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Structured Summary of the Legal Opinion (C.R.P.SR 61701 of 1996)

Factual and Procedural Background

Respondents 1, 3 and 4 in I.A. No. 480 of 1996 (who are defendants 1, 3 and 4 in O.S. No. 158 of 1996 before the Subordinate Judge, Tuticorin) are the petitioners in the revision filed under Article 227 of the Constitution of India. The plaintiff (who describes himself as a shareholder and a customer of the Tamil Nadu Mercantile Bank Limited) instituted O.S. No. 158 of 1996 seeking declaration that the defendants ceased to be directors on specified dates and consequential injunctions restraining them from participating in board, committee and ad hoc meetings of the Bank. The plaintiff also obtained interim relief by filing I.A. No. 480 of 1996 seeking an injunction restraining the respondents (petitioners herein) from taking part in any meeting including Board meetings pending disposal of the suit.

The petitioners filed a counter-affidavit disputing the plaintiff’s averments and raised objections as to the jurisdiction of the civil court and the plaintiff’s locus standi. On 3.9.1996 the learned Subordinate Judge allowed I.A. No. 480 of 1996 and made the injunction absolute until the suit’s disposal. The petitioners challenged that order by filing the present revision on 5.9.1996 under Article 227. The Registry raised a maintainability objection on the ground that an appeal lies against the impugned order; nevertheless, the matter was listed for hearing on 6.9.1996 because of urgency asserted by the petitioners.

Legal Issues Presented

  1. Whether a High Court, in exercise of its supervisory jurisdiction under Article 227 of the Constitution, can entertain a revision challenging an order of a subordinate court when an effective alternative remedy by way of appeal is available.
  2. Whether extraordinary urgency (here, imminent meetings of the Bank’s Board of Directors and absence of the appellate judge) justifies bypassing the appellate remedy and invoking Article 227.

Arguments of the Parties

Petitioners' Arguments (as advanced by Mr. R. Gandhi, senior counsel)

  • There is extraordinary urgency because meetings of the Board of Directors were scheduled for 6th and 7th September 1996 and the District Judge (appellate forum) was on leave until 8th September; therefore petitioners approached the High Court under Article 227 instead of waiting to file an appeal.
  • Even though an effective appeal remedy exists, this Court has ample power under Article 227 to entertain the revision in view of the urgency and facts of the case; reliance was placed on several High Court decisions permitting Article 227 where alternative remedies were not speedy or effective.
  • On merits, petitioners contended the injunction/order was vulnerable because:
    • The plaintiff, although a shareholder, did not implead the Bank (Tamil Nadu Mercantile Bank Limited), and therefore the suit as framed is not maintainable;
    • The plaintiff had not explained how he was aggrieved or prejudiced by continuance of the defendants as directors;
    • Civil court lacked jurisdiction in view of provisions of the Companies Act, 1956;
    • By Section 256 of the Companies Act the defendants were entitled to continue as directors until the next general body meeting.

Plaintiff's Position (as reflected in the record)

