PANDURANG DHONI CHOUGULE versus MARUTI HARI JADHAV

PANDURANG DHONI CHOUGULE

MARUTI HARi JADHA V -April_ 26, 1965

[P. B. GAJENDRAGADKAR, C.J., K. N. WANCHOO, J.C. SHAH, J. R. MuDHOLKAR AND S. M. Snm1, JJ.]

Code of Civil Procedure, 1908 (5 of !908), s. 115-Revisional lu{is-diction of High Court-Tests--Cons.truction of docu111ent-Question of law-When jurisdiction can be exercised. ~ =

In suit for redemption of mortgage! filed by the respondents' pre-decessors on ~.mortgage executed by them in favour of the appellants' predecessors, deer~ was passed directing the respondents' predecessors to pay certain sum within specified time to the appellant's predecessors and- recover possession of the mortgage property and in case of failure to pay within the sp<;1:ific time they shall be deemed to have lost th.e right of redemption for all time. According to the! respondents ithe money was not paid; even so, the relationship between the parties con-tinued to be that of the mortgagors and mortgagees. So the respondents fil<:d an application_nnder the Bombay Agriculturists Debtor> Relief Act for adjustment of the debt, The appellants also filed an application for adjustment of the debt due under the decree; but in doing so, they made it clear that they were making the application as matter of precaution and without prejudice to their. contentions that the equity of redemption had been extinguished and the parties no longer stood in the relationship of creditors and debtors. The trial court rejected the appellants' con-tention that the mortgage had been extinguished and held that the equity of redemption still vested in the re$pondents; but as the respondents' applica.ti0n was barred. by time, it dismissed the respondents' application. On appeal, the District Court held, inter alia, that the decree \Vas com-posite decree and on the respondents' failure to pay the decretal amount within the time specified, their right to redeem the mortgage \Vas extin-guiShed by virtue of the express terms contained in it. and dismissed the respondents' appeaJ. On revision under s. 115 of the Code of Civil Procedure, the High Court construed the decree as preliminary decree and found that the clause purporting to extinguish the equity of redemp-tion did not ·effect its essential character as preliminary decree and did not in law put an end to the relationship of creditor and debtor between the parties. In appeal to this Court, the appellants contended that in reversing the conclusion of the District Court, the High Court exceeded its jurisdiction under s. 115 of the Code.

HELD : This contention was well founded and must be upheld. [106HJ (While exercising its jurisdiction under s. 115 it is not competent to the High Court to correct errors of fact however, gross they may be, or even errors of law, unless the said errors have relation to the jurisdiction of the court to try the dispute itself. The tests laid down in Clauses (a) (b) and (c) of s. 115, before the High Court exercises its revisional jurisdiction, are, does the alleged n1is-construction of the statutory pro-vision have relation to the eroneous assumption of the jurisdiction; or the erroneous failure to exercise jurisdiction; or the exer· cise of jurisdictlon illega11y or wi·th material irregularity by the subordinate.' court.) It is well-settled that plea of limitation or plan of

res judicata is plea of law which concerns the jurisdiction of the court which tries the proceedings. distinction must be drawn betw~n errors. committed by subordinate courts in deciding questions of law which have relation to, or are concerned wi.th, questions of jurisdiction of the said court, and error of law which have no such relation or connection. It is undesirable and inexpedient to Jay do\vn general rule in regard to this position. [107 A-E; 108 D-E]

Manirtdra Land and Building Corporation Ltd. v. Bhutnath Banerjee and Others, A.I.R. 1964 S.C. 1336 and Vora Abbasbhai Alinahomed v. Haji Gu/amnabi lfaji Safihlwi, A.LR. 1964 S.C. 1341.

(Th~ construction of document of title is no doubt point of law. Even so, it cannot be held to justify the exercise of the High Courts' revisional jurisdiCtion under s. 115 of the Code because it has no rela-tion to the jurisdiction of the Court. Like other matters which are relevant and material in determining the question of the adjustment of debts, the question about the existence of the debt has been left to the determination of the courts which are authorised ·to administer the pro-visions of the Act; and even in dealing with such questions, the trial court or Dis.trict Court commits an error of la\V. it cannot be said that such an error of law 'vould necessarily involve ihe question of the said court's jurisdiction within the metaning of s. 115 of the Code. [108H-!09C]

