Manindra Land And Buildingcorporation Ltd. vs Bhutnath Banerjee and Others

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

Court: Supreme Court of India

Case Number: Civil Appeal No. 524/62

Decision Date: 2 May, 1963

Coram: Raghubar Dayal, J.R. Mudholkar

In the matter titled Manindra Land and Building Corporation Ltd. versus Bhutnath Banerjee and others, the Supreme Court of India delivered its judgment on 2 May 1963. The judgment was authored by Justice Raghubar Dayal, who was joined by Justice J. R. Mudholkar. The parties are identified as the petitioner, Manindra Land and Building Corporation Ltd., and the respondents, Bhutnath Banerjee and others. The formal citation of this decision appears as 1964 AIR 1336 and 1964 SCR (3) 495, with additional citator references including RF 1964 SC 1341 (16), F 1966 SC 153 (12), R 1966 SC 439 (4), R 1972 SC 2379 (9), and RF 1978 SC 1341 (10). The legal issues addressed involve a substitution application filed beyond the prescribed period for setting aside the abatement of a suit, the propriety of a lower court’s order being set aside by a high court in revision, and the scope of the high court’s revisional power under Order XXII of the Code of Civil Procedure, 1908, specifically section 115, together with references to Rules 4, 9(2) and 9(3) of the same Order. The Indian Limitation Act, 1908, sections 3, 4 and 5, and Articles 171 and 176 of the Constitution are also mentioned.

The headnote explains that the appellant filed a belated application for substitution to set aside the abatement of a suit that had been instituted against the respondents’ father. The subordinate judge concluded that the appellant was prevented by sufficient cause from proceeding with the suit and therefore permitted the application. On review, the high court disagreed, holding that the appellant failed to demonstrate any satisfactory reason for filing the application after the statutory period had expired. The court observed that the high court was not entitled to reassess the factual findings of the subordinate court when exercising revisional jurisdiction under section 115 of the Code of Civil Procedure, a jurisdiction that, as established by precedent, is limited to questions of jurisdiction. Authorities cited in support of this principle include Balakrihna Udayar v. Vasudeva Aiyar (1917) LR 44 IA 261, M/s. A. Batchamian Saheb and Co. v. A. N. Channiah, Government Appeal Nos. 452 and 487/62 decided on 19 October 1962, joy Chand Lal Babu v. Kamalaksha Chaudhury (1949) LR 76 IA 131, and Deshardeo Ohamria v. Radha Kisses Chamria [1953] SCR 136. The court further clarified that where a subordinate court misinterprets the Limitation Act or applies an incorrect provision, a revisional court may intervene to correct that error. However, the exclusive authority to determine factual matters—such as whether the appellant had sufficient cause for not filing the application within the prescribed time and whether any impediment existed for seeking substitution of legal representatives—remains with the subordinate court. The judgment distinguished earlier decisions in Babu Rain v. Munna Lal (1927) ILR 49 All 454, Hars Bhikaji v. Naro Vishvanath (1885) ITR 9 Bomb 432, Dwarka v. Union of India (1954) ITR 33 Pat 176, and Basantilata v. Amar Nath, AIR (1950) Cal 411. The case proceeds under civil appellate jurisdiction as Civil Appeal No. 524/62, filed by special leave against the Calcutta High Court order dated 24 July 1958.

Counsel for the appellant were N. C. Chatterjee, E. Udayaratnam and D. N. Mukherjee, while counsel for respondents Nos. 1 to 3 were B. Sen and S. Gosh. The judgment was delivered on May 2, 1963 by Justice Raghubar Dayal. This appeal, granted by special leave, challenged the order of the Calcutta High Court that refused to allow the appellant’s application under sub‑rule (2) of rule 9 of Order XXII of the Code of Civil Procedure for setting aside the abatement of a suit it had filed against the father of the respondents.

The suit had been instituted on April 29, 1952 by the appellant corporation against Kalosashi Banerji, the father of the respondents, seeking recovery of a sum of money due under a mortgage by way of deposit of title deeds. The defendant contested the suit. A preliminary decree was passed ex parte in February 1955, and after an application filed on June 11, 1955, a final decree was rendered on June 23, 1955.

The first application for execution of the decree was presented on August 30, 1955. This application was dismissed for default on October 4, 1955 because the decree‑holder had taken no steps following a process‑server’s report dated September 14, 1955, which stated that the defendant, Kalosashi Banerji, had died. A second application for execution, this time against the legal representatives of the deceased defendant, was filed on September 20, 1956.

