Jyoti Bhushan Gupta Vs. The Banaras
Bank Ltd. [1961] INSC 299 (12 October 1961)
SHAH, J.C.
SINHA, BHUVNESHWAR P.(CJ) SUBBARAO, K.
MUDHOLKAR, J.R.
CITATION: 1962 AIR 403 1962 SCR Supl. (1) 73
CITATOR INFO :
F 1971 SC 218 (5)
ACT:
Limitation-Order of high Court directing
contributors to pay money to liquidator-Order if passed in exercise of ordinary
original Civil jurisdiction-Execution application filed beyond three years-If
barred-Indian Limitation Act 1908 (IX of 1908), Art. 183-Indian Companies Act,
1913 (VII of 1913), ss and 199-Letters Patent of the Allahabad High Court.
HEADNOTE:
The Banaras Bank Ltd. was ordered by the
Allahabad High Court to be compulsorily wound up.
The High Court passed an order under s. 187
of the Indian Companies Act, 1913, directing the appellants, whose names had
been placed on the list of contributors, to pay a certain sum of money to the
official Liquidator. The official Liquidator applied for execution of the order
more than three years after the making thereof. The appellants contended that
the execution application, not having Been preferred within three years as
prescribed by Art. 182 of the Limitation Act was barred. The official
Liquidator contended that the order was made in the exercise of ordinary
original civil jurisdiction by the High Court and the application was governed
by Art. 183 which prescribed a period of limitation of twelve years.
^ Held, that Art. 183 was applicable to the
case and the application for execution was within time. The order was Made by
the High Court in the exercise of its ordinary original civil jurisdiction as
contemplated in Art. 183. Though the Letters Patent did not invest the High
Court with any original jurisdiction it could be conferred by legislation. The
Indian Companies Act, 1913, invested the High Court with the jurisdiction to
order payment of amounts due by debtors of companies ordered to be wound up.
The jurisdiction was ordinary, it did not depend on and extraordinary action on
the part of the High Court. It was original as a petition for the exercise of
it was entertained by the High Court as a court of: first instance and not as
an appellate court, and since the High Court adjudicated upon the liability of
the debtor to pay debts due by him to the company the jurisdiction was civil.
In the matter of Candas Narondas, Navivahu
and C. A; Turner, I. L. R. (1889) 13 Bom. 520 and P. T. Munia Cervai 74 v. The
Hunuman Bnak Ltd., I.L.R (1958) Mad. 658, referred to
CIVIL APPELATE JURISDICTION: Civil APPEAL No.
198 of 1956.
Appeal from the judgment and decree dated
August 24, 1950, of the Allahabad High Court in Execution First Appeal No. 399
of 1947.
Gopi Nath Kunzru and Ganpat Rai, for the
appellants G. S. Pathak and G. C. Mathur, for the respondent.
1961. October l 2. The Judgment of the Court
was delivered by SHAH, J.-The Banaras Bank Ltd.-a public limited company having
its registered office at Banaras-(hereinafter referred to as the Bank) was
ordered on March l, 1 940 to be compulsorily wound up by the High Court of
Judicature at Allahabad, and the Official Liquidator was appointed to conduct
the proceedings in winding up. On September 12, 1942, an order was made by the
High Court under s. 187 of the Indian Companies Act, 1913 (VII of 1913) for payment
of unpaid calls and the appellants Jyoti Bhushan Gupta. and Gokul Chand, whose
names had been placed on the list of contributors, were directed to pay with
interest Rs. 95,178/5/9 to the official Liquidator of the Bank. This order was,
by virtue of s. 199 of the Act, enforceable in the manner in which the decree
of the High Court made in any suit pending therein may be enforced. On
September 12, 1946, the order was transferred to the District Judge, Allahabad
for execution. On September 23, 1946, the official Liquidator applied to the
District Court, Allahabad for execution of the order dated September 12, 1942,
and prayed that certain amounts due to the appellants be attached in
satisfaction of the claim. The execution proceedings were transferred by the
District Judge 75 to the Civil Judge, Allahabad. The appellants contended Inter
alia that as the application for execution was not preferred within 3 years of
the order for payment as prescribed by Art. 182 of the First Schedule of the
Limitation Act it was barred by the law of limitation. The official Liquidator
contended that the application was governed by Art. 183 of the Act and that, in
any event, certain part payments having been made towards the claim by the
appellants, the period of limitation was extended thereby. At the hearing, the
alternative plea of part payment was abandoned by the Official Liquidator.
The Civi1 Judge held that the application for
execution was barred limitation as it was not preferred within 3 years from the
order of the High Court. In appeal to the High Court of Allahabad, the order
passed by the Civil Judge was reversed and the proceedings were remitted to the
Civil Judge with a direction to restore the execution application to its
original number and to proceed with it according to law. Against that order
with certificate of fitness granted by the High Court under Art. 133 of the
Constitution, this appeal is preferred.
