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Khadi and Village Industries Commission, Bombay Vs. N.S. Pai - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKarnataka High Court
Decided On
Case NumberFirst Appeal No. 27 of 1975
Judge
Reported inAIR1976Kant85; ILR1976KAR310
ActsKhadi and Village Industries Commission Act, 1956 - Sections 19-B and 26(2) - Rules 25-A and 25-B; Code of Civil Procedure (CPC), 1908 - Sections 9
AppellantKhadi and Village Industries Commission, Bombay
RespondentN.S. Pai
Appellant AdvocatePadubidri Raghavendra Rao, Adv.
Respondent AdvocateK.A. Swamy, Adv.
Excerpt:
.....and for matters connected therewith and the commission was intended to be vested with powers executive as well as administrative for the proper development of khadi and village industries. 8. it is however, settled law that the exclusion of the jurisdiction of civil courts is not to be readily inferred, but, that such exclusion must either be explicitly expressed or clearly implied. such decree has to be executed like any other decree......in the context of the ouster of jurisdiction of a civil court. under section 9 of the code of civil procedure, 'the courts shall subject to the provisions herein contained, have jurisdiction to try all suits of a civil nature excepting suits of which their cognisance is either expressly or impliedly barred.' a suit is expressly barred if legislation in express terms says so. it is impliedly barred if a statute creates a new offence or a new right and prescribes a particular penalty or special remedy. in that event, no other remedy can in the absence of evidence of contrary intention, be resorted to: see wolverhampton new waterworks v. hawkesford, (1859) 6 cb (ns) 336. the general rule is that statutes affecting jurisdiction of courts are' to be construed, so far as possible, to.....
Judgment:

Venkatachaliah, J.

1. The central question that arises for determination in this appeal of the Khadi and Village Industries Commission, a body corporate established by the Khadi and Village Industries Commission Act, 1956 (61 of 1956), which we shall hereinafter call the Act, preferred against the decree of dismissal dated 6-9-1974 in 0. S. No. 48 of 1972 on the file of the Civil Judge at Hubli, is whether the jurisdiction of Civil Courts is barred by virtue and clear implications of the provisions of Section 19-B of the Act. The Court below holds that it is.

2. Appellant instituted the above suit against respondent for the recovery of sum of Rs. 26,406.75. The suit was resisted on the ground, amongst others, that the dispute in the suit was triable exclusively by the Tribunal contemplated under Section 19-B of the Act and that the Civil Court had no jurisdiction to take cognisance of and entertain the suit. Having regard to the scope of this appeal which arises out of and is directed against a preliminary decision on the question of jurisdiction, it is not necessary for us to examine the nature and merits of the claim. Suffice it to say that the suit does not seek the enforcement of any special right created by or conferred under the Act; but seeks to enforce an alleged right under the general law.

3. The court below framed several issues, of which, Issue No. I relating to the jurisdiction of the Court is material and it reads:

'Has this Court no jurisdiction to try the suit in view of Section 19-B of Khadi and Village Industries Commission Act, 1956 read with Rules 25-A and 25-B of Rules, 1957 thereunder?'

The Court below having recorded a finding on this issue that the provisions of Section 19-B of the Act read with Rules 25-A and 25-B of the Rules framed thereunder implied a clear bar to the jurisdiction of the Civil Courts, dismissed the suit.

4. Sri Pedubidri Raghavendra Rao, learned counsel for appellant, contends before us that provisions of Section 19-B of the Act which contemplate the constitution of a Tribunal for settlement of disputes relating to the recovery of sum payable to appellant and the procedure prescribed under Rules 25-A and 25-B in relation thereto do not have the effect of barring the jurisdiction of a Civil Court; but merely provides for an alternative procedure. Sri K. A. Swami, learned counsel for respondent, sought to support the view as to jurisdiction taken by the Court below,