OBITER : When Legislature pass Acts dealing with socio-economic matters, or make provisions for the levy of sales-tax, it is realised that the operative provisions of such legislation present difficult problems of construction; and as sometimes, the Act in question provides for revisional application to the High Court or authorises reference to be made to it. In such cases, the High Court will undoubtedly deal with the prob-lems raised by the construction of the relevant provisions in accordance with the extent of the jurisdiction conferred on it by the material provi-sions contained in the statute itself. Sometimes, however, no such specific provision is made, and the question raised in regard to the construction of the provisions of such statute reach the High Court under its gene-ral revisional jurisdiction under s. 115 of the Code. In this class of cases, the revisional jurisdiction of the High Court has to be exercised in accor-danco with the limits prescribed by the said section. [107 E-H]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 163 of 1963.

Appeal by special leave from the judgment and decree dated October 31, 1960 of the Bombay High Court in Civil Revision Application No. 2131 of 1957 .

. S. P. Sinha and M. I. Khowja, for the appellants.

C. B. Aganvala and A. G. Patraparkhi, for the respondent<.

The Judgment of the Court was delivered by :

Gajendragadkar, C.J. This appeal by special leave arises out of proceedings initiated under the provisions of the Bombay Agri-cultural Debtors Relief Act, 1939 (No. 28 of 1939) (hereinafter called 'the Act'). The respondents Maruti Hari Jadhav and two

others moved the B.A.D.R. Court at Karad on ·May 26, 1949, for adjustment of the debt alleged to be due from them to the .appellants, P andurang Dhondi Chougule & others. Their case was that the debt in question was due under mortgage deed executed by their grand-father in favour of the grand-father of the appellants •On August 29, 18 81. By this mortgage, six agricultural lands situated at Kapil in the former State of Oundh had been mortgaged to the mortgagee with possession for sum of Rs. ,57 5. In 1908, the respondents' predecessors-in-interest sued on this mortgage in 'the Court of the Sub-Judge at Kapil (Civil Suit No. 28 of1908-09). This suit was, however, withdrawn with liberty to file-a--freslf suit Then followed another suit by the respondents in the same Cour~ for redemption of the mortgage (No. 102 ,of 1932-33). On September 2, 1936, decree came to be passed in the said suit According to the respondents, the decree directed them to pay Rs. 3,677-12-6 within six months from the date on which it was drawn, but the said money had not been paid; even so, the rela-tionship between the parties continued to be that of the mortgagors and the mortgagees, and so, they were entitled to claim adjust-ment of the debt in question. The respondents also pleaded that the decree which was passed in the said suit was in the nature of -a preliminary decree, and though the appellants were entitled to .apply for making the said decree final after the expiration of the six months' period prescribed by it, they took no such action and 1he mortgage debt, therefore, remains unpaid and the .equity of -redemption vesting in the respondents is unextinguished. That, in brief, is the nature of the clrum made by the respondents in the application made by them under the Act for adjustment of their debt due to the appellants.

It appears' that the State of Oundh merged in the erstwhile "State of Bombay and thereafter, the Act was extended to the said "State. That is how the respondents commenced the present pro--ccedings under the provisions of the Act thus extended to the State of Oundh.

The appellants also made an application fo~ the adjustment of the debt due under the decree in Suit No. 102/1932-33 in the -Court of Joint Civil Judge, Karad; but in doing so, they made it perfectly clear that they were making the application as matter of -precaution and without prejudice to their contention that the equity of redemption had been extinguished and the parties no longer stood in the relationship of creditors and debtors. In fact, it was the appellants the first made the application on May 19, 1949, and the respondents followed by their application on May

26, 1949. For the purpose Gf hearing, these two applications were consolidated by the trial Court.

At the hearing of these proceedings, the appellants raised several contentions. They urged that the mortgage was extinguish-ed and the respondents were therefore, not entitled to claim adjustment of the debt, and they also contended that the applica-tion made by the respondents was barred by time. The trial Judge rejected the appellants' argument that the mortgage had been extinguished, and held that the equity of redemption still vested in the respondents. He, however, found that the respon-dents' application for adjustment of the debt was barred by time. In the result, the respondents failed and their application was dismissed. The matter then went in appeal to the District Court, North Satara. The appellate Court held that the decree in suit No. 102 of 1932-33 amounted to final decree which absolutely debarred the right of the mortgagors to redeem the property in view of the fact that they had failed to pay the decretal mnount within the time prescribed by it. It also agreed with the view taken by the trial Court that the respondents' application was barred by limitation. In the result, the appeal preferred by the respondents was dismissed. The dispute then reached the Bombay High Court in its revisional jurisdiction uader s. 115 of the Code. Before the High Court it was urged th:it the Code of Civil Procedure did not apply to the State of Oundh at the relevant time; that is why by an interlocutory judgment, the High Court remanded the proceedings to the trial Court with direction that the issue as to whether the Code of Civil Procedure applied to the State of Oundh at the relevant time, should be tried. On remand, the tiial Court made finding that the Code of Civil Procedure had been made appli-cable to the State of Oundh as far back as 1909-10. The High Comt had also directed that the issue as to who was in possessioll of the property at the relevant time, should be tried; and the finding returned by the trial Court was that the appellants were in possession of the mortgaged property not as mortgagees, but as owners from 2nd March, 1937.