On January 30, 1957 the respondents raised an objection under section 47 of the Code, and on March 1, 1957 they produced a certified copy of the death register showing that Kalosashi Banerji had died on July 20, 1954. After this disclosure, the appellant filed an application for substitution and for setting aside the abatement of the suit. The respondents opposed the application. The learned Subordinate Judge, however, found that the appellant had demonstrated that it was prevented by sufficient cause from continuing the suit and therefore set aside the abatement.

The respondents subsequently filed a revision petition before the High Court. The High Court disagreed with the Subordinate Judge, holding that the appellant had entirely failed to show any good cause for the delay in applying for the setting aside of the abatement and for filing the substitution application long after the period prescribed by law. The High Court noted that the defendant had died on July 20, 1954 and that the suit had abated because the plaintiff had not brought the legal representatives on record within the ninety‑day period required by Article 176 of the First Schedule to the Limitation Act. The appellant could have applied for setting aside the abatement within the next sixty days under Article 171. Consequently, the appellant’s application filed on March 27, 1957 was deemed a very belated application. The appellant therefore had to satisfy the Court in two respects. Firstly it had to satisfy the Court, in order to obtain advantage

The Court explained that, in order to invoke the provisions of section 5 of the Limitation Act which govern applications under rule 9(2) of Order XXII, in view of sub‑rule (3) of that rule, the appellant was required to demonstrate two distinct points. First, the appellant had to establish that it possessed a sufficient cause for failing to make the application within the limitation period prescribed for setting aside the abatement of the suit. Second, the appellant had to show that some sufficient cause had prevented it from continuing the suit by filing an application under rule 4 of Order XXII to bring the legal representatives of the deceased defendant onto the pleadings within the limitation period prescribed for such an application. To satisfy the Court on these two matters, the appellant was required to prove the moment at which it became aware that the defendant had died before the decree was passed, that it was therefore necessary to implead the deceased’s legal representatives, and that the delay in acquiring this knowledge and in filing the application for setting aside the abatement was not attributable to laches on the part of the appellant. On both factual questions, the findings of the trial Court were recorded in favour of the appellant. The Court noted that it was unnecessary, for the purposes of the present appeal, to elaborate upon the reasons that had been advanced as a justifiable excuse for the appellant’s failure to take the necessary steps earlier.

The Court further observed that the High Court was not authorised to re‑examine the factual findings made by the Subordinate Court when exercising its revisional jurisdiction under section 115 of the Code of Civil Procedure. It reiterated the settled principle that section 115 applies only to cases involving questions of jurisdiction—specifically, instances of irregular or non‑exercise of jurisdiction, or unlawful assumption of jurisdiction by a court—and does not extend to conclusions of law or fact where jurisdiction is not in issue. The Court cited the decisions in Bala Krishna Udayar v. Vasudeva Aiyar (1) and M/s A. Batchamian Sahib and Co. v. A. N. Channiah (2) to support this position, noting that the respondents did not dispute the legal proposition. The respondents, however, contended that a question of limitation constitutes a jurisdictional question and relied upon the case reported as Joy Chand Lal Babu v. Kamalaksha Chaudhury (3). The Court clarified that the cited case did not introduce any new principle of law; its observations had been reproduced with approval in Keshardeo Chamria v. Radha Kissen Chamria (4). In that precedent, the Court quoted that “There have been a very large number of decisions of Indian High Courts on section 115; to many of which their Lordships have been referred. Some of such decisions prompt the observation that High Courts have not always appreciated that although error in a decision of a subordinate court does not itself involve that the subordinate court has acted illegally or with material irregularity so as to justify interference in revision under sub‑section (c), nevertheless, if the erroneous decision results in the subordinate court exercising a jurisdiction not vested in it by law, or failing to exercise a jurisdiction so vested, a case for revision arises under sub‑section (a) or sub‑section (b) and sub‑section (c) can be ignored.” These observations were highlighted as the basis for the Court’s view that the limitation issue did not fall within the scope of section 115, and therefore the High Court could not disturb the trial Court’s factual findings.

In the passage under discussion, the Court explained that if a court acts beyond the jurisdiction granted to it by law, or fails to exercise jurisdiction that is lawfully vested in it, a case for revision may arise under sub‑section (a) or sub‑section (b) of the relevant provision, and sub‑section (c) can be set aside.

