Object

In Chottubhai v. Bai Kashi (AIR 1941 Bom 365) it was held that the object of this provision is to enable a subordinate court to obtain in non-appealable cases the opinion of the High Court in the absence of a question of law and thereby avoid the commission of an error which could not be remedied later on.

Further, such provisions also ensures that the validity of a Legislative provision is interpreted and decided by the High Court.

Conditions

The right to refence is subject to conditions prescribed by Order 46 Rule 1, and, unless these conditions are fulfilled, the High Court cannot entertain a reference made my subordinate court.

The conditions which are needed to be satisfied are:

There must be a pending suit or appeal in which the decree is not subject to appeal or a pending proceeding in execution of such decree;
A question of law or usage having the five of law must arise in the course of such suit, appeal or proceedings; and
The court trying the suit or appeal or executing a decree must entertain a reasonable doubt on such question.

Further, question of law on which a subordinate court may entertain a doubt may be divided into two classes:

Those related to the validity of any Act, Ordinance or Regulation; and
Other questions.

In case of other questions, the reference is optional, but in the former case it is obligatory if the following conditions are fulfilled:

It is necessary to decide such question in order to dispose of the case;
The subordinate court is of the view that the impugned Act, Ordinance or Regulation js ultra vires; and
There is no determination either by Supreme Court or by the High Court to which such court is subordinate that such Act, Ordinance or Regulation is ultra vires.

Who may apply?

A reference can be made by a subordinate court on an application made by a party or suo moto. “Court” means a court of civil judicature. A tribunal or persona designata cannot make a reference.

Power and Duty of Referring Court

In Tinka Ram v. Maheshwari Das (AIR 1959 All 659) the court was of the opinion that reference can be made when a subordinate court entertains a doubt on a question of law. Further, such question must have actually arisen between the parties litigating and the court must have been called upon to adjudicate the lis.

Once a question arises and the Proviso is attracted and the validity if any Act, Ordinance or Regulation is challenged, and the referring court is prima facie satisfied that such Act, Ordinance or is ultra vires, the case has to be referred to the High Court.

Power and Duty of High Court

The jurisdiction of the High Court is consultative. In dealing and deciding the reference the High Court is not confined to the questions referred by a subordinate court.

In S.K. Roy v. Board of Revenue (AIR 1967 Cal 338) it was held that if a new aspect of law arises in the case, the Court can consider it as well.

Order 46 Rule 3 states that the High Court may answer the question referred to it and send back the case to the referring court for disposal in accordance with law.

Order 46 Rule 5 states that the court may also refuse to answer the reference or even quash it.

In Muncipal Corpn. Of City v. Shivshanker Gaurishanker ((1998) 9 SCC 197) it was held that the High Court, cannot make any order on merits of the case nor can it make suggestions.

Procedure at Hearing

As per Rule 1, The referring court should draw up a statement of the facts of the case, formulate the question of law on which opinion is sought and give its opinion thereon.

Rule 2 states that the court may either stay the proceedings or pass a decree or order contingent upon the decision of the High Court on the point referred, which cannot be executed until receipt of a copy of the judgement of the High Court on the reference.

If the High Court answers the question in favour of the plaintiff, the decree will be confirmed and if it is answered against him, the suit will be dismissed.

Rule 3 states that the High Court, after hearing the parties, if they so desire, shall decide the point so referred and transmit a copy of its judgement to the court which shall dispose of the case in accordance with the said decision.

Rule 5 states that the High Court may alter, canel, set aside any decree or order passed or made by the Court making the reference and make such order as it thinks fit.

Cost

As per Rule 4 the cost of reference shall be costs of cause. However, in a judgement made in L.S. Sherlekar v. D.S. Agarwal (AIR 1968 Bom 439) it was held that if the reference is altogether unwarranted, the High Court may direct the referring judge to personally pay the costs.