Difference Between Preliminary Decree and Final Decree Under CPC

Key Takeaways

• A preliminary decree determines the rights or liabilities of the parties but leaves further proceedings to be completed before the suit can be fully disposed of.
• A final decree completely determines the matters requiring adjudication and brings the suit, or the relevant part of it, to its final stage before the court passing the decree.
• The principal test is whether something further remains to be done judicially in the suit. If further inquiry or determination is necessary, the decree is preliminary; if nothing remains for adjudication, it is final.
• In Renu Devi v. Mahendra Singh, the Supreme Court explained that a preliminary decree declares rights or shares, while the final decree incorporates the result after the necessary further inquiry has been completed.
• A decree can be partly preliminary and partly final. For example, in a suit for possession and mesne profits, the direction granting possession may be final while the direction for inquiry into mesne profits may remain preliminary.
• A suit may, depending on its nature, contain more than one preliminary decree or more than one final decree. The Supreme Court recognised this position in Rachakonda Venkat Rao v. R. Satya Bai.
• A preliminary decree need not necessarily precede every final decree. If the court can completely determine the rights of the parties without any further inquiry, a final decree may be passed directly.

Meaning of Decree Under Section 2(2) of CPC

To understand the difference between preliminary and final decree, it is first necessary to understand the meaning of a decree under the Code of Civil Procedure, 1908.

Section 2(2) defines a decree as the formal expression of an adjudication which, so far as the court expressing it is concerned, conclusively determines the rights of the parties regarding all or any of the matters in controversy in the suit.

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The definition expressly states that a decree may be preliminary or final. The Explanation to Section 2(2) further clarifies that a decree is preliminary when further proceedings have to be taken before the suit can be completely disposed of. It is final when the adjudication completely disposes of the suit. A decree may also be partly preliminary and partly final.

Therefore, the distinction does not depend merely upon the name given to the decree. Its true character depends upon what the court has actually decided and whether further judicial proceedings remain necessary.

What Is a Preliminary Decree?

A preliminary decree is a decree that conclusively determines certain rights and liabilities of the parties but does not completely dispose of the suit.

Further proceedings are required before the rights declared by the court can be fully worked out.

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For example, in a partition suit, a court may declare that one party is entitled to one-half share and another party to the remaining one-half share. However, the property may still have to be physically divided by metes and bounds. The declaration of shares is therefore preliminary because further proceedings are required before separate possession can ordinarily be worked out.

In Renu Devi v. Mahendra Singh, (2003) 10 SCC 200, the Supreme Court explained that a preliminary decree declares the rights or shares of the parties and leaves room for further inquiry. Once that inquiry is completed and the rights are finally worked out, a decree incorporating that determination becomes the final decree.

Main Characteristics of a Preliminary Decree

A preliminary decree generally has the following characteristics:

• It determines substantive rights: The court settles important questions concerning the rights, shares or liabilities of the parties. It is therefore not merely an interlocutory procedural order.
• It does not completely dispose of the suit: Some proceedings remain to be undertaken before the litigation reaches its final stage.
• Further inquiry may be necessary: Matters such as accounts, actual division of property, mesne profits or other consequential determinations may still have to be made.
• A final decree may ordinarily follow: Once the remaining matters have been worked out, the court may draw up a final decree giving effect to the rights declared earlier.
• More than one preliminary decree may be possible: Where circumstances require reconsideration or modification before final disposal, the CPC does not necessarily restrict a suit to a single preliminary decree.

Thus, a preliminary decree is conclusive regarding the matters that it actually decides, even though the suit itself remains pending for further proceedings.

What Is a Final Decree?

A final decree is a decree that completely disposes of the matters requiring determination and leaves nothing further to be judicially decided in relation to the decree.

It gives complete effect to the rights and liabilities of the parties and ordinarily represents the culmination of the adjudicatory process.

The Supreme Court in Shankar Balwant Lokhande v. Chandrakant Shankar Lokhande, (1995) 3 SCC 413, explained that a preliminary decree declares rights and liabilities while the actual result is worked out later. The final decree carries those declared rights into fulfilment and finally works them out.

