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The Public Trustee Vs. A. Rajeshwartyagi and ors. - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtDelhi High Court
Decided On
Case NumberFirst Appeal No. 16 of 1972
Judge
Reported inAIR1972Delhi362; [1973]43CompCas371(Delhi)
ActsDelhi High Court Act, 1966 - Sections 5(1); Companies Act, 1956 - Sections 10; Code of Civil Procedure (CPC), 1908 - Sections 9
AppellantThe Public Trustee
RespondentA. Rajeshwartyagi and ors.
Advocates: S. Pappu,; Pappu,; R.L. Tandon,;
Excerpt:
.....other hand, when a learned single judge delivers a judgment in exercise of the ordinary original civil jurisdiction obtained from the subordinate courts under section 5(2) of the delhi high court act then the appeal lies under section 10(1) of the act. due to this basic difference, the meanings of the word 'judgment' in clause 10 of the letters patent and section 10(1) of the delhi high court act are different. the former includes a preliminary, interlocutory or final judgment or order, while the latter includes only a decree or an order appealable under the court of civil procedure. 1. university of delhi etc. v. hafiz mohd. said etc. in f.a.o. (os) 6 of 1968 decided on 2.3.1972.;(ii) companies act (1956) - section 10 and civil procedure code - section 9--jurisdiction--nature and..........of the act. section 5(1) of the act, on the other hand, conferred on this court ordinary original civil jurisdiction in every suit the value of of which exceeded at first rs. 25,000.00 and since 1/10/1969 rs. 50,000.00. before the commencement of the act, this jurisdiction vested in the subordinate courts at delhi. for, the high court of punjab did not have ordinary original civil jurisdiction as a court of first instance to entertain civil suits of any value whatever. this court has thus two distinct kinds of original jurisdiction, namely :- (1)the pre-existing jurisdiction ofthe punjab high court, and (2) the ordinary original civil jurisdiction transferred from the subordinate courts from the commencement of the act.(3) consequently, the provisions governing appeals against judgments.....
Judgment:

V.S. Deshpande, J.

(1) The question which arises for decision is whether this appeal is maintainable to this Division Bgnch as being from 'the judgment' of a learned Single Judge of this Court under clause 10 of the Letters]Patent of the High Court of Lahore or of the High Court of Punjab and Haryana or of the High Court of Delhi.

(2) This Court was established by the Dslhs High Court Act, 1966 (hereinafter called the Act.). Section 5(1) of the Act continued the 'original, appellate and other jurisdiction' exercised by the High Court of Punjab in the Union territory of Delhi prior to the coming into force of the Act. Section 5(1) of the Act, on the other hand, conferred on this Court ordinary original civil jurisdiction in every suit the value of of which exceeded at first Rs. 25,000.00 and since 1/10/1969 Rs. 50,000.00. Before the commencement of the Act, this jurisdiction vested in the subordinate courts at Delhi. For, the High Court of Punjab did not have ordinary original civil jurisdiction as a court of first instance to entertain civil suits of any value whatever. This Court has thus two distinct kinds of original jurisdiction, namely :-

(1)the pre-existing jurisdiction ofthe Punjab High Court, and (2) the ordinary original civil jurisdiction transferred from the subordinate courts from the commencement of the Act.

(3) Consequently, the provisions governing appeals against judgments of a learned Single Judge of this Court in these two different jurisdictions are also different. When a judgment is delivered by a learned Others Single Judge exercising the jurisdiction inherited from the Punjab High Court under section 5(1) of the Act, then the appeal against it lies under clause 10 of the Letters Patent. On the other hand, when a learned Single Judge delivers a judgment in exercise of the ordinary A original civil jurisdiction obtained from the subordinate courts under section 5(1) of the Act then the appeal lies under section 10(1) of the Act. Due to this basic difference, the meanings, of the word 'judgment' in clause 10 of the Letters Patent and Section 10(1) of the Act are different. The former includes a preliminary, interlocutory or final judgment or orders while the latter includes only a decree or an order appealable under the Code of Civil Procedure. This has been so held by a Full Bench of five Judges of this Court in University of Delhi etc. v. Hafiz Mohd. Said etc. (F.A.O. (OS) 6/1968 decided on 2-3-1972). (i) It is in the light of the above legal position that we have to see whether the present appeal is maintainable before us.

(4) Suit No. 370 of 1970 filed by Rajeshwar Tyagi (Respondent No. 1 herein) was entertained by a learned Single Judge of this Court excercising the ordinary original civil jurisdiction under section 5(2) of the the Act. Tyagi is a shareholder in the Indian Iron & Steel Company Ltd., (Respondent No. 2 herein). He avers, inter alia, that a Trust was created on 18th December 1957 under which a large number of equity and right shares were transferred to the trustees whose powers are exercised by the Public Trustee under sections 187A and 187B of the Companies Act, 1956. This Trust is challenged as being illegal and void. Consequently the Public Trustee has no authority to deal with these shares. The plaintiff, thereforee, claims a declaration that-

(A)the Public Trustee has no power to deal with the shares which are allegedly the subject-matter of the illegal and void Trust; (b) the continuance of the Trust is void which incidentally means that the Register of the Indian Iron & Steel Company should be rectified by showing these shares as being not held by the Public Trustee; (c) the provisions of section 187B of the Companies Act are themselves ultra virus the Constitution; and (d) a preliminary decree for accounts in favor of the plaintiff.