Counsel for the Company contended that the
order passed by the High Court not being a final order the appeal on
certificate granted by this High Court is not maintainable. We have not thought
it necessary, having regard to the importance of the question raised by the
appellants and the fact that this Court may in a proper case regularise the
proceeding in this Court by granting special leave, even if certificate under
Art. 133 of the Constitution could not be issued by the High Court, to hear the
parties on the question as to the maintainability of the appeal OD the
certificate and have heard the appeal on the merits.
We are of the view that the appeal must fail
on the merits.
76 Art. 182 of the Indian Limitation Act
provides a period of 3 years for an application for execution of a decreer an
order of any Civil Court not provided by Art. 183 or s. 48 of the Code of Civil
Procedure, 1908 (V of l908). By Art.
183 a period of l2 years for enforcing a
judgment, decree or order of any Court established by Royal Charter in the
exercise of its ordinary original civil jurisdiction is prescribed and the
period commences to run from the date on which a present right to enforce the
judgment, decree or order accrues to some person capable of. releasing the
right. The order sought to be executed was not passed by the High Court in the
trial of a suit:
it was passed in exercise of the jurisdiction
conferred upon the High Court by s. 187 of the Indian Companies s Act, 1913.
Section 3 of the Indian Companies Act by sub-s.(1) enacts that the Court having
jurisdiction under this Act shall be the High Court having jurisdiction in the
place at which the registered office of the company is situate. By the proviso,
the Central Government may by notification in the official Gazette empower any
District Court to exercise all or any of the jurisdiction conferred upon the
High Court.
But it is common ground that no notification
conferring jurisdiction and empowering the District Court at Banaras-where the
registered office of the company is situate-to pass orders under B. 187 has
been issued. The High Court was therefore the only Court competent to direct
under B. 187 of the Indian Companies Act payment of the amount due from the
appellants.
Counsel for the appellants contends that the
authority exercised by the High Court in directing payment under s. 187 of the
Indian Companies Act, 1913, is neither ordinary, nor original civil. He submits
that by s. 187 a special power is vested in the High Court by the Indian
Companies Act, 1913, which is exercisable in its extraordinary jurisdiction. To
appreciate this argument it is necessary to refer to the statute authorising
the establishment of the High Court, and the Letters Patent constituting the
same.
The High Court for the North Western
Province, of which the Allahabad High Court is the successor, was constituted
by the Letters Patent issued on March 17, 1866, in exercise of the powers
conferred by cl. 16 of the Charter Act of 1861 (24.25 Vict. C. 104). By that
clause, Her Majesty the Queen was authorised to establish a High Court and to
invest the High Court with such jurisdiction, powers and authority as under the
Charter Act may by cl. 9 be conferred upon the High Court to be established in
any of the presidencies, i. e., Calcutta, Bombay and Madras.
The High Courts of Calcutta, Bombay and
Madras, which were popularly known as the Presidency High Courts were by cl. 12
of their respective Letters Patent invested with ordinary original civil
jurisdiction to entertain and try suits of every description subject to the
restriction as to territorial limitations contained in cl. 11 thereof. But by
its Letters Patent, the High Court for the North Western Province was not
invested with jurisdiction to entertain civil suits in exercise of its ordinary
original civil jurisdiction.
Counsel for the appellants submits that
Art.183 applies only to decrees and orders passed by the High Courts
established by the Royal Charter, which by their constitution are authorised to
entertain, hear and try civil suits in exercise of their ordinary civil
jurisdiction, and as no such power was conferred upon the Allahabad High Court,
the order sought to be executed was not passed in exercise of the ordinary
original civil jurisdiction. It is true that when the Letters Patent were
issued the High Court had no jurisdiction under a law relating to companies of
the nature exercised by the High Court, the character whereof falls to be
determined in this appeal. But by cl. 16 of the Charter Act and cl. 35 of the
Letters Patent of the Allahabad High Court jurisdiction 78 which Was not
initially conferred upon the High Court could the conferred by legislation
within the competence of the Governor-General in Council and the Governor in
Council. By the Companies Act of 1913, the High Court was invested with
jurisdiction to order payment of the amounts due by debtors of companies
ordered to be wound up.
This jurisdiction may be invoked as of right
against all persons whose names are placed on the list of contributors. The
jurisdiction is ordinary: it does not depend on any extraordinary action on the
part of the High Court. The jurisdiction is also original in character because
the petition for exercise of the jurisdiction is entertainable by the High
Court as a court of first instance and not in exercise of its appellate
jurisdiction. Again by s. 187 no special jurisdiction is conferred. The High
Court adjudicates upon the liability of the debtor to pay debts due by him to
the Company: the jurisdiction is therefore civil. Normally, a creditor has to
file a suit to enforce liability for payment of a debt due to him from him debtor.