5. Before we examine these contentions, it is necessary to look into the scheme and provisions of the Act.

The Act was enacted to provide for the establishment of a Commission for the Development of Khadi and Village Industries and for matters connected therewith and the Commission was intended to be vested with powers executive as well as administrative for the proper development of Khadi and Village Industries. Section 2 of the Act is the interpretation clause. Section 3 enables the Central Government to add to or omit from the schedule to the Act any village industry or alter the description of any village industry. Section 4 provides for the establishment and constitution of the Khadi and Village Industries Commission as a body corporate. Sections 5 and 6 deal with and provide for appointments of Secretary and Financial Adviser respectively, Section 7 provides for resignation of office by any member of the Commission and the procedure for the acceptance thereof. Section 8 provides for the validation of the acts and proceedings of the Commission against defects in the constitution of the Commission. Section 9 provides for temporary association of persons with the Commission for particular purposes. Sections 10 and 11 contemplate the constitution of the Board called the Khadi and Village Industries Board for the purpose of assisting the Commission in the discharge of its functions under the Act and for consultation between them. Section 12 deals with the meetings of the Commission. Section 13 deals with the term of office and conditions of service of the Chairman, the Vice-Chairman, the Secretary and other members of and of the Financial Adviser to the Commission. Section 14 deals with the delegation of powers to the Secretary and appointment of officers and servants. Section 15 in Chapter III of the Act relates to the function of the Commission and charges it with the functions of planning and implementing programmes for the development of Khadi and Village Industries. Section 16 relates to the power of the Central Government to give directions. Sections 17 to 24 in Chapter IV of the Act deal with Finance, Accounts and Audit and Reports to Government. Sections 25, 26 and 27 in Chapter V deal with procedure for the dissolution of the Commission, power to make Rules and matters with respect to which such Rules could be made; and power to make regulation and matters with respect to which regulations could be made.

6. Section 19-B, a relevant section for our purpose, which occurs in Chapter IV reads as follows: -

'19-B (1) Any sum payable to the Commission under any agreement express or Implied, or otherwise howsoever may be recovered in the same manner as an arrear of land revenue.

(2) If any question arises whether a sum is payable to the Commission within the meaning of sub-section (1), it shall be referred to a Tribunal constituted by the Central Government for the purpose which shall, after making such inquiry as It may deem fit and after giving to the person by whom the sum is alleged to be payable an opportunity of being heard, decide the question; and the decision of the Tribunal shall be final and shall not be called In question by any court or other authority.

(3) The Tribunal shall consist of one person who is not connected with the Commission or with the person by whom the sum is alleged to be payable.

(4) The expenses of the Tribunal shall be borne by the Commission.'

Rules 25-A and 25-B read as follows: -

'25-A. Notice of proposal for recovery of monies due as arrears of land revenue

(1) Where any sum Is payable to the Commission under any agreement, express or - implied. or otherwise howsoever, the Commission may cause a notice to be served on the Person liable to pay the sum directing him to pay the sum stated therein.

(2) Where the person on whom a notice is served under sub-rule (1) disputes Ids liability to pay the sum stated in the notice, he may within thirty days of the receipt of the notice make a representation to that effect to the commission.

(3) If, within the period referred to in sub-rule (2) the person on whom a notice Is served under sub-rule (1) neither pays the sum stated in the notice nor makes representation to the Commission under sub-rule M. the Commission may request the Collector within whose jurisdiction its office is situated to take such action as may be necessary for recovering the sum as arrears of land revenue.

(4) If in the course of proceedings taken against a person for recovery of any sum requested to be recovered under sub rule (3), such person denies his liability to pay the sum or any part thereof, the authority before whom such proceedings are pending shall forthwith send a notice of such denial to the Commission.

25-B. Request for constitution of a Tribunal under Section 19-B and for reference of question as to denial of liability to such Tribunal:

(1) On receipt of a representation under sub-rule (2) or a notice under sub rule (4) of Rule 25-A, the Commission shall forward a copy of such representation or, as the cue may be of the notice to the Central Government with a request that a Tribunal may be constituted for determining the question as to denial of liability to Pay to the Commission made in such representation or referred to in such notice.

(2) On receipt of a request under sub rule (1) the Central Government may constitute a Tribunal in accordance with the provisions of Section 19-B of the Act and refer the question mentioned in such request to the Tribunal for decision.

(3) The Tribunal so constituted shall after making such inquiry as it may deem fit and after giving to the person denying liability and the Commission a reasonable opportunity of being heard and after considering such evidence as may be produced by such person and the Commission, decide the question whether, and if so, what sum is payable by such person to the Commission.

