Salem Advocate Bar Association, T.N. v Union of India AIR 2005 SC 3353

Introduction

• This is the landmark case under the Code of Civil Procedure, 1903 (CPC) where the Court upheld the Amendments made by Amendment Acts of 1999 and 2002.
• In this case the Supreme Court formed a committee headed by a former Judge of the Court and the Chairman, Law Commission of India (Justice M. Jagannadha Rao) to suggest modalities for operation of amendments.
• The Hon’ble Judges who presided over the case were Y.K. Sabharwal, D.M. Dharmadhikari, and Tarun Chatterjee.

Facts

• The challenge made to the constitutional validity of amendments made in the CPC by the Amendment Acts of 1999 and 2002 was rejected by the Court.
• But it was noticed in the judgment that modalities have to be formulated for the manner in which Section 89 of the Code and, for that matter, the other provisions, which have been introduced by way of amendments, may have to be operated.
• The Committee submitted a report in three parts: -
  Report 1-Consideration of various grievances
  Report 2-Draft Rules for ADR and mediation
  Report 3-Case management conferences

Issue Involved

Whether the 1999 and 2002 Amendments to the Civil Procedure Code, 1908 were constitutionally valid?

REPORT 1

• Amendment inserting Sub-section (2) to Section 26 and Rule 15(4) to Order VI Rule 15.

It was contended that the affidavit required under section 26(2) and Order VI, Rule 15(4) of the Code creates an additional responsibility on the deponent as to the truth of the facts stated in the pleadings.

• Amendment of Order XVIII Rule 4
  • Another contention by the parties was that there is a conflict between Order VIII, Rule 4 and Order XVIII, Rule 5(a) and (b).
  • The conflict here was that Order XVIII, Rule 5, provides for the recording of evidence by the Court itself in appealable cases.
  • However, Rule 4 and 19 of the same order enable the commissioner to record the statements in any case, notwithstanding any situation.
  • Order XVIII Rule 4(4) requires that any objection raised during the recording of evidence before the Commissioner shall be recorded by him and decided by the Court at the stage of arguments.
  • Order XVIII Rule 4(8) stipulates that the provisions of Rules 16, 16-A, 17 and 18 of Order XXVI, in so far as they are applicable, shall apply to the issue, execution and return of such commission thereunder.
  • The discretion to declare a witness hostile has not been conferred on the commissioner.
• Additional Evidence
  • In Salem Advocates Bar Association's case, it has been clarified that on deletion of Order XVIII Rule 17-A which provided for leading of additional evidence, the law existing before the introduction of the amendment would stand restored.
    • The Rule was deleted by the Amendment Act of 2002.
  • The Court has inbuilt power to permit the parties to produce evidence not known to them earlier or which could not be produced in spite of due diligence.
  • Therefore, deletion of Order XVIII Rule 17-A does not disentitle production of evidence at a later stage.
• Order VIII Rule 1
  • Order VIII Rule 1, as amended by Act 46 of 1999, provides that the defendant shall, within 30 days from the date of service of summons to him, present a written statement in his defence.
  • The use of the word 'shall' in Order VIII Rule 1 by itself is not conclusive to determine whether the provision is mandatory or directory.
  • It was contended that the rules of procedure are made to advance the cause of justice and not to defeat it.
  • Construction of the rule or procedure which promotes justice and prevents miscarriage has to be preferred.
  • The rules or procedure are hand-maid of justice and not its mistress.
• Section 39
  • Section 39 (4) section provides for the non-authorising Court to execute decree outside its jurisdiction.
  • But it does not dilute other provisions giving such power in compliance with conditions stipulated in those provisions.
  • Thus, Order XXI, Rule 3, or Rule 48 provide differently and not affected by Section 39 (4).
• Section 64(2)
  • Section 64(2) in the Code has been inserted by Amendment Act, 22 of 2002.
  • Section 64, as it originally stood, has been renumbered as Section 64(1).
  • Sub-section (2) protects the aforesaid acts if made in pursuance of any contract for such transfer or delivery entered into and registered before the attachment.
  • The concept of registration has been introduced to prevent false and frivolous cases of contracts being set up with a view to defeat the attachments.
  • If the contract is registered and there is subsequent attachment, any sale deed executed after attachment will be valid, if it is unregistered, the subsequent sale after attachment would not be valid. Such sales would not be protected.
  • There is no ambiguity in Sub-section (2) of Section 64.
• Costs
  • The contention raised by the parties with respect to the suit contended that many unscrupulous parties take advantage of the fact that either the costs are not awarded, or nominal costs are awarded to the unsuccessful party.
  • Unfortunately, it has become a practice to direct parties to bear their own costs.
  • In a large number of cases, such an order is passed despite Section 35(2) of the Code.
  • Such a practice also encourages filing of frivolous suits.
  • It also leads to the taking up of frivolous defences.
• Section 80
  • It was contended that Section 80 (1) requires prior notice of two months to be served on Government as condition for filing suit except where there is urgency for interim order.
  • Two months period is provided so that the Government shall examine the claim put up in notice and has sufficient time to send a suitable reply.
  • The underlying object is to curtail litigation, but in large number of cases, either notice is not replied, or reply is generally vague and evasive.

REPORT 2

• Both "shall" and "may" are used in Section 89 of the C.P.C., whereas "shall" is used in Order X, Rule 1A.
• However, when these provisions are read together, it becomes clear that Section 89's use of "may" only applies to the aspect of reformulating the terms of a potential settlement and its reference to one of the ADR methods.
• There is no opposition.
• It is obvious that the disagreement that is summarized in the terms of settlement created or modified in accordance with Section 89 is what is meant when one of the ADR modalities is referred to.

Relying on the case of P Anand Gajapathi Raju v. P.V.G. Raju, it was contended that if reference is made to arbitration under Section 89, the Arbitration Act will apply from the stage after reference and not before.

Further, it was also submitted that even if the arbitration or any other proceeding is not successful, the Court would not be barred from trying the suit afterwards.

REPORT 3

• Case Flow Management and Model Rules are the topics of Report No. 3. The case management policy has the potential to significantly increase the number of cases that are resolved.
• Its purpose is for the judge or another court official to set a timeline and keep track of a case from the beginning to the end.
• Trial courts, first appellate subordinate courts, and Supreme Courts have each received a different set of Model Case Flow Management Regulations.
• These proposed rules cover every phase of the case in great detail. In order to move towards delivering fair, quick, and affordable justice to the litigating public, the High Courts can review these Rules, discuss the issue, and decide whether to accept or make case law management and model rules with or without change.

Conclusion

• Salem Advocate Bar Association v. Union of India is a landmark judgment of the Supreme Court of India which has been relied by Courts and tribunals in over 700 judgments.
• The judgements constitute sound law and differ from those typically seen in that they do not include the individual opinions of all the judges, as is common in most judgements.

Note

Justice Y K Sabharwal in this case gave a few important rules of interpretation in respect of procedural law.

• He affirmed that “Procedure is handmaid to justice and not its mistress” which means it is the justice that controls the procedure.
• It was also observed that the verification is not an oath, just self-declaration, affidavit is an oath.