Holding

Interlocutory orders are valid only to the extent that they aid the adjudication of the claims within the scope of the suit and must not affect parties not before the court.

Summary

Two related suits were filed in the Calcutta High Court concerning a government contract for the preparation of photo identity cards. The plaintiff, Lohia Jute Press, sued its sub‑contractors for non‑performance, while the sub‑contractors filed counter‑suits seeking return of pledged shares and other reliefs. The High Court issued several interlocutory orders, including appointing a receiver and directing the preparation of the cards, which were appealed before a Division Bench and subsequently challenged by special leave petitions before the Supreme Court. The Supreme Court held that such interlocutory orders are permissible only to aid the proper adjudication of the disputes and must not extend beyond the scope of the suits or affect parties not before the court. It emphasized a balanced approach, rejecting both excessive conservatism and over‑zealous activism, and directed that the High Court continue to decide pending applications in line with this principle. Consequently, the special leave petitions were disposed of and the contempt proceedings were dropped.

Issues considered

The validity and scope of interlocutory orders issued by the High Court in the suits.
Whether the Supreme Court can set aside or modify such interlocutory orders under its jurisdiction.
The appropriate forum for adjudicating disputes arising from a government contract where the government is not a party.
The applicability of the salutary principle in granting interim reliefs.
The effect of the High Court's orders on parties not directly before it.

Subjects

interlocutory orderspecial leave petitioncontract performancegovernment contractjurisdictionHigh CourtSupreme Courtcivil procedurecontemptsalutary principle

Judgment

~-- RITONA CONSULTANCY PVT. LTD. AND ORS. ETE. ETC. A
v.
LOHIA JUTE PRESS AND ORS. ETC.

FEBRUARY 5, 2001

[S. RAJENDRA BABU AND S.N. VARIA VA, JJ.] B
~ .....
Suit-Government-Award of contract for preparation ofphoio Identity
Cards-Dispute between contractor and sub-contractor-Suits by contractor
and sub-contractors-In those suits applications filed for interim relief-
Interim order passed by High Court-Appeals preferred before Division Bench c
of the High Court against said order-Order passed by Division Bench-
--< Appeal before Supreme Court-Held-An interlocutory order is made by way
of aid to the proper adjudication of the claims and disputes arising in and
not made beyond the scope of the suit or against the parties who are not
before it-That neither excessive conservatism or traditional technical
D
approach nor over-zealous activist approach is conducive to advancement
ofjustice-The High Court shall decide on· applications bearing in mind the
salutary principle.
~
CIVIL APPELLATE JURISDICTION : Special Leave Petition (C)
Nos. I 0072-10073 of 1998. E
From the Judgment and Order dated 5.5.98 of the Calcutta High Court
in G.A. No. 1835/97 and 4659/97 in A.P.O.T. No. 273 of 1997.

~ With
F
SLP (C) NOS. J0456/98, 17765/98, 18274/98 and 2273/2001 Cont. Pet.
(Civil) Nos. 457-462/99 in SLP(C) Nos. I 0072-10073/98, 10456/98, 17765/98 and
SLP(C) No. 18274/98.

K.V. Vishwanathan Anil Agarwalla, Z. Rehman, K.V. Vijayakumar, Jaideep
Gupta, H.K. Puri, A.K. Roy, S.K. Puri, Rajesh Srivastava, Ujjwal Benerjee,
G
a r Satish Vig, Vijay Hansaria and Jain Hansaria & Co. for the appearing parties.

The following Order of the Court was delivered :

Two suits were filed in the High Court of Calcutta. Suit No. 228/96 was
filed by Lohia Jute Press against (I) Ritona Consultancy Pvt. Ltd. (2) Smrity
855 H
856 SUPREME COURT REPORTS [2001] 1 S.C.R.

A Securities Pvt. Ltd. (3) River Blue· Commodities Pvt. Ltd. and 18 others,
alleging that having obtained a contract with the Government of Assam on
17.7.1995, entered into agreements with defendant Nos. 1, 2 and 3 on 31.8.1995
for preparation and supply of 49,26,465 photo identity Cards-defendant No.
1 to cover the area in the district of Barpeta and Kamrup; defendant No. 2
for Nalbari, Darang and Marigaon and defendant No.3 for Dhuburi, Kokarajahar,
B Bangiagaon and Goalpara [in all nine districts]. Defendant No. 4, who was a
Director in the defendant companies guaranteed due performance of the •~-
obligation by defendant Nos. 1, 2 and 3. Defendant Nos. 1, 2 and 3 were liable
to furnish bank guarantee i.e., performance guarantee of Rs. 10 Lakhs each
and on failure to do so, pledge share scrips with duly signed transfer deeds
C by way of security. On various facts and grounds averred in the plaint, the
plaintiff sought for relief against defendant Nos. I ,2 and 3 for (a) delivery of
photo identity cards/video cassettes or cartridges containing photos of
electors/generator sets or payment of Rs. 80,000 in lieu thereof; (b) decree of
Rs.l crore against defendant Nos. I and 4; decree of Rs. 1 crore against
defendant Nos. 2 and 4; decree of Rs.l crore against defendant Nos. 3 and
D 4, alternatively inquiry for damages; (c) declaration that shares stand pledged
to plaintiff and for sale thereof for adjustment of the proceeds against dues
to the plaintiff from the defendants.