After these findings were returned, the revision application was argued before the High Court; and the main point which was urged before the High Court at that stage was whether the respondents' right to redeem the mortgage had been extinguished by the decree passed in civil suit No. 102 of 1932-33. The High

Court has differed from the District Court and has taken the view that the decree did not determine the respondents' right to redeem the mortgage. In regard to the finding recorded by the courts below that the respondents' application was barred by time, the High Court took the view that the question as to whether the application is within sixty years from the expiry of the period prescribed in the mortgage deed for repayment is entirely irrele-vant inasmuch as the said application is substantially for the adjustment of debt under the decree passed in suit No. 102 or 1932-33. On that view of the matter. the High Court has set aside the orders passed by the courts below and has remanded the proceedings to the trial Court with direction that the applica-tion made by the respondents for adjustment of the debt 'hould be tried in accordance with law. It is agaimt thi' order that the appellants have come to this Court by special leave.

Before proceeding to deal with the contentions raised bc[o;·e us in the present appeal it would be convenient to <et out the relevant portion of the decree in suit No. 102 of 1932-33. The operative part of the deC'"ec reads thus :-

"1l1e plaintiffs should pay to defendants I and 2

Rs. 3,677-12-6 within six months from today and should recover possession of the suit property as the he;rs of Gopala free from the mortgage. In case the plaintiffs do not pay the amount within the prescribed time, the plaintiffs shall be deemed to have lost the right of re-demption for all time".

The District Court h3s held that this decree is composite decree and on the failure of th~ respondents to pay the dccrctal amount within the time specified, their right to redeem the mortgage is extinguished by virtue of the express terms contained in it. The High Court has construed the decree as preliminary decree an:! has found that the clause purporting to extinguish th~ cquitv or redemption does not affect its essential character as preliminary decree and docs not in law put an cad to the relationship of credi-tors and debtors between the parties.

The first question which falls for our decision in the present appeal is whether the High Court was justified in inte•feoing with the deci,ion of the District Court that the decree in question extinguished the respondents' right to redeem the mortga§e. Mr. Sinha for the appellants contends that in reversing the con-clusion of the District Court, the High Court has exceeded its jurisdiction undeo s. 115 of the Code. In our opinion, this con-tention is well-founded and must be upheld.

(The povisions of s. 115 of the Code have been examined by judicial decisions on several occasions. While exercising its juris-diction under s. 115, it is not competent to the High Court to correct errors of fact however• gross they may, or even errors of law, unless the said errors have relation to the jurisdiction of the Court to try the dispute itself. As clauses (a), (b) and (c) of s. 115 indicate, it is only in cases where the subordinate Court has exercised jurisdiction not vested in it by law, or has failed to exercise jurisdiction so vested, or has acted in the exercise of its jurisdicHon illegally or with material irregularity that the revisional jurisdiction of the High Court can be properly invoked) It is conceivable that points of law may arise in pro-c ceedings instituted before subordinate courts which are related to questions of jurisdiction. It is well-settled that plea of limita-tion or plea of res ;udicata is plea of law which concerns 1he jurisdiction of the court which tries the proceedings. finding on these pleas in favour of the party raising them would oust the jurisdiction of the court, and so, an erroneous decision on these pleas can be said to be concerned with questions of jurisdic-tion which fall within the purview of s. 115 of the Code. But an erroneous decision on question of law reached by the sub-ordinate court which has no relation to questions of jurisdiction of that court, cannot be corrected by the High Court under s. 115.The history of recent legislation in India shows that when Legislatures pass Acts dealing with socio-economic matters, or make provisions for the levy of sales-tax, it is realized that the operative provisions of such legislation present difficult problems of construction; and so, sometimes, the Act in question provides for revisional application to the High Court in respect of such matters or authorises reference to be made to it. In such cases, the High Court will undoubtedly deal with the problems raised by the construction of the relevant provisions in accordance with the extent of the jurisdiction conferred on it by the material provi-sions contained in the statute itself. Sometimes, however, no such specific provision is made, and the questions raised in regard to the construction of the provisions of such statute reach the High Court under its general revisional jurisdiction under s. 115 of the Code. In this class of cases, the revisional jurisdiction of the High Court has to be exercised in accordance with the limits prescribed by the said section. It is true that in order to afford guidance to subordinate courts and to avoid confusion in the admimstration of the specific law in question, important questions relating to the construction of the operative provisions contained L5Sup./65-8

