Supreme Court in the case namely Shah Babulal Khimji vs. Jayaben D. Kania and Anr., (Civil Appeal No. 662 of 1981), decided on 10.08.1981 and reported as AIR 1981 SC 1786;  1 SCR 187, explained the scope and ambit of the term Judgment.
In the instant appeal filed against the impugned order of the Division Bench of the Bombay High Court, Appellant’s appeal challenging trial court verdict was dismissed on the ground that the appeal was not maintainable as the order impugned was not a judgment within the meaning of clause 15 of the Letters Patent of the High Court.
Supreme Court set aside the finding of High Court by opining that appeal before the High Court was maintainable and the High Court should have entertained and decided it on merits. Dispute had originated before the trial court in form of a suit by Appellant for specific performance of a contract and therein a prayer was made for an interim relief by appointing a receiver of the suit property and injuncting the defendant from disposing of the suit property during the pendency of the suit. The single Judge after hearing the notice of motion dismissed the application for appointment of receiver as also for interim injunction. Thereafter, an appeal was preferred before the Bombay High Court which dismissed the appeal as being non-maintainable on the ground that the order impugned (order of the Single Judge) was not a judgment as contemplated by Clause 15 of the letters patent of the High Court, which eventually brought the dispute before the Apex Court.
The substantial questions of law raised in the instant appeal was as to the scope, ambit and meaning of the word 'judgment' appearing in clause 15 of the Letters Patent of the Bombay High Court and corresponding clauses in the Letters Patent of other High Courts.
Accordingly, applicability of Section 104 read with order 43 Rule 1 of the Code of Civil Procedure, 1908 became a necessary issue for the Court to deal with. It was held section 104 made it clear that appeals against orders mentioned in order 43 Rule 1 were not in any way inconsistent with the Letters Patent and merely provided an additional remedy by allowing appeals against miscellaneous Orders passed by the Trial Judge to a larger Bench. Section 104 read with Order 43 Rule 1 clearly applies to the proceedings before the Trial Judge of the High Court. Section 104 read with Order 43 Rule 1 does not in any way abridge, interfere with or curb the powers conferred on the Trial Judge by Clause 15 of the Letters Patent. What Section 104 read with Order 43 Rule 1 does is merely to give an additional remedy by way of an appeal from the orders of the Trial Judge to a larger Bench.
When the Code contemplates appeals against orders passed under various clauses of Order 43 Rule 1 by a Trial Judge, such an appeal can lie to a larger Bench of the High Court and not to any court subordinate to the High Court.
It was observed that the intention of the legislature in enacting Sub-section (1) of Section 104 was clear: - the right to appeal conferred by any other law for the time being in force is expressly preserved. This intention is emphasised by Section 4 which provides that in the absence of any specific provision to the contrary nothing in the Code is intended to limit or otherwise affect any special jurisdiction or power conferred by or under any other law for the time being in force. The right to appeal against judgments (which did not amount to decrees) under the Letters Patent, was therefore not affected by Section 104(1) of the Code of Civil Procedure, 1908.
Thus, the right to appeal against judgments under the Letters Patent is not affected by Section 104(1) of the Code of 1908. There is no inconsistency between the Letters Patent jurisdiction and Section 104 read with Order 43 Rule 1 of the Code of 1908. The effect of Section 104 is thus, not to take away a right of appeal given by Clause 15 of the Letters Patent, but to create a right of appeal in cases even where Clause 15 of the Letters Patent is not applicable.
Following hence could be held as key points:
(1) There is no inconsistency between Section 104 read with Order 43 Rule I and the appeals under the Letters Patent and there is nothing to show that the Letters Patent in any way excludes or overrides the application of Section 104 read with Order 43 Rule I or to show that these provisions would not apply to internal appeals within the High Court.
(2) Even if it be assumed that Order 43 Rule I does not apply to Letters Patent appeals, the principles governing these provisions would apply by process of analogy.
(3) Having regard to the nature of the orders contemplated in the various clauses of Order 43 Rule 1, there can be no doubt that these orders purport to decide valuable rights of the parties in ancillary proceedings even though the suit is kept alive and that these orders do possess the attributes or character of finality so as to be judgments within the meaning of Clause 15 of the Letters Patent and hence, appealable to a larger Bench.
(4) The concept of the Letters Patent governing only the internal appeals in the High Courts and the Code of Civil Procedure having no application to such appeals is based on a serious misconception of the legal position.