The Court then referred to further observations from an earlier judgment, which the counsel for the respondents heavily relied upon. Those observations cited the cases of Babu Ram v. Munna Lal and Hari Bhikaji v. Naro Vishvanath, along with several other reported decisions, as examples where a subordinate court, by an erroneous decision, claimed a jurisdiction it did not possess. In the first of those cited cases the error concerned a point of limitation; in the second it concerned a question of res judicata. According to the earlier judgment, the High Court mistakenly thought that it had no power to intervene in revision to prevent the subordinate court from exercising such improper jurisdiction.

The present Court held that the remarks drawn from those earlier cases were not applicable to the facts before it. The earlier observations, the Court explained, relate to situations where legislation expressly removes the court’s power to try a particular dispute between the parties. By contrast, the present case involved no statutory ouster of jurisdiction. Instead, the law left it to the court itself to determine certain issues, and from those determinations the court must pass the appropriate orders and, if necessary, decide the substantive dispute between the parties.

The Court distinguished between two classes of cases. In the first class, the court decides a question of law that relates to its jurisdiction; a wrong decision in that class may cause the court to wrongly seize jurisdiction it does not have, or to refuse to exercise jurisdiction that it does possess. In the second class, the court decides a question that lies within its jurisdiction. The Court noted that the present matter fell within the second class, because the question of whether there was “sufficient cause” to justify a particular procedural step was squarely within the court’s jurisdiction. Whether the court reached the correct conclusion on that question was a matter of its own adjudicative discretion.

Turning to the statutory framework, the Court observed that Section 3 of the Limitation Act commands a court to dismiss any suit, appeal, or application that is filed after the period of limitation prescribed in the First Schedule, regardless of whether the opposing party has raised the defence of limitation. Accordingly, the court has a duty not to proceed with an application that is made beyond the prescribed limitation period. The Court explained that when a subordinate court misinterprets the relevant provision of the Limitation Act, or errs in deciding which provision applies, a higher court in revision may intervene. Such intervention is justified because the erroneous conclusion effectively leads the subordinate court to assume, or to refuse to assume, jurisdiction over the matter.

Finally, the Court noted that Section 5 of the Limitation Act empowers a court to admit an application, even when presented after the expiry of the prescribed period, if the court is satisfied that the applicant had sufficient cause for the delay. This provision confirms that the court possessed jurisdiction to examine whether the appellants had sufficient cause for not filing the application to set aside the abatement of the suit within the stipulated time, and, if satisfied, to admit the application.

The Court possessed authority under the relevant provision to admit an application even when it was filed after the prescribed limitation period, provided that the Court was convinced that the applicant had sufficient cause for not filing it earlier. Consequently, the Court was empowered to examine whether the appellants had sufficient cause for failing to make the application to set aside the abatement of the suit within the prescribed time, and, if the Court was satisfied with the existence of such cause, to admit the application.

The judgment referred to Babu Ram’s case (1). According to the report, the application seeking to set aside an ex parte decree dated 15 December 1925 was filed on 19 April 1926, which was well beyond the one‑month period prescribed for such applications from the date of the decree. The trial court disregarded the limitation issue altogether and restored the suit. The High Court held that the simple fact that the appellate court granted the application for restoration amounted to a legal finding that the application had been presented within time, and that such a finding, even if erroneous, did not fall within any of the categories (a), (b) or (c) of section 115 of the Code of Civil Procedure. The Privy Council subsequently declared that view to be incorrect. The Babu Ram decision did not address a trial‑court finding of sufficient cause for the delay in filing the application. The citation for that case is (1927) 1 LR 49 AIR 454.

The judgment also cited Hari Bhikaji’s case (1). In that matter the trial court erred on the question of res judicata. Section II of the Code expressly prohibits any court from trying a suit or issue that is covered by the provisions of that section, and the court has no discretion to proceed with such a suit under any circumstances. A similar observation was made in the Joy Chand case (2). In that case the judgment debtors, who had obtained a decree in a suit for recovery of a sum of money lent, applied for relief under sections 30 and 36 of the Bengal Money‑Lenders Act. The Act was intended to apply only to suits for recovery of loans that were not defined as “commercial loans” under the Act. If the loan involved a commercial loan, the Act did not apply and the court lacked jurisdiction to grant the relief claimed. The trial court concluded that the loan in the suit was a commercial loan and therefore fell outside the scope of the Act. The High Court disagreed with that conclusion, holding that the loan was not a commercial loan. Accordingly, the High Court set aside the order of the subordinate judge in the exercise of its jurisdiction.

