1. Order for payment of unpaid calls under Section 187, Indian Companies Act, 1913 — Execution application — Dispute over limitation period under Articles 182 and 183, Limitation Act. (Para 1 )
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1961 Supreme(SC) 341
SUPREME COURT OF INDIA
l2th October, 1961.
B.P. SINHA, C.J.I., K. SUBBA RAO, J.C. SHAH AND J.R. MUDHOLKAR, JJ.
Jyoti Bhushan Gupta and others, Appellants
Versus
The Banaras Bank Ltd., Respondent.
Civil Appeal No. 198 of 1956.
Advocates appeared
Mr. Gopi Nath Kunzru, Sr. Advocate (Mr. Ganpat Rai Advocate with him), for Appellants; Mr. G. S. Pathak, Sr. Advocate (Mr. G. C. Mathur, Advocate, with him), for Respondent.
Advocates:
G.C.MATHUR, G.S.PATHAK, GANPAT RAI, Gopi Nath Kunzru
G.C.MATHUR, G.S.PATHAK, GANPAT RAI, Gopi Nath Kunzru
An order passed by a High Court under Section 187 of the Indian Companies Act, 1913, for payment of unpaid calls is an order passed in the exercise of its ordinary original civil jurisdiction, attracting a 12-year limitation period for execution under Article 183 of the Limitation Act.
Headnote:(A) Indian Companies Act, 1913 - Sections 3, 187 and 199 - Limitation Act - Articles 182 and 183 - Order for payment of unpaid calls - Limitation for execution - Whether an order passed by a High Court under Section 187 of the Companies Act is passed in exercise of its ordinary original civil jurisdiction - If so, the period of limitation for its execution is 12 years as per Article 183 and not 3 years as per Article 182. (Paras 5, 8)
(B) Ordinary Original Civil Jurisdiction - Jurisdiction is "ordinary" when exercised in the ordinary course of law without any special step being necessary to assume it; "original" when the petition is entertainable by the court as a court of first instance; and "civil" when the court adjudicates upon the liability of a debtor to pay debts. (Paras 8, 9)
Facts of the case:
A public limited company was ordered to be compulsorily wound up. The High Court directed certain contributories to pay unpaid calls with interest. The order was later transferred to a District Court for execution. The application for execution was filed after three years from the date of the order. The contributories contended that the application was barred by limitation under Article 182 of the Limitation Act, while it was contended that Article 183 applied.
Findings of Court:
The application for execution was within the limitation period because the order was passed in the exercise of the ordinary original civil jurisdiction of the High Court.
Issues: Whether the authority exercised by the High Court in directing payment under Section 187 of the Indian Companies Act, 1913, constitutes ordinary original civil jurisdiction, thereby extending the limitation period for execution to 12 years under Article 183 of the Limitation Act.
Ratio Decidendi: The court held that jurisdiction under Section 187 of the Companies Act is ordinary as it does not depend on extraordinary action; original as the court acts as a court of first instance; and civil as it determines the liability to pay a debt. Such jurisdiction, even if conferred by a special statute, falls within the meaning of "ordinary original civil jurisdiction" for the purposes of Article 183 of the Limitation Act.
Result: Appeal dismissed.
Legal Category Hierarchy
Table of Contents
2. Whether an order for payment under Section 187, Indian Companies Act, 1913, is passed in ordinary original civil jurisdiction, attracting a twelve-year limitation period. (Para 1 , 6 , 8 )
3. Jurisdiction under Section 187, Indian Companies Act, 1913, is ordinary, original, and civil as it determines debt liability in the ordinary course of law without special steps. (Para 5 , 8 , 9 )
4. Jurisdiction exercised by a High Court under a special statute is ordinary original civil jurisdiction if it is a court of first instance and requires no special discretionary step. (Para 8 , 9 )
5. Appeal dismissed; execution application held to be within the limitation period. (Para 11 )
6. Does an order passed under Section 187 of the Indian Companies Act, 1913, fall under the ordinary original civil jurisdiction of the High Court?
