Karnataka High Court
Chandrana Brothers vs Jalajalaxmi S. Bhat on 19 April, 1984
Equivalent citations: AIR1985KANT33, ILR1984KAR141, AIR 1985 KARNATAKA 33, ILR (1984) 2 KANT 141
ORDER
1. C. R. P. No. 3867 of 1983 has been filed by defendants 1, 3 and 4 in O. S. No. 129 of 1983 on the file of the Principal Civil Judge, Mangalore. They have challenged the order dated 25-10-1983 passed on I. A. S. Nos. IV and V. C. R. P. No. 598 of 1984 has been filed by defendant 2 in the said suit challenging the very order. The Principal Civil Judge has, by the impugned order, granted leave to the defendants to defend the suit but on terms, namely, the defendants furnishing security for due performance of the decree that may be passed if the plaintiff succeeds in the suit. He has further directed the defendants to file their written statement within a period of one month from the date of the order.
2. C. R. P. No. 3867 of 1983 has been admitted and the impugned order has been stayed. C.R.P. No. 598 of 1984 has come up for admission. Respondent-1 plaintiff has filed I.A. No. 11 in C.R.P. No. 3867 of 083 requesting the Court to vacate the interim order of stay. The Counsel appearing on both sides in C.R.P. No. 3867 of 1983 submitted that the C.R.P. be heard and disposed of on merits. The Counsel for the petitioner in C.R.P. No. 598 of 1984 submitted, in my opinion rightly, that the fate of this petition depends on the result of C.R.P. No. 3867 of 1983.
3. Respondent- 1-plaintiff filed the said suit for recovery of certain amounts. The suit was filed under 0. 37 Civil PC as a summary suit. The procedure duly prescribed in 0. 37 R. 3, CPC, was undisputably complied with by the trial Court. The defendants entered appearance in accordance with 0. 37 R. 3(3) Civil PC. The plaintiff took steps as per the provisions in sub-r. (4) of R. 3 of 0. 37, C.P.C. Summons for judgment in Form No. 4A in Appendix B was duly served. The defendants took necessary steps 18 under sub-r. (5) of the said provision and thereupon the matter was heard in the course of which elaborate arguments were advanced and the learned Civil Judge passed the impugned order.
4. Prior to the coming into force of Act 104 of 1976 0. 37 R. 3 C. P.C., consisted of sub-r. (1) and sub-r. (2) only. These two sub-rules have been split into sub-rules (1) to (7) by the amending Act. Reading of the unamended provisions and the amended provisions side by side leaves no doubt in the mind of anyone that the object behind the provisions as it was unamended has remained unchanged even by the amended provisions. Different stages regarding procedure particularly pertaining to issue of notices and judicial processes, entering of appearance by defendants, taking of step by the plaintiff to serve summons for judgment in Form No. 4A in Appendix B and thereafter the defendants applying for leave to defend have been provided. What should be considered at the aforementioned different stages have also been provided particularly in sub-rr. (5) and (6). By introducing sub-r. (7) power has been granted to the Court or Judge to excuse the delay of the defendant in entering appearance or in applying for leave to defend the suit when sufficient cause is shown, evidently to the satisfaction of the Court or Judge.
5. The principles underlying grant or refusing to grant leave to defendants have obviously remained unchanged. These principles have been settled by the Supreme Court in Santosh Kumar v. Mool Singh . The Supreme Court has laid, down as follows -
"Though the Court is given a discretion by 0. 37 R. 3(2) it must be exercised along judicial lines, and that in turn means, in consonance with the principles of natural justice that form the foundations of our laws. Those principles so far as they touch the, matter, are well known. Wherever the defence raises a 'triable issue', leave must be given and when that is the case it must be given unconditionally, otherwise the leave may be illusory. If the Court is of opinion that the defence is not bona fide, then it can impose conditions and is not tied down to refusing leave to defend.
But it cannot reach the conclusion that the defence is not bona fide arbitrary. It is as much bound by judicial rules and judicial procedure in reaching a conclusion of this kind as in any other matter.
Where the defence is a good and valid one, conditions cannot be imposed. The power to impose conditions is only there to ensure that there be a speedy trial. If there is reason to believe that the defendant is trying to prolong the litigation and evade a speedy trial, then conditions can be imposed. But that conclusion cannot be reached simply because the defendant does not adduce his evidence even before he is told that he may defend the action.
It is always undesirable and indeed impossible, to lay down hard and fast rules in matters that affect discretion. But it is necessary to understand the reason for a special procedure of this kind in order that the discretion may be properly exercised. Taken by and large, the object is to see that the defendant does not unnecessarily prolong the litigation and prevent the plaintiff from obtaining an early decree by raising untenable and frivolous defences in a class of cases where speedy decisions are desirable in the interests of trade and commerce. In general, therefore, the test is to see whether the defence raises a real issue and not a sham one, in the sense that, if the facts alleged by the defendant were established, there would be a good or even a plausible, defence on those facts.
Ordinarily an appeal will not be entertained against an exercise of discretion that has been exercised along sound judicial lines. But if the discretion is exercised arbitrarily, or is based on a misunderstanding of the principles that govern its exercise, then interference is called for if there has been a resultant failure of justice. Where the only ground given for concluding that the defence is not bona fide is that the defendant did not prove his assertions before he was allowed to put in his defence, there is an obvious failure 6f justice if judgment is entered against a man who, if he is allowed to prove his case, cannot but succeed. Accordingly in such a case interference is called for.