  • The plaintiff had obtained an injunction from the Subordinate Judge restraining the defendants from taking part in Board, committee and ad hoc meetings pending disposal of the suit; that injunction was made absolute by the Subordinate Judge on 3.9.1996.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Abanindra Kumar Maity v. A.K. Biswas, AIR 1954 Cal. 355 Where an alternative remedy exists, the High Court may still exercise Article 227 if the alternative remedy is not as speedy or effective as relief under Article 227. The Court noted this authority as representative of High Court decisions permitting Article 227 where alternative remedies are inadequate; however, it contrasted such authorities with Supreme Court guidance limiting Article 227's scope.
Vasudeo Ganu v. Returning Officer, AIR 1968 Bom. 259 Ordinarily High Courts will not issue extraordinary writs where adequate alternative remedy exists, but the normal rule can be relaxed in appropriate cases (e.g., where the alternative remedy cannot be availed of effectively). The Court acknowledged this as an example where High Courts have relaxed the rule, but it treated such High Court precedents as distinct from the binding, more restrictive principles laid down by the Supreme Court.
Bhagirath Singh v. State of Punjab, AIR 1965 Punj. 170 Existence of an alternative remedy is not a per se bar to exercise jurisdiction under Articles 226/227; High Courts may exercise jurisdiction in suitable cases. The Court accepted that some High Courts have so held, but relied primarily on Supreme Court authorities to determine the correct scope of Article 227 in the present situation.
Walaiti Ram v. Siri Krishnan, AIR 1976 Delhi 50 Article 227 may be invoked even where an appeal lay but was not filed, or even where an appeal had become barred by time, if the ends of justice require it. The Court referred to this as further support cited by petitioners' counsel from High Court practice, but placed greater weight on Supreme Court pronouncements when assessing maintainability.
Nagendra Nath v. Commissioner of Hills Division, AIR 1958 SC 398 Article 227 powers are not greater than Article 226; Article 227 is limited to ensuring a tribunal functions within the limits of its authority (not to exercise broader appellate powers). The Court relied on this Supreme Court statement to emphasize the supervisory, not appellate, character of Article 227 and to delimit the High Court's powers in the presence of an available appeal.
Bhutnath Chatterjee v. State of West Bengal and others, 1969 (3) S.C.C. 675 Article 227 is exercised to ensure subordinate courts do not transgress jurisdiction; it is not to be used to revise mere errors of law or fact as an appellate court would. The Court cited this authority to reinforce that Article 227 is not an appellate substitute and should not be used to correct errors of law/fact where an appeal exists.
Babhutmal v. Laxmibai, AIR 1975 SC 1297 The power of superintendence under Article 227 is extraordinary and to be exercised sparingly; it cannot be used to correct findings of fact or to convert the High Court into an appellate forum. The Court applied this principle to conclude that the present revision could not be entertained merely because petitioners preferred not to use the appellate remedy.
Maneck Custodji v. Sarafazali, AIR 1976 SC 2446 Where an effective and comprehensive legal remedy by appeal exists, the High Court should not ordinarily entertain Article 227; Article 227 jurisdiction is extraordinary and not a substitute for appeal. The Court used this decision to affirm that the existence of an adequate appeal remedy (here to the District Court) weighs against entertaining a revision under Article 227 in the present case.
Mohd. Yunus v. Mohd. Mustaqim, AIR 1984 SC 38 A mere wrong decision is not sufficient to invoke Article 227; supervisory jurisdiction is limited to ensuring inferior courts act within their authority and not to correct errors apparent on record or errors of law. The Court cited this to underline that an erroneous subordinate-court order does not alone justify interference under Article 227 where an appeal is available.

Court's Reasoning and Analysis

The Court first addressed the threshold question of maintainability. It accepted as undisputed that an appeal lies to the District Court against the Subordinate Judge’s order dated 3.9.1996 (the injunction made absolute). The petitioners' primary contention was that extraordinary urgency (scheduled Board meetings on 6th and 7th September and absence of the District Judge until 8th September) justified invoking Article 227 instead of pursuing the appellate route.

The Court examined authorities cited by petitioners — several High Court decisions which recognized that Article 227 may be entertained notwithstanding an alternative remedy where that remedy is not speedy or effective. The opinion quotes two such High Court formulations (from Abanindra Kumar Maity and Vasudeo Ganu) that permit relaxation of the normal rule in appropriate cases.

The Court then turned to binding Supreme Court precedents addressing the scope of Article 227. It summarized the Supreme Court’s consistent line of authority that:

  • Article 227 is a supervisory jurisdiction meant to ensure subordinate courts/tribunals function within their authority, and is not broader than Article 226.
  • It is not an appellate jurisdiction and cannot be used to correct mere errors of law or fact, to re-weigh evidence, or to convert the High Court into an appellate court.
  • The jurisdiction under Article 227 is extraordinary and must be exercised sparingly; the mere availability of an alternative remedy does not automatically preclude Article 227, but where an adequate and effective appeal exists, the High Court should ordinarily refrain from entertaining revision.

Applying these principles, the Court concluded it could not accept petitioners' contention that Article 227 should be entertained simply because an appeal could not be immediately pursued due to temporary absence of the appellate judge and impending Board meetings. Considering the nature of the impugned order (an injunction by a subordinate court) and the existence of an effective appellate remedy to the District Court, the Court found the present revision to be not maintainable.

The Court expressly refrained from expressing any view on the merits of the Subordinate Judge’s order and invited the petitioners to raise their jurisdictional and prejudice objections before the appellate court, noting that the appellate court is bound to consider those objections.

Holding and Implications

Holding: The revision (C.R.P.SR 61701 of 1996) is REJECTED as not maintainable under Article 227 in the presence of an effective appellate remedy.

Implications and direct effects:

  • The petitioners' revision challenging the Subordinate Judge’s order granting injunction in I.A. No. 480 of 1996 is dismissed on maintainability grounds.
  • The Court directed the Registry to return the certified copy of the impugned order so that the petitioners may approach the appellate court (District Court) if they so advise.
  • The Court did not decide the merits of the injunction or the substantive objections (jurisdiction, locus standi, prejudice); it left open the petitioners’ right to raise those points before the appellate forum and noted the appellate court is bound to consider them.

The opinion does not purport to lay down any new precedent; it resolves the maintainability question by applying established Supreme Court authorities limiting the exercise of Article 227 where an adequate appellate remedy is available.

    D. Ganesