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PETITIONER: MULRAJ

       Vs.

RESPONDENT: MURTI RAGHONATHJI MAHARAJ

DATE OF JUDGMENT: 02/03/1967

BENCH: WANCHOO, K.N. BENCH: WANCHOO, K.N. BACHAWAT, R.S. BHARGAVA, VISHISHTHA

CITATION:  1967 AIR 1386            1967 SCR  (3)  84

ACT: Stay order-When takes effect.

HEADNOTE: While   an  application  of  the   respondent-landlord   for permission   to  sue  for  ejectment  of  his  tenant,   the appellant,  under the U.P. (Temporary) Rent Control Act  was pending  before a Magistrate, the appellant applied for  the transfer  of  proceedings relating to permission  from  that Magistrate’s  Court.  On that transfer application an  order was  passed ,staying further proceedings.  This  stay  order was not communicated to the Magistrate with the result  that the  Magistrate granted permission to sue.   The  respondent filed the suit for ejectment where the appellant -raised the plea  that the permission granted subsequent to  stay  order was a nullity as the Magistrate dealing with the matter  had lost his jurisdiction thereunder.  The trial court  accepted the appellant’s plea, but High Court in appeal rejected  it. In appeal to this court HELD : The appealmust be dismissed. An order of stay inan execution matter is in the nature  of a  prohibitory order and is addressed to the court  that  is carrying out execution.  It is not of the same nature as  an order allowing an appeal and quashing execution proceedings. That  kind of order takes effect immediately it  is  passed, for  such an order takes away the very jurisdiction  of  the court  executing  the  decree as there is  nothing  left  to execute  thereafter.  But a mere order of stay of  execution does not take away the jurisdiction of the court.  All  that it  does is to prohibit the court from proceedings with  the execution  further,  and the court, unless it knows  of  the order cannot be expected to carry it out.  As soon as a stay order is withdrawn, the executing court is entitled to carry on execution and there is no question of fresh conferment of jurisdiction  by  the  fact that the  stay  order  has  been withdrawn.   The  jurisdiction  of the court  is  there  all along.   In effect a stay order is more or less in the  same position as an order of injunction with one difference.   An order of injunction is generally issued to a party and it is forbidden from doing certain acts. [87G-88D, H] The  court  may receive knowledge either on  receipt  of  an

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order  of stay from the court that passed it or through  one party  or  the other supported by an affidavit or  in  other way. [89E-F] The  court can always act under s. 151 C.P.C. and set  aside steps  taken between the time the stay order was passed  and the time it was brought to its notice, if that is  necessary in the ends of justice and the party concerned asks it to do so. [90E] What have been said about execution proceedings applies with greater   force   to   stay  orders   passed   in   transfer applications. [90H] The above principle may not be applicable where stay is made for ministerial officers. [91D] 85 Bessesswari Chowdhurany v.  Horro Sunder Mozmadar  (1896-97) 1  C.W.N. 226, Hukum Chand Bold v. Kamalanand Singh,  I.L.R. (1906)  XXXIII Cal. 227, Liakat Mian v. Padampat  Singhania, A.I.R. 1951 Pat. 130, Din Dyal Lakhi Ram v. Union of  India, A.I.R.  1954 Punj. 46 and Kasaribada Venkatachalpati Rao  v. Maddipatla  Kameshwaramma,  I.L.R.  (1918)  XLI  Mad.   151, approved. Hukum Chand Boid v.  Kamalanand Singh, I.L.R. (1906)  XXXIII Cal.  227 and L. Parsotam Saran v.  D. Barhma  Nand,  A.I.R. 1927 All. 401, disapproved.

