Section 92: Suits against Public Trusts - Part II

(Part I of the post is available here)

On the question of whether if an application to revoke leave is rejected the defendant is entitled to apply for rejection of the plaint, it has been held that he is not so entitled. This is because the questions which the Court will go into in order to determine the two applications are essentially the same. Accordingly, allowing the defendant to pursue both courses of action would only lead to wastage of judicial time. The Supreme Court has in fact held once leave was granted, the question of rejection of plaint under Order VII, Rule 11 of the CPC does not arise at all. Thus, after having lost their opposition to the grant of leave, it is not open to the defendants to apply for rejection of the plaint under Order VII, Rule 11 of CPC (Sudhir Angur v. M. Sanjeev, AIR 2006 SC 351.).

Finally one may turn to a peculiar issue which might arise given the nature of the provisions. Let us assume a hypothetical situation where the Court refuses to grant leave to the plaintiff. The order refusing to grant leave being an appealable order under the provisions of the CPC, the plaintiff prefers an appeal to the appellate Court. The appellate Court reverses the impugned order and grants the plaintiff leave to sue. Accordingly, the suit commences in the Court of first instance. Now, the defendant files an application for revocation of leave. Considering that the leave has been granted to the appellate Court, can the Court of first instance adjudicate on whether the leave should be revoked? There does not seem to be any case-law specifically dealing with the issue under Section 92 of the CPC. However, one may seek to draw an analogy with a similar provision under the Income Tax Act. Under that enactment, there was originally a provision for registration of partnership firms by the Income tax Officer. It was held that when the Officer refuses to grant a certificate of registration, but a Court overturns his decision and decides to grant the certificate, it was no longer open to the Officer to consider any application for cancellation of the certificate (CIT v. Deokinandan Om Prakash, 276 ITR 497 (All)). The rationale behind the decision was that the judicial hierarchy must be respected, and a lower authority cannot sit in appeal over a higher Court’s decision. By analogy, the same should extend to the case of grant of leave. Accordingly, there is a strong case that the Court of first instance should not hear the application for revocation. As submitted earlier, ordinarily, the Court should hear the defendant before deciding whether to grant leave or not. The same must be true of an appellate Court as well. Thus, the appellate Court’s decision would be based on hearing both the parties and would be conclusive of the matter as to the lower Court.

On the other hand, there may be an exceptional case where the defendant has not been heard by the appellate Court before the decision to grant leave. In such a case, there would be no difference; as an ex-parte order would be entitled to as much respect as an order passed after hearing both parties. It is submitted that the only exceptional situation is where new facts come to light, which were not (and could not have reasonably be) placed before the appellate Court. In such a situation, the Court of first instance may be able to decide the application for revocation of leave on merits. Such an approach would not engender disrespect for the higher judicial authority, as it would be taken only on the basis of new facts which could not have reasonably be placed before the appellate Court. The case in which this is most likely to arise is where the appellate Court has heard the matter ex-parte without hearing the defendant. In such a case, on the basis of new facts which were not and could not reasonably be before the appellate Court, it may be possible for the application of revocation of leave to be considered.

Of course, these questions still remain unsettled; perhaps, the pending cases on the point will serve to settle the debate on the interpretation of Section 92.