Lakshmi Narain vs First Additional District Judge, Allahabad

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: supreme-court

Case Number: Civil Appeal No. 784 of 1962

Decision Date: 20 December 1962

Coram: Bhuvneshwar P. Sinha, P. B. Gajendragadkar, K. N. Wanchoo, K. C. Das Gupta, J. C. Shah

In the case titled Lakshmi Narain versus First Additional District Judge, Allahabad, the Supreme Court rendered its judgment on 20 December 1962. The opinion was authored by Justice Bhuvneshwar P. Sinha, who sat as Chief Justice, and was delivered by a bench comprising Justice Bhuvneshwar P. Sinha, Justice P. B. Gajendragadkar, Justice K. N. Wanchoo, Justice K. C. Das Gupta, and Justice J. C. Shah. The petitioner's name is Lakshmi Narain and the respondent is the First Additional District Judge of Allahabad. The judgment is reported in 1964 AIR 489 and 1964 SCR (1) 362, and is also cited in R 1970 SC 878 (9). The substantive legal issue concerns the transfer of a first appeal under Section 24(1)(a) of the Code of Civil Procedure, 1908 (Act V of 1908), in the context of the Uttar Pradesh Civil Laws (Reforms and Amendment) Act, 1954 (U.P. 24 of 1954), specifically Section 3(1). The Act amended Section 21(1)(c) of the Bengal, Agra and Assam Civil Courts Act, 1887 to empower District Courts to hear first appeals where the value of the suit does not exceed ten thousand rupees, and it also provided in Section 3(1) that any proceeding instituted or commenced in any court before the commencement of the Act shall, notwithstanding the amendment, continue to be heard and decided by that court. The headnote of the judgment summarises that the Act, while intended to relieve the High Court’s burden, does not extend that relief to pending first appeals, and it also notes that costs are not ordinarily awarded against a court.

The factual background reveals that the appellant filed a suit for possession of certain properties in the Civil Judge’s Court, and that suit was dismissed on 27 November 1951. The appellant then filed a first appeal to the High Court on 8 February 1952. The High Court, by order of the Chief Justice in Chambers and without giving notice to the parties, transferred the appeal to the District Judge of Allahabad under Section 24(1)(a) of the Code of Civil Procedure. The appellant appeared before the District Court and raised a preliminary objection challenging the jurisdiction of that court to hear the appeal. The District Court overruled the objection and proceeded to hear the matter. The appellant subsequently moved the High Court under Article 226, but the single judge who heard the petition dismissed it on the ground of a prior decision of the Division Bench. An appeal against that dismissal was filed and the Division Bench summarily dismissed it. The Supreme Court held that, pursuant to Section 3(1) of the Uttar Pradesh Act, only the High Court possessed the competence to hear the appeal that was pending before it, and that the transfer of the appeal to the District Court failed to give effect to the concluding words of Section 3(1). Moreover, Section 24 of the Code of Civil Procedure requires that the court to which an appeal is transferred must be competent to dispose of it; in view of Section 3(1), the District Court was not competent to entertain the appeal. The Court further observed that, although the purpose of the Act was to alleviate the High Court’s workload, the legislature had not intended to extend that relief to appeals that were already pending. Finally, the Court noted that costs cannot ordinarily be awarded against a court and that the High Court’s action in this regard was erroneous.

In this appeal the Court noted that the High Court had acted incorrectly in transferring the matter. The Court referred to the decisions in Sarjudei v. Rampati Kunwari (1962 All. L. J. 544) and Cyril Spencer v. M. H. Spencer (1955 All. L. J. 307). The case before the Civil Appellate Jurisdiction was Civil Appeal No. 784 of 1962, which arose from the judgment and order dated 13 July 1962 of the Allahabad High Court in Special Appeal No. 82 of 1962. The Attorney‑General for India, M. C. Setalvad, and B. C. Misra represented the appellant, while K. S. Hajela and C. I‑. Lal appeared for respondent No. 1, and J. P. Goyal appeared for the intervener. The judgment was delivered on 20 December 1962 by Justice Sinha, C. J. After concluding the hearing on 13 December 1962, the Court informed the parties that the appeal would be allowed and that the reasons would be set out subsequently. The sole issue for determination was whether, under the Uttar Pradesh Civil Laws (Reforms and Amendment) Act (U. P. XXIV of 1954), a first appeal arising from a suit decided before the Act’s commencement and involving a valuation of less than ten thousand rupees could be transferred for hearing and disposal to a District Judge or an Additional District Judge. The First Additional District Judge of Allahabad was identified as the first respondent and was represented by counsel at the hearing. The other respondents, who had been parties to the main appeal, did not appear and seemed uninterested in the outcome of this appeal. To clarify the points of controversy, the Court set out the relevant facts. The appellant, acting as plaintiff, had instituted suit No. 7 of 1949 in the Court of the Civil Judge at Mathura on 26 January 1949 for possession of certain properties against respondents 2 and 3. That suit was dismissed on 27 November 1951. The dissatisfied plaintiff then filed a first appeal before the High Court of Judicature at Allahabad, designated as First Appeal No. 37 of 1952. This appeal remained pending in the High Court from the date of filing on 8 February 1952 until 23 April 1952, when the parties were notified that the appeal had been transferred to the Court of the District Judge at Allahabad for hearing. The transfer order was issued by the learned Chief Justice in chambers, invoking section 24(1)(a) of the Code of Civil Procedure, on his own motion and without giving notice to the parties. The order read: “It is hereby ordered that first appeals mentioned in the list annexed hereto transferred under orders of this Court to the Court of the District Judge Allahabad are now transferred from that Court to the Court of the First Additional District Judge at Allahabad.” The annexed list included the appeal in question along with several other appeals, and the Court observed that the Chief Justice’s order appeared to have been passed in this manner.