6. In Milkhiram (India) P. Ltd. v. Chamanlal Bros. the Supreme Court has again laid down as follows :
"It is indeed not easy to say in many cases whether the defence is a genuine one or not and therefore it should be left to the discretion of the trial Judge who has experience of such matters to form his own tentative conclusion about the quality or nature of the defence and determine the conditions upon which leave to defend may be granted. If the Judge is of opinion that the case raises a triable issue, then leave should ordinarily be granted unconditionally. On the other hand, if he is of opinion that the defence raised is frivolous, or false, or sham, he should refuse leave to deiend altogether. The majority of cases, however, cannot be dealt with in a clear cut way. The Jud may entertain a genuine doubt whether the defence is genuine or sham or in other words whether it raises a triable issue or not. To meet such cases, by the amendment made by the Bombay High Court to 0.37 R. 2, even in cases where an apparently triable issue is raised the Judge may impose conditions in granting leave to defend. The matter is in the discretion of the trial Judge which discretion has to be exercised judiciously. Care has, however, to be taken that the object of the rule to assist the expeditious disposal o commercial causes is not defeated and at the same time real and genuine triable issues are not shut out by unduly sever orders as to deposit. It would be undesirable and inexpedient to lay down any rule of general application. Whether the defence raises a triable issue or not has to be ascertained by the Court from the pleadings before it and the affidavits of parties and it is not open to the Court to call for evidence at the stage. If upon, consideration of material placed before the Court, it comes to the conclusion that the defence is a sham one or is fantastic or highly improbable, an order - putting the defendant . upon terms before granting leave to defend would be justified. Even in cases where a defence is plausible but is improbable the Court would be justified in concluding that the issue is not a triable issue and put the defendant on terms while granting leave to defend." (underlining is mine) It May be stated here with advantage that the Bombay Amendment reads as follows:
"(2) If the defendant enters an appearance, the plaintiff shall thereafter serve on the defendant a summons for judgment returnable not less than ten clear days from, the date of service supported by an affidavit verifying the cause of action and the amount claimed and stating that in his belief there is no defence to the suit.
(3) The defendant may at any time within ten days from the service of such summons for judgment by affidavit or otherwise disclosing such facts as may be deemed sufficient to entitle him to defend, apply on such summons for leave to defend the suit. Leave to defend may be grated to him unconditionally or upon such terms as to the Judge appear just."
As this provision is similar to sub-rules (4) and (5) of 0. 37 R. 3 as it, stands, the learned Civil Judge has, after having expressed so in the impugned order, proceeded to pass the impugned order namely, 'granting leave unconditionally but on terms'. It is necessary to state here that as per the facts in the said case leave had not been granted unconditionally but on terms by a single Judge of the Bombay High Court. The complaint was that no acceptable reasons had been put forth in support of that order. The Supreme Court dismissed the appeal and affirmed the order impugned.
7. In Mechalec Engineers & Manufacturers, v. Basic Equipment Corporation the Supreme Court has enumerated the principles to be followed while considering the question of grant of leave to the defendant, as follows:
" (a) If the defendant satisfies the Court that he has a good defence to the claim on its merits the plaintiff is not entitled to leave to sign judgment and the defendant is entitled to unconditional leave to defend.
(b) If the defendant raises a triable issue indicating that he has a fair or bona fide or reasonable defence although not a positively good defence the plaintiff is not entitled to sign judgment and the defendant is entitled to unconditional leave to defend.
(c) If the defendant discloses such facts as may be deemed sufficient to entitle him to defend, that is to say, although the affidavit does not positively and immediately make it clear that he has a defence, yet, shews such a state of facts as leads to the inference that at trial of the action he may be able to establish a defence to the plaintiff's claim the plaintiff is not entitled to judgment and the defendant is entitled to leave to defend but in such a case the Court may in its discretion impose conditions as to the time or mode of trial but not as to payment into Court or furnishing security.
(d) If the defendant has no defence or the defence set up is illusory or sham or practically moonshine then ordinarily the plaintiff is entitled to leave to sign judgment and the defendant is not entitled to leave to defend.
(e) If the defendant has no defence or the defence is illusory or sham or practically moonshine then although ordinarily the plaintiff is entitled to leave to sign judgment, the Court may protect the plaintiff by only allowing the defence to proceed if the amount claimed is paid into Court or otherwise secured and give leave to the defendant on such condition, and thereby show mercy to the defendant by enabling him to try to prove a defence. The decisions of the Supreme Court already referred have-been followed in this decision. One more principle that has been laid down in Mechalec Engineers & Manufacturer's case is regarding exercise of jurisdiction by High Court under S. 115, C.P.C., in interfering with the orders passed under 0. 37 R. 3(2) as it stood prior to the amendment and therefore necessarily under 0. 37 R. 3(4), (5) and (6) as they stand now. The Supreme Court has laid down that it is only in cases where the defence is patently dishonest or so unreasonable that it would not reasonably be expected to succeed that the exercise of discretion by the trial Court to grant leave unconditionally may be questioned. In the said case the Supreme Court concluded that there was no ground for interference under S. 115, C.P.C., as the High Court also held that a triable issue arose for adjudication. What had happened is that even though the High Court held that a triable issue arose for adjudication, the High Court concluded that the defences were not bona fide and therefore modified the order granting leave to defend but on payment of the amount into Court. The Supreme Court set aside that order. In view of the principles laid down by the Supreme Court in Milkhiram (India) P. Ltd.'s case , 1 have no hesitation in holding that the discretion to decide whether the defence is a genuine one or not is to be left to the trial Judge. It is for the trial Judge to form an opinion whether the allegation made raises a triable issue or whether the defence raised is frivolous, false or sham. In view of this principle, it will be for the trial Judge to form an opinion as to whether the defendant has no defence or the defence set up is illusory, sham or practically moonshine. As to how such an opinion is to be formed by the trial Judge has been also laid down by the Supreme Court in the said decision.
8. It is not the complaint before me that the Civil Judge has based his conclusion on any material contrary to what has been laid down by the Supreme Court in the said decision. On the other hand, it is seen from para15 onwards that the Civil Judge has adverted to the material, which ought to be taken into consideration to form such an opinion. At the end of para16 of the impugned order th6 Civil Judge has concluded as follows:
"But, at present it cannot be said that the defense of defendants 3 and 4 is sham or colorable."