Yes. The jurisdiction is ordinary because it does not depend on extraordinary action, original because the High Court acts as a court of first instance, and civil because it adjudicates liability to pay a debt. (Para 8 )
7. What constitutes ordinary jurisdiction as opposed to extraordinary jurisdiction for the purpose of the Limitation Act?
Ordinary jurisdiction embraces all jurisdiction exercised in the ordinary course of law without any special step being necessary to assume it, whereas extraordinary jurisdiction is assumed at the court's discretion on special occasions and by special orders. (Para 9 )
8. Which article of the Limitation Act governs the execution of an order passed by a High Court in its ordinary original civil jurisdiction?
Article 183 of the Limitation Act prescribes a period of twelve years for enforcing a judgment, decree, or order of a Court established by Royal Charter in the exercise of its ordinary original civil jurisdiction. (Para 5 )
Judgment
SHAH, J. : The Banaras Bank Ltd. -a public limited company having its registered office at Banaras (hereinafter referred to as the Bank) was ordered on March 1, 1940 to be compulsorily wound up by the High Court of judicature at Allahabad, and the Official Liquidator was appointed to conduct the proceedings in winding up. On September 12, 1942 an order was made by the High Court under S. 187 of the Indian Companies Act, 1913 (Act VII of 1913) for payment of unpaid calls and the appellants Jyoti Bhushan Gupta and Gokul Chand, whose names had been placed on the list of contributories,
were directed to pay with interest Rs. 95,178-5-9 to the Official Liquidator of the Bank. This order was, by virtue of S. 199 of the Act, enforceable in the same manner in which the decree of the High Court made in any suit pending therein may be enforced. On September 12, 1946 the order was transferred to the District Judge, Allahabad for execution. On September 23, 1946 the Official Liquidator applied to the District Court, Allahabad for execution of the order dated September 12, 1942, and prayed that certain amounts due to the appellants be attached in satisfaction of the claim. The execution proceedings were transferred by the District Judge to the Civil Judge, Allahabad. The appellants contended inter alia that as the application for execution was not preferred within 3 years of the order for payment as prescribed by Art. 182 of the First Schedule of the Limitation Act it was barred by the law of limitation. The Official Liquidator contended that the application was governed by Art. 183 of the Act and that, in any event, certain part payments having been made towards the claim by the appellants, the period of limitation was extended thereby. At the hearing, the alternative plea of part payment was abandoned by the Official Liquidator.
2. The Civil Judge held that the application for execution was barred by limitation as it was not preferred within 3 years from the order of the High Court. In appeal to the High Court of Allahabad, the order passed by the Civil Judge was reversed and the proceedings were remitted to the Civil Judge with a direction to restore the execution application to its original number and to proceed with it according to law. Against that order with certificate of fitness granted by the High Court under Art. 133 of the Constitution, this appeal is preferred.
3. Counsel for the Company contended that the order passed by the High Court not being a final order the appeal on certificate granted by the High Court is not maintainable. We have not thought it necessary, having regard to the importance of the question raised by the appellants and the fact that this Court may in a proper case regularise the proceeding in this Court by granting special leave, even if certificate under Art. 133 of the Constitution could not be issued by the High Court, to hear the parties on the question as to the maintainability of the appeal on the certificate and have heard the appeal on the merits.
4. We are of the view that the appeal must fail on the merits.
5. Art. 182 of the Indian Limitation Act provides a period of 3 years for an application for execution of a decree or an order of any Civil Court not provided by Art. 183 or S. 48 of the Code of Civil Procedure, 1908 (V of 1908. By Art. 183 a period of 12 years for enforcing a judgment decree or order of any Court established by Royal Charter in the exercise of its ordinary original civil jurisdiction is prescribed and the period commences to run from the date on which a present right to enforce the judgment, decree or order accrues to some person capable of releasing the right. The order sought to be executed was not passed by the High Court in the trial of a suit : it was passed in exercise of the jurisdiction conferred upon the High Court by S. 187 of the Indian Companies Act, 1913. Section 3 of the Indian Companies Act by sub- (1) enacts that the Court having jurisdiction under this
