Shri Durga Prasad and Another vs The Banaras Bank Limited

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

Court: Supreme Court of India

Case Number: Civil Appeal No. 569 of 1960

Decision Date: 21 December 1962

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

In the matter of Shri Durga Prasad and another versus The Banaras Bank Limited, the Supreme Court of India delivered its judgment on 21 December 1962. The bench comprised Justice K.N. Wanchoo, Justice Bhuvneshwar P. Sinha, Justice P.B. Gajendragadkar, Justice K.C. Das Gupta and Justice J.C. Shah. The petitioners were Shri Durga Prasad and another; the respondent was The Banaras Bank Limited. The decision was reported in 1963 AIR 1322 and also appears in 1964 SCR (1) 475, with subsequent citations in the Supreme Court reports of 1971, 1972 and 1973, and it concerned the appellate jurisdiction of the Supreme Court under Article 133(1) of the Constitution of India. The factual matrix reported in the headnote was that the Official Liquidator of the respondent bank placed an advertisement seeking buyers for two houses that formed part of the bank’s assets. The houses were sold to the second appellant, Roshan Lal, with the sanction of the court. Subsequently, the second appellant transferred the houses to the first appellant, asserting in the deed that the first appellant was the real owner and that the sale deed obtained from the Official Liquidator had been procured benami for his benefit. The Official Liquidator then moved the Allahabad High Court seeking a declaration that the sale was void and an order directing the re‑transfer of the houses to the bank. A single judge of the High Court held that the first appellant, being a member of the committee of inspection appointed under section 178‑A of the Indian Companies Act, 1913 and having concealed his interest, was disqualified from acquiring the bank’s property and directed him to convey the houses back to the Official Liquidator. That order was affirmed by a division bench of the High Court in an appeal under clause 10 of the Letters Patent. After confirming the judgment, the High Court certified the case for appeal to the Supreme Court under Article 133(1)(a) of the Constitution. At the hearing before this Court, the Official Liquidator contended that the appeal was incompetent because the High Court lacked jurisdiction to issue a certificate under Article 133(1)(a) without first finding that the appeal involved a substantial question of law. The Supreme Court held that the expression “court immediately below” in Article 133(1) does not carry the same meaning as “court subordinate to the High Court”. Consequently, because the single judge’s decision had already been affirmed on appeal, the matter could not be taken to this Court on a certificate under Article 133(1)(a) unless the High Court had certified that it raised a substantial question of law. The Court relied on the authorities in Deoki Nandan v. State of U.P., Toolsay Persaud Bhuckt v. Benayek Misser, Probhawati Kunwar v. Panmat Lodha and Ladli Prasad Jaiswal v. The Karnal Distillery Co. to support its reasoning.

In the matter of Civil Appeal No. 569 of 1960, the appeal was brought against the judgment and decree dated 9 September 1958 pronounced by the Allahabad High Court in Special Appeal No. 214 of 1956. The parties appearing on behalf of the appellants were represented by counsel, while the respondent was represented by another counsel. The judgment of the Supreme Court was delivered on 21 December 1962 by Justice Shah. The Bank in question, Banaras Bank Ltd (hereinafter referred to as “the Bank”), had been ordered by the Allahabad High Court to undergo winding‑up. Pursuant to section 178‑A of the Indian Companies Act, 1913, a committee of inspection was constituted to supervise the winding‑up process together with the Official Liquidator. One of the members appointed to this committee was Durga Prasad, who is the first appellant in the present appeal. The Official Liquidator proceeded to advertise for the sale of two houses that formed part of the Bank’s assets. Roshan Lal, the second appellant, submitted an offer of Rs 18,000 for the purchase of the two houses. The Official Liquidator accepted this offer, and, with the sanction of the Court, the transfer of the houses to Roshan Lal was completed on 2 August 1941.