It is in Para 17 that the Civil Judge has dealt with the defense of defendant 2 as per IA No. V filed by him. It may be remembered that this defendant 2 is the petitioner in C.R.P. No. 598 of 1984. He has ultimately concluded as follows "So, therefore, it can be seen that all these allegations of the second defendant would also certainly give rise to triable issues in the suit. There is nothing in the pleas of the second defendant also that these pleas are in any way sham or colourable."
In the end of para17 he has expressed his opinion as follows:
"But, all the same they cannot be pressed into service to condemn the defendants and to hold that the pleas that they have raised now in I. A. Nos. 4 and 5 are in any way sham or colourable."
Thereafter he has concluded in para18 as follows:
"Hence, for all the reasons discussed above, I am of the opinion that the defendants will have to be given an opportunity to defend the suit unconditionally but on terms, keeping in view the object of 0. 37, C.P.C., which is meant to provide summary trial and disposal of disputes relating to commercial transactions based on negotiable instruments, the intention being that the money involved in commercial transaction should not be allowed to be staggered or its payment delayed on frivolous grounds."
It is on this basis that he has passed the impugned order.
9. From this stage onwards the Court would be dealing with C.R.P. No. 3867 of 1983. Sri K. Shivashankar Bhat, learned. Advocate appearing on behalf of the petitioners, urged that the trial Court has acted in excess of its jurisdiction in imposing terms while granting leave unconditionally. He adumbrated his contention with reference to sub-r. (5) and sub-r. (6) of 0. 37 R. 3. He argued that reading of sub-r. (5) and sub-r. (6) shows that the trial Court has to hear the application made by the defendant in response to the summons for judgment served on him and praying for leave to defend and then proceed to pass orders. He argued that after passing such orders the stage for hearing of such summons for judgment as per sub-r. (6) would be reached and at that stage the trial Court has to proceed to consider whether or not terms should also be imposed. According to him, the trial Court has proceeded in violation of these provisions in passing the impugned order.
10. Reference to Form No. 4A in Appendix B clearly, negatives this contention. The form may conveniently be reproduced.
No. 4A SUMMONS FOR JUDGMENT IN A SUMMARY SUIT (Order XXXVII, Rule 3) (Title) In the Court, at Suit No. of 19.
XYZ, Plaintiff v. ABC, Defendant.
Upon reading the affidavit of the plaintiff the Court makes the following order, namely: -
Let all parties concerned attend the Court or Judge, as the case may be, on the day of 19 at O'clock in the forenoon on the hearing of the application of the plaintiff that he be at liberty to obtain judgment in this suit against the defendant (or if against one or some or several, insert names) for Rs.... and for interest and costs.
Dated the day of .... 19 It is therefore plain that the defendant is called upon to take part in the hearing of the application of the plaintiff that the plaintiff be at liberty to obtain judgment in the suit against the defendant. This hearing is evidently the one provided in sub-r. (6) R. 3 of 0. 37 C.P.C. Therefore the application made by a defendant under sub-r. (5) of R. 3 of Order 37 will have to go with the summons for judgment served by the plaintiff for the purpose of hearing the summons for judgment as contemplated by sub-r. (6) R. 3 of 0. 37 C.P.C. Hence this contention is rejected,
11. It was attempted to argue on behalf of the plaintiff that the trial Court had wrongly concluded, on the basis of the material before it, that triable issues had arisen and it cannot be said that the defense put forth by the defendants was either sham or colourable and so on. I do not find any force in this contention as it is left to the discretion of the trial Judge to come to such conclusion. The principle behind it has been explicitly laid down by the Supreme Court in .
12. Sri Tukaram S. Pai, learned Advocate appearing on behalf of the respondent-plaintiff, argued that this Court cannot, under the facts and circumstances of the case, exercise its jurisdiction under S. 115, Civil PC. He vehemently urged that according to the provisions in sub-rr. (5) And (6) of R. 3, 0. 37 C.P.C., it is for the trial Court while exercising its jurisdiction to form an opinion or conclude whether terms should be imposed or not on the defendant while granting leave to defend and when the trial Court has exercised its judicial discretion in reaching such a conclusion, it cannot be said that the trial Court has acted in exercise of its jurisdiction illegally or with material irregularity so as to attract the provision in S. 115(l)(c), Civil PC.
13. Section 115(l), C.P.C., is in the following terms:
"The High Court may call for the record of any case which has been decided by any Court subordinate to such High Court and in which no appeal lies thereto, and if such subordinate Court appears -
(a) to have exercised a jurisdiction not vested in it by law, or
(b) to have failed to exercise a jurisdiction so vested, or
(c) to have acted in the exercise of its jurisdiction illegally or with material irregularity, the High Court may make such order in the case as it thinks fit."
Understanding of cls. (a) and (b) does not offer much difficulty. Each one of them deals with exercise of jurisdiction. Plain reading of cl. (c) makes it explicit that the Court has jurisdiction and it exercises its jurisdiction. This part of cl. (c) makes it distinct from cls. (a) and (b). The High Court has jurisdiction to make such order in the case as it thinks fit if the Court acts in exercise of its jurisdiction illegally or with material irregularity. Illegally means not legally. That in turn leads to the expression not in accordance with law. What amounts to material irregularity within the meaning of this expression used in cl. (c) is to be gone into.
14. In the case of Amir Hassan Khan v. Sheo Baksh Singh, (1883-84) 11 Ind App 237: ILR 11 Cal 6 (PC), the Privy Council made the following observation upon S. 622 of the former Code of Civil Procedure which was replaced by S. 115 of the Code of 1908.
