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Official Receiver Vs. N.S. Kuppuswami Chettiar and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1937Mad930
AppellantOfficial Receiver
RespondentN.S. Kuppuswami Chettiar and anr.
Cases ReferredIn Secy. of State v. Chellikani Rama Rao
Excerpt:
.....of justice. it will be seen that there is no direct decision on what is the meaning of 'a court of final appellate jurisdiction' in section 75, provincial insolvency act, although there is a strong trend of authority suggesting that no court is a court of final appellate jurisdiction over which another court has revisional powers. giving the best consideration we i can to this matter, we have come to the conclusion that section 75, provincial insolvency act, is all. .it might well be that nevertheless by reason of the context it would come within the obvious meaning and purpose of the statute; we are clearly of opinion that section 75 does not govern appeals to the privy council and that as no appeal is provided against an order passed under order 45, rule 3, no appeal lies to this court......(b) from any decree or final order passed by a high court in the exercise of original civil jurisdiction; and (c) from any decree or order, when the case as hereinafter provided is certified to be a fit one for appeal to his majesty in council.3. the important words are contained in (a). what is meant by 'any other court of final appellate jurisdiction'? the appellant argues that the district court is not a court of final appellate jurisdiction because revision lies to the high court generally under section 115, civil p.c., and specially in this case under the first proviso to section 75, provincial insolvency act, and had this been a case within section 4, provincial insolvency act, then a second appeal would have been competent to the high court. mr. sitarama rao for the.....
Judgment:

1. The Official Receiver, Madura, filed a petition ostensibly under Sections 4 and 53, Provincial Insolvency Act, to set aside two mortgages by the insolvents in favour of the respondents to this appeal. The value of the property in question exceeded Rs. 10,000. There were two mortgages concerned, evidenced by Exs. I and II. Ex. I was of the value of Rs. 12,000 and Ex. II of the value of Rs. 1,000. The Subordinate Judge of Dindigul set aside the alienation under Ex. II on the ground that it was a sham transaction but refused to set aside Ex. I holding that it was genuine. A Civil Miscellaneous Appeal No. 54 of 1935 was filed Under Section 75, Provincial Insolvency Act, before the District Judge of Madura against the order of the Subordinate Judge in respect of Ex. I, the Rs. 12,000 mortgage. The learned Judge allowed the appeal holding that the mortgage was without consideration and not in good faith. The respondents here filed a petition before the District Judge seeking leave to appeal to the Privy Council, which was resisted by the Official Receiver on the ground that no appeal lay. It is necessary to point out that an application such as was heard by the lower Courts Under Section 53 is not' within the provisions of Section 4, Provincial Insolvency Act. This is relevant when considering the provisions of Section 75, Provincial Insolvency Act (see Alagiri Subba Naick v. Official Receiver, Tinnevelly AIR 1931 Mad 745). Section 75 is as follows:

(1) The debtor, any creditor, the receiver or any other person aggrieved by a decision come to or an order made in the exercise of insolvency jurisdiction by a Court subordinate to a District Court, may appeal to the District Court, and the order of the District Court upon such appeal shall be final; Provided that the High Court, for the purpose of satisfying itself that an order made in any appeal decided by the District Court was according to law, may call for the case and pass such order with respect thereto as it thinks fit; Provided, further, that any such person aggrieved by a decision of the District Court on appeal from a decision of a subordinate Court Under Section 4 may appeal to the High Court on any of the grounds mentioned in Sub-section (1) of Section 100, Civil P.C., 1908. (2) Any such person aggrieved by any such decision or order of a District Court as is specified in Schedule 1 come to or made otherwise than in appeal from an order made by a Subordinate Court, may appeal to the High Court.