JUDGMENT: CIVIL  APPELLATE  JURISDICTION : Civil Appeal  No.  1938  of 1966. Appeal  by special leave from the judgment and  order  dated April 20, 1966 of the Allahabad High Court in Second  Appeal No. 2648 of 1964. Yogeshwar Prasad and S. S. Khanduja, for the appellant. Hardev Singh, for the respondent. The Judgment of the Court was delivered by Wanchoo,  j This is an appeal by special leave  against  the judgment  of  the  High Court  of  Allahabad.   Brief  facts necessary  for present purposes are these.   The  respondent filed a suit against the appellant for eviction from a  shop which  the  appellant  had taken on monthly  rent  from  the respondent.   The suit was filed after permission  had  been obtained  under  the  U.P. (Temporary Control  of  Rent  and Eviction  Act, No. III of 1947, (hereinafter referred to  as the  Act),  in the court of the Munsif in  Jhansi.   It  was contested  by  the appellant and one of  the  points  raised before the trial court was that as the permission to sue had been  granted  at a time when there was a  stay  order,  the Magistrate granting the permission had no jurisdiction to do so  and  therefore the permission was a  nullity.   On  that basis it was contended that the suit should fail for no suit could continue under the Act without such permission. The Munsif dismissed the suit. - The respondent then went in appeal.   The  appeal court upheld the order of  the  Munsif taking  the view that the permission granted after the  stay order  had been passed was a nullity.  The  respondent  then came in second appeal to the High Court, and the only  point considered  there was whether the permission granted by  the Magistrate  was a nullity or not.  It may be mentioned  that though the stay order had been passed on September 29,  1961 by  the District Magistrate, the Magistrate who was  dealing with  the matter of permission, had no knowledge of it  when he granted the permission on October 4, 1961.  The  question that  arose before the High Court therefore was whether  the permission granted in

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86 these circumstances could be said to be a nullity.  The High Court  held that the stay order could not and did  not  take away  the jurisdiction of the Magistrate from the moment  it was passed and that as the Magistrate had no knowledge of or information  about  the  stay  order  when  he  granted  the permission  on  October 4, 1961, that  permission  was  with jurisdiction  and the suit would therefore be  maintainable. As  no  other point was apparently in dispute  in  the  High Court  it  allowed  the  appeal and  granted  a  decree  for ejectment  and  rent  in  favour  of  the  respondent.   The appellant,  then obtained special leave from this Court,  as there is some conflict of opinion between the High Courts on this question. As  we  have already indicated, the facts  on  the  question raised  before us are not in dispute.  When the  application for  permission was pending before Sri Nigam,  Magistrate  I Class, who had jurisdiction to deal with that application by virtue  of  the authority delegated to him by  the  District Magistrate,  it appears that the appellant applied  for  the transfer  of  proceedings relating to  permission  from  Sri Nigam’s  court.  On that transfer application, the  District Magistrate passed an order staying further proceedings  till the  disposal of the transfer application.  This  order  was not  communicated to the Magistrate concerned by the  office of  the  District Magistrate.  Nor does it appear  that  the appellant informed the Magistrate of the order of stay  with the,  result  that on October 4, 1961, the  Magistrate  gave permission  to the respondent to file a suit  for  eviction. When  however the respondent filed the suit in the  Munsif’s Court,  the  appellant raised the question that  as  a  stay order had been passed on September 29, 1961, the  permission granted on October 4, 1961, was a nullity as the  Magistrate dealing   with   the  matter  had  lost   his   jurisdiction thereunder. There  has been difference of opinion among the High  Courts on the question of the effect of a stay order,  particularly with reference to execution proceedings.  The High Courts of Calcutta, Patna and Punjab have held that in such a case the stay order takes effect from the moment it is passed and the fact that the court executing the decree has no knowledge of it  makes  no  difference  and  all  proceedings  taken   in execution  after the stay order has been passed are  without jurisdiction.  On the other hand, the High Courts of  Madras and Kerala have taken the view that the executing court does not lose its jurisdiction from the moment the stay order  is passed  and  that  the  order  being  in  the  nature  of  a prohibitory  order the court carrying on execution does  not lose  its jurisdiction to do so till the order comes to  its knowledge  and that proceedings taken in between are  not  a nullity.   The Allahabad High Court seems to have  taken  an intermediate  view and has held that where rights’ of  third parties  like a stranger auction-purchaser  have  intervened the  fact  that the executing court had no  knowledge  would protect third parties. 87 The earliest case on the point is Bessesswari Chowdhurany v. Horro  Sunder  Mozmadar  and  others(1).   In  that  case  a Division  Bench  of the Calcutta High Court  held  that  "an order staying execution of a decree against which an  appeal is  pending is in the nature of a prohibitory order, and  as such  would  only  take  effect  when  communicated.   If  a property is sold before such an order is communicated to the court holding the sale, such sale is not void and cannot  be treated  as a nullity".  In Hukum Chand Boid  v.  Kamalanand