In the wake of the recent legislation, the Act that had been referenced earlier amended a substantial number of statutes, one of which was the Bengal, Agra and Assam Civil Courts Act of 1887 (XII of 1887). Under that amendment, the provision in Section 21, clause (a) of subsection (1) was altered so that the monetary limit for a first appeal before a District Court was increased from five thousand rupees to ten thousand rupees. Consequently, District Courts acquired the authority to entertain first appeals whose value did not exceed ten thousand rupees. The appellant subsequently appeared before the District Court and raised a preliminary objection, questioning whether that Court possessed jurisdiction to hear the appeal at all. The District Court, however, rejected this preliminary objection by way of an order dated 31 May 1962. In that order, the Court observed that it could not act contrary to the orders previously issued by the High Court, and it further noted that any remedy the appellant might have lay in filing a petition before the High Court itself.

Following the District Court’s order, the appellant instituted proceedings in the High Court, invoking Articles 226 and 227 of the Constitution. The petition sought a writ of certiorari to compel the production of the appeal records and a writ of prohibition to restrain the first respondent from proceeding with the appeal. The writ petition was assigned to a single judge of the High Court, identified as Justice Dwivedi. By an order dated 11 July 1962, that judge dismissed the petition, relying on a Division Bench decision of the same Court rendered on 14 November 1961 in the case of Sarjudei v. Rampati Kunwari (1962 All. L.J. 544). The single judge correctly stated that he could not set aside the earlier Division Bench ruling, even though counsel pressed him to reconsider that decision. Undeterred, the appellant then filed an appeal against the single judge’s order, specifically challenging the dismissal in limine. This appeal was entered as Special Civil Appeal No. 82 of 1962 and was summarily dismissed on 20 July 1962 on the ground that the issue raised had already been finally decided by the Division Bench’s earlier judgment. The Division Bench declined to refer the matter to a larger bench, electing instead to adhere to its prior decision. The appellant subsequently applied to the High Court for special leave to appeal to the Supreme Court, a request that was granted, thereby bringing the matter before this Court. The Division Bench, while noting that the question had “been exhaustively dealt with by this Court in the case of Sarjudei v. Rampati Kunwari,” observed that the issue presented a substantial question of law of general importance, given the large number of similar cases pending. Consequently, the Court issued a certificate under Article 133(1)(c) of the Constitution. Interestingly, the Court also awarded costs against the First Additional District Judge of Allahabad, who had been the opposite party No. 1 in the High Court proceedings. Before addressing the principal controversy, it is necessary to point out that the same Act had earlier been examined by a Division Bench comprising Justices Agarwala and Mulla in First Appeal No. 60 of 1955.

In the matter of First Appeal No. 60 of 1955, the Division Bench delivered its judgment on 18 February 1955, and the decision appears in the reported case of Cyril Spencer v. M. H. Spencer (2). The learned judges pronounced that the right of appeal is not merely a procedural mechanism but a substantive right, and that such a right becomes vested at the moment the suit is instituted. Relying on section 3 of the Act, which is later examined in this judgment, the court concluded that once the right to appeal to a superior tribunal has vested before the Act came into force, that vested right cannot be altered by the provisions of the Act. Consequently, every appeal that, under the law then in force, lay to the High Court would continue to be maintainable in the High Court when the suit had been instituted prior to the commencement of the Act. On that basis the court permitted the appeal to be filed in the High Court. This ruling serves as a clear authority for the proposition that section 3(1) of the Act preserved pending appeals in the High Court from being affected by the Act.

Because a large number of first appeals dealing with valuations of ten thousand rupees or less were then pending, the High Court decided to revisit the issue. It issued notice to the parties in several of those pending first appeals and heard the matter anew. The judgment of the Division Bench, composed of Desai, C. J., and Ramabhadran, J., is recorded in Surjudei v. Rampati Kunwari (1). This bench arrived at a conclusion that differed from the earlier Division Bench of the same High Court, and the correctness of that later decision is now before this Court. On the merits, the High Court acknowledged that the Act did not have retrospective effect and that the right to appeal to a superior tribunal is a vested right fixed at the date of institution of the suit or proceeding. Accordingly, the High Court accepted that, despite the Act, the pending appeal could be disposed of by it. However, the High Court also held that the Act did not amend section 24 of the Code of Civil Procedure, which provides that a litigant’s right of appeal remains subject to the High Court’s authority to transfer the appeal under that section. The court further observed that this overriding power of the High Court to transfer a case to a competent court superseded the party’s right to have the case tried by a particular court.