The Supreme Court then moved on to the next question as to under what circumstances orders passed by a Trial Judge not covered by Order 43 Rule 1 would be appealable to a Division Bench. To handle the question, court dealt with question as to what is the true scope, meaning and purport of the word 'judgment' used in Clause 15 of the Letters Patent.
Supreme Court observed that in view of the decision taken by it on the applicability of Section 104 read with Order 43 Rule 1 even to internal appeals in the High Court, the controversy regarding the meaning of the word 'judgment' largely narrowed down and sufficiently abridged because the orders mentioned in clauses (a) to (w) of Order 43 Rule 1 having been held to be appealable, there would be only a few cases left in which the question as to whether or not the orders passed by the Trial Judge are judgments would arise.
The judgment must be the final pronouncement which puts an end to the proceeding so far as the court dealing with it is concerned. It certainly involves the determination of some right or liability, though it may not be necessary that there must be a decision on the merits.
Where an order which is the foundation of the jurisdiction of the Court or one which goes to the root of the action, is passed against a particular party, it doubtless amounts to a judgment. Whenever a Trial Judge decides a controversy which affected valuable rights of one of the parties, it must be treated to be a judgment within the meaning of the Letters Patent.
In finding out whether the order is a judgment within the meaning of Clause 15 of the Letters Patent it has to be found out that the order affects the merits of the action between the parties by determining some right or liability. The right or liability is to be found out by the court. The nature of the order will have to be examined in order to ascertain whether there has been a determination of any right or liability.
The definition of the word 'judgment' in Sub-section (9) of Section 2 of the Code of 1908 is linked with the definition of 'decree' which is defined in Sub-section (2) of Section 2. Thus, under the Code of Civil Procedure, a judgment consists of the reasons and grounds for a decree passed by a court. As a judgment constitutes the reasons for the decree it follows as a matter of course that the judgment must be a formal adjudication which conclusively determines the rights of the parties with regard to all or any of the matters in controversy. The concept of a judgment as defined by the Code of Civil Procedure seems to be rather narrow and the limitations engrafted by Sub-section (2) of Section 2 cannot be physically imported into the definition of the word 'judgment' as used in Clause 15 of the Letters Patent because the Letters Patent has advisedly not used the terms 'order' or 'decree' anywhere. The intention, therefore, of the givers of the Letters Patent was that the word 'judgment' should receive a much wider and more liberal interpretation than the word 'judgment' used in the Code of Civil Procedure. At the same time, it cannot be said that any order passed by a Trial Judge would amount to a judgment; otherwise there will be no end to the number of orders which would be appealable under the Letters Patent. It seems to us that the word 'judgment' has undoubtedly a concept of finality in a broader and not a narrower sense.
In other words, a judgment can be of three kinds:
(1) A Final Judgment-a judgment which decides all the questions or issues in controversy so far as the Trial Judge is concerned and leaves nothing else to be decided. This would mean that by virtue of the judgment, the suit or action brought by the plaintiff is dismissed or decreed in part or in full. Such an order passed by the Trial Judge indisputably and unquestionably is a judgment within the meaning of the Letters Patent and even amounts to a decree so that an appeal would lie from such a judgment to a Division Bench.
(2) A preliminary judgment-This kind of a judgment may take two forms-(a) where the Trial Judge by an order dismisses the suit without going into the merits of the suit but only on a preliminary objection raised by the defendant or the party opposing on the ground that the suit is not maintainable. Here also, as the suit is finally decided one way or the other, the order passed by the Trial Judge would be a judgment finally deciding the cause so far as the Trial Judge is concerned and therefore appealable to the larger Bench. (b) Another shape which a preliminary judgment may take is that where the Trial Judge passes an order after hearing the preliminary objections raised by the defendant relating to maintainability of the suit, e.g., bar of jurisdiction, res Judicata, a manifest defect in the suit, absence of notice under Section 80 and the like, and these objections are decided by the Trial Judge against the defendant, the suit is not terminated but continues and has to be tried on merits but the order of the Trial Judge rejecting the objections doubtless adversely affects a valuable right of the defendant who, if his objections are valid, is entitled to get the suit dismissed on preliminary grounds. Thus, such an R order even though it keeps the suit alive, undoubtedly decides an important aspect of the trial which affects a vital right of the defendant and must, therefore, be construed to be a judgment so as to be appealable to larger Bench.