"The question then is, did the Judges of the lower Courts in this case, in the exercise of their jurisdiction, act illegally or with material irregularity. It appears that they had perfect jurisdiction to decide the question, which was before them and they did decide it. Whether they decided rightly or wrongly, they had jurisdiction to decide the case, and even if they decided wrongly, they did not exercise their jurisdiction illegally or with material irregularity."
The expression particularly to be noted in the excerpt cited above is, in the exercise of their jurisdiction, act illegally or with material irregularity'. Therefore it is clear that under cl. (c) the Court -has jurisdiction, it exercises its jurisdiction, acts in exercise of its jurisdiction but acts illegally or with material irregularity.
15. In the case of Balakrishna Udayar v. Vasudeva Ayyar, 44 Ind App 261: AIR 1917 PC 71 the Board has laid down as follows:
"It will be observed that the section applies to jurisdiction alone, the irregular exercise or non-exercise of it, or the illegal assumption of it. The section is not directed against conclusions of law or fact in which the question of jurisdiction is not involved."
In my opinion, what is important to note in this context is the sentence 'the section is not directed against conclusions of law or fact in which the question of jurisdiction is not involved.'
16. The Privy Council has, in the case of N. S. Venkatagiri Ayyangar v. Hindu Religious Endowments Board, Madras AIR 1949 PC 156 followed the aforecited decisions and laid down as follows while holding that the High Court had interfered on the ground that the subordinate Court had made a mistake in the construction of a will and as such the High Court was without jurisdiction and therefore its order must be set aside:
"Section 115 applies only to cases in which no appeal lies, and where the 'Legislature has provided no right of appeal, the manifest intention is that the order of the trial Court, right or wrong, shall be final. The section empowers the High Court to satisfy itself upon three matters: (a) that the order of the subordinate Court is within its jurisdiction; (b) that the case is one in which the Court ought to exercise jurisdiction; and (c) that in exercising jurisdiction the Court has not acted illegally, that is, in breach of some provision of law, or with material irregularity, that is, by committing some error of procedure in the course of the trial which is material in that it may have affected the ultimate decision. If the High Court is satisfied upon those three matters, it has no power to interfere because it differs, however profoundly, from the conclusions of the subordinate Court upon questions of fact or law. There can be no justification. Whatsoever for the view that S. 115(c), was intended to authorised the High Court to interfere and correct gross and palpable errors of subordinate Courts It would indeed be difficult to formulate any standard by which the degree of error of subordinate Courts could be measured." (underlining is mine) Hence it is to be held that the High Court has no jurisdiction to interfere under S. 115(l)(c), Civil P.C. upon questions of fact or upon conclusions of law in which the question of jurisdiction is not involved and when the subordinate Court has not by committing some error of procedure in the course of the trial which is material in that it may have affected the ultimate decision It is evident that the error of procedure committed by a subordinate Court must be in relation to exercise of jurisdiction. This is how the Privy Council has laid down in regard to the expression material irregularity' occurring in S. 115(l)(c) C.P.C. It is to be noted in this connection that in the said case the concerned High Court had found that the subordinate Court had made a serious mistake in the construction of a will and, therefore, it interfered in exercise of its jurisdiction under S. 115. It is also to be noted that construction of a document or interpretation of a document is deemed to be a question of law. Even then the Privy Council has held that the High Court had acted without jurisdiction apparently because the ground on which the High Court had interfered had no relation to exercise of jurisdiction by the subordinate Court.
17. Later, in the case of Joy Chand v. Kamalaksha AIR 1949 PC 239 the Privy Council has reiterated the very principles.
18. The Supreme Court has in the decision in Keshardeo v. Radha Kishen considered a large number of cases collected in Chitaley and Rao's Civil Procedure Code (Vol. 1) which according to the Supreme Court only served to show that the. High Courts had not always appreciated the limits of the jurisdiction conferred by S. 115, CPC. The Supreme Court was dealing with S. 115 CPC, which after the amendment by Act No. 104 of 1976 is in pari materia with S. 115), CPC. Reliance has been placed on (1883-84) 11 Ind App 237, 44 Ind App 261: (AIR 1917 PC 71), 76 Ind App 67 : (AIR 1949 PC 156) and 76 IA 131 : AIR 1949 PC 239. Their Lordships have referred with approval to the observations made by Bose, J. in his order of-reference in Narayan Sonaji v. Sheshrao Vithoba AIR 1948 Nag 258 (FB) wherein it was said that the words 'illegally' and 'material irregularity' do not cover either errors of fact or law and that they also do not refer to the decision arrived at but to the manner in which it is 'reached and further that the errors contemplated relate to material defects of procedure and not to errors of either law or fact after the formalities. which the law prescribes have been complied with.
19. In the case of M. L. & B. Corporation v. Bhutnath the Supreme Court was considering an order passed under 0. 22 R. 9(2) and (4), Civil PC, with reference to exercise of jurisdiction by the Calcutta High Court under S. 115, CPC. The relevant facts were : An application for setting -aside abatement had been made. There was delay. An application for condo nation of delay for sufficient cause had been made. The subordinate Court had exercised its discretion in favour of the applicant and condoned delay. Reliance was placed on all the aforecited decisions. The. Supreme Court held as follows "It is not open to the High Court in the exercise of its revisional jurisdiction under S. 115, to question the findings of fact recorded by a subordinate Court. Section 115 applies to cases involving questions of jurisdiction, i.e., questions regarding the irregular exercise or non-exercise of jurisdiction or the illegal assumption of jurisdiction by a Court and is not directed against conclusion of law or fact in which questions of jurisdiction are not involved.
The proposition that erroneous decision on a question of limitation, involves the question of jurisdiction applies to cases in which the law definitely ousts the jurisdiction of the Court to try a certain dispute between the parties and not to cases in which there is no such ouster of jurisdiction under the provisions of any law, but where it is left to the Court itself to determine certain matters as a result of which determination the Court has to pass a certain order and may, if necessary, proceed to decide the dispute between, the parties. The distinction between the two classes of cases is that in one, the Court decides a question of law pertaining to jurisdiction. In the other, it decides a question within its jurisdiction.