(4) A copy of the decision of the Tribunal shall-

(a) Where it is in respect of a representation made under sub-rule (2) of rule 25-A, be forwarded to the Commission and if the decision declares any sum as payable to the Commission, the Commission may take action for having the sum recovered as an arrear of land revenue;

(b) Where it is in respect of denial of liability referred to in a notice under sub rule (4) of rule 25-A, be forwarded to the authority by whom such notice was issued for disposal of the proceedings concerned in accordance with such decision.'

Section 26(2)(ddd) under which the above rules are made reads:

'the procedure to be followed by the Tribunal in deciding questions referred to it under sub-section (2) of Section 19-B.'

Consistent with the objects and purposes of the Act and with a view to providing a speedy procedure for recovery of sums payable to the Commission provision is made under the Act for recovery of the sums payable to the Commission in the same manner as arrears of land revenue. An examination of the provisions of the Act does not disclose that Section 19-B envisages the Tribunal contemplated by it as a special and exclusive forum for the enforcement of any right specially conferred by the Act.

7. In support of his contention, Sri Padubidri Raghavendra Rao sought to derive support from the decision of the Supreme Court in Maganlal Chhagganlal (P) Ltd. v. Municipal Corporation of Greater Bombay : [1975]1SCR1 . That case related to the legality of certain proceedings taken under the Bombay Municipal Corporation Act of 1888, in exercise of powers under Sections 105-A and 105-B of Chapter V-A which was introduced by an Amending Act (Maharashtra Act 14 of 1961) and under Bombay Government Premises (Eviction) Act, 1955. The newly introduced provisions in the Municipal law granted certain powers for eviction in respect of 'unauthorized occupants' from any Corporation Premises, subject to the procedures and conditions contained therein. The decision of the question raised in that case postulated and proceeded on the premise that there were two procedures available to the Corporation one by way of suit under the ordinary law and the other under the Act. The following observation of the Supreme Court defines the scope of the question which arose for determination:

3. It was not and could not be argued that the Acts in so far as they provided for special procedures applying to the State and the Municipal Corporation were invalid.

It cannot now be contended that special provision of law applying to Government and public bodies is not based upon reasonable classification or that it offends Article 14.

4. The submission was a much more limited one and that is that as there are two procedures available to the Corporation and the State Government, one by way of a suit under the ordinary law and the other under either of the two Acts, which is harsher and more onerous than the procedure under the ordinary law, the latter is hit by Article 14 of the Constitution in the absence of any guidelines as to which procedure may be adopted . ................................'

The question raised in that case was not whether the special procedure prescribed by the statute barred the Civil Court's jurisdiction. The matter proceeded on the basis of the existence of both remedies.

Sri Padubidri Raghavendra Rao cannot derive any support from the said decision for the proposition contended for by him before us.

8. It is however, settled law that the exclusion of the jurisdiction of Civil Courts is not to be readily inferred, but, that such exclusion must either be explicitly expressed or clearly implied. The determination of this question must rest on the terms of the statute itself, the decision on he statutory provisions of other statutes being of assistance only in so far as the general principles of construction are laid down.

9. The various aspects of this concept of exclusion of the jurisdiction of Civil Courts implied by a finality imparted to statutory decisions have received judicial consideration covering a wide field co-extensive with the plenitude of the attack on such finality which has ranged from the ground of an infirmity imparted by a mere error to attack on the vires of the statute itself, encompassing all the variants in between. Permissibility of the challenges in Civil Courts has, in turn, depended upon the nature of the challenge.

10. In Kamaraja Pandiya Naicker v. Secretary of State for India in Council, 69 Mad LJ .695 at p. 700 = (AIR 1936 Mad 269 at p. 271), Varadachariar, J., stated this principle in the following terms:

'The ordinary rule is that where-a person's liberty or property is interfered with, under colour of statutory powers, he has a cause of action which the Civil Courts are bound to entertain unless a bar to such entertainment has been enacted expressly or at least by necessary implication. Where there is no question of a common law right and an infringement thereof, the position may be different, for in such cases, the ordinary Courts had prima facie no jurisdiction aid therefore there is no question of any ouster of their jurisdiction.'

In Secretary of State v. Mask & Co. , the Judicial Committee of the Privy Council referred, with approval to the principles enumerated by Willes, J., in Wolverhampton New Waterworks Co. v. Hawkesford, in the following terms:

'Where the statute creates a liability not existing at common law, and gives also a particular remedy for enforcing it. ..................With respect to that class it has always been held, that the party must adopt the form of remedy given by the statute.'

