2008 (2) TMI 869 - SC - Indian Laws

Whether in such a case the appellate court is bound to direct the trial court to take additional evidence required? Whether a particular provision of a statute is directory or mandatory cannot be resolved by laying down any general rule of universal application?

Issues Involved:
1. Legality of the remand order by the First Appellate Court.
2. Interpretation and application of Order XLI Rule 25 of the Code of Civil Procedure, 1908.
3. Discretionary vs. mandatory nature of statutory provisions using "may" and "shall".

Detailed Analysis:

1. Legality of the Remand Order by the First Appellate Court:

The core issue in this case was the legality of the remand order passed by the First Appellate Court. The First Appellate Court had remanded the matter to the trial court for fresh decision after allowing an amendment to the written statement and framing additional issues. The High Court set aside this remand order, directing the First Appellate Court to decide the appeal on its merits. The High Court opined that remand orders should be passed rarely and not as a matter of routine. The Supreme Court upheld this view, emphasizing that the First Appellate Court, being the last court of facts, should have analyzed the factual position and decided the issues itself rather than remanding the matter.

2. Interpretation and Application of Order XLI Rule 25 of the Code of Civil Procedure, 1908:

Order XLI Rule 25 of the Code of Civil Procedure was central to the dispute. This rule allows the Appellate Court to frame issues and refer them for trial to the court whose decree is appealed from if it finds that certain essential facts were not determined. The Supreme Court clarified that the use of the word "may" in this provision indicates that it is discretionary for the Appellate Court to frame issues and refer them back to the trial court. However, if the Appellate Court decides to do so, the trial court is mandatorily required to take additional evidence and return the findings to the Appellate Court. The Supreme Court noted that the First Appellate Court had the power to decide the issues itself, rather than remanding the matter.

3. Discretionary vs. Mandatory Nature of Statutory Provisions Using "May" and "Shall":

The judgment extensively analyzed the interpretation of the words "may" and "shall" in statutory provisions. The Supreme Court highlighted that the use of "may" generally indicates a discretionary power, while "shall" suggests a mandatory requirement. However, the context, purpose, and legislative intent behind the provision must be considered to determine whether it is mandatory or directory. The Court cited various precedents to illustrate that permissive language could imply a duty to act in certain circumstances. For instance, in public interest cases or where specific rights are at stake, a provision using "may" could be interpreted as imposing a duty.

The judgment also discussed the principle of "power coupled with duty," where a discretionary power must be exercised when certain conditions are met. This principle was applied to emphasize that the First Appellate Court should have exercised its discretion to decide the issues rather than remanding the matter, as the remand was not necessary for the right decision of the suit on merits.

Conclusion:

The Supreme Court upheld the High Court's decision to set aside the remand order, emphasizing that the First Appellate Court should decide the issues itself. The interpretation of Order XLI Rule 25 was clarified, confirming that while the provision is discretionary, it becomes mandatory for the trial court to take additional evidence if the Appellate Court frames issues and refers them back. The judgment also provided a detailed analysis of the discretionary and mandatory nature of statutory provisions, underscoring the importance of legislative intent and the context in which the words "may" and "shall" are used.

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