2. It will be seen that in an appeal from the Subordinate Judge to the District Court the order of the District Court 'shall be final'. There are however two Provisos. The first Proviso gives a wide revisional jurisdiction to the High Court much wider in its terms than Section 115, Civil P.C., and the second Proviso gives a right of second appeal to the High Court from the District Judge. This however as has already been pointed out is not a case within Section 4 and therefore under the Act the only remedy open to the respondents was by way of revision. The position in the moffussil relating to insolvency applications is peculiar. They are not always heard at first instance by the Subordinate Judge but sometimes by the District Judge. In the ease before us there being no District Judge at Dindigul, there was no option except for this case to go before the Subordinate Judge for trial. The result of this is that if the case is heard by the Subordinate Judge at first instance, an appeal lies to the District Judge, but if the case is heard by the District Judge at first instance, the appeal lies to the High Court in which latter case, provided the amount in dispute is more than Rs. 10,000 and other necessary conditions are fulfilled, an appeal would lie to the Privy Council; Maung Ba Thaw v. Ma Pin is an authority in point as to the right of appeal to the Privy Council. As the matter before us is not within Section 4, Provincial Insolvency Act, a second appeal does not lie to the High Court and therefore a party losing in appeal before the District Judge would appear to be confined to his remedy by way of revision whatever be the amount at stake. The appellant's contention is that Section 109, Civil P.C., is the dominant provision of law on which this matter should be decided. Section 109 reads as follows:

Subject to such rules as may, from time to time, be made by His Majesty in Council regarding appeals from the Courts of British India, and to the provisions hereinafter contained, an appeal shall lie to His Majesty in Council: (a) from any decree or final order passed on appeal by a High Court or by any other Court of final appellate jurisdiction; (b) from any decree or final order passed by a High Court in the exercise of Original Civil Jurisdiction; and (c) from any decree or order, when the case as hereinafter provided is certified to be a fit one for appeal to His Majesty in Council.

3. The important words are contained in (a). What is meant by 'any other Court of final appellate jurisdiction'? The appellant argues that the District Court is not a Court of final appellate jurisdiction because revision lies to the High Court generally Under Section 115, Civil P.C., and specially in this case under the first Proviso to Section 75, Provincial Insolvency Act, and had this been a case within Section 4, Provincial Insolvency Act, then a second appeal would have been competent to the High Court. Mr. Sitarama Rao for the appellant contends that once the decision of the District Judge is given in appeal, the facts can never be re-opened. He concedes--as he is bound to concede--that the powers of the High Court in revision are discretionary and although the High Court under the Proviso to Section 75, Provincial Insolvency Act, has wider powers than Under Section 115, Civil P.C., it is equally conceded that those powers extend no further than those given by the corresponding provisions in the Provincial Small Cause Courts Act, 9 of 1887. It is now a well-established practice not to interfere even under the last mentioned Act on questions of fact unless there has been a patent miscarriage of justice. Therefore the only appeal to the Privy Council open to a litigant whose case is at first instance tried by a Subordinate Judge would be against the misuse of the revisional discretion of the High Court or by special leave Under Section 109, Civil P.C. The argument of the respondents is that whatever may be the trend of authority with regard to the meaning of the words 'any other Court of final appellate jurisdiction' in other connections, the sense of Section 75, Provincial Insolvency Act, and Section 109, Civil P.C., is that for the purpose of applications in matters such as those before us, the District Court is a Court of final appellate jurisdiction.

4. In Chappan v. Moidin Kutti (1899) 22 Mad 68 a Full Bench of six Judges considered the important question whether an appeal would lie against an order made by a single Judge Under Section 622, Civil P.C. This decision was of course before the amendment. It is clear that Shephard, Offg. C.J., while agreeing with the majority view, would have preferred to distinguish between the revisional and appellate jurisdiction of the High Court. Subramania Iyer, J., whose judgment may be taken to represent the view of the majority of the Bench, held that the term 'appellate jurisdiction' was 'both grammatically and logically' wide enough to comprehend the power exercisable Under Section 622 (now Section 115), Civil P.C. Recently a Full Bench of this High Court in Chidambara Nadar v. Rama Nadar AIR 1937 Mad 385 had to consider whether in Article 182(2) and (5), Limitation Act, the word 'appeal' included revision. Venkatasubba Rao, J. gave the opinion of the Court and approves the view that there is no essential difference between a remedy by way of appeal and by way of revision and considers that that view is reinforced by the observations of their Lordships of the Judicial Committee in Nagendranath De v. Sureshchandra De . In considering the meaning of the word 'appeal' in Article 182(2), their Lordships said:

But their Lordships have no doubt that any application by a party to an Appellate Court asking it to set aside or revise a decision of a subordinate Court is an appeal within the ordinary acceptation of that term and that it is no less an appeal because it is irregular or incompetent.

