Case: Ladli Prasad Jaiswal Vs. Karnal Distillery Co., Ltd., &amp; Ors

the resolutions the plaintiff acquired no overriding privilege. His rights were the same as of the other branches of the family. On the question as to what transpired at and before the meeting dated October 16, 1945 there is the evidence of Devi Prasad which may be briefly referred to: He has deposed that he was present at the meeting and that the compromise was arrived at by the free consent of the parties and no undue influence was exercised by any party on the other. The compromise talks had begun a week earlier, and the account books of the Karnal Distillery Company were produced at the time of the compromise, and the books were examined by defendants 2 to 5 and some objections raised during the talks of compromise were settled after seeing the books of account. The witness also produced a copy of the minutes of the meeting which had taken place at 10-30 A.M. on October 16, 1945 stating that the same were typed by him. There was substantially no cross-examination of this witness on the evidence given by him that the account books were examined during the negotiations for compromise. The finding of the High Court that the books of account were never examined and the plaintiff pursuaded the defendants to give him a complete discharge in respect of the liabilities incurred by him for his transactions was never pleaded in the written statement, though it was an important particular which if true would have been pleaded. Even assuming that on the general plea of undue influence it was open to the defendants to lead evidence on this matter, the defendants have not -chosen to lead any reliable evidence to show that that books of account were not examined and entries were not verified, and the equivocal evidence made by the witness Raghu Nandan has no evidentiary value at all. It is true that the plaintiff had started another Company in the name of Jagatjit Distilling and Allied Industries but even if that circumstance has any bearing on the issue of undue influence there is again little evidence that he had made large profits and had acquired influence and power thereby. The appointment of receivers by the Court of Subordinate Judge, Karnal was stayed by the High Court, but that single circumstance will not justify an inference that the defendants were effectively prevented from prosecuting their claim. There is no evidence to show that the plaintiff was interested in creating a deadlock so as to prevent the smooth and successful business of the Company.The only two facts viz. that the plaintiff was the eldest member and that he was before the resolution dated February 20, 1945 receiving very much larger sums of money from the Company as his remuneration in comparison with the Remuneration received by the defendants, viewed in the light of the other circumstances will not justify an inference that the plaintiff was in a position to dominate the will of the defendants. For reasons already stated the High Court was in error in relying upon the presumption under sub-section (3) of s. 16, because in our view the evidence does not justify the conclusion that the plaintiff was in a position to dominate the will of the defendants and that the resolutions gave an unconscionable advantage to the plaintiff. We must add that the decisions of the District Court and Division, Bench of the High Court, suffered from Serious infirmities in that they wrongly placed the onus of proof upon the plaintiff, and reached a conclusion that the plaintiff failed to prove that the resolutions were not obtained by the exercise of undue influence.18. It was urged that in any event, at this late stage-sixteen years after the date on which the resolutions were passed by the defendants at the meeting dated March 28, 1945-this Court would not be justified in declaring the actions of the defendants in pursuance of the resolutions, invalid, for they would affect third parties who must have dealt with the Company on the footing that the manangement of the Company had authority to transact business. But the plaintiff has unauthorisedly been deprived of his rights by the arbitrary conduct of the defendants. All the Courts below have held that the resolutions dated March 28, 1946 are invalid. The High Court declined to grant relief to the plaintiff, for in their view the plaintiff had disentitled himself to equitable relief because of his previous conduct in exercising undue influence, and thereby securing an unfair advantage to which he was not lawfully entitled. It is unnecessary to enter upon a discussion of the question whether in the circumstances it was a sufficient ground for depriving the plaintiff of relief, for we are of opinion that subject to the reservations made by Bishan Narain, J., which fully protect third parties, relief should be awarded. Before the learned judge, counsel for the plaintiff gave an undertaking that he will not question the dealings of the defendants qua third parties, and requested expressly that the prayer for declaration that all acts of the Company and the defendants which affected him personally qua the members of the Company may alone be declared invalid. That, in our judgment, should be sufficient to meet any objection which may be raised by the defendants on the score of delay.It was also submitted that the plaintiff has lost his right to the shares since the suit was instituted because the Company had enforced its lien and had sold the shares of the plaintiff in enforcement of the lien. The validity of that action of the Company has been challenged in a separate proceeding, and we need express no opinion on that question. All the Courts have come to the conclusion that the reso- lutions dated March 3, 1.946 and March 28, 1946 were invalid and not binding on the plaintiff. Therefore, any action taken by the defendants pursuant to those resolutions may prima facie be regarded as ineffective.19.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]But the two expressions have not the same meaning. A court subordinate to the High Court is a court subject to the superintendence of the High Court. whereas a court immediately below is the court from whose decision the appeal has been filed. If the two expressions are equated, the right of appeal against the decree of the High Court sitting in appeal over the decision of a single judge exercising original jurisdiction would be severely restricted for in such an appeal whether the judgment is of affirmance or reversal -the High Court can certify a case under Art. 133 (1) cls. (a) & (b) only if the appeal involves a substantial question of law. The Attorney- General, however, concedes and in our judgment properly that there has been a long standing practice which has the approval of the Privy Council (see Tulsi Prasad v. Benayak : L. R. 23 I. A. 102) that if the decree or order of the Division Bench reverses the judgment of a single , Judge trying a suit or proceeding in exercise of original jurisdiction of the High Court and the condition as to valuation is satisfied, an appeal lies as a matter of course, i.e. without satisfying the condition that it involves a substantial question of law. This view can be justified only if a single Judge of a High Court trying a suit or proceeding in exercise of the original jurisdiction is a court immediately below the Division Bench of the High Court which decides an appeal from his decision. The right to appeal against the judgment of a single judge whether exercising original jurisdiction or exercising appellate jurisdiction to a Division Bench is governed by the same clause of the Letters Patent. If for certifying a case for appeal to this Court in a pro- ceeding tried in exercise of the original jurisdiction the judgment of a single judge is to be regarded as the decision of the court immediately below a Division Bench to which an appeal is filed under the Letters Patent, it is difficult to discover any logical ground for holding that the judgment of a single judge in exercise of appellate jurisdiction is not such a decision. Clause 10 of the Letters Patent of the Lahore High Court (which continues to apply to the Punjab High Court) provides, in so far as it is material:- "And we do further ordain that an appeal shall lie to the said High Court of judicature x x x x x x from thejudgment (not being a judgment passed in the exercise of appellate jurisdiction in respect of a decree or order made in the exercise of appellate jurisdiction by a Court subject to the superintendence of the said High Court x x x x x) of one judge of the said High Court x x x x x and that notwithstanding anything hereinbefore provided an appeal shall lie to the said High Court from a judgment of one judge of the said High Court x x x x x in the exercise of appellate jurisdiction in respect of a decree or order made in the exercise of appellate jurisdiction by a Court subject to the superintendence of the said High Court, where the judge who passed the judgment declares that the case is a fit one for appeal; x x x X. Manifestly the clause confers an unqualified right of appeal to the High Court from the judgment of a single judge exercising original civil jurisdiction. Similarly there is a right of appeal from a judgment of a single judge hearing a civil appeal where the judgment is not in an appeal from an appellate decree. But against the judgment of a single judge exercising powers in appeal from an appellate decree, an appeal under the Letters Patent only lies if the judge declares that the case is a fit one for appeal, and not otherwise. There is no warrant for making a distinction between an appeal filed against the judgment of a single judge exercising original jurisdiction and a judgment in exercise of appellate jurisdiction. There is nothing in the context to support the plea that the expression court immediately below includes a judge of the High Court trying a proceeding in exercise of original jurisdiction, i. e. sitting as a court of first instance, but not a judge exercising appellate jurisdiction. The Constitution in cl. (1) (a) of Art. 133 has expressly referred to a court of first instance in prescribing the condition relating to the value of the subject- matter and if it was intended that for the purpose of deciding whether the judgment of the High Court sought to be appealed against affirmed the decision of the Court immediately below, the decision of a single judge was to be ignored, if it was a judgment in exercise of appellate powers, but not when he was exercising original jurisdiction, an appropriate provision that behalf would have been enacted. In the absence of any such enactment, the expression "court immediately below in Act. 133 (1) must mean the court from the decision of which an appeal has been filed to the High Court, whether such court is a single judge of the High Court or a Court subject to the superintendence of the Highour judgment the appeal with certificate granted by the High Court under Art. 133 (1) (a) and (b) is competent, because a Single Judge of the High Court hearing either a proceeding as a Court of original jurisdiction or in exercise of appellate jurisdiction is a Court immediately below the Division Bench which hears an appeal against his judgment under the relevant clause of the Letters Patent.Bishan Narain J., was, it is true, hearing an appeal from an appellate decree and his powers were restricted, for a second appeal lies to the High Court only on the following grounds, namely:- (a) the decision being contrary to law or to some usage having the force of law; (b) the decision having failed to determine some material issue of law or usage, having the force of law; (c) a substantial error or defect in the procedure provided by this Code or by any other law for the time being in force, which may possibly have produced error or defect in the decision of the case upon the merits. Whether a particular transaction was vitiated on the ground of undue influence is primarily a decision on a question ofmust add that the decisions of the District Court and Division, Bench of the High Court, suffered from Serious infirmities in that they wrongly placed the onus of proof upon the plaintiff, and reached a conclusion that the plaintiff failed to prove that the resolutions were not obtained by the exercise of unduethe plaintiff has unauthorisedly been deprived of his rights by the arbitrary conduct of the defendants. All the Courts below have held that the resolutions dated March 28, 1946 are invalid. The High Court declined to grant relief to the plaintiff, for in their view the plaintiff had disentitled himself to equitable relief because of his previous conduct in exercising undue influence, and thereby securing an unfair advantage to which he was not lawfully entitled. It is unnecessary to enter upon a discussion of the question whether in the circumstances it was a sufficient ground for depriving the plaintiff of relief, for we are of opinion that subject to the reservations made by Bishan Narain, J., which fully protect third parties, relief should be awarded. Before the learned judge, counsel for the plaintiff gave an undertaking that he will not question the dealings of the defendants qua third parties, and requested expressly that the prayer for declaration that all acts of the Company and the defendants which affected him personally qua the members of the Company may alone be declared invalid. That, in our judgment, should be sufficient to meet any objection which may be raised by the defendants on the score of delay.It was also submitted that the plaintiff has lost his right to the shares since the suit was instituted because the Company had enforced its lien and had sold the shares of the plaintiff in enforcement of the lien. The validity of that action of the Company has been challenged in a separate proceeding, and we need express no opinion on that question. All the Courts have come to the conclusion that the reso- lutions dated March 3, 1.946 and March 28, 1946 were invalid and not binding on the plaintiff. Therefore, any action taken by the defendants pursuant to those resolutions may prima facie be regarded as ineffective.