Major S.S. Khanna v Brig. F.J. Dillon

Facts

Khanna and Dillon were partners in a construction engineering business which they dissolved in 1956, with Dillon taking over the assets and liabilities, and a compromise decree creating a joint account for partnership realizations. Dillon later sued Khanna to recover about Rs. 46,000 said to be loans advanced from the joint account. Khanna contested maintainability, contending such a suit between partners over joint funds did not lie. The trial judge decided the preliminary issue of maintainability against Dillon without a full trial; the High Court reversed in revision and the matter reached the Supreme Court.

Issues

• Whether an interlocutory order deciding a preliminary issue is a 'case which has been decided' within Section 115 CPC.
• Whether the High Court's revisional jurisdiction under Section 115 is available even when an appeal lies from the final decree in the suit.
• Whether the trial court could decide the question of maintainability as a preliminary issue of law without recording evidence.

Arguments

The appellant (Khanna) argued that the trial judge's order was not a 'case decided' under Section 115, that revisional jurisdiction was excluded because appeals lay to the High Court from the final decree, and that the order did not fall within clauses (a), (b) or (c). The respondent (Dillon) argued that the order directly affected the parties' rights on maintainability, raised a jurisdictional question apt for revision, and was wrongly decided on assumptions without any trial.

Held

The Supreme Court held that the expression 'case' in Section 115 is a word of comprehensive import and includes civil proceedings other than suits and interlocutory orders affecting the rights of parties. The phrase 'in which no appeal lies thereto' does not bar revision merely because an appeal lies from the ultimate decree, so revisional jurisdiction may be exercised irrespective of whether an appeal lies from the final decree. Under Order 14 Rule 2 a court may try an issue of law separately only where the whole suit may be disposed of on that issue of law alone; here the question of maintainability turned on disputed facts about the nature of the joint account and the loans and could not be decided as a pure preliminary issue. The trial judge therefore acted with material irregularity, and the High Court had correctly intervened. The appeals were dismissed with costs and the suit was directed to be tried on evidence.

Ratio decidendi

'Case' in Section 115 CPC is of comprehensive import and covers interlocutory orders affecting parties' rights, so the High Court's revisional jurisdiction over a jurisdictional question may be exercised even where an appeal lies from the final decree; and a court may decide an issue of law as a preliminary issue under Order 14 Rule 2 only where the whole suit can be disposed of on that issue alone.

Significance

A landmark on the scope of revisional jurisdiction under Section 115 CPC, settling that the word 'case' embraces interlocutory orders and that revision is not ousted merely because an appeal lies from the final decree. It also remains a leading authority on the proper use of Order 14 Rule 2 for trying preliminary issues of law, and has been consistently cited and followed on both points.

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