(3) Intermediary or Interlocutory judgment-Most of the interlocutory orders which contain the quality of finality are clearly specified in clauses (a) to (w) of Order 43 Rule 1 and have already been held by us to be judgments within the meaning of the Letters Patent and, therefore, appealable. There may also be interlocutory orders which are not covered by Order 43 Rule 1 but which also possess the characteristics and trappings of finality in that, the orders may adversely affect a valuable right of the party or decide an important aspect of the trial in an ancillary proceeding. Before such an order can be a judgment the adverse effect on the party concerned must be direct and immediate rather than indirect or remote. For instance, where the Trial Judge in a suit under Order 37 of the Code of Civil Procedure refuses the defendant leave to defend the suit, the order directly affects the defendant because he loses a valuable right to defend the suit and his remedy is confined only to contest the plaintiff's case on his own evidence without being given a chance to rebut that evidence. As such an order vitally affects a valuable right of the defendant it will undoubtedly be treated as a judgment within the meaning of the Letters Patent so as to be appealable to a larger Bench. Take the converse case in a similar suit where the trial Judge allows the defendant to defend the suit in which case although the plaintiff is adversely affected but the damage or prejudice caused to him is not direct or immediate but of a minimal nature and rather too remote because the plaintiff still possesses his full right to show that the defence is false and succeed in the suit. Thus, such an Order passed by the Trial Judge would not amount to a judgment within the meaning of Clause 15 of the Letters Patent but will be purely an interlocutory order.
Similarly, suppose the Trial Judge passes an Order setting aside an exparte decree against the defendant, which is not appealable under any of the clauses of Order 43 Rule 1 though an order rejecting an application to set aside the decree passed exparte falls within Order 43 Rule l Clause (d) and is appealable, the serious question that arises is whether or not the order first mentioned is a judgment within the meaning of Letters Patent. The fact, however, remains that the order setting aside the ex-parte decree puts the defendant to a great advantage and works serious injustice to the plaintiff because as a consequence of the order, the plaintiff has now to contest the suit and is deprived of the fruits of the decree passed in his favour. In these circumstances, therefore, the order passed by the Trial Judge setting aside the ex parte decree vitally affects the valuable rights of the plaintiff and hence amounts to an interlocutory judgment and is therefore, appealable to a larger Bench.
In the course of the trial, the Trial Judge may pass a number of orders whereby some of the various steps to be taken by the parties in prosecution of the suit may be of a routine nature while other orders may cause some inconvenience to one party or the other, e.g., an order refusing an adjournment, an order refusing to summon an additional witness or documents, an order refusing to condone delay in filing documents, after the first date of hearing an order of costs to one of the parties for its default or an order exercising discretion in respect of a procedural matter against one party or the other. Such orders are purely interlocutory and cannot constitute judgments because it will always be open to the aggrieved party to make a grievance of the order passed against the party concerned in the appeal against the final judgment passed by the Trial Judge.
Thus, every interlocutory order cannot be regarded as a judgment but only those orders would be judgments which decide matters of moment or affect vital and valuable rights of the parties and which work serious injustice to the party concerned. Similarly, orders passed by the Trial Judge deciding question of admissibility or relevancy of a document also cannot be treated as judgments because the grievance on this score can be corrected by the appellate court in appeal against the final judgment.
In another instance, suppose the Trial Judge allows the plaintiff to amend his plaint or include a cause of action or a relief as a result of which a vested right of limitation accrued to the defendant is taken away and rendered nugatory. It is manifest that in such cases, although the order passed by the trial Judge is purely discretionary and interlocutory it causes gross injustice to the defendant who is deprived of a valuable right of defence to the suit. Such an order, therefore, though interlocutory in nature contains the attributes and characteristics of finality and must be treated as a judgment within the meaning of the Letters Patent.
Again, suppose the Trial Judge allows the plaintiff to amend the plaint by adding a particular relief or taking an additional ground which may be inconsistent with the pleas taken by him but is not barred by limitation and does not work serious injustice to the defendant who would have ample opportunity to disprove the amended plea taken by plaintiff at the trial. In such cases, the order of the Trial Judge would only be a simple interlocutory order without containing any quality of finality and would therefore not be a judgment within the meaning of Clause 15 of the Letters Patent.
Following were marked as some of the principles which might guide a Division Bench in deciding whether an order passed by the Trial Judge amounts to a judgment within the meaning of the Letters Patent.
Whereas an order deciding the nature of the court fees to be paid by the plaintiff would be a judgment but this order affects only the plaintiff or the Government and not the defendant. Thus, only the plaintiff or the Government as the case may be will have the right to file an appeal in the Division Bench and not the defendant because the question of payment of court fees is a matter between the Government and the plaintiff and the defendant has no locus in this regard.