Under S. 3, Limitation Act, it is the duty of the Court not to proceed with the application if it is made beyond the period of limitation prescribed. The Court has no choice and if in construing the necessary provision of the Limitation Act or in determining which provision of the Limitation Act applies, the Subordinate Court comes to erroneous decision it is open to the High Court in revision to interfere with that conclusion as that conclusion led the Court to assume or not to assume the jurisdiction to proceed with the determination of that matter. S. 5, Limitation Act, on the other hand, empowers the Court to admit an application, to which its provisions are made applicable, even when presented after the expiry of the specified period of limitation if it is satisfied that the applicant had sufficient cause for not presenting it within time. The question whether there was a sufficient cause is exclusively within the jurisdiction of the Court and the Court can decide it rightly or wrongly. "
It was held that the trial Court had jurisdiction to determine whether there was sufficient cause for the plaintiff for not making the application for setting aside the abatement in time and if so satisfied, to admit it, and the High Court fell in error in interfering with that finding of fact. While rendering this decision the Supreme Court has explained and distinguished its decision in . The principle laid down as I understand is that when the subordinate Court has, after considering all the material relied upon by the parties in regard to the question, namely, sufficient cause to be shown under S. 5, Limitation Act, and without ignoring any crucial material, passed its order, the High Court has no jurisdiction under S. 115(l)(c), CPC to interfere with that order. This flows from the decision of the Supreme Court as observed in Jagannath Ramachandra Datar v. Dattaraya Balwant Hingmire, Civil Appeal No. 585 of 1964, D/- 9-9-1966. That observation is excerpted by the Supreme Court in the decision in Surja v. Hardeva :
"Therefore, if it can be shown that the subordinate Court without any evidence whatsoever held that the transaction in question was not a sale but a mortgage and that the relationship between the parties was that of a debtor and a creditor and on that footing proceeded to exercise its power under Ss. 3 and 10A, Dekkan Agriculturists Relief Act, the High Court would be entitled to interfere with such a decision under both the parts of S. 115. It would then be possible to say that the subordinate Court had clutched at jurisdiction which it had not under the said Section and it would also be possible to say that that Court had exercised its jurisdiction, illegally or with material irregularity."
Hence, it is to be held that if the subordinate Court has passed its order under S. 5, Limitation Act, in favour of the applicant without there being any evidence or ignoring the crucial evidence or apparently misreading evidence, then the High Court would have jurisdiction under S. 115(l), CPC, to interfere with such an order though-the order relates to decision on facts and the subordinate Court has perfect jurisdiction to decide the same.
20. The Supreme Court has in the case of Abbasbhai v. Gulamnabi relied upon the decision in . The Supreme Court has reiterated the very principle. It has, further, in the course of the decision referred to the decisions of the Privy Council (which have been already stated) and observed as follows "The Privy Council distinguished between cases in which on a wrong decision the Court either assumes jurisdiction which is not vested in it or, refuses to exercise jurisdiction which is vested in it by law, and those in which in exercise of its jurisdiction the Court arrives at a conclusion erroneous in law or in fact. In the former class of cases exercises revisional jurisdiction by the High Court is permissible but not in the latter. This was pointed out by this Court in Manindra Land and Building Corporation v. Bhutnath Bannerjee ."
What is distinguished cannot be, expressed in a better manner.
21. How the principle enunciated in the aforementioned paragraphs has been applied is seen from the decision in Chellammal Anni v. Masanan Samban . The decision has been rendered by a five member Bench. In my opinion, it is necessary to narrate the brief facts of the case and some provisions of law applicable. The land in dispute was let by the appellant to the respondent. The rent was fixed partly in kind and partly in cash. The tenancy in question had been created some time before the Madras Cultivating Tenants (Payment of Fair referred to as the Fair Rent Act) came into force. The dispute in question arose in 1959 when the crop for that year was reaped, by the respondent. The claim was that the appellant was only entitled to 40 per cent of the crop as provided in the Fair Rent Act. The agreement referred to earlier was that 60 percent of the crop was to be paid to the appellant. That was demanded by the agent of the appellant. The harvested crop was lying in the threshing floor. The respondent approached the police complaining that the appellant was delaying the division of the produce and preventing the removal of the respondent's share. The police enquired and reported to the Tahsildar. It was also reported that the crop was deteriorating and the seeds had begun to germinate because of rain. The Revenue Inspector made measurements in the presence of the respondent and some prominent persons of the village in spite of the absence of the appellant's agent. He sent the result with his report to the Tahsildar. It appeared that the respondent removed the crop soon after the Revenue Inspector left the, spot. That led to a criminal complaint against the respondent. That complaint was dismissed. A petition under S. 3(4), Madras Cultivating Tenants Protection Act, No. XXV of 1955 (hereinafter referred to as the Protection Act) for ejectment of the respondent was filed before the Revenue Divisional Officer. The Revenue Divisional Officer held that the respondent was justified in insisting that the appellant should take only 40 per cent of the produce as provided by the Fair Rent Act, but was not justified in removing the crop instead of proceeding to enforce his right in the manner provided by law. On that basis he ordered ejectment of the respondent refusing to exercise the discretion which in law lay in him to give time to the respondent to pay the arrears in Court. The respondent went in revision to the High Court. The High Court held that the Revenue Divisional Officer should have exercised his discretion in favour of the respondent. It set aside the order of ejectment. The appellant obtained special leave in the Supreme Court. It was urged before the Supreme Court that even if the Revenue Divisional Officer had misunderstood cl. (b) of S. 3(4), Protection Act, the High Court could not interfere with the exercise of the discretion by the Revenue Divisional Officer under S. 6(3), Protection Act, inasmuch as this provision gives revisional jurisdiction to the High Court to the extent to which such jurisdiction is conferred on it by S. 115, CPC. The Supreme Court applied the aforestated principles and held as follows:
"There are two answers to this contention. The first is that the Revenue Divisional Officer was patently wrong in his view of the law and therefore if the High Court interfered with the wrong exercise of discretion this Court in its jurisdiction under Art. 136 will not interfere with the order of the High Court, which is clearly in the interest of justice. Secondly by taking the view that he cannot and should not exercise his discretion where a tenant has failed to take action under S. 30), Protection Act, the Revenue Divisional Officer has, in our opinion, failed to exercise jurisdiction vested in him under the law, and the High Court would be justified in interfering with its order even under S. 115, Civil PC."