In this case the High Court correctly framed the issue of whether District Judges or Additional District Judges possessed the jurisdiction to dispose of appeals similar to the one before them. However, the High Court answered that issue incorrectly by invoking the principle that its authority to transfer a case to another court supersedes a party’s entitlement to have the matter heard by a particular court. Accordingly, the High Court concluded that, after the enactment of the Amending Act, appeals involving valuations not exceeding ten thousand rupees could be determined by District Judges or Additional District Judges and therefore those courts were competent, even though such appeals could not have been entertained by those courts on the date the appeal was originally filed, given the date of the suit’s decision. The High Court further stated that it was immaterial to examine whether the Act possessed any retrospective effect. It emphasized that the transfers of appeals like the present one to the District Courts were made not under the provisions of the Amending Act but under section twenty‑four of the Code of Civil Procedure. In support of this position the High Court observed that the Uttar Pradesh Amending Act contains no provision removing its power to transfer appeals under section twenty‑four CPC, nor does it contain any provision declaring District Judges incompetent to hear appeals arising from suits instituted before the Act’s commencement. It added that section three of the Act does not render District Judges incompetent, and that subsection one merely preserves rights acquired prior to the Act’s enforcement, but any alteration of the parties’ appellate rights would arise from the exercise of power under section twenty‑four CPC rather than from enforcing the Act. With due respect, the High Court misinterpreted section three, subsection one of the Act, which governs the present dispute. That subsection expressly provides that any amendment made by the Act shall not affect the validity, effect, or consequence of anything already done, nor any right, title, obligation, or liability already acquired, nor any proceeding instituted or commenced in any court before the Act’s commencement, and that such proceedings shall, despite any amendment, continue to be heard and decided by the court in which they were originally instituted. The High Court failed to give effect to the words “any proceeding instituted or commenced in any Court prior to the commencement of this Act shall, notwithstanding any amendment herein made, continue to be heard and decided by such Court.”

In applying the language of section 3(1) of the Amending Act, the Court concluded that only the High Court possessed jurisdiction to hear and determine the appeals that were pending before it. Consequently, the District Courts did not have the authority to entertain those appeals, and the High Court could not lawfully transfer the matters to a District Judge or an Additional District Judge. This conclusion follows from the requirement of section 24, which mandates that a suit, appeal, or any other proceeding may be transferred only to a court that is competent to try or dispose of the case. At the time the appeal was filed in the High Court, the District Courts lacked competence to hear the case, because their jurisdiction to do so arose only through the later amendment to section 21 of the Civil Courts Act. The present analysis does not address the hypothetical question of whether, absent the saving provision introduced by section 3(1), the High Court could have relied on section 24 of the Code of Civil Procedure. However, given the operative effect of section 3(1), it is untenable to hold that the District Courts were competent to hear appeals involving a valuation of ten thousand rupees or less where the underlying suits were decided before the Act came into force and where the appeals were already pending before the High Court. The High Court reached its earlier conclusion based on the declared objects and reasons for the amendment. In particular, it cited an extract from the Statement of Objects and Reasons which stated that the amendment was intended “to reduce the volume of work in the High Court and to ensure quicker disposal of appeals, the Bengal, Agra and Assam Civil Courts Act, 1887, is proposed to be amended so that appeals in cases from Rs 5,000 to Rs 10,000 in valuation may be heard by District judges.” While the High Court correctly observed that the purpose of the amendment was to provide relief to the High Court, it erred in assuming that the legislature intended an instantaneous effect of the amendment. The Amending Act may indeed have granted relief for appeals that were instituted after the commencement of the Act, but it did not extend that relief to pending first appeals. A plain reading of section 3(1) makes clear that the legislature did not intend to provide such immediate relief. If that had been the intention, the wording of section 3(1) would have reflected it. The High Court, therefore, was fully aware of the legal position that the saving clause in section 3(1) precluded any transfer of pending appeals to courts that were not competent at the time of filing.

In this case the Court observed that, under the law, a District Judge could entertain only those appeals that were transferred to him by the High Court and that he was properly competent to hear and dispose of. The Court then examined the High Court’s finding that such competence existed from the very date the amending Act became operative. It concluded that this finding was defective because it failed to give effect to the concluding words of section 3(1) of the Act. Accordingly, the Court held that the High Court had not adopted the correct legal position with regard to the scope of the District Judge’s jurisdiction. As a result, the Court allowed the appeal and set aside the order of the High Court that had transferred the appeal to a District Judge or to an Additional District Judge. The Court further directed that, in the absence of any statutory provision to the contrary, the appeal should be heard by the High Court itself. Finally, the Court ordered that no costs be awarded in the proceedings, noting that the principal respondent in both the present and the lower proceedings was a Court, and ordinarily costs are not imposed against a Court. The appeal was therefore allowed.