in such an Act must be finally determined by fae High Court; but in doing so, the High Court must enquire whether complaint made against the decision of the subordinate court on tho ground that it has misconstrued the relevant provisions of the statute, attracts the provisions of s. 115. Does the alleged misconstruction -0f the statutory provision have relation to the erroneous assump-tion of jurisdiction, or the erroneous failure to exercise jurisdic-tion, or the exercise of jurisdiction illegally or with material irregularity by the subordinate court ? These are the tests laid down by s. 115 of the Code and they have to be borne in mind before the High Court decides to exercise its revisional jurisdiction under it.

This question has been recently considered by this Court in Man/ndra tand and Building Corporation Ud.. v. Bhutnath Banerjee and Others('); and Vora Abbasbhai Ali1nahomed v. Haji Gulamnabi Haji Safibhai([2]). The effect of these two deci-sions clearly is that distinction must be drawn between the errors committed by subordinate courts in deciding questions of law which have relation to, or are concerned with, questions of jurisdiction of the said court, and errors of law which have no such relation or connection. It is, we think, undesirable and inexpedient to lay down any general rule in regard to this posi-tion. An attempt to define this position with precision or to deal with it exhaustively roay create unnecessary difficulties. It is clear that in actual practice, it would not be difficult to distinguish between cases where errors of Jaw affect, or have relation to, the jurisdiction of the court concerned, and where they do not have such relation.

Considering the point raised by Mr. Sinha in the light of this position, it seems to us that the High Court was in error in assuming jurisdiction to correct what it thought to be the miscons-truction of the decree passed in civil suit No. 102 of 1932-33. As we have already seen, in the present debt adjustment proceed-ings, one of the points which arose for decision was whether the mortgage debt was subsisting at the time wfien the respondents made their application, and the District Court had found that the respondents' equity of redemption had been extinguished. This finding was based on the construction of the said decree. It is difficult to see how the High Court was justified in reversing this finding under s. 115 of the Code. The construction of decree like the construction of document of title is no doubt point of law. Even so, it cannot be held to justify the exercise of the

(2) A.l.R. 1964 S.C. 1341.

High Court's revisional jurisdiction under s. 115 of the Code because it has no relation to the jurisdiction of the Court. Like other matters which are relevant and material in determining the question of the adjustment of debts, the question about the exist-ence of the debt has been left to the determination of the court• which are authorised to administer the provisions of the Act; and even if in dealing with such questions, the trial court or the District Court commits an error of law, it cannot be said that such an error of law would necessarily involve the question of the said courts' jurisdiction within the meaning of s. 115 of the Code. We are, therefore, satisfied that on the facts of this case, the High Court exceeded its jurisdiction in interfering with the conclusion of the District Court that the decree in question had extinguished the respondents' equity of redemption.

This conclusion is enough to dispose of the present appeal, because the main ground on which the High Court has reversed the concurrent decision of the courts below dismissing the respon-D dents' application for adjustment of the debt, is furnished by its finding that the decree in question did not extinguish the equity of redemption vesting in the ~espondents. In fact, it was as result of this decision that the High Court reversed the finding of the courts below that the respondents' application was barred by time. Having regard to the fact that we are inclined to take the view that the High Court exceeded its jurisdiction in reversing the finding of the District Court as to the effect of the decree in question, we do not think it is necessary to consider the further question as to whether the High Court was right in holding that the decree in question was preliminary decree and the clause which purported to extinguish the equity of redemption was in-F operative and invalid and as much, it did not affect the essential character of the decree as preliminary decree.

The result, is, the appeal is allowed, the order passed by the High Court is set aside and that of the District Court restored. There would be no -order as to costs.

Appeal allowed.