5. In conclusion, the Full Bench point out that the word 'appeal' has a narrower meaning in Articles 150 to 157 than it seems to have in Article 182, but accept the position that if sufficient reasons exist, a word can be construed in one part of an Act in a different sense from that it bears in another part. The appellant also referred to Secretary of State v. British India Steam Navigation Co., (1911) 13 CLJ 90, Harish Chandra v. Nawab Bahadur of Moorshidabad (1911) 13 CLJ 688 and Shew Prosad Bungshidhur v. Ram Chunder Haribux AIR 1914 Cal 388, and contended that the District Judge's order being subject to revision by the High Court on the basis of the above authorities, the District Judge was not a Court of final appellate jurisdiction. The argument may be summarized in the words of Subramania Iyer, J. in Chappan v. Moidin Kutti (1899) 22 Mad 68

Here the two things which are required to constitute appellate jurisdiction are the existence of the relation of superior and inferior Court and the power on the part of the former to review decisions of the latter.

6. Mr. Sitarama Rao accepted the position that if his view is correct there are no other Courts of final appellate jurisdiction in the Madras Presidency within the meaning of Section 109(a), Civil P.C. and suggested that the words were put in the Code so as to include Chief Courts or any other Courts not subordinate to the High Courts. It will be seen that there is no direct decision on what is the meaning of 'a Court of final appellate jurisdiction' in Section 75, Provincial Insolvency Act, although there is a strong trend of authority suggesting that no Court is a Court of final appellate jurisdiction over which another Court has revisional powers. The trend of authority is therefore in favour of the view urged by the appellant that the District Court is not a Court of final appellate jurisdiction. But our attention has been drawn to the decision of the Judicial Committee in Saadamand Khan v. Phul Kuar (1898) 20 All 412. The facts of that case are very common in India. A petitioner alleged that owing to an irregularity in an auction sale, property worth Rs. 10,000 was sold for Rs. 670. A petition to the District Munsif to set aside the sale was dismissed. On an application to the District Judge the sale was set aside. An application was made to the District Judge for a certificate for leave to appeal to Her Majesty in Council Under Section 598, Civil P.C. 1882. Holding that his order was a final decree within the meaning of Section 595 (now represented by Section 109 which introduced the words 'any decree or final order') the District Judge granted a certificate; and as pointed out in Suraj Singh v. Phul Kumari : AIR1926All202 , the matter never came before the High Court but in due course it came up for hearing before the Board. Now it cannot be doubted that although no appeal lay from the District Judge's order to the High Court, an application for revision would have been sustainable, but it does not appear that before the Judicial Committee any objection was taken to the maintainability of the appeal on this or on any other ground and it must be borne in mind that the last issue before the District Judge was whether his judgment in appeal was final. It did not appear whether the certificate was granted Under Section 595(a) or Section 595(c) as suggested by the appellant's learned counsel. This case is relied on by the respondents as being by implication authority for the proposition that a District Judge in certain circumstances analogous to those before us is a Court of final appellate jurisdiction. But in view of the decision in Rangoon Botatoung Co., Ltd. v. Collector Rangoon, (1913) 40 Cal 21, we do not consider that the hearing of appeals by the Judicial Committee is necessarily to be regarded as a ruling relating to their maintainability. That this is so is clear from Rangoon Botatoung Co., Ltd. v. Collector Rangoon, (1913) 40 Cal 21 where their Lordships held that no appeal lay to His Majesty in Council from a decision of the Chief Court of Lower Burma on a reference under the Land Acquisition Act. Appellant's learned counsel then relied in argument on the fact that appeals had been entertained by the Board under the Land Acquisition Act on previous occasions. In view of the fact that in Saadamand Khan v. Phul Kuar (1898) 20 All 412 there was no actual decision or even discussion with regard to the maintainability of the appeal, we do not consider we are precluded from deciding the matter before us.