(5) By the order appealed against, the learned Single Judge has held that a part of the c?use of action for the suit his arisen in Delhi by the exercise of the powers by the Public Trustee under section 187B of the Companies Act and he has, thereforee, the territorial jurisdiction. to entertain the suit . It is against this order that the present appeal has been filed.

(6) As the order appealed against is neither a decree nor an order appealable under the Code of Civil Procedure, this appeal is not entertainable under section 10(1) of the Delhi High Court Act, 1966 as held by the Full Bench of five Judges in the case referred to above. Mrs. Shyamla Pappu, learned counsel for the appellant has, however. argued that the appeal lies under clause 10 of the Letters Patent, According to her, the suit was really entertained by the learned Single Judge under section 5(1) and not under section 5(2) of the Act. She contends that in two respects, at any rate, the so-called suit is in the nature of a company petition which could lie before a Single Judge of this Court under section 10 of the Companies Act, namely, (1) insofar as the plaintiff demands a rectification of the Register of members, and (2) insofar as he challenges the actions of the Public Trustee. She contends that the decision of the learned Single Judge regarding the rectification of the Register of members would be appealable under section 155(4) of the Companies Act read with clause 10 of the Letters Patent while his decision regarding the accounts of the Public Trustee would be appealable under section 5(1) of the Delhi High Court Act read with clause 10 of the Letters Patent. She argues, thereforee, that the order under appeal should be regarded as a judgment within the meaning of clause 10 of the Letters Patent. If so regarded, it would bs appealable there under.

(7) There is a clear distinction between a suit of a civil nature filed under section 9 of the Code of Civil Procedure and a company petition filed under section 10 of the Companies Act. The difference lies in the nature of the two and not merely in the former being called a a suit and the letter being called a company petition. The jurisdiction of the civil court including the ordinary original civil jurisdiction of this Court under section 5(2) is the residuary jurisdiction for the enforcement of ordinary common law rights. When the plaintiff says that the Trust created by the Indian Iron & Steel Company was illegal and seeks to set aside, he is challenging the legality of the creation of the Trust. It is a question under the ordinary civil law including the statutes relating to Trusts Contract, Transfer of Property etc., which governs the question whether the Trust was legally created or not. The Compaines Act as such has no bearing on this Others question. The legality of such a Trust can, thereforee, be challenged only by a civil suit in a civil court. It cannot be challenged by a company petition. For, a company petition pre-supposes that actions are being taken by validly co nstituted authorities under the provisions of the A Companies Act. In such a company petition, the virus of section 187B of the Companies Act cannot be challenged. If the Public Trustee acts contrary to the provisions of the company law, his actions can be challenged under the Companies Act provided that his appointinent as a Public Trustee in respect of the shares concerned is not itself challenged. But the plaintiff in the present suit challenges the virus of section 187B and also the, very nature of the creation of Trust which has vested in the Public Trustee with powers to deal with the shares which are the subject-matter of the Trust. These challenges cannot be inquired into In a company petition. On the other hand, such matters can certainly be inquired into by this Court in exercise of ordinary original civil jurisdiction in a suit.

(8) Reference to section 155 of the Companies Act in not helpful. It is well established by decisions there under that the scope of section 155 is restricted to a summary inquiry. If, on the other hand, the very title to the holding of shares is challenged then the Company Judge will not inquire into such a dispute under section 155. For such inquiry a civil suit is the proper ready. It is only the rights and liabilities which arise out of the provisions of the Companies Act which can be inquired into in a company petition. What the plaintiff complains is that the creation of Trust by the Indian Trion & Steel Company Ltd., was itself illegal. This contention is not made under any provision of the Companies Act but under the general law. It follows, thereforee, that the relief of rectification of Register of members is not sought by the plaintiff under section 155 of the Companies Act but only as incidental to the main relief of declaration that the Trust itself is void. Similarly. the actions of the Public Trustee are being challenged not because he has contravened any of the provisions of the Companies Act but because he is acting under a void Trust which is a question which falls outside the Companies Act.

(9) For the above reasons, the suit pending before the learned Single Judge is properly a proceeding entertained in exercise of the ordinary original civil jurisdiction under section 5(2) of the Delhi High Court Act, 1966, It is not a proceeding entertained under section 5(1) of the Act. An appeal against an order in such a proceeding will lie, thereforee, only if it satisfies the provisions of section 10(1) of the Act. It will not lie under clause 10 of the Letters Patent. Mrs. Shyamla Pappu reserves her right to contend that the decision given by the Full Bench of five Judges of this Court referred to above is not correct. But she has not given to us any reasons in support of such a contention in this case. For the above reasons, the appeal is dismissed as not maintainable. Costs to be costs in the suit.


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