What has been recorded as 'secondly' is 'that when a subordinate Court takes a wrong view of a legal provision so as to refuse to exercise its jurisdiction, the High Court would be justified in interfering with such an order under S. 115), CPC. This case, in my opinion, illustrates what amounts to contravention of a provision of law by a subordinate Court thereby making its act illegal while exercising its jurisdiction vested in it by law.
21A. This takes me to three important decisions rendered by the Supreme Court. In the decision in Pandurang v. Maruti (rendered by five member Bench) the Supreme Court has, on relying on the decisions in and , laid down as follows "The High Court cannot while exercising its jurisdiction under S. 115, correct errors of fact, however gross they may be, or even errors of law. It can only do so when the said errors have relation to the jurisdiction of the Court to try the dispute itself. It is only in cases where the subordinate Court has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity that the revisional jurisdiction of the High Court can be properly invoked. Points of law may arise which are related to questions of jurisdiction. A pie of limitation or a plea of res judicata is a plea of law which. concerns the jurisdiction of the Court which tries the proceedings. A finding on these pleas in favour of the party which raises them would oust the jurisdiction of the Court. An erroneous decision on these pleas, therefore, can be said to be concerned with questions o jurisdiction falling within the purview of S. 115 of the Code. But an erroneous decision on a question of law having no relation to questions of jurisdiction will not be corrected by the High Court under S. 115."
In the said case the District Court had put a wrong construction on certain decree. The High Court interfered with the order under S. 115, CPC. The Supreme Court held that *the High Court had no jurisdiction and reversed the order of the High Court. This decision was rendered on 26-4-1965. Next is the decision rendered by the Supreme Court on 23-8-1965 in the case of Ratilal v. Ranchhodbhai (by, a Bench consisting of three Hon'ble Judges). The earlier decisions in 76 Ind App 131: (AIR 1949 PC 239), 44 Ind App 261: (AIR 1917 PC 71), , and have been referred. In that case, the Principal Judge of a City Civil Court had in appeal held that upon a construction placed by him on the provisions of S. 12, Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, that the case fell under S. 120) of the Act read with the Explanation thereto and not under either cl. (a) or cl. (b) of sub-s- (3) of S. 12. Upon that view the Principal Judge of the City Civil Court decreed the relief for possession in favour of the respondent before the Supreme Court. The Supreme Court had already in the case of Jashwantrai Maluk Chand v. Anandilal Bapalal, laid down the law contrary to what had been held by the Principal Judge of the City Civil Court. The High Court had interfered in exercise of its jurisdiction under S. 115, CPC and set aside the order of the Principal Judge of the City Civil Court. In this connection, the Supreme Court has observed in para3 of its judgment as follows:
"Mr. Peerzada, who appears for the appellant, relying upon the decision of this Court in Jashwantrai Malukchand v. Anandilal Bapalal, CA No. 539 of 1963, D/- 7-12-1964: , contended that the view taken by the Principal Judge is not in accordance with what this Court has taken in the aforesaid case. Prima facie the decision of this Court supports the contention of the appellant, but even so, we are constrained to hold that the High Court was not, in the exercise of its jurisdiction under S. 115, Civil PC which was invoked by the appellant, competent to interfere and that the limitations placed upon the powers of the High Court under that section would also circumscribe the power of this Court to interfere under Art 136 of the Constitution. No doubt by an erroneous construction of the relevant provisions the Principal Judge of the City Civil Court granted relief of possession to the respondent to which he would not have been entitled had the provision been rightly construed. Even so, as observed by this Court in Abbasbhai v. Gulamnabi, , an erroneous construction placed upon the relevant provision would not furnish a ground for interference under S. 115 of the Code. It may be mentioned that in that case also the question was about the construction of S. 12(3)(b) of this very Act and an argument similar to the one advanced before us was addressed in it ....... "
22. Sri Tukaram S. Pai, learned Advocate for the respondent-plaintiff argued that even when a subordinate Court had, on a question of law, taken a view quite contrary to what had been laid down by the Supreme Court and thereby granted relief of possession, the Supreme Court has held that the High Court had no jurisdiction to interfere with such an order even when the party who had obtained relief at the hands of the subordinate Court was, in law, not entitled to that relief. He, in this connection, further pointed out that the law laid down by the Supreme Court is to be law of the land and binding on all the Courts in view of Art 141 of the Constitution. It has to be said that the argument of Sri Pai has all the force in it in view of this decision. In the case of Papiah Setty v. Padmanabha Setty ((1965) 2 Mys U 598) Hombe Gowda, C.J., has held that a subordinate Court acts with material irregularity when it gives decision ignoring a ruling of the High Court and where a subordinate Court decides a matter contrary to the law laid down by the High Court, it acts without jurisdiction and the High Court has jurisdiction to interfere with the order in revision. The matter in question was under S. 17, Mysore House Rent and Accommodation Control Act (30 of 1951). Section 17 of the said Act is in pari materia with S. 115, Civil PC. The Supreme Court has dealt with this very case after granting special leave to Padmanabha Setty, the respondent before the Mysore High Court, in . The decision has been rendered by a Bench of five Hon'ble Judges on 11-3-1966, that is, later to the decisions in and . The Supreme Court has in. Para 8 of the decision dissented with the view expressed by Subba Rao, J. and agreed with the view expressed by Ahmed Ali Khan, J. on the question of law under S. 8(3)(a)(ii), Mysore House Rent and Accommodation Control Act (30 of 1951). Thereafter it has proceeded to hold as follows in paras 9 and 10.
