Case: 73Jyoti Bhushan Gupta Vs. The Banaras Bank Ltd

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 his 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 S. 187 of the Companies Act.9. The Judicial Committee of the Privy Council was called upon In the matter of Candas Narrondas, ILR 13 Bom 520 (PC) to determine the true 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, 1908) applies to a judgment of a Court for the relief of insolvent debtors 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 insolvents estate, the proceedings in execution and the judgment are the High Courts. 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 extraordinary 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. Rigby 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 on special occasions and by special orders.They are confirmed in this view by observing that, in the next group of clauses which indicate the law to be applied by the Court to the various classes of cases, there is not a fourfold division of jurisdiction, but a three-fold one, into ordinary, extraordinary, 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."Counsel 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 ILR 13 Bom 520 (PC), 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.10. In P. T. Munia Servai v. The Hanuman bank Ltd., Tanjore, ILR (1958) Mad 685 : (AIR 1958 Mad 418 ), a Division Bench of the Madras High Court held that the jurisdiction conferred on the High Court, by the Banking Companies Act, 1949 (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.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]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 on the certificate and have heard the appeal on the merits.4. We are of the view that the appeal must fail on theis 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 which was not initially conferred upon the High Court could be 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 contributories. 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 his 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 S. 187 of the Companiesunder 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 isan application for enforcement of that liability Art. 183 of the Limitation Act was held applicable.