IEEE Mumbai Section Welfare Assn. v. Global IEEE Institute for Engineers: An Immediate Re-Look Necessary by the Supreme Court

The judgment delivered by a 2-Judge Bench of the Supreme Court on 27-5-2025 in IEEE Mumbai Section Welfare Assn. v. Global IEEE Institute for Engineers¹ requires a relook and restatement of law laid down therein. It is binding on all subordinate courts of the country under Article 141² of the Constitution of India³ on a situation of frequent occurrence before the High Courts and also, before the district judiciary exercising civil appellate jurisdiction. With great respect it is submitted that the proposition of law stated therein curtails the appellate power provided by the express provisions of the Civil Procedure Code, 1908⁴ and is likely to render the plaintiffs in many genuine cases remediless. It is also inconsistent with earlier decisions rendered by the larger Benches and a settled practice followed in almost all the High Courts. The facts and laws laid down in the aforesaid judgment are clear from paras 3 to 5 which are quoted ad verbatim hereunder:

3. The impugned order dated 15-4-2025⁵ is passed on IA No. 1 of 2025 in COMAP No. 181 of 2025 by the Karnataka High Court at Bengaluru. The said appeal is filed assailing the order passed by the LXXXIV Additional City Civil and Sessions Judge, Commercial Court, Bengaluru on IA No. 4 of 2024 in Commercial Original Suit No. 906 of 2024. The said application (IA No. 4 of 2024) was filed under Order 7 Rule 11⁶ of the Civil Procedure Code, 1908 (“CPC”, for short) seeking rejection of the plaint. By the order dated 12-3-2025, the plaint was rejected by the Commercial Court.

4. Being aggrieved, the respondent herein has filed COMAP No. 181 of 2025. Along with the said appeal, an application (IA No. 1 of 2025) was filed by Respondent 1 herein seeking temporary injunction against the appellant herein. By the impugned order dated 15-4-2025, the temporary injunction has been granted. The appeal is still at large and pending consideration before the High Court.

5. Having heard learned counsel for the appellant and learned Senior Counsel for the respondent, we observe that in a case where an appeal is filed by being aggrieved by the rejection of a plaint in exercise of powers under Order 7 Rule 11 CPC, the High Court ought not to have granted an order of temporary injunction. We say so for the reason that the plaint itself has been rejected by the Commercial Court and the correctness or otherwise of the said rejection is a matter at large before the High Court. When the plaint itself has been rejected, it cannot be said that the appeal filed against such an order is a continuation of a suit. It may be that in the commercial suit the respondent herein had the benefit of an interim injunction, but once the plaint has been rejected by the trial court i.e. the Commercial Court, in the instant case, until it is revived/restored, an order of temporary injunction cannot operate against the defendant in the suit, who is the respondent in the appeal filed against the rejection of the plaint. In other words, it is necessary that there ought to be a subsisting plaint in order to seek an order of temporary injunction.

(emphasis supplied)

The dictum that when the plaint is rejected under Order 7 Rule 11 CPC and an appeal is filed against this order which is a decree under Section 2(2)⁷ CPC and is appealable under Section 96(1)⁸ CPC, the appellate court cannot grant any temporary injunction because there is no subsisting plaint after its rejection by the trial court is an erroneous enunciation of law. This erroneous dictum will have very serious consequences in many genuine cases where the plaintiff would be unable to obtain any interim relief even in cases where the trial court has committed a patent error in rejecting the plaint under Order 7 Rule 11 CPC. The assumption that an appeal filed against such rejection cannot be treated as a continuation of the suit is inconsistent with several previous decisions of the Supreme Court rendered by the larger Benches.

Relevant statutory provisions

(1) Section 2(2) CPC defines decree which runs as under:

(2) “decree” means the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be either preliminary or final. It shall be deemed to include the rejection of a plaint and the determination of any question within Section 144⁹, but shall not include—

(a) any adjudication from which an appeal lies as an appeal from an order, or

(b) any order of dismissal for default.

It expressly includes rejection of plaint with the consequence that if the application moved by the defendant under Order 7 Rule 11 CPC is allowed and plaint is rejected, appeal lies under Section 96 CPC. When such application is rejected by the Court, the order is not appealable but open to revision by the High Court under Section 115¹⁰ CPC or under Article 227¹¹ of the Constitution of India.

(2) Section 96(1) CPC confers a very wide right of appeal available against every decree unless otherwise expressly provided by CPC or any other law and runs as under:

96. Appeal from original decree.—(1) Save where otherwise expressly provided in the body of this Code or by any other law for the time being in force, an appeal shall lie from every decree passed by any court exercising original jurisdiction the court authorised to hear appeals from the decisions of such court.

This provision makes no distinction between a decree resulting from an order rejecting the plaint under Order 7 Rule 11 and one passed at the end of the trial dismissing the suit on merits or at an earlier stage on decision of the preliminary issues against the plaintiff.

(3) Section 107¹² CPC envisages and provides the powers of appellate courts and runs as under:

107. Powers of appellate court.—(1) Subject to such conditions and limitations as may be prescribed, an appellate court shall have power—

(a) to determine a case finally;

(b) to remand a case;

(c) to frame issues and refer them for trial; and

(d) to take additional evidence or to require such evidence to be taken.

