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PETITIONER: 73JYOTI BHUSHAN GUPTA

       Vs.

RESPONDENT: THE BANARAS BANK LTD

DATE OF JUDGMENT: 12/10/1961

BENCH: SHAH, J.C. BENCH: 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

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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

JUDGMENT:      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 compulsorliy 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

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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

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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 establish- 77 ment 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

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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 Hobhouse 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

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    have  just   been   epitomised   divide   the      jurisdiction   into   four   classes-ordinary      original, extraordinary  original, appellate,      and  those  special  matters  which  are  tho      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      ordineary 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 deter mined 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

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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.