In the case of the Vijayawada Municipality v. Naganath Ramachandra Rowlwar, (1959) 2 Andh WR 69, Krishna Rao, J., as he then was, said:

'Further, the principle that a right or liability created by a statute has to be enforced in the manner provided by the statute has no application to rights which exist independently of the statute such as the common law rights of enjoyment of immovable property.'

In M/s. K. S. Venkataraman and Co. (P) Ltd. v. State of Madras : [1966]60ITR112(SC) , the Supreme Court observed:

'........... The sheet-anchor of the arguments of the learned counsel for the respondent is the decision of the Judicial Committee in Raleigh Investment Co.'s case, 74 Ind App 50 = (AIR 1947 PC 78). Before we consider the scope of the said decision, it will be convenient to notice some of the propositions of law settled in the context of the ouster of jurisdiction of a Civil Court. Under Section 9 of the Code of Civil Procedure, 'The Courts shall subject to the provisions herein contained, have jurisdiction to try all suits of a civil nature excepting suits of which their cognisance is either expressly or impliedly barred.' A suit is expressly barred if legislation in express terms says so. It is impliedly barred if a statute creates a new offence or a new right and prescribes a particular penalty or special remedy. In that event, no other remedy can in the absence of evidence of contrary intention, be resorted to: see Wolverhampton New Waterworks v. Hawkesford, (1859) 6 CB (NS) 336. The general rule is that statutes affecting jurisdiction of courts are' to be construed, so far as possible, to avoid the effect of transferring the determination of rights and liabilities from the ordinary courts to executive officers; see Winter v- Attorney General- (1875) LR PC 380.

11. What emerges from these enunciations is the principle that if a right is newly created by the statute and a special procedure is prescribed by the statute itself for its enforcement and a finality to that procedure is statutorily intended, then the jurisdiction of Courts stand impliedly barred in respect of the matter and that following as a corollary from that principle, the rule that a right created by statute has to be enforced in the manner prescribed by the statute has no application in respect of rights which are not created by but exist independently of the statute.

12. Turning to the present case, we are of the opinion that Section 19-B, consistently with the objects and purposes of the Act and with a view to protecting the financial interests of the Commission provides for a speedier and cheaper procedure enabling enforcement even off rights arising under the general law respecting sums payable to the Commission, in the same manner as arrears of land revenue. The Commission at its option may make an election to resort to this special procedure which, in our opinion, is merely enabling and not exclusive in nature. Sub-section (2) of Section 19-B requires that if any question arises whether a sum is payable to the Commission 'within the meaning of sub-section (1)' the same shall be referred to the Tribunal. The expression 'within the meaning of sub section (1)' occurring in sub-section (2) of Section 19-B, renders the obligation to so refer an incident and concomitant of and ancillary to, the provision enabling the sum payable to be recovered as an arrear of land revenue. Accordingly, in our opinion, reference to Tribunal contemplated in sub-section (2) is necessarily con fined to cases where the sum due is elect ed to be recovered as an arrear of land revenue under sub-section (1) of Section 19-B. The special procedure envisaged in sub-sections (2), (3) and (4) of Section 19-B and Rules 25-A and 25-B is confined to cases where appellant elects to adopt the procedure in Section 19-B. (1) of the Act and not otherwise. Section 19-B does not bar a suit under the general low to enforce the same right if the appellant elects to do so. Where the Commission does not elect to have recourse to the special procedure under the Act, but chooses to seek the remedy in a court of law, any awn decreed by the Civil Court cannot be recovered as an arrear of land revenue; such decree has to be executed like any other decree.

13. For the aforesaid reasons we are of the opinion that the decision of the Court below on the question of its jurisdiction is erroneous and unsustainable and that this appeal should succeed. Accordingly, we allow this appeal; set aside the decree of dismissal dated 6-9-19,74 in O. S. No. 48 of IR72 on the file of the Civil Judge, Hubli and reverse his finding on Issue No. 1. We hold on Issue No. I that the jurisdiction of the Civil Court was not barred and that the court below was competent to entertain appellant's suit and dispose of the same on merits. The suit O. S. No. 48/72 is accordingly remanded to the court below for disposal on merits on other Issues. The costs in this appeal will be costs in the cause.

Let a certificate for refund of the Court-fee paid on the memorandum of appeal be issued to the appellant

15. Appeal allowed.


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