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Singh(2),  another  Division Bench of the  same  High  Court dissented  from the view taken in  Besseswari  Chowdhurany’s case(1) and held that an order of stay takes effect from the moment it is passed and the knowledge of the court to  which it is addressed is immaterial and from the moment the  order is  passed  the court to which the application is  made  for execution  has no authority to execute it.  It is these  two cases of the Calcutta High Court which are the basis of  the decisions  of  other  High Courts.   Some  High  Courts.  as already  indicated,  have accepted the view  in  Bessesswari Chowdhurany’s case(1) while other High Courts have  followed the view taken in Hukum Chand Boid’s(2) case. Before  we  consider the question raised before us,  we  may indicate  the leading cases on the two sides  briefly.   The Patna High Court in Liakat Mian v. Padampat Singhania(3) and the  Punjab  High Court in Din Dayal Lakhi Ram v.  Union  of India(4) follow Hukum Chand Boid’s(2) case.  The Madras High Court  in  Kasaribada  Venkatachalpati  Rao  v.   Maddipatla Kameshwaramma(5) follows Bessesswari Chowdhurany’s  case(6). The   Kerala  High  Court  in   Cheeramparambilalikutty   v. Thalavanaparambilalikutty(6)   also   follows    Bessesswari Chowdhurany’s case(1).  It is unnecessary to refer to  other cases  of these courts which were cited before us  for  they follow the view taken in these leading cases. The  Allahabad High Court in L. Parsotam Saran v. B.  Barhma Nand(7)  , as already indicated, took an  intermediate  view and held that where a third party’s interest intervened, the stay  order  does not nullify a sale in favour  of  a  third party.:  But  where  only  the  parties  to  the   execution proceedings  were  concerned it followed the view  taken  in Hukum Chand Bold’s case(2). We  are of opinion that the view taken in Bessesswari  Chow- dhurany’s  case(1) is the correct one.  An order of stay  in an  execution  matter is in our opinion in the nature  of  a prohibitory  order  and is addressed to the  court  that  is carrying (1)  [1896-97] 1 C.W.N. 226. (3) A.I.R. 1951 Pat. 130. (5)I.L.R. (1918) XLI Mad. 151. (2)I. L.R. [1906] XXXIII Cal 227. (4)   A.I.R. 1954 Punj. 46. (6)  I.L.R. (196) Ker. 528. (7) A.I.R. 1927 All. 401. 88 out  execution.   It is not of the same nature as  an  order allowing an appeal and quashing execution proceedings.  That kind  of  order takes effect immediately it is  passed,  for such an order takes away the very jurisdiction of the  court executing  the  decree as there is nothing left  to  execute thereafter.  But a mere order of stay of execution does  not take  away the jurisdiction of the court.  All that it  does is to prohibit the court from proceeding with the  execution further,  and the court unless it knows of the order  cannot be  expected  to carry it out.  Therefore,  till  the  order comes  to  the knowledge of the court  its  jurisdiction  to carry  on  execution is not affected by a stay  order  which must  in  the  very  nature of things be  treated  to  be  a prohibitory  order  directing  the  executing  court   which continues to have jurisdiction to stay its hand till further orders.   It  is  clear  that as soon as  a  stay  order  is withdrawn,  the  executing  court is entitled  to  carry  on execution  and there is no question of fresh  conferment  of jurisdiction  by  the  fact that the  stay  order  has  been withdrawn.   The  jurisdiction  of the court  is  there  all along.  The only effect of the stay order is to prohibit the

