Case Note & Summary
The matter arose from special leave petitions filed by the National Textile Corporation (U.P.) Ltd. against an order of the Allahabad High Court Division Bench dated 14 May 1996 in a pending civil suit concerning possession of premises. Earlier, the Supreme Court had passed interim orders on 13 July 1987 and 12 July 1988 directing the petitioner to deposit Rs.25,000 per month in an interest-bearing account in the name of the first respondent, with a stipulation that the first respondent could not withdraw any amount without prior court order. When a clarification was sought, the Supreme Court by order dated 7 October 1996 made clear that the deposit was not meant as rent for the part of the premises occupied by the petitioner, but was to be adjusted as per the final order in the proceedings arising out of the suit. The High Court, in the impugned order, allowed respondents 11 to 14 to withdraw the deposited amount after furnishing a bank guarantee of a nationalised bank to the extent of the amount lying in deposit and an additional guarantee of 10% of that amount, to the satisfaction of the Civil Judge, Kanpur Nagar, after giving an opportunity of hearing to the plaintiff-appellant. The Supreme Court, while disposing of the appeals, held that the withdrawal would be subject to the result in the appeal and subject to adjustment as per the orders of the civil court in the pending suit. If the appellant succeeded in the appeal arising out of the suit, the withdrawal would be subject to the orders that may be passed therein. No costs were awarded.
Headnote
A) Civil Procedure - Interim Orders - Nature and Adjustment of Court-Directed Monthly Deposits - Supreme Court Orders dated 13 July 1987 and 12 July 1988 - The Supreme Court directed the petitioner to deposit Rs.25,000 per month into an interest-bearing account in the name of the first respondent, not withdrawable without prior court order; subsequent clarification on 7 October 1996 stated that the deposit was not rent but amount to be adjusted as per final order in proceedings arising out of the suit. Held that the deposits were provisional security and subject to final adjudication in the pending civil suit. B) Civil Procedure - Withdrawal of Court Deposits - Requirement of Bank Guarantee and Final Adjustment - Orders of Allahabad High Court dated 14 May 1996 - The High Court allowed respondents 11 to 14 to withdraw the deposited amount after furnishing bank guarantee of a nationalised bank for the amount lying in deposit plus 10% additional guarantee to the satisfaction of Civil Judge, Kanpur Nagar. The Supreme Court upheld this withdrawal but directed that it would remain subject to the result in the appeal and adjustment as per the final order in the pending suit. Held that conditional withdrawal with adequate bank guarantee safeguards appellant’s interests pending final adjudication. C) Civil Procedure - Clarification of Interim Orders - Binding Effect on Subsequent Proceedings - Supreme Court’s Inherent Power to Clarify - The Supreme Court clarified that the monthly deposit was not intended as rent for occupied premises, preventing an erroneous interpretation in the trial court proceedings. Held that parties are bound by such clarifications and all withdrawals and adjustments must await final orders in suit and appeal.
Issue of Consideration
Whether the High Court could permit respondents to withdraw the amount deposited by the appellant in terms of the Supreme Court’s earlier orders, and whether such withdrawal should be made subject to adjustment as per the final order in the pending civil suit; interpretation of earlier deposit orders.
Final Decision
Appeals disposed of. The High Court's direction allowing respondents 11 to 14 to withdraw the deposited amount after furnishing a bank guarantee to the extent of the amount lying in deposit plus additional 10% guarantee of a nationalised bank to the satisfaction of Civil Judge, Kanpur Nagar, with opportunity to the plaintiff-appellant, was upheld with clarification that such withdrawal would be subject to the result in the appeal and to adjustment as per the orders of the civil court in the pending suit. No costs.
Law Points
- amounts deposited under interim court orders not rent but adjustable as per final order
- withdrawal of court deposits requires bank guarantee and prior court permission
- withdrawal subject to final outcome of pending suit and appeal
- interim orders can be clarified to reflect true nature of deposit