7. The matter is of considerable importance because Mr. T.M. Krishnaswami Iyer here has contended before us that the test as to whether a Court is a Court of final appellate jurisdiction is whether its findings on facts are final and not open to reconsideration by any other Court. If this is so, it would appear to follow that in second appeals it would be open to a Subordinate Judge sitting in first appeal from a Munsif's decision to grant a certificate for leave to appeal to the Privy Council, provided that the case came within the provisions of Section 109(c), Civil P.C. That at least is the argument before us. In this connexion it must be noticed that certificates Under Section 109(a) and (b) are rigidly circumscribed by considerations as to valuation and Section 109(c) is not so limited; and even in revision petitions there is a precedent for the High Court granting a certificate in an appropriate case:Raja Rajaswara Sethupathl v. Kamith Ravuthan AIR 1922 Mad 34 In order to arrive at a decision in this matter, a consideration of the terms of Section 75, Provincial Insolvency Act, is as important as a consideration of Section 109, Civil P.C. It has been pointed out to us that Article 163, Lim. Act, and Order 43, Rule 1(v) contemplate the position that there may be Courts of final appellate jurisdiction subordinate to the High Court. Except the case now argued before us, no examples have been given and no precedents have been quoted to us other than the case in Saadamand Khan v. Phul Kuar (1898) 20 All 412, to which reference has already been made, in which a Court other than the High Court has granted leave to appeal to His Majesty in Council. It may be that the Legislature contemplated that there might be such Courts; but what we have to decide is whether a District Judge sitting in appeal from a Subordinate Judge Under Section 75 is such a Court. The matter is obviously not free from difficulty. Giving the best consideration we I can to this matter, we have come to the conclusion that Section 75, Provincial Insolvency Act, is all.comprehensive and self-contained. The Legislature could have distinguished, had it thought fit, between appeals valued at more than Rs. 10,000 and those under Rs. 10,000. It has not done so. It is true that the decision of the District Judge in appeal is stated to be final, but what follows immediately after? There is provision for the widest form of revision which at least enables a High Court to go into facts if it thinks fit. We have indicated that the Court seldom does so.

8. The methods of applying the powers of revision Under Section 25, Provincial Small Cause Courts Act, 9 of 1887 which correspond in its terms to the revisional powers in Section 75, Provincial Insolvency Act, are dealt with in Valab Das v. Maung Ba Than AIR 1921 Rang 54, Siva Dass Dey v. Ashabl AIR 1925 Rang 310 and Poona City Municipality v. Ramji (1897) 21 Bom 250. But whatever view a Court may take as to its powers Under Section 25, Provincial Small Cause Courts Act, if there seems to be an apparent injustice, we consider that a Court can and will deal with the matter as fully as if it were a first appeal. Section 75 seems to be deliberately framed and it would appear to be the intention of the Legislature that the finding of the District Judge, whatever the subject matter, are to be subject only to the revisional powers of the High Court there given. There is further a right of second appeal in matters coming within the provisions of Section 4, Provincial Insolvency Act. For it must be remembered that had this been a matter involving a question of title Under Section 4 it would have been open to the appellant to file an appeal from the District Judge to the High Court, an appeal limited in form no doubt but still an appeal in its strict sense. But the respondents' counsel contends that even in such a case if the value of the subject matter exceeds Rs. 10,000, he is entitled, disregarding the special remedy provided by the section, to appeal direct to His Majesty in Council. The argument therefore comes back to this: that the District Judge is a Court of final appellate jurisdiction if the value of the property exceeds Rs. 10,000 but not so if it is less than Rs. 10,000. Can it be said that a Court expressly subject to wider powers of revision than those given Under Section 115, Civil P.C., and whose decision in certain oases can be questioned in second appeal can be regarded as a Court of final appellate jurisdiction? We are of the opinion that it cannot be so regarded. We think this view is in agreement with the decisions to which we have referred and the intention of the Legislature. As Venkatasubba Rao, J. observes in Chidambara Nadar v. Rama Nadar AIR 1937 Mad 385 the view that there is no decided difference between a remedy by way of revision and by way of appeal is considerably reinforced by the observations of the Judicial Committee above quoted and this is of assistance in considering the meaning of the words Court of final appellate jurisdiction'. That the result is unsatisfactory is, we venture to say, apparent; but in view of what follows our view is academic--at least so far as this case is concerned.

