necessity of so appealing; whereby on the one hand he might be harassed with endless expense and delay, and on the other inflict upon his opponent similar calamities.”
12. In Sheonoth v. Ramnath [(1865) 10 MIA 413] the Privy Council reiterated that a party is not bound to appeal from every interlocutory order which is a step in the procedure that leads to a final decree. It is open on appeal from such final decree to question an interlocutory order.
13. This principle is recognised by Section 105(1) of the Code of Civil Procedure and reaffirmed by Order 43 Rule 1­A of the Code. The two exceptions to this rule are found in Section 97 of the Code of Civil Procedure, 1908, which provides that a preliminary decree passed in a suit could not be challenged in an appeal against the final decree based on that preliminary decree and Section 105(2) of the Code of Civil Procedure, 1908 which precludes a challenge to an order of remand at a subsequent stage while filing an appeal against the decree passed subsequent to the order of remand. All these aspects came to be considered by this Court in Satyadhyan Ghosal v. Deorajin Debi [(1960) 3 SCR 590 : AIR 1960 SC 941. Ed.: See also(1981) 2 SCC 103, (2004) 12 SCC 754 and (2005) 3 SCC 422] wherein, after referring to the decisions of the Privy Council, it was held that an interlocutory order which had not been appealed from either because no appeal lay or even though an appeal lay, an appeal was not taken, can be challenged in an appeal from a final decree or order. It was further held that a special provision was made in Section 105(2) of the Code of Civil Procedure as regards orders of remand where the order of remand itself was made appealable.
Since Section 105(2) did not apply to the Privy Council and can have no application to appeals to the Supreme Court, the Privy Council and the Supreme Court could examine even the correctness of an original order of remand while considering the correctness of the decree passed subsequent to the order of remand. The same principle was reiterated in Amar Chand Butail v. Union of India [AIR 1964 SC 1658] and in other subsequent decisions.
14. It is thus clear that an order notifying a vacancy which leads to the final order of allotment can be challenged in a proceeding taken to challenge the final order, as being an order which is a preliminary step in the process of decision­making in passing the final order. Hence, in a revision against the final order of allotment which is provided for by the Act, the order notifying the vacancy could be challenged. The decision in Ganpat Roy case[(1985) 2 SCC 307] which has disapproved the ratio of the decision in Tirlok Singh and Co.[(1976) 3 SCC 726] cannot be understood as laying down that the failure to challenge the order notifying the vacancy then and there, would result in the loss of right to the aggrieved person of challenging the notifying of vacancy itself, in a revision against the final order of allotment. It has only clarified that even the order notifying the vacancy could be immediately and independently challenged. The High Court, in our view, has misunderstood the effect of the decision of this Court in Ganpat Roy case [(1985) 2 SCC 307] and has not kept in mind the general principles of law governing such a question as expounded by the Privy Council and by this Court. It is nobody's case that there is anything in the Act corresponding either to Section 97 or to Section 105(2) of the Code of Civil Procedure, 1908 precluding a challenge in respect of an order which ultimately leads to the final order. We overrule the view taken by the Allahabad High Court in the present case and in Kunj Lata v. Xth ADJ [(1991) 2 RCJ 658] that in a revision against the final order, the order notifying the vacancy could not be challenged and that the failure to independently challenge the order notifying the vacancy would preclude a successful challenge to the allotment order itself. In fact, the person aggrieved by the order notifying the vacancy can be said to have two options available. Either to challenge the order notifying the vacancy then and there by way of a writ petition or to make the statutory challenge after a final order of allotment has been made and if he is aggrieved even thereafter, to approach the High Court. It would really be a case of election of remedies.”

   It could thus be seen, that considering the scheme of the Act; the principles as recognized by Section 105(1) and Order XLIII Rule 1­A of the Code of Civil Procedure, 1908 and the various judgments of the Privy Council as well as this Court, it was held, that an interlocutory order which had not been appealed from, either because no appeal lay or even though an appeal lay, an appeal was not taken, can be challenged in an appeal from a final decree or order. It was therefore held, that an order, notifying a vacancy which leads to the final order of allotment can be challenged in a proceeding taken out to challenge the final order, as being an order which is a preliminary step in the process of decision making in passing the final order. The learned three Judges therefore held, that in a revision against the final order of allotment which is provided for by the Act, the order notifying the vacancy could be challenged. It was held, that the decision in Ganpat Roy (supra), which disapproved the ratio in Tirlok Singh (supra) cannot be understood as laying down, that the failure to challenge the order notifying the vacancy then and there, would result in the loss of right to the aggrieved person of challenging the order notifying vacancy itself, in a revision against the final order of allotment. It was held, Ganpat Roy (supra) had only clarified that even the order notifying the vacancy could be immediately and independently challenged. It was therefore held, that the High Court had misunderstood the effect of the decision of this Court in Ganpat Roy (supra) and had not kept in mind the general principles of law governing such a question as expounded by the Privy Council and this Court. It was held, that there was nothing in the Act corresponding either to Section 97 or to Section 105(2) of the Code of Civil Procedure, 1908 precluding a challenge in respect of an order which ultimately leads to the final order. It was further held, that in fact, the person aggrieved by the order notifying the vacancy can be said to have two options available, either to challenge the order notifying the vacancy then and there by way of a writ petition or to make a statutory challenge after a final order of allotment has been made and if he is aggrieved even thereafter, to approach the High Court. It was further observed, that it would really be a case of election of remedies.[Para No.10]

   In the light of this, we fail to appreciate, as to how the learned judge of the High Court in the impugned order, could have made observations in paragraph 11 thereof. The learned Judge goes to observe, that after dismissal of the writ petition there was no occasion for the said High Court to grant liberty to the respondents to avail remedy of revision challenging the order of vacancy dated 4.6.2003. It appears, that the learned judge has missed the last line in the order of the High Court dated 23.8.2006, which reads thus:

“Subject to aforesaid, writ petition is dismissed.”[Para No.12]

   The learned single Judge of the High Court has also failed to take into consideration that in the order dated 23.8.2006 itself, the learned judge while disposing of the earlier writ petition had referred to the law laid down by this Court in the case of Achal Misra (supra), wherein it is specifically held, that even if a party does not challenge the vacancy order by way of writ petition, it is still open to it to challenge the same order along with the final order passed under Section 16 in the revision under Section 18. However, the learned Judge, in the impugned judgment, has not even referred to the judgment of this Court in the case of Achal Misra (supra), a relevant part of which has been reproduced in the earlier order of the said High Court dated 23.8.2006.[Para No.13]

Supreme Court of India

Mohd. Inam

Vs.

Sanjay Kumar Singhal

Decided on 26/06/2020