The Legislature has by s. 187 of the
Companies Act empowered the High Court in a summary proceeding to determine the
liability and to pass an order for payment, but on that account the real
character of the jurisdiction exercised by the High Court is not altered. Nor
is there any substance in the contention that the authority to order payment of
a debt under s. 187 is merely a power of the High Court and not its
jurisdiction.
By s. 3 read with s. 187 of the Companies Act
the High Court has jurisdiction to direct payment of the amount due by a
contributory: and an order passed for payment manifestly is an order passed in
exercise of the jurisdiction vested in the High Court by s. 3 read with 8. 187
of the Companies Act.
The Judicial Committee of the Privy Council
was called upon In the matter of Candas Narondas Navivahu and C. A. Turner(1)
to determine the true (1) I. L. R. (1889) 13, Eom. 520.
79 nature of the jurisdiction exercised by
the High Court of judicature at Bombay in respect of insolvent debtors. The
Privy Council held that article 180 of Schedule II of the Indian Limitation Act
XV of 1877 (which was similar to article 183 of the Indian Limitation Act,
l908) applies to a judgment of a Court for the relief of insolvent ebtors
entered up in the High Court, in accordance with section 86 of the Statute 11
and 12 Vic., c. 21. It was held in that case that although a Court exercising
insolvency jurisdiction determines the substance of the question relating to an
insolvent's estate, the, proceedings in execution and the judgment are the High
Court's. The judgment is entered up in the ordinary course of the duty cast
upon the High Court by the law, not by way of special or extra ordinary action,
but in the exercise of its ordinary original civil jurisdiction. Lord Hob house
delivering the judgment of the judicial committee observed:
"But it was strongly contended at the
bar that this jurisdiction though civil and original, was not ordinary: and Mr.
Rugby argued that the passages of the Charter which have just been epitomised
divide the jurisdiction into four classes-ordinary original, extraordinary
original, appellate, and those special matters which are the subject of special
and separate provisions.
But their Lordships are of the opinion that
the expression "ordinary jurisdiction" embraces all such as is
exercised in the ordinary course of law and without any special step being
necessary to assume it and that it is opposed to extraordinary jurisdiction,
which the Court may assume at its discretion upon special occasions and by
special orders. They are confirmed in this view by observing that, in the next
group of clauses which indicated the law to be applied by the Court to the
various clauses of cases, there is not a four-fold division of jurisdiction,
but a three-fold one, into ordinary, extraordinary, 80 and appellate. The
judgment of 1868 was entered up by the High Court, not by way of special or
discretionary action, but in the ordinary course of the duty cast upon it by
law, according to which every other case of the same kind would be dealt with.
It was, therefore, entered up in exercise of the ordinary original civil
jurisdiction of the High Court." Council for the appellants contended that
by cl. 18 of the letters Patent the High Court of Bombay was invested with
insolvency jurisdiction whereas the High Court of Allahabad is not invested by
the Letters Patent with any jurisdiction in the matter of companies and
therefore the principle of "In re-Candas Narondas" does not apply.
But under cl. 18 of the Letters Patent a Judge or Judges of the High Court are
to sit as a Court for relief of insolvent debtors and powers and authorities
with respect to original and appellate jurisdiction are to be determined by
reference to the law relating to insolvent debtors. The jurisdiction to deal
with the claims of companies ordered to be wound up is conferred by the Indian
Companies Act and to that extent the Letters Patent are modified. There is,
however, no difference in the character of the original civil jurisdiction
which is conferred upon the High Court by Letters Patent and the jurisdiction
conferred by special Acts. When in exercise of its authority conferred by a
special statute the High court in an application presented to it as a court of
first instance declares liability to pay a debt, the jurisdiction exercised is
original and civil and if the exercise of that jurisdiction does not depend
upon any preliminary step invoking exercise of discretion of the High Court,
the jurisdiction is ordinary.
In P. T. Munia Servai v The Hanuman Bank Ltd,
Tanjore (1), a Division Bench of the Madras (I) 1. L. R. (1958) Mad. 685 81
High Court by the Banking Companies Act, ]949 (X of 1949) is part of its
ordinary civil jurisdiction within the meaning of Art. 183 of the Limitation
Act and an order passed in exercise of its ordinary original Civil Jurisdiction
is governed by Art. 183 and not by Art. 182 of the Limitation Act. In that case
on an application preferred by the Official Liquidator of the Hanuman Bank
Ltd., a direction for payment by the High Court of certain sums of money by the
appellant Munia on or before a certain date was made. To an application for
enforcement of that liability Art. 183 of the Limitation Act was held
applicable.
In our view, the High Court was right ill
holding that the application for execution filed by the official Liquidator was
within limitation.
The appeal, therefore, fails and is dismissed
with costs.
Appeal dismissed.
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