(2) Subject as aforesaid, the appellate court shall have the same powers and shall perform as nearly as may be the same duties as are conferred and imposed by this Code on courts of original jurisdiction in respect of suits instituted therein.

(emphasis supplied)

This provision also does not make any distinction between appeals filed against rejection of plaint and appeals filed against dismissal of the suit.

Precedents

(1) In Chandi Prasad v. Jagdish Prasad¹³, a three-Judge Bench of the Supreme Court in para 22 stated the law as under:

9. A decree is defined in Section 2(2) of the Civil Procedure Code to mean the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be either preliminary or final. As against a judgment and decree unless otherwise restricted, a first appeal would be maintainable under Section 96 of the Civil Procedure Code and a second appeal under Section 100¹⁴ thereof. A decree within the meaning of Section 2(2) of Civil Procedure Code would be enforceable irrespective of the fact whether it is passed by the trial court, the first appellate court or the second appellate court.

10. Where a statutory appeal is provided for, subject, of course to the restrictions which may be imposed, it is a continuation of suit. It is also not in dispute that when a higher forum entertains an appeal and passes an order on merit, the doctrine of merger applies.

22. When an appeal is prescribed under a statute and the appellate forum is invoked and entertained, for all intent and purport, the suit continues.

(2) In Dharam Dutt v. Union of India¹⁵, a Division Bench of the Supreme Court in para 69 has clearly laid down that filing of an appeal destroys the finality of judgment under appeal.

(3) In a recent case of Malluru Mallappa v. Kuruvathappa¹⁶, a Division Bench of the Supreme Court reiterated the same proposition of law in para 13 as under:

13. It is a settled position of law that an appeal is a continuation of the proceedings of the original court. Ordinarily, the appellate jurisdiction involves a rehearing on law as well as on fact and is invoked by an aggrieved person. The first appeal is a valuable right of the appellant and therein all questions of fact and law decided by the trial court are open for reconsideration.

In view of the clear provisions of Section 107 CPC the appellate court has all the powers which the trial court could exercise under Order 39 Rules 1 and 2¹⁷ CPC for granting temporary injunctions or appointment of Receiver under Order 40 Rule 1 to maintain status quo in respect of the suit property till the decision of appeal. When the order rejecting plaint is challenged in appeal, the question becomes sub judice before the appellate court and cannot affect or curtail the powers of appellate court to pass interim orders during the pendency of the appeal which the trial court had all along during the pendency of the suit. The decision of the Supreme Court in the captioned case results in curtailment of right of appeal available to a plaintiff in CPC and also the powers of the appellate court both plainly conferred by the statute. There is no basis for this curtailment and in many cases denial of interim relief on admission of a first appeal may inevitably result in the appeal itself being rendered infructuous.

(4) In CIT v. M.K. Mohammed Kunhi¹⁸, a three-Judge Bench was dealing with an appeal provided under a provision of Income-tax Act, 1961¹⁹ but there was no power expressly conferred to grant stay therein. In all other provisions of the same Act providing for appeal had a separate sub-section conferring power to grant interim stay on the appellate authority. In spite of this difference in the statutory provisions a three-Judge Bench of the Supreme Court laid down the law as under:

8. … where the legislature invests an Appellate Tribunal with powers to prevent an injustice, it impliedly empowers it to stay the proceedings which may result in causing further mischief.

13. … It could well be said that when Section 254²⁰ confers appellate jurisdiction, it impliedly grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution and that the statutory power carries with it the duty in proper cases to make such orders for staying proceedings as will prevent the appeal if successful from being rendered nugatory.

Submission

It is submitted with respect that the distinction made by the Supreme Court in the captioned case between appeal against a decree resulting from rejection of plaint and any other first appeal against a decree of dismissal of the suit is erroneous in law and constitutionally fragile. It is customary in almost all the High Courts to consider and grant in appropriate cases the interim relief which remained in operation during the pendency of the suit when the first appeal is admitted for final hearing. A plaintiff who suffers rejection of plaint under Order 7 Rule 11 CPC cannot be treated differently than a plaintiff who suffers dismissal of suit after trial. The order of the trial court rejecting the plaint is also pending adjudication in appeal and the plaint does not perish or mortalise from the record. On the contrary, the order rejecting the plaint loses its finality and becomes pending consideration and scrutiny by the appellate court. In many cases where the plaintiff seeks restraint against demolition or his dispossession and suffers an erroneous or unjust rejection of plaint and comes to the appellate court challenging it, would be rendered remediless if the appellate court is deprived of its statutory as also inherent power to grant temporary injunctions or any other interim relief for preventing the appeal itself becoming infructuous and an exercise in futility.

Our judiciary at every level is under manned and over worked and functioning under grave stress of arrears. A Judge of the Supreme Court has to spend several hours at home to read in advance the several cases appearing in the cause list of next day and for preparing reserved judgments. The public expectations from him are very high to the extent that he should be consistent not only with himself and his thirty-two colleagues but also with the fraternity of 282 former Judges and Chief Justices of the Supreme Court which is humanly impossible. No human performance can be perfect or flawless and errors are inevitable. We are lucky that this community in black robes has a corrective mechanism like review and curative petitions unlike the medical fraternity in white robes where errors of judgment are frequently fatal and irreversible.