JETHABHAI KHATAU & CO. versus LUXMI NARAYAN COTTON MILLS LTD. & ORS.

Citation: [1981] 3 S.C.R. 449 · Decided: 10-04-1981 · Supreme Court of India · Bench: A.C. GUPTA · Disposal: Appeal(s) allowed

Judgment (excerpt)

,. 
449 
JETHABHAI KHATAU & CO. 
v. 
LUXMI NARAYAN COTTON MILLS LTD. & ORS. 
April JO, 1981 
[A.C. GUPTA AND D.A. DESAI, JJ.] 
Constitution of India 1950, Art, 136-lnterim orders by the High Court-
lnterference by Supreme Court-When arises. 
The appellant filed a suit for recovery of certain amounts due from the first 
respondent company. By the time the suit came up for hearing the first respon-
dent company was superseded and an Administrator was appointed. The suit 
was compromised and a consent decree was passed, the company being held liable 
and directed to make payment of Rs. 2.85 lakhs with interest at 6% from the date 
of the decree. The first respondent company received a sum of about Rs. 15 lakhs 
from the Custodian of Enemy Property as compensation in respect of certain 
cotton mills owned by it. The third respondent was appointed a receiver in res-
pect of this amount and he desosited a sum of Rs. 8 lakhs of the compensation 
amount into a fixed deposit account with a Bank. The decretal amount having 
become due and payable the appellant by an order dated April 12, 1978 obtained 
an interim attachment of the money in the fixed deposit account of the hank, 
which was confirmed by order dated April 24, 1978. On May 4, 1978 upon a 
petition by the appellant, the Court directed the receiver, 3rd respondent to pay 
the decretal amount to the appellant out of the amount in the fixed deposit 
account of the judgment-debtor with the Bank. As this order was not implemen-
ted, the appellant again moved the Court and by its order dated the May 24. 
1978 the Court directed the receiver to pay the amount to the decree holder and 
the Bank, the keeper of the fixed deposit account of the receiver was also put 
under an obligation not to raise any objection on the receiver withdrawing the 
money and paying the same to the decree holder. These directions not being 
obeyed, the appellant moved the Court for holding the third respondent receiver 
and the fourth respondent Bank in contempt and for passing appropriate orders 
for punishing them for contempt. Respondents 5 and 6 were in the meanwhile 
appointed as joint receivers. 
A solemn undertaking was given by the Bank to 
the Court that the decretal amount would be paid. In view of the undertaking 
the Court did not pass any orders on the contempt application. On March 7, 
1980 the Court declined to grant the prayer for discharge of the receiver 3rd res-
pondent and directed that the balance after payment of the d~cretal amount 
in the fixed deposit account will be held by· the receiver. The Court however 
at the instance of the joint receivers-Respondents 5 and 6 stayed the order for a 
fortnight. 
A 
B 
c 
D 
E 
F 
G 
H 
450 
SUPREME COURT REPORTS 
[1981) 3 S.C.R 
A 
Three appeals were filed against the order dated March 7, 1980. Two 
B 
c 
D 
E 
F 
G 
H 
appeals were preferred by the 1st respondent company and one appeal was pre-
ferred by 2nd respondent, State of West Bengal. In the appeals preferred by 
the Jst respondent company the High Court by its order dated March 27, 1980 
granted ad interim stay in the matter, by directing that the Bank would not dis· 
burse any amount in respect of the fixed deposit account and by issuing an injunc-
tion restraining the appellant from obtaining any payment. 
Allowing the appeals to this Court, 
HELD: The order made by the Division Bench on March 27, 1980 and 
continued on September 9, 1980 are set aside. The order dated May 4, 1978 and 
May 24, 1979 as also the undertaking given by the Manager of the 4th respon-
dent Bank through its Counsel on June 7, 1979 would be revived and would 
be effective and will have to be implemented. 
The 4th Respondent Bank 
will pay the decretal amount to the appellant, the appellant shall pass a receipt 
acknowledging receipt and the liability of the 4th Respondent company to the 
3rd Respondent receiver shall thereupon stand discharged. Before the amount is 
paid, the appellant shall give security to the satisfection of the High Court and 
also an undertaking on affidavit that in the event of the appeals being allowed, 
the appellant shall deposit the said amount with the High Court within one 
month from the date of the order of the appellate Bench. 
[ 459 C-F] 
2. This Court ordinarily does not interfere with interim orders unless and 
until manifest injustice convulsively shakes it. [ 455 E] 
In the instant case the interim order made by the Division Bench on 
September 9, 1980 confirmin

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