"9. In conclusion we are of the view that the High Court was right in holding that the Additional District Judge erred in not following the decision of the Mysore High Court in (1962) 40 Mys LJ 760.
10. There is no force in the second point raised by the learned counsel for the tenant. It is true that the jurisdiction of a High Court under provisions similar to S. 17 of the Act is limited, but we cannot say that the High Court was wrong in holding that the Additional District Judge acted with material irregularity in not following the decision of the Mysore High Court when that decision had been rendered in a case arising from an earlier order of the same Additional District Judge. It may be that this decision was not pointed out to the Additional District Judge but we cannot in exercise of our jurisdiction under Art. 136 of the Constitution, say that the High Court should not have set aside the order of the Additional District Judge on this ground." The appeal was dismissed. This decision and the decision in do not appear to see eye to eye with each other. The question would be as to which view would be, binding on this Court. A Full Bench of this Court has, in the case of Govindanaik v. West Patent Press Co. dealt with this question and held as follows:
"If two decisions of the Supreme Court on a question of law cannot be reconciled and one of them is by a larger Bench while the other is by a smaller Bench, the decision of the larger, Bench, whether it is earlier or later in point of time, should be followed by High Court and other Courts. The decision in (1974) 1 Kant U 344 (FB) has been overruled. In the case on hand not only is the decision in rendered by a larger Bench but is also later in Point of time. Therefore, it is to be followed by this Court.
23. In the case of M. L. Sethi v. R. P. Kapur, a Division Bench of the Supreme Court has reiterated the main principles laid down by the Privy Concil (already dealt with) and the Supreme Court in , and and held:
"The jurisdiction of the High Court under S. 115, CPC is a limited one. The section is not directed against conclusions of law or fact in which the question of jurisdiction is not involved.
Section 115 empowers the High Court to satisfy itself on three matters (a) that the order of the subordinate Court is within its jurisdiction; (b) that the case is one in which the Court ought to exercise jurisdiction and (c) that in exercising jurisdiction the Court has not acted illegally, that is, in breach of some provision of law, or with material irregularity by committing some error of procedure in the course of the trial which is material in that it may have affected the ultimate decision. And if the High Court is satisfied on these three matters it has no power to interfere because it differs from the conclusions of the subordinate Court on questions of fact or law. A distinction must be drawn between the errors committed by subordinate courts in deciding questions of law which have relation to, or are concerned with, questions of jurisdiction of the said court, and errors of law which have no such relation or connection. An erroneous decision on a question of law reached by the subordinate court which has no relation to questions of jurisdictions of that court, cannot be corrected by the High Court under S. 115."
24. Again in the case of Hindustan Aeronautics v. Ajit Prasad the Supreme Court has relied upon the case in D. L. F. Housing & Construction Co. (P) Ltd., New Delhi v. Sarup Singh and held that the High Court should not interfere even if the order of a subordinate Court is right or wrong or in accordance with law or not unless it has exercised its jurisdiction illegally or with material irregularity.
25. In the case of Sher Singh v. Joint Director of Consolidation AIR 1978 SC 1341, ( 1978 ) 3 SCC 172 the Supreme Court has relied upon the Privy Council decisions and the decisions of the Supreme Court in , , , and and held:
"It is well settled that the revisional jurisdiction of the High Court is confined to cases of illegal or irregular exercise or non-exercise or illegal assumption of the jurisdiction by the subordinate courts. If a subordinate court is found to possess the jurisdiction to decide a matter, it cannot be said to exercise it illegally or with material irregularity even if it decides the matter wrongly. In other words, it is not open to the High Court while exercising its jurisdiction under S. 115, Civil PC, to correct errors of fact howsoever gross or even errors of law unless the errors have relation to the jurisdiction of the court to try the dispute itself."
It is to be noticed that the decision rendered by the five member Bench of the Supreme Court and does not appear to have been cited in the case argued before the Supreme Court subsequently.
26. A Division Bench of this Court has, in the case of Mokenzies Ltd. v. State of Mysore ((1978) 1 Kant LJ 57: (A IR 1978 Kant 89)) while dealing with the question of interference under S. 115 in relation to an application for leave to revoke the authority of the arbitrator under S. 5, Arbitration Act, 1940, adverted to the decision of the Supreme Court in . In regard to the contention raised by the Advocate General that the case was not a fit one for interference by the High Court under S. 115, CPC on the ground that the discretion vested in the Court below had been exercised in a particular manner, the Bench held as follows:
"In support of his contention, he relied upon the decision of the Supreme Court in Hindustan Aeronautics Ltd. v. Ajit Prasad Tarway . It is clear from the judgment of the Supreme Court that on the facts of the case before their Lordships they held that the order of the first appellate Court did not suffer from any illegality. But in the instant case, the learned Civil Judge having recorded a clearly unsustainable finding to the effect that refusal to grant leave under S. 5 of the Act will result in substantial miscarriage of justice, proceeded to exercise his discretion in favour of the first respondent. By recording a clearly unsustainable finding in regard to the aforesaid aspect, the learned Civil Judge has proceeded to allow the application of the first respondent. As we have recorded a finding to the effect that it is impossible in this case to take the view that refusal to accord leave under S. 5 of the Act will result in substantial miscarriage of justice it-has to be held that the decision of the learned Civil Judge rendered under S. 5 of the Act is vitiated by material illegality, justifying interference by this Court under S. 115(l)(c), Civil PC. We, therefore, reject the contention of the learned Advocate General in this behalf."
