Judgment Case ID: 1333

Judgment:
vil 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. section Pathak and G. C. Mathur	 for the respondent. 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 section 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 section 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 article 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 article 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 article 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 article 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 article 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 article 183 or section 48 of the Code of Civil Procedure	 1908 (V of l908). By article 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 section 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 section 187 of the Indian Companies Act	 1913	 is neither ordinary	 nor original civil. He submits that by section 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 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 section 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 section 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 section 187 is merely a power of the High Court and not its jurisdiction. By section 3 read with section 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 section 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. 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 'section 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 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. 81 High Court by the Banking Companies Act	 ]949 (X of 1949) is part of its ordinary civil jurisdiction within the meaning of article 183 of the Limitation Act and an order passed in exercise of its ordinary original Civil Jurisdiction is governed by article 183 and not by article 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 article 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.

Summary:
The Banaras Bank Ltd. was ordered by the Allahabad High Court to be compulsorily wound up. The High Court passed an order under section 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 article 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 article 183 which prescribed a period of limitation of twelve years. ^ Held	 that article 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 article 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. and P. T. Munia Cervai 74 vs The Hunuman Bnak Ltd.	 I.L.R 	 referred to