9. The next point that arises for consideration is whether an appeal lies against the order of the District Judge granting permission to appeal to the Privy Council. If such permission had been granted in an ordinary civil suit, undoubtedly no appeal would lie because Order 43, Civil P.C., while providing for an appeal against an order of refusal in Sub-section 1(v), makes no provision for an appeal as against an order granting a certificate. It is however contanded that although no appeal lies under the Civil Procedure Code, Section 75, Provincial Insolvency Act, makes provision for appeals from all orders passed by a District Judge otherwise than in appeal from an order made by a Subordinate Court, upon leave being granted by the District Court or by the High Court. Although the District Judge may be said to have ordered the grant of a certificate before he actually granted the certificate, is the order he passed of the kind contemplated in Section 75? A somewhat similar question arose in Lane v. Eadaile, (1891) AC 210, a case decided by the House of Lords. By Order 58, Rule 15, which governs the right of appeal from the Court of Appeal to the House of Lords, it is laid down that:

No appeal to the Court of Appeal from any interlocutory order shall, except by special leave of the Court of Appeal, be brought after the expiration of '21 days....

10. In that case no appeal was filed within 21 days and so the leave of the Court of Appeal for filing an appeal to the House of Lords was sought and that leave the Court refused. An appeal was then filed in the House of Lords against the order of the Court of Appeal refusing leave to appeal; and it was argued that the refusal of leave was an order and that therefore there was a right of appeal against that order within 21 days. Lord Hals bury, L.C. says in his judgment, which represented the opinion of six Lords of Appeal:

Although it may be that in some sense the leave of the Court, whether it is given or withheld, becomes an order, that is not the ordinary mode in which it would be described. It is to be something that is done by the order of the Court. . . . It might well be that nevertheless by reason of the context it would come within the obvious meaning and purpose of the statute; so that although it was no one of those things in name, it might be one of those things in substance, and therefore would come within the general provision that an appeal should lie. But when I look not only at the language used, but at the substance and meaning of the provision, it seems to me that to give an appeal in this case would defeat the whole object and purview of the order or rule itself; because it is obvious that what was there intended by the Legislature was that there should be in some form or other a power to stop an appeal --that there should not be an appeal unless some particular body pointed out by the statute should permit that an appeal should be given.

11. And later:

How could any Court of review determine whether leave ought to be given or not without hearing and determining upon the hearing whether it was a fit case for an appeal? And if the intermediate Court could enter and must enter into that question, then the Court which is the ultimate Court of Appeal must do so also.

12. No doubt a distinction could be made between the conditions under which an appeal can be preferred before the House of Lords and those governing an appeal to the Privy Council in India. The word 'order' is actually used in Order 43, Rule 1(v), and the Court of Appeal had to grant or refuse leave, whereas the Courts in India have to grant or refuse a certificate which has to be granted under certain conditions; but we think that the reasoning of their Lordships of the House of Lords in the case above quoted applies equally cogently to the case before us. As has been pointed out by Mr. T.M. Krishnaswami Iyer, if an order passed by the District Judge refusing permission to appeal to the Privy Council is an order falling within the mischief of Section 75, Provincial Insolvency Act, then the order granting leave to appeal to this Court against the order granting permission to appeal to the Privy Council is also an appealable order, and so on ad infinitum. Thus if the argument of the appellant be correct, this Court will have to consider whether the leave to appeal to this Court given by the District Judge was properly given and after it has decided that point, it would have to decide the main point in appeal. This process could have been rendered endless if other petitions had also been filed for leave to appeal against the order granting leave to appeal to this Court against the order granting leave to appeal to the Privy Council and so on.