The Division Bench did not agree with the finding recorded by the Civil Judge on the ground that it was clearly unsustainable. In view of that it held that the decision of the Civil Judge was vitiated by material illegality. I am unable to make out any principle or principles having been laid down in this decision. What has been done by the Division Bench is only to distinguish the case before the Division Bench from the decision in Hindustan Aeronautics Ltd. v. Ajit Prasad . In the decision in J. Hiralal v. Gulabch4nd a single Judge of this Court has interfered with an order passed by a subordinate Court under 0. 6 R. 17, CPC. The plaintiff in the suit had applied for amendment of the plaint by including another item in the schedule property. The objection was that if the amendment were to be allowed the area already covered by the suit schedule property would be increased. The matter was under the Karnataka Rent Control Act. The subordinate Court agreed with, the contention of the defendant and. rejected the application holding that the area of the property already described in the suit schedule was sought to be increased by securing the amendment. This Court held that that was not the effect of the amendment sought and on fact the area of the property described in the suit schedule would not be increased. This Court further held that while refusing the amendment sought for by the plaintiff the principles governing the application of 0. 6 R. 17, CPC, had been ignored. In the course of the judgment many of the Supreme Court decisions have been cited. Ultimately, it has been held that as the principles governing 'the law of amendment of pleadings had been given a go by, this Court had jurisdiction to interfere under S. 115, CPC. I am not able to draw much assistance in regard to the principles from this decision. On the other hand, I find that this Court has recorded a finding of fact disagreeing with the decision arrived at by the subordinate Court on that question of fact. I am afraid that such a course is not open to this Court in exercise of its jurisdiction under S. 115, CPC.
27. Two more decisions rendered by this Court are: in the case of Rajagopalaiah Setty v. Radhakrishna . After exhausting the right of revision under S. 50, Karnataka Rent Control Act, 1961, a revision petition to this Court under S. 115, CPC, had been filed. The single Judge of this Court has while considering the scope of S. 115, CPC, relied upon the decisions in , , and and held as follows:
"However gross the conclusions of-the District Judge either on question of fact or law might be, the High Court cannot assume jurisdiction under S. 115, CPC to correct the mistake of fact or law. It is only misinterpretation of law affecting jurisdiction, like limitation, res judicata or provisions creating bar of jurisdiction that can be corrected under S. 115."
28. Here again the principles laid down by the decisions discussed in the preceding Para have not been actually adverted to. I am observing this with due respect to the learned Judge particularly in view of the complications and difficulties arising in understanding the principles in S. 115(l)(c), Civil PC and application of the same.
29. The last decision to be referred to is the one rendered by a single Judge of this Court in the case of Mahaboobsab v. Ramachandrappa (1984) 1 Kant LJ 3037. Here again it was a revision petition under S. 115(l), C.P.C., after the right of revision under S. 50, Karnataka Rent Control Act, 1961, had been exhausted. Once again the general principle laid down in all the aforecited decisions has been reiterated.
30. In the light of the above, the scope of S. 115(l)(c), C.P.C., may be stated and illustrated as follows though not exhaustively. A subordinate Court should have jurisdiction and it should exercise it. It should commit an act in exercise of such jurisdiction. In doing so there should be no breach of some provisions of law or material irregularity i.e., committing some error of procedure in the course of the trial, that may have affected the ultimate decision; which can only have relation to jurisdiction. For example grabbing at jurisdiction. Though a subordinate Court has jurisdiction to decide finally on facts, such as, in an application under S. 5 Limitation Act, and concludes on facts and if such conclusion is not based on evidence or material available or if such conclusion is arrived at after ignoring crucial evidence or material, the High Court has jurisdiction under S. 115(l)(c) to interfere with such an order as the ultimate decision on these facts relates to jurisdiction of the Court. If a subordinate Court renders a decision contrary to the law laid down by the High Court of a State or takes a wrong view of a legal provision, the High Court does have jurisdiction under S. 115(l), C.P.C., to interfere with such decision. The High Court has no jurisdiction to interfere in a decision of a subordinate Court on interpretation or construction of document though' interpretation or construction of a document is generally deemed to be a question of law.
31. In the petitions on hand it is already seen that the trial Court has recorded its opinion on-the basis of the material before it that there are triable issues and the defense is neither sham nor frivolous, etc. It has on this basis granted leave unconditionally, at the same time expressing, 'but on terms', to the defendants to file written statement. Order 37 Rule 3 (5), C.P.C., reads as follows.
"The defendant may, at any time within ten days from the service of such summons for judgment, by affidavit or otherwise disclosing such facts as may be deemed sufficient to entitle him to defend, apply on such summons for leave to defend such suit, and leave to defend may be granted to him unconditionally or upon such terms as may appear to the Court or Judge to be just."
(underlining is mine) The conjunction used is 'or'. The principles of granting leave to defend have been succinctly enunciated by the Supreme Court. The same have been adverted to in the preceding paragraphs. The impugned order is in breach of these principles particularly that part of the order by which terms have been imposed on the petitioners-defendants. Moreover, the use of the conjunction 'or' clearly shows that leave can, in law, be granted either unconditionally or upon terms. It cannot be both ways. Therefore, the trial Court has committed a breach of the provision of law. Hence this Court has jurisdiction to interfere under S. 115(1)(c) civil pc.
32. In the result C.R.P. No. 3867 of 1983 is partly allowed. The impugned order is set aside to the extent that it imposes terms on the petitioners - defendants. The rest of the order is confirmed. No order as to costs.
33. As the very same order is challenged in C.R.P. No. 598 of 1984, no practical purpose would be served by admitting this revision petition since that order has been modified as above. Hence C.R.P. No. 598 of 1984 is disposed of accordingly. No costs.
34. Order accordingly.