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executing  court from proceeding further and that  can  only take  effect when the executing court has knowledge  of  the order.  The executing court may have knowledge of the  order on  the order being communicated to it by the court  passing the stay order or the executing court may be informed of the order by one party or the other with an affidavit in support of  the information or in any other way.  As soon  therefore as the executing court has come to know of the order  either by communication from the court passing the stay order or by an affidavit from one party or the other or in any other way the executing court cannot proceed further and if it does so it acts illegally.  There can be no doubt that no action for contempt  can  be taken against an executing  court,  if  it carries  on execution in ignorance of the order of stay  and this  shows the necessity of the knowledge of the  executing court before its jurisdiction can be affected by the  order. In effect therefore a stay order is more or less in the same position as an order of injunction with one difference.   An order of injunction is generally issued to a party and it is forbidden from doing certain acts.  It is well-settled  that in  such  a  case  the party  must  have  knowledge  of  the injunction order before it could be penalised for disobeying it.  Further it is equally well-settled that the  injunction order  not  being  addressed  to the  court,  if  the  court proceeds  in  contravention  of the  injunction  order,  the proceedings are not a nullity.  In the case of a stay order, as  it  is  addressed to the court  and  prohibits  it  from proceeding  further, as soon as the court has  knowledge  of the order it is bound to obey it and if it does not, it acts illegally, and all proceedings taken after the knowledge  of the  order would be a nullity.  That in our opinion  is  the only  difference between, an order of injunction to a  party and an order of stay to a court.  In both cases knowledge of the  89 party  concerned  or of the court is  necessary  before  the prohibition takes effect.  Take the case where a  stay order has been passed but it is never brought to the notice of the court,  and  the  court  carries  on  proceedings  ignorance thereof.   It  can hardly be said that the  court  has  lost jurisdiction    because  of  some order  of  which   has  no knowledge.  This to our mind clearly follows from the  words of O. XLI R. 5 of the Code of Civil Procedure which  clearly lays down that mere filling of an appeal does not operate as stay  of proceedings in execution, but the  appellate  court has  the  power  stay  of  execution.  Obviously  when   the appellate  court orders the stay of execution the order  can have  affect  only when it is made known  to  the  executing court.   We cannot agree that an order staying execution  is similar  to  an  order  allowing  an  appeal  and   quashing execution  proceedings.   In the case  where  the  execution ’Proceeding.   is  quashed,  the  order  takes   effect   in immediately and there is nothing left to execute.  But where a stay order is passed, execution still stands and can go on unless  the court executing the decree has knowledge of  the stay  order.   It  is  only when  the  executing  court  has knowledge  of  the stay order that the court must  stay  its hands and anything it does thereafter would be a nullity  so long as the stay order is in force. It  is  argued that this view  would  introduce  uncertainty inasmuch us proceedings may go on and it may take  sometime- whether long or short-for the stay order to reach the court. There is in our opinion no question of uncertainty, even  if we  hold that the stay order must come to the  knowledge  of the  court to which it is addressed before it takes  effect.

