The Supreme Court on Friday (September 18) held that a Civil Court cannot grant protective or preservatory interim relief while a Section 92 CPC Leave application remains pending. The Court said prior leave is mandatory before individuals can institute a representative suit under Section 92 of the Code of Civil Procedure, 1908.
A bench of Justice Manoj Misra and Justice Manmohan delivered the ruling. It held that the grant of leave under Section 92 CPC is a mandatory pre-condition for instituting the suit.
Until the Court grants leave, no suit or lis exists before the Civil Court. Therefore, the Court cannot exercise interlocutory or supplemental powers at that stage.
The Supreme Court considered whether a Civil Court could grant protective or preservatory relief after receiving a plaint under Section 92 CPC along with a leave application.
Answering the question in the negative, the Court observed:
“…a Civil Court, seized of a plaint under Section 92 of the Code together with an application seeking leave to institute the suit, is not empowered to pass protective or preservatory interim orders pending disposal of the leave application.”
Section 151 CPC Cannot Override Section 92
The Supreme Court also considered the Civil Court’s inherent powers under Section 151 CPC. It clarified that courts cannot use those powers to grant interim relief before deciding the leave application.
The Court relied on the principle generalia specialibus non derogants. Under this principle, a general provision cannot override a specific provision.
Accordingly, Section 151 CPC cannot override the safeguards contained in Section 92 CPC.
The Court said:
“…it is settled law that the generality of the inherent power preserved under Section 151 of the Code cannot override the special provision contained in Section 92, in light of the principle generalia specialibus non derogants. The special provision must prevail over the general and the safeguards embedded in Section 92 must be complied with before any interlocutory orders are passed.”
Proceedings Against People’s Education Trust
The appellants initiated proceedings under Section 92 CPC against the People’s Education Trust. They also filed an application seeking leave to institute the suit.
The Civil Court acted before deciding that application. It invoked Order XL Rule 1(a) CPC and constituted an ad hoc committee. The committee comprised the existing trustees and managed the Trust’s day-to-day affairs.
The Karnataka High Court later set aside the Civil Court’s order. It held that a Section 92 suit remains “stillborn” without leave. Therefore, the Civil Court had no jurisdiction to issue interlocutory directions at that stage.
The plaintiff-appellant challenged the High Court’s decision before the Supreme Court.
Supreme Court Resolves Conflicting High Court Views
The Supreme Court dismissed the appeal and affirmed the High Court’s conclusion. Justice Manmohan authored the judgment.
The Court also examined conflicting High Court decisions on this issue.
The Allahabad, Bombay, Kerala and Madras High Courts had recognised the possibility of protective jurisdiction in appropriate cases. However, the Orissa and Karnataka High Courts had taken a different position. They held that courts could not exercise such jurisdiction before granting leave.
The Supreme Court agreed with the latter view and resolved the conflict.
The appellant argued that the leave application itself constituted a substantive proceeding. According to the appellant, this allowed the Civil Court to exercise interlocutory powers before deciding the application.
The Supreme Court rejected that contention.
The respondents argued that an application seeking leave under Section 92 does not become a “substantive proceeding” merely because Rule 16-A of the Karnataka Civil Rules of Practice requires separate registration.
The Supreme Court accepted this position. It described the consideration of leave as a “threshold proceeding”.
The Court observed:
“In fact, the proceedings under Section 92 are substantial proceedings in the nature of a Suit and interlocutory orders can be passed only after leave has been granted…Consequently, the grant of leave under Section 92 is an essential and mandatory pre-condition, in the absence of which there exists no pending proceeding in which interlocutory applications can be entertained.”
Thus, a Section 92 CPC Leave application must succeed before the Civil Court can exercise interlocutory jurisdiction in the suit.
Appointment of Receiver Not Merely Preservatory
The Supreme Court then applied these principles to the facts of the case.
It found that appointing a receiver for a public trust is not merely a preservatory measure. Such an order may displace the Trust’s existing management.
The Court held that granting such relief before leave would defeat the purpose of Section 92 CPC. The requirement of prior leave acts as a statutory safeguard.
Ex Parte Leave Possible in Urgent Cases
The Supreme Court also addressed cases involving genuine urgency.
It clarified that courts can dispense with prior notice before granting leave under Section 92 CPC when compelling circumstances require urgent relief.
However, the Court must record its reasons in writing.
The judgment stated:
“However, for compelling reasons to be recorded in writing like where facts disclose the necessity of urgent relief, notice prior to the grant of leave may be dispensed with.”
Accordingly, the Supreme Court dismissed the appeal and affirmed the Karnataka High Court’s decision.