Subsequently, Roshan Lal conveyed the houses to Durga Prasad, stating in the conveyance deed that Durga Prasad was “the real owner” of the houses and that the original sale deed from the Official Liquidator had been obtained by Roshan Lal “benami” for Durga Prasad. Upon learning of this arrangement, the Official Liquidator filed a petition before the Allahabad High Court seeking a declaration that the sale was null and void and requesting that Durga Prasad be ordered to surrender the houses and retransmit them to the Bank. The High Court found that the sale deed had effectively been procured by Durga Prasad, who was the true purchaser, and that he had concealed his interest in the transaction. The Court also observed that, as a member of the committee of inspection, Durga Prasad occupied a fiduciary position akin to that of a trustee with respect to the Bank’s assets, and therefore he was disqualified from purchasing the Bank’s property. Consequently, the High Court directed Durga Prasad to convey the houses back to the Official Liquidator. This order was affirmed on appeal under clause 10 of the Letters Patent by a Division Bench of the High Court. The High Court, however, issued a certificate under Article 33 (1) of the Constitution for this appeal to be heard by the Supreme Court. In its certification, the High Court observed that the judgment involved a claim concerning property valued at not less than Rs 20,006 and, relying on the precedent set in Shri Deoki Nandan v. State of Uttar Pradesh, held that the appellants were entitled by right to a certificate under Article 133 (1) of the Constitution without the need for an additional certification that the matter raised a substantial question of law. The High Court thus indicated that the requisite certificate would be issued. At the hearing before the Supreme Court, counsel for the Official Liquidator submitted that the appeal was incompetent because the High Court lacked jurisdiction to grant the certificate under Article 133 (1) (a) without first determining that the appeal raised a substantial question of law.

The Court observed that it lacked authority to issue a certificate under Article 133 (1)(a) of the Constitution unless it first certified that the appeal raised a substantial question of law, and it concluded that this contention must be affirmed. In the earlier decision of Deoki Nandan v. State of Uttar Pradesh, the Allahabad High Court explained that the phrase “the Court immediately below” in clause (1) of Article 133 must be interpreted to mean a court other than the High Court itself; a single judge of a High Court does not constitute a court subordinate to the High Court. The Court further held that an appeal against an order of an appellate Bench of the High Court dismissing an appeal from an order of a single judge of the Court on its original side, which had rejected a petition under Article 226 of the Constitution, lay as a matter of right under Article 133 (1) where the claim related to property valued in excess of Rs 20,000/‑, and that it was not necessary for the case to involve a substantial question of law. Nevertheless, the expression “court immediately below” in Article 133 (1) was distinguished from the expression “court subordinate to the High Court.” In the Privy Council decision Toolsey Persaud Bhuckt v. Benayek Misser (1), the Council expressed the view that a single judge of a High Court hearing an original proceeding was the court immediately below the High Court hearing an appeal under the Letters Patent from his judgment; consequently, an appeal under Section 696 of the Code of Civil Procedure Act XIV of 1882, whose terms were substantively identical to those of Article 133 (1), could be certified for appeal to the Privy Council only when a substantial question of law was involved. The Judicial Committee observed, “Their Lordships think that no question of law, either as to construction of documents or any other point, arises on the judgment of the High Court, and that there are concurrent findings of the two Courts below on the oral and documentary evidence submitted to them. That being so, the present appeal cannot be entertained.” In Probhawati Kunwar v. Panmal Lodha (2), the High Court of Calcutta held that an appeal to the Privy Council could not be certified if the High Court merely confirmed the judgment of a single judge trying an original proceeding, unless that appeal involved a substantial question of law. More recently, in Ladli Prasad Jaisuul v. The Karnal Distillery Company Ltd. (3), this Court ruled that a single judge hearing a second appeal under Section 100 of the Code of Civil Procedure, 1908, functioned, for the purposes of Article 133 (1), as the “court immediately below” a Division Bench of the High Court hearing an appeal against his judgment under the Letters Patent. The Court noted that the expression “Court immediately below” used in Article 133 (1)(a) does not convey the same meaning as “court subordinate to the High Court.”

The Court clarified that the expression “court immediately below” used in Article 133(1)(a) does not refer to a court that is subordinate to the High Court. The Court explained that a court subordinate to the High Court is one that is subject to the superintendence of the High Court, whereas a court described as immediately below is the court whose decision is the subject of the appeal. In the earlier case, the Attorney‑General appearing for the respondents conceded that a single judge of the High Court who was hearing a suit or proceeding in his original jurisdiction functioned as a court immediately below the High Court when an appeal was filed against his decision. The Court observed that this concession was correctly made in its earlier judgment. In the present appeal, the High Court’s judgment affirmed the judgment of that single judge, and the High Court did not certify that the decision appealed from raised any substantial question of law. Consequently, the Court held that the appeal could not be entertained. The appellant’s counsel then prayed for special leave to appeal under Article 136 of the Constitution. After considering all the circumstances, the Court was of the view that the case did not fall within the category of matters for which special leave should be granted. Accordingly, the appeal was dismissed. The Court further stated that no order as to costs would be made, and the dismissal of the appeal was affirmed.