13. Turning to the actual wording used by Section 75 itself, we cannot resist the conclusion, reading the section as a whole, that it concerns itself with orders passed under the Provincial Insolvency Act determining the rights of parties. It seems extremely unlikely that the Legislature intended to apply Section 75 to orders passed under the Civil Procedure Code which are governed with respect to appeals by Order 43, Civil P.C. Mr. Sitarama Rao for the appellant has quoted a decision of Wadsworth, J. in Basappa v Hansaji Gulabchand Firm AIR 1936 Mad 660 to support his contention that the word 'order' in Section 75 is all embracing. There the District Judge refused to set aside an ex parte order passed by him in appeal and it was argued that this was an order passed by him in appeal and so according to Section 75(1), it was final and against it no appeal lay. Wadsworth, J. very rightly, if we may say so, held that when the appeal had been dismissed for default, the appeal was at an end and that any order passed subsequently Under Order 9, Rule 13 was not an order made in appeal and that therefore an appeal was not barred by virtue of Section 75. We do not however see how this decision can in any way help us. An order passed Under Order 9, Rule 13 is appealable under Order 43, Civil P.C. If the District Judge in that case had passed an order setting aside the ex parte decree, would it have been open to the other side to contend that although no appeal is provided for by the Civil Procedure Code against an order passed Under Order 9, Rule 13 setting aside an ex parte decree, an appeal would nevertheless lie Under Section 75, Provincial Insolvency Act? We do not think so. A fortiori, no appeal would lie against an order granting permission to appeal to the Privy Council; for undoubtedly the right of a party to appeal to the Privy Council is something that is beyond the scope of the Provincial Insolvency Act and not governed by it.

14. In Secy. of State v. Chellikani Rama Rao AIR 1916 PC 21 it was contended that as the Forest Act made no provision for appeals to the High Court and was self-contained in the matter of appeals, an appeal to the High Court did not lie. Their Lordships repelled this argument and accepted the contention of the respondents that though an appeal from a District Judge to the High Court is not provided for in the Madras Forest Act in a claim to lands which have been notified as resarved forest lands under the Act, such an appeal will lie under the provisions of the Civil Procedure Code; where in such proceedings the District Court is reached, that Court is appealed to as one of the ordinary Courts of the country with regard to whose procedure, orders and decrees the rules of the Civil Procedure Code are applicable. In such a case the ordinary incidents of litigation could only be excluded by specific provisions to that effect. If therefore the right of appeal to the Privy Council is something beyond the Provincial Insolvency Act and is one of the ordinary incidents of litigation, how can appeals to the Privy Council be regulated by Section 75 of that Act? We are clearly of opinion that Section 75 does not govern appeals to the Privy Council and that as no appeal is provided against an order passed Under Order 45, Rule 3, no appeal lies to this Court.

15. The appellant has however also filed a revision petition against the order of the learned District Judge; and it has been contended by the respondents that even a revision petition to the High Court does not lie. We have no doubt, however, that Section 115, Civil P.C. is applicable to an order passed granting or refusing a certificate Under Order 45; for if subordinate Courts acted without jurisdiction in passing an order of this nature, it will be intolerable if this Court had no power to control them. The right of the High Court to interfere in revision is as much an incident of litigation as the right of an aggrieved person to appeal from the decree of a District Judge. We are not however of the opinion that this is a proper case for interference in revision. The question whether a subordinate Court can under certain circumstances grant permission to appeal to the Privy Council is of very considerable public importance and has not been covered by authority. Although we have held that an appeal does not lie direct from an order of a subordinate Court to the Privy Council, yet the oases above considered do not preclude the possibility that the term 'final appellate jurisdiction' used in Section 109(a), Civil P.C., has a more restricted meaning. Moreover, our decision in this matter has been governed by the fact that even if this Court interfered in revision, it would be open to the respondents to apply for permission to appeal to the Privy Council against the order passed in revision; and in view of the importance of this case and its pecuniary valuer we would feel ourselves compelled to grant a certificate that it was a matter of great public importance and ought to be adjudicated upon by the highest tribunal. We therefore dismiss the appeal and the revision petition. As both sides' contentions have succeeded in part, there will be no order as to costs.


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