The Delhi High Court in the case Communication Components Antenna Inc. versus Ace Technologies Corp. and Ors observed and has referred the issue which relates to the interpretation of Order XXV Rule 1(1) of the Code of Civil Procedure, CPC to a larger bench. The court observed that it is being appeared to be a “clear inconsistency” in the views which is being expressed by different coordinate benches of the high court on whether the proviso to Order XXV Rule 1(1) of Code of Civil Procedure is mandatary in nature or whether the court has a discretion while deciding an application under Order XXV Rule 1(1). However, it has been stated by the Court that the present matter may be referred to a larger Bench of this Court, as the matter being of judicial propriety and so that the court can pass a authoritative judgment on the interpretation of Order XXV Rule 1(1) of the Civil Procedure Code, 1908. The bench headed by Justice Amit Bansal framed the following questions for the reference of larger bench: (i) Whether it being mandatory for the court to direct the plaintiff residing outside India and not possessing any sufficient immovable property within India, to furnish a security in terms of Order XXV Rule 1(1) of the Code of Civil Procedure for payments of costs which are being incurred or likely to be incurred by the defendant or whether the Court can exercise discretion in this regard? (ii) Whether the proviso to Order XXV Rule 1(1) of the CPC is only being applicable in respect of the suits relating to immovable property? The court while observing made the references that though there is no dispute that in terms of the main provision of Rule 1(1) of Order XXV, the court is having a discretion for directing the plaintiff to deposit security for costs, thus, it has been expressed by the coordinate benches the different opinions which are interpreting the proviso to Order XXV Rule 1(1). In the present case, the court was dealing with an application filed by the defendant, Ace Technologies Corp., under Order XXV Rule 1(1) of Code of Civil Procedure, wherein seeking a direction to the plaintiff, Communication Components Antenna Inc, for depositing security with the court. It has been argued by the Ace Technologies that in terms of the proviso to Order XXV Rule 1(1) of CPC, in all cases where the plaintiff is residing outside India and does not possess any immovable property in India, it is being mandatory for the court to direct the plaintiff to deposit security. It has been submitted by Communication Components Antenna in response that the word ‘shall’ contained in the proviso to Order XXV Rule 1(1), must be read as ‘may’ and thus, it being medatry for the plaintiff to deposit security for costs in all cases where the plaintiff resides outside India and does not own any immovable property in India. It has furtjer been observed by the court that while a coordinate bench in the case Alberto-Culver USA Inc. v. Nexus Health & Home Care (P) Ltd, where the court held that it is not mandatory to direct the plaintiff to deposit security for costs in every case under the proviso to Order XXV Rule 1(1), the coordinate benches in the case S.A. Brothers & Co. v. Bartholomow & Sons Ltd and in the case Kiran Shoes Manufacture v. Welcome Shoes Pvt. Ltd, the court has held that the said proviso is mandatory in nature. Further, it has been noted by the bench headed by Justice Bansal that the high court in the case Millennium & Copthorne International Limited v. Aryans Plaza Services Pvt. Ltd, the court held that the proviso to Order XXV Rule 1(1) would be applied only to case where the subject matter of the suit is an immovable property and the same would not be applied in a suit where the subject matter being an ‘intellectual property’ However, the court stated that it is appeared to the court that be a clear inconsistency in the views expressed by different Coordinate Benches of this Court. In the case Kiran Shoes (supra) and S.A. Brothers (supra), the court observed that the proviso to Order XXV Rule 1(1) of the CPC is mandatory in nature. On the other hand, the court in the case Millennium & Copthrone (supra) and Alberto Culver USA (supra) observed that the provisions of Order XXV Rule 1(1) of the CPC are not mandatory in nature and the said Court has a discretion. Therefore, the bench referred the matter regarding the interpretation of Order XXV Rule 1(1) to the larger bench. The court stated, let the matter be placed before the bench headed by Hon’ble the Chief Justice for constitution of a Larger Bench/ Division Bench for consideration of the interpretation of Order XXV Rule 1(1) of the Civil Procedure Code, 1908.