Suit No. 209-A/96 was filed by (1) Ritona Consultancy Pvt. Ltd. (2)
E Smrity Securities Pvt. Ltd. (3) River Blue Commodities Pvt. Ltd. against Lohia
Jute Press and its partners and shareholders [defendant Nos. 5 to 22] whose
shares have been pledged and defendant Nos. 23 to 190 to whom shares are
transferred for (a) return of the shares or debentures from defendants other
than defendant Nos. 5 to 22 or inquiry into their value and decree for such
sum as may be fixed; (b) decree for money in f~vour of plaintiffs or for inquiry
F into damages and decree thereof; (c) decree for injunction restraining defendant
Nos. 1 to 4 from lodging any of the Shares or debentures with defendant Nos.
23 to 190 not to further alienate or alter ownership and if altered, to restore
ownership to defendant Nos. 5 to 22; and (d) declaration that plaintiffs are
owners of video cassettes, cartridges and photographs and injunction from
G claiming ownership.

These two suits arose out of contract awarded to M/s Lohia Jute Press
12 a
for preparation and supply of 49, 26,465 photo identity cards to be completed
by 3.9.1995 subject to several conditions with which we are at present not
concerned. M/s. Lohia Jute Press entered into contracts with the three
H defendants in Suit No. 228/96 to which the State of Assam is not a party. In
RITONA CONSULTA~CY PVT. LTD v LOHIA JUTE PRESS AND ORS.
857
,, se suits applications were filed for interim reliefs and the High C · rt f ·
ulO • • I 'd d OU 0 A
Calcurta, on its ongm~ SI e~ rna e an o_rder on 26.8.96 appointing court ·
, ~~ receiver in ~espect .of v1deo cassettes. and directions were given to him to take
steps for preparation of the voter Identity cards and deliver the same 00
reparation thereof. In furtherance of this order, another order was made on ·
-~g.4.l997 framing a scheme for preparation of the identity cards by the court
receiver. Appeals were preferred before the Division Bench of the Hi<Fh Court B
against the order of the learrned Single Judge dated 28.4.1997 fra;ing the
scheme. The Division Bench directed the joint receivers to complete the work
of preparation of photo identity cards within a time frame by taking necessary
assistance of outside agency for preparation of the same by an order made
on 5.5.1998. This order is challenged in SLP(c) Nos. 10072-10073/98. Certain C
other orders made by the Division bench which do not effectively dispose
ofthe matters before it are also challenged in different special leave petitions.
This Court has passed several orders to complete the work of preparation of
photo identity cards within a particular time frame by taking help of the Chief
Electoral Officer, though he was.. not a party to the proceedings and as many
as 12 different orders have been passed on various dates from 28.8.99 to D
18.8.2000. Still as per·the status report filed in the court, the work is not
complete. · ·

As this stage of the proceedings, we must notice certain staggering
r~a t ures of the case: . E
(a) Contract was awarded by the Government of Assam on 17.7.1995
to be completed by 3.9.1995 which is not still complete, though
over five years have elapsed;
(b) In the disputes between the main contractor and sub-contractors ·
ansing out of certain contract to which the State Government is F
not a party, various reliefs are sought for even affecting the
.. .., rights and interests of the Government of Assam; thus this is
a case of playing Hamlet without the Prince of Denmark.
(c) In the event the contract with the Government of Assam and
Loh ia Jute Press is cancelled (for which step there is no G
impediment) many of the reliefs sought for in the suits file~ by
·
cllhcr of the parties wou Id become ·mfruc~ous and d"ffi
1 ere nt kmds

r of rel iefs will have to be worked out~
(d) ·Suits are filed in the High Court of Calcutta forum found to be
convenient to the parties, and not where the contract has to be H

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I
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858 SUPREME COURT REPORTS [2001] I S.C.R.

: exe~uted or the Government upon which it is binding is located.
.r
· In these circumstances, no useful purpose wj]J be served in keeping
these proceedings in this Court pending a·nd the orders made by the High ·
Court as modified by this Court shall be effective until further orders are made
. by the High Court either on the trial side or in the LPA side. In respect of .
B those reliefs sought for in different applications, either pending or not
effective1y disposed of by allowing or rejecting or in any similar manner or
fresh or new aspects, it is open to the parties to seek for further directions
in the High Court. The High Court shall decide on such applications bearing
in mind the salutary principle that an interlocutory order is made by way of ·
C aid to the proper adjudication of the claims and disputes arising in and not
made beyond the scope of the suit or against the parties who are not before
it. That neither excessive conservatism or traditional technical approach nor
over-zealous activist approach is conducive to advancement of justice.

Subject to the aforesaid observations, these special leave petitions shall
D stand disposed of accordingly.

In view of the orders made by us now, the petitions invoking the
jurisdiction in contempt have become unnecessary. The proceedings in the
contempt petitions shall thus stand dropped and shall be treated to have
terminated with this order. """'
E
T.N.A. Petitions dis posed of.

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