Main Characteristics of a Final Decree

A final decree generally has the following features:

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• It finally works out or determines the rights of the parties.
• No further adjudication is required on the matters covered by it.
• It may follow a preliminary decree where further proceedings were necessary.
• A final decree may also be passed directly if no preliminary decree is required.
• There may be more than one final decree in appropriate circumstances.
• Once properly drawn and capable of execution, it can ordinarily be enforced through execution proceedings under the CPC.

The important consideration is therefore not merely whether a document has been described as a “final decree”, but whether the adjudication has actually reached finality in relation to the matters involved.

Difference Between Preliminary Decree and Final Decree

The basic distinction between preliminary and final decree lies in the stage at which the rights declared by the court have been worked out.

The Supreme Court’s formulation in Renu Devi v. Mahendra Singh provides a useful practical test: if the decree merely declares rights or shares and an inquiry remains necessary to work those rights out, it is preliminary. If the inquiry has been completed and the resulting determination has been incorporated into the decree, it is final.

Can a Final Decree Be Passed Without a Preliminary Decree?

Yes. A preliminary decree is not compulsory in every suit.

Where the court can completely determine and give effect to the rights of the parties at the first stage itself, there may be no need to first pass a preliminary decree.

This principle was clearly illustrated in Renu Devi v. Mahendra Singh. The dispute arose from a partition arrangement in which specific properties had already been allotted to different groups and the properties were identified by metes and bounds. The Supreme Court held that, in substance, the earlier decree was already a final decree because no further inquiry remained necessary for completing the partition.

The case demonstrates that the substance of the adjudication is more important than the label attached to it.

Can There Be More Than One Preliminary or Final Decree?

Yes.

In Rachakonda Venkat Rao v. R. Satya Bai, (2003) 7 SCC 452, the Supreme Court stated that there can be more than one preliminary decree in a suit. It also recognised that there can similarly be more than one final decree.

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This becomes particularly relevant in proceedings such as partition suits, where the rights of different parties or different portions of property may have to be worked out at different stages.

Therefore, it would be incorrect to assume that every suit can contain only one preliminary decree followed by exactly one final decree.

What Is a Decree That Is Partly Preliminary and Partly Final?

Section 2(2) itself recognises that a decree may be partly preliminary and partly final.

Such a decree arises when one part of the adjudication completely decides a particular matter, while another part requires further inquiry.

Example: Possession and Mesne Profits

Consider a suit seeking:

1. possession of immovable property; and
2. mesne profits for wrongful possession.

The court may conclusively hold that the plaintiff is entitled to possession and direct delivery of the property. That part of the decree is final.

At the same time, the court may direct a further inquiry to determine the amount of mesne profits payable. Since further proceedings remain necessary for determining that amount, this part of the decree is preliminary.

Order XX Rule 12 of CPC specifically deals with decrees for possession of immovable property and rent or mesne profits and permits the court to direct an inquiry regarding such profits.

The same decree can therefore contain both preliminary and final characteristics.

The principle was reaffirmed in Rachakonda Venkat Rao v. R. Satya Bai, where the Supreme Court referred to the Explanation to Section 2(2) and recognised that a decree may be partly preliminary and partly final.

Suits in Which Preliminary Decrees May Be Passed

The CPC contemplates preliminary decrees in several kinds of proceedings where rights must first be determined and further steps taken afterwards.

Common examples include:

• Suits for possession and mesne profits – Order XX Rule 12: The court may determine the right to possession while directing further inquiry regarding rent or mesne profits.
• Administration suits – Order XX Rule 13: A preliminary decree may direct accounts and inquiries necessary for administering the property of a deceased person.
• Partition suits – Order XX Rule 18: The shares or rights of parties may first be declared, followed by proceedings for actual partition or separate possession.
• Partnership suits – Order XX Rule 15: In a suit for dissolution of partnership or taking partnership accounts, rights may first be declared and accounts subsequently worked out.
• Principal and agent accounts – Order XX Rule 16: Where accounts must be taken between a principal and agent, the decree may contain directions for the necessary accounting process.
• Mortgage suits: Order XXXIV contains provisions for preliminary and final decrees in proceedings relating to foreclosure, sale and redemption of mortgages. Such suits concerning immovable property are also governed by the rules relating to the appropriate place of suing under the CPC.

