Explain the concept of deemed decree

The Concept of Deemed Decree

The Foundation: What the Definition Says

The starting point for understanding a deemed decree lies in the definition of the word "decree" itself under Section 2(2) of the Code of Civil Procedure, 1908. The section defines a decree as the formal expression of an adjudication which, so far as regards the court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in a suit.

This is, of course, the standard decree — the formal outcome of litigation tried and determined on merits. But the legislature, with deliberate care, added a further sentence to this definition. It provided that a decree shall be deemed to include the rejection of a plaint and the determination of any question within Section 144. These are the two categories of the deemed decree — adjudications which, in their true nature, might not satisfy every formal condition of a decree, but which the law, by a fiction, treats as decrees for all practical purposes.

The phrase "shall be deemed to include" is the legislative key that unlocks the concept. In interpretation, the word "includes" enlarges the scope of a definition — it brings within the net things that may not ordinarily fall within the primary definition. When the Code says that a decree "shall be deemed to include" these two things, it creates a legal fiction: what would otherwise perhaps be only an order is elevated to the status of a decree, with all the consequences and remedies that flow from that status.

The First Category: Rejection of the Plaint

The most significant and frequently encountered deemed decree is the rejection of the plaint under Order VII, Rule 11 of the Code. A plaint may be rejected on several grounds — that it discloses no cause of action, that the relief claimed is undervalued, that it is barred by law, or that it has not been filed in duplicate. When a court rejects a plaint on any of these grounds, it has not decided the suit on merits. There has been no adjudication of the rights of parties with regard to the controversy in the suit, because the suit is stopped at the threshold, before it even begins in earnest.

Strictly speaking, such an order would not satisfy the definition of a decree, because there has been no determination of the rights of the parties on the matters in controversy. And yet, the consequence of rejection of a plaint is of the most serious kind — the plaintiff is shut out of court, the suit comes to an end, and the plaintiff's cause of action remains unaddressed. The law, therefore, in its concern for fairness, steps in and treats this rejection as a decree, so that the plaintiff is not left without a remedy. The Supreme Court has held unequivocally that an order rejecting a plaint under Order VII, Rule 11 — even when the rejection is for non-payment of additional court-fee demanded by the court — is a decree and is appealable under Section 96 of the Code.

The practical consequence is of great importance: since rejection of the plaint is a deemed decree, it is not revisable under Section 115. The defendant's remedy is an appeal, and a regular first appeal at that. An order rejecting a plaint can only be set aside in review or under Section 152 for clerical error, failing which the proper course is to prefer an appeal as against any other decree. This is in contrast to ordinary interlocutory orders, which do not travel the route of appeal but may be assailed in revision.

It is equally important to note what is not a rejection of a plaint. Where a suit is dismissed for the plaintiff's default of appearance, that is governed expressly by Section 2(2)(b), which excludes any order of dismissal for default from the definition of decree. The distinction drawn by the Code between rejection of a plaint and dismissal of a suit is not merely technical — it goes to the nature of the order. A rejection of the plaint under Order VII, Rule 11 is an adjudication that the plaint is defective in a manner that the law cannot overlook. A dismissal for default, on the other hand, is not an adjudication on the merits or on the character of the plaint at all. Where a plaintiff was dispaupered and his suit dismissed for failure to pay court-fees, the High Court held that this fell under dismissal for default and was not a deemed decree — and the same logic governs generally wherever the dismissal flows from default of prosecution and not from rejection on grounds specified under Order VII, Rule 11.

The Second Category: Determination Under Section 144 (Restitution)

The second category of deemed decree is the determination of any question within Section 144 of the Code — the provision relating to restitution.

Section 144 embodies one of the most equitable doctrines of civil procedure. It provides that where a decree or order is varied or reversed in any appeal, revision, or other proceeding, or is set aside or modified in any suit instituted for that purpose, the court which passed the decree shall, on the application of any party entitled to any benefit, cause such restitution to be made as will, so far as may be, place the parties in the position they would have occupied but for such decree or order. The doctrine rests on the principle that on the reversal of an erroneous decree, the law raises an obligation on the party who received the unjust benefit to make restitution to the other party for what was lost.

When the court adjudicates upon a question under this section — for instance, whether a party is entitled to the refund of costs paid out in execution of a decree that has since been reversed, or whether mesne profits collected under an erroneous decree must be returned — that determination is a consequential adjudication of great moment to the parties. The Code treats it as a deemed decree so that a remedy of appeal is available. As one authority put it, the determination of a question under Section 144 is a decree and is appealable as such, because the right to appeal is one of the important safeguards that the law provides to litigants.

It is worth noting that the position changed significantly with the Amendment of 1976. Before the amendment, the definition of decree also included the determination of any question under Section 47 — the provision dealing with questions relating to execution, discharge, or satisfaction of the decree. This inclusion meant that orders passed in execution proceedings could be appealed as decrees, which caused enormous delays in the finalisation of execution. Parliament stepped in and deleted the words "Section 47 or" from the definition, with effect from 1 February 1977. From that date, an order under Section 47 is no longer a decree, and no appeal lies against it. The only recourse against such an order is a revision under Section 115, if the conditions prescribed by that section are satisfied. Section 144, however, continues to be included in the definition and a restitution order remains a deemed decree.

The Nature of the Legal Fiction

A deemed decree differs from a decree proper in one fundamental respect: it does not, by itself, satisfy all the formal requirements of a decree under Section 2(2). The element of adjudication in a suit, or of conclusive determination of the rights of parties, may be incomplete or absent in the technical sense. The deemed decree is brought within the definition only by the operation of a legal fiction — the words "shall be deemed to include."

The courts have consistently held that such legal fictions must not be extended beyond the purpose for which they are created. This principle appears with clarity in the context of arbitral awards. Section 36 of the Arbitration and Conciliation Act, 1996, provides that an arbitral award shall be enforced in the same manner as if it were a decree. This makes an award a deemed decree — but only for the purpose of enforcement. The use of the words "as if" in Section 36 demonstrates that it is a decree only by a legal fiction, and that legal fiction cannot be stretched to give an award the status of a decree for all other purposes. Similarly, under the Land Acquisition Act, an award made under Section 18 is deemed to be a decree for the purposes of the Code by virtue of Section 26(2), and the reasons for such award are deemed to constitute a judgment for the purposes of Section 2(9) of the Code.

The Practical Significance

The concept of the deemed decree matters most when it comes to the remedy of appeal. A party aggrieved by a decree — whether a true decree or a deemed decree — may file a first appeal under Section 96. Where there is no deemed decree, only an order, the remedy is revision under Section 115, which is far more restricted in scope. The difference is not trivial: in an appeal, the appellate court may re-examine the entire matter on facts and law; in revision, interference is only permissible on limited jurisdictional grounds.

The deemed decree thus stands as a bridge built by the legislature — recognising that certain adjudications, though technically falling outside the strict definition, carry such finality and such consequence for the parties that they deserve the fuller protection of the appellate process. It is an instance of the Code's deliberate preference for substance over form, and for ensuring that no litigant is left without an adequate remedy against a judicial act that has shut the door against him.