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The  court  may receive knowledge either on  receipt  of  an order  of stay from the court that passed it or through  one party or the other supported by an affidavit or in any other way.   There is in our opinion no uncertainty by  reason  of the fact that the court to which the stay order is addressed must have knowledge of it before it takes effect for it  can always be proved that the court to which the stay order  was addressed had knowledge of it and that is not a matter which should really create any difficulty or uncertainty.  Once it is clear that a stay order is in the nature of a prohibitory order,  knowledge of it by the court which is prohibited  is essential before the court is deprived of the power to carry on  the  proceedings.   As was pointed  out  in  Bassesswari Chowdhurany’s  case(1), "the appellate court has nothing  to do with the execution of the decree; the execution  proceeds under  the direction of the court which made the decree  and it has full authority to execute it.  An order of stay  does not undo anything which has been done; its utmost affect  is to stop further action in the direction of execution, but it would  only  have that effect when it reached the  court  or person whose duty it was to obey it."  (1)(1896-97) 1 C. W. N. 226. Sup. CI/67--7 90 As we have already indicated, an order of stay is as much  a prohibitory  order  as an injunction order  and  unless  the court  to which it is addressed has knowledge of  it  cannot deprive  that court of the jurisdiction to proceed with  the execution before it.  But there is one difference between an order of injunction and an order of stay arising out of  the fact  that an injunction order is usually passed  against  a party while a stay order is addressed to the court.  As  the stay  order is addressed to the court; as soon as the  court has  knowledge of it must stay its hand; if it does  not  do so,  it  acts illegally.  Therefore, in the case of  a  stay order  as opposed to an order of injunction, as soon as  the court  has  knowledge of it must stay its hand  and  further proceedings  are  illegal; but so long as the court  has  no knowledge   of  the  stay  order  it  does  not   lose   the jurisdiction  to deal with the execution which it has  under the Code of Civil Procedure. Though  the court which is carrying on execution is not  de- prived  of  the  jurisdiction the moment  a  stay  order  is passed, even though it has no knowledge of it, this does not mean  that when the court gets knowledge of it is  powerless to  undo any possible injustice that might have been  caused to  the  party  in whose favour the stay  order  was  passed during  the period till the court has knowledge of the  stay order.   We are of opinion that s. 151 of the Code of  Civil Procedure  would always be available to the court  executing the  decree,  for  in such a case, when the  stay  order  is brought  to its notice it can always act under S.  151,  and set  aside steps taken between the time the stay  order  was passed and the time it was brought to its notice, if that is necessary  in  the ends of justice and the  party  concerned asks  it to do so.  Though, therefore, the  court  executing the  decree  cannot  in  our  opinion  be  deprived  of  its jurisdiction to carry on execution till it has knowledge  of the  stay order, the court has the power in our view to  set aside  the proceedings taken between the time when the  stay order  was  passed and the time when it was brought  to  its notice, if it is asked to do so and it considers that it  is necessary  in  the  interests of justice  that  the  interim proceedings should be set aside.  But that can only be  done by the court which has taken the interim proceedings in  the

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interest  of  justice  under s. 151 of  the  Code  of  Civil Procedure provided the order is brought to its knowledge and a prayer is made to set aside the interim proceedings within a reasonable time.  Otherwise the interim proceedings in our opinion  are  not  a  nullity and in  the  absence  of  such exercise of power by the court executing the decree under S. 151, they remain good for all purposes. What  we have said about execution proceedings applies  with greater   force   to   stay  orders   passed   in   transfer applications,  as  ’in  the present case.  In  the  case  of execution proceedings at 91 any rate there is an appeal in which a stay order is passed; the  transfer  proceedings are collateral  _proceedings  and even  though  the superior authority may have the  power  to stay  it  cannot  deprive  the  inferior  authority   having jurisdiction  of  that  jurisdiction,  unless  the  inferior authority   is  apprised  of  the  order  by  the   superior authority.  In the present case the order of stay never came to  the knowledge of the Magistrate concerned till  he  gave the  permission on October 4, 1961.  Later on  the  District Magistrate  himself  dismissed the transfer  petition.   The order  was  not brought to the knowledge of  the  Magistrate concerned  by  the appellant at any time.  Nor did  he  ever apply  to the Magistrate to set aside the permission  passed in   ignorance  in  the  interest  of  justice.   In   these circumstances, the appellant cannot challenge the permission as a nullity in the suit which has been brought on the basis of that permission. We  may,  however, add that what we have said  above  refers only   to  proceedings  being  carried  on  by   courts   or authorities after the stay order has been passed and  before they have knowledge of it.  But this may not apply in a case where stay is made for ministerial officers, as for  example in the case of a court asking a bailiff not to sell and  the bailiff selling without knowledge of the order of the  court prohibiting it to carry on the sale.  The position in such a case  may be different, but as to that we express  no  final opinion in the present appeal. The  appeal  therefore fails and is  hereby  dismissed  with costs. Y.P.                              Appeal dismissed. 92