The common feature in these proceedings is that an initial judicial determination must often be followed by accounts, inquiries, division, payment or other consequential proceedings.

Importance of Shankar Balwant Lokhande v. Chandrakant Shankar Lokhande

The decision in Shankar Balwant Lokhande v. Chandrakant Shankar Lokhande is significant for understanding the relationship between preliminary and final decrees in partition proceedings.

The Supreme Court explained that the preliminary decree declares the rights and liabilities of the parties, while the final decree works out and crystallises those rights. The Court also distinguished between finality for appellate purposes and finality in the sense contemplated by Section 2(2).

In the context of the partition before it, the Court further dealt with the requirement of drawing up and engrossing the final decree on the requisite stamped paper before execution. The decision therefore emphasises that mere declaration of shares in a preliminary decree does not itself amount to completion of the process of actual partition.

Preliminary Decree Does Not Terminate the Suit

An important consequence of a preliminary decree is that the suit remains pending.

The declaration of rights is conclusive regarding what has been decided, but the proceedings do not end because further steps are still required.

This is particularly clear in partition proceedings. Once shares are declared, further proceedings may be required to identify, divide and allot specific portions of the property. The final decree then completes the process by working out the rights declared earlier.

The Supreme Court in Renu Devi reiterated this distinction while observing that where no further inquiry remains necessary, the court can pass a final decree at the first instance itself.

Is Rejection of a Plaint a Decree?

Yes. Section 2(2) expressly provides that rejection of a plaint is deemed to be a decree.

This is significant because the rejection of a plaint under Order VII Rule 11 is treated differently from several procedural orders passed during civil proceedings. Since rejection of the plaint falls within the statutory definition of decree, the remedy is ordinarily an appeal from the decree, subject to the applicable provisions of the CPC.

However, the return of a plaint for presentation before the proper court is different. It does not amount to rejection of the plaintiff’s substantive claim. Such an adjudication falls within the category of orders appealable under the provisions relating to appeals from orders rather than being treated as a decree.

Is Dismissal for Default a Decree?

No.

Section 2(2) expressly excludes an order of dismissal for default from the definition of decree.

In Firdous Omer v. Bankim Chandra Daw, (2006) 6 SCC 569, the Supreme Court confirmed that dismissal of a suit for non-prosecution or non-appearance of the plaintiff is not a decree within Section 2(2).

The reason is that such dismissal does not amount to a conclusive adjudication of the substantive rights of the parties on the matters in controversy.

Why Is the Distinction Between Preliminary and Final Decree Important?

The distinction has several practical consequences in civil procedure.

First, it indicates whether the suit is still pending. A preliminary decree leaves further proceedings to be completed, whereas a final decree ordinarily represents the completion of adjudication on the matters covered by it.

Second, it affects execution proceedings. Where a preliminary decree merely declares rights requiring further proceedings, the ultimate relief may ordinarily have to be worked out through the final decree before execution.

Third, the distinction is important for appeals under the CPC. A preliminary decree is itself a decree and may therefore have independent legal consequences regarding appeal. It should not be treated as merely an interim procedural direction.

Finally, the distinction helps identify whether further inquiries, accounts, partition proceedings or other consequential steps must take place before the successful decree-holder receives the complete benefit of the adjudication.

Conclusion

The difference between preliminary decree and final decree under the CPC depends primarily upon whether further judicial proceedings remain necessary before the suit can be completely disposed of.

A preliminary decree conclusively determines certain rights or liabilities but leaves those rights to be worked out through additional proceedings. A final decree completes that process and finally gives effect to the adjudication. Where one part of a decree finally determines a matter while another requires further inquiry, the decree may be partly preliminary and partly final.

The decisions in Renu Devi v. Mahendra Singh, Rachakonda Venkat Rao v. R. Satya Bai and Shankar Balwant Lokhande v. Chandrakant Shankar Lokhande make the underlying principle clear: the nature of a decree depends upon its substance and the extent of adjudication remaining, rather than merely upon the terminology used by the court.