In reviewing the matter, the judicial Committee examined whether the High Court was correct in exercising its revisional jurisdiction and, quoting from page 142, observed that “on the assumption that his decision that the loan was a commercial loan was erroneous, he refused to exercise a jurisdiction vested in him by law, and it was open to the High Court to act in revision under sub‑section (b) of section 115.” The Committee then reiterated the observations previously cited. It became clear that the Subordinate Court’s power to act under the specific Act hinged on its ability to decide the essential question. The Subordinate Court possessed the authority to determine the issue, but it could not create jurisdiction for itself or relinquish the exercise of its jurisdiction merely because its finding might be erroneous. The facts of the earlier case are not comparable to the facts of the present case, and the observations relied upon by the counsel for the respondents cannot be applied here. In the present matter, the Subordinate judge had jurisdiction to decide both factual questions: first, whether the appellant had sufficient cause for failing to make an application to set aside the abatement of the suit within the period prescribed, thereby justifying the Court’s discretion in extending the limitation period under section 5 of the Limitation Act; and second, whether the appellant was prevented by sufficient cause from making an application for the substitution of the legal representatives within the prescribed limitation period, which would allow the suit to continue. The Court therefore had the jurisdiction to decide both questions of fact and to proceed with the suit as a consequence of its decision. For the respondents, two cases were cited. In Dwarka v. Union of India (1), an application to set aside an ex parte decree dated 30 November 1951 was filed on 25 January 1952. Although the filing occurred after the limitation period had expired, the Court held that it was still within time because the Court, although open on 2 January 1952, must be treated as closed since substantive work was transacted on that day. The High Court concluded that the trial Court was incorrect in treating the Court as closed on 2 January and therefore intervened in revision. The trial Court had misapplied the provisions of section 4 of the Limitation Act, which permit an application to be made on the day the Court reopens after the day on which the limitation period expires and on which the Court happens to be closed. By ignoring that provision, the trial Court had gone absolutely against the statutory text.

The Court observed that the only relevant date for determining the limitation period was the day on which the Court actually reopened, namely 2 January, and not the later date of 25 January 1952. In reaching its conclusion, the High Court relied upon the provisions of section 3 of the Limitation Act. The Court further noted that section 5 of the Limitation Act does not apply to applications seeking to set aside ex parte decrees under Order IX, rule 13 of the Code of Civil Procedure. The present decision, however, does not settle the question of whether a finding that the Court was satisfied that sufficient cause existed constitutes a jurisdictional finding that could be subject to interference by the High Court.

To illustrate the approach to similar questions, the Court referred to the reported case of Basantilata v. Amar Nath (1). In that matter, the High Court intervened because the Trial Court had misinterpreted and misapplied the provisions of sections 10 and 11 of the Indian Soldiers (Litigation) Act 1925 (Act IV of 1925). The suit in that case had been dismissed on 14 December 1942, and an application for setting aside the dismissal order was filed on 15 July 1947. The plaintiff, a soldier, had served under war conditions from 23 May 1942 until his discharge on 25 November 1946, amounting to a total period of four years, six months and three days. The principal issue was whether the entire wartime service period should be excluded when computing the limitation period for filing the application to set aside the dismissal.

The Subordinate Judge had excluded the wartime period, but the High Court held that excluding the time prior to 14 December 1942, the date of the original decree, was unjustifiable because that period could not have in any manner prevented the plaintiff from filing the application for setting aside the dismissal. The High Court emphasized that the error of the Trial Court lay not in its factual finding but in its application of the statutory limitation provisions. Specifically, the Court explained that section 5 of the Limitation Act, which governs such applications, was correctly invoked, whereas the Trial Court’s reliance on subsection (2) of section 10 mirrored the language of section 3 of the Limitation Act, which requires that no such application be entertained unless filed within the prescribed time.

Consequently, the Court held that the High Court had erred in interfering with the Subordinate Judge’s factual finding that the appellants possessed sufficient cause for failing to bring the respondents on record within the stipulated time and for not applying for the setting aside of the abatement within the prescribed period. In its final order, the Court allowed the appeal with costs throughout, set aside the order of the lower Court, and restored the decree of the Trial Court. The decree will now proceed according to law with the further execution of the decree on the second application presented by the appellant for that purpose. The appeal was thereby allowed.