CA Kamal Garg

“Tata Sons files caveat in all courts as legal cover…………….

In further anticipation of a legal challenge from the just ousted Tata Sons chairman Cyrus Mistry, Ratan Tata’s legal eagles have filed “caveats” in all courts including with the National Company Law Tribunal, said a person involved.”

[Source: ET,]

1. What is caveat:

‘Caveat’ literally means “let him beware” [Aiyer’s Concise Legal Dictionary, (1995)]. Caveat petition is a precautionary measure which is undertaken by people usually when they are having very strong apprehension that some case is going to be filed in the court regarding their interest in any manner. a caveat is a caution or warning giving notice to the court not to take any step without notice being given to the party lodging the care at. Section 148-A of the code of civil procedure  provides for lodging of a caveat. A caveat protects the caveator’s interest. The caveator is already ready to face  the suit or proceedings which is expected to be instituted by his opponent. Hence no ex-parte order shall be passed against the caveator.

Section 148-A reads as follows:

“148-A. (1) Where an application is expected to be made, or has been made, in a suit or proceeding instituted, or about to be instituted, in a Court, any person claiming a right to appear before the Court on the hearing of such application may lodge a caveat in respect thereof.

(2) Where a caveat has been lodged under Sub-section (1), the person by whom the caveat has been lodged (hereinafter referred to as the caveator) shall serve a notice of the caveat by registered post, acknowledgment due, on the person by whom the application has been, or is expected to be, made, under Sub-section (1).

(3) Where, after a caveat has been lodged under Sub-section (1), any application is filed in any suit or proceeding, the Court shall serve a notice of the application on the caveator.

(4) Where a notice of any caveat has been served on the applicant, he shall forthwith furnish the caveator, at the caveator’s expense, with a copy of the application made by him and also with copies of any paper or document which has been, or may be filed by him in support of the application.

(5) Where a caveat has been lodged under Sub-section (1), such caveat shall not remain in force after the expiry of ninety days from the date on which it was lodged unless the application referred to in Sub-section (1) has been made before the expiry of the said period.”

2. Rights and Duties:

Sub-sections (2), (3) and (4) of Section l48-A of Code of Civil Procedure prescribe the rights and duties of the caveator who lodges a caveat, of the applicant who intends to obtain an interim order and of the court.

(1) Of caveator: Under sub-section (2) of Section l48-A, once a party is admitted to the status of a caveator, he is clothed with certain rights and duties. It is his duty to serve a notice of the caveat lodged by him by registered post on the person or persons by whom an application against the caveator for an interim order has been or is expected to be made. [Nirmal chandra v. Girindra narayan, AIR 1978 Cal 492.]

(2) Of applicant: Sub-section (4) of Section f48-A provides that it is the duty of the applicant to furnish to the caveator forthwith at the caveator’s expense a copy of the application made by him along with the copies of papers and documents on which he relies. This provision thus makes it obligatory for the applicant to serve his application along with all copies and documents filed or intended to be filed in support of his application.[Reserve Bank of India Employees Association v. Reserve Bank Of India, AIR 1981 AP 246]

(3) Of court: Once a caveat had been lodged, under sub-section (3), it is the duty of the court to issue a notice of that application on the caveator. This duty has been cast on the court obviously for the purpose of enabling the caveator to appear and oppose the granting of an interim relief in favour of the applicant. Although the expression, ‘notice of application’, has not been defined in the Code, it would include the date of hearing. It must, therefore, be taken that it is the duty of the court to give sufficiently reasonable and definite time to the caveator to appear and to oppose the application filed by the applicant. This duty of the court is in addition to the duty of the applicant under sub-section (4) and non-compliance with it defeats the very object of introducing Section 148-A and the breach thereof vitiates the order. Therefore, merely because the caveator refuses to accept the copy of the application from the applicant, the court is not absolved from serving the notice of the application to the caveator.[Siddalingappa v. Veeranna,AIR 1981 Kant 242].

3. CAVEAT applications before NCLT under the Companies Act, 2013:

Section 424(1) of the Companies Act, 2013 provides that the NCLT (The Tribunal) and NCLAT (the Appellate Tribunal) shall not be bound by the procedure laid down in the Code of Civil Procedure, 1908, but shall be guided by the principles of natural justice and, subject to the other provisions of this Act and of any rules made by the Central Government, the Tribunal and the Appellate Tribunal shall have power to regulate their own procedure.

3.1. Lodging of caveat [Rule 25 of NCLT Rules, 2016]:

(1) Any person may lodge a caveat in triplicate in any appeal or petition or application that may be instituted before this Tribunal by paying the prescribed fee after forwarding a copy by registered post or serving the same on the expected petitioner or appellant and the caveat shall be in the form prescribed and contain such details and particulars or orders or directions, details of authority against whose orders or directions the appeal or petition or application is being instituted by the expected appellant or petitioner or applicant which full address for service on other side, so that the appeal or petition or application could be served before the appeal or petition or interim application is taken up:

Provided, that the Tribunal may pass interim orders in case of urgency.

(2) The caveat shall remain valid for a period of ninety days from the date of its filing.

3.2. Issue of notice [Rule 105 of NCLT Rules, 2016]:

(1) Where notice of an appeal or petition for caveat or interlocutory application is issued by the Tribunal, copies of the same, the affidavit in support thereof and if so ordered by the Tribunal, the copy of other documents filed therewith, if any, shall be served along with the notice on the other side.

(2) The aforesaid copies shall show the date of presentation of the appeal or petition for caveat or interlocutory application and the name of the authorised representative, if any, of such party with his full address for service and the interim order, if any, made thereon.

(3) The Tribunal may order for issuing notice in appropriate cases and also permit the party concerned for service of the said notice on the other side by Dasti and in such case, deliver the notice to such party and it is for such party to file affidavit of service with proof.

(4) Acknowledgement under sub-rule (3) shall be filed by the party with the Registry before the date fixed for return of notice.


In Nirmal chandra v. Girindra narayan, AIR 1978 Cal 492, the Calcutta High Court it was observed that the object of the introduction of Section 148 A for caveat in the Code was to afford an opportunity of hearing to a person as against whom a proceeding is likely to be instituted This was obviously with a view to avoid multiplicity of proceedings and to give an opportunity to the person as against whom proceedings have been lodged in the court of hearing so that injustice was not done to him and an order was not obtained or procured by hiding the facts which may have a relevance on the decision of the controversy. In Seethaiah v. Govt. of A.P, AIR 1983 AP 443, too this view was supported that the intention of the legislature in making this provision is to enable the caveator-respondent to be heard before any orders are passed and no orders are passed by the Court ex parte that this is the intention of the legislature.

Therefore it can be understood that the two primary objective reasons for caveat applications are:

(1) to safeguard the interest of a person against an order that may be passed on an application filed by a party in a suit or proceeding instituted or about to be instituted. Such a person lodging a caveat may not be a necessary party to such an application, but he may be affected by an order that may be passed on such application. This section affords an opportunity to such party of being heard before an ex parte order is made; and

(2) to avoid multiplicity of proceedings. In absence of such a provision, a person who is not a party to such an application and is adversely affected by the order has to take appropriate legal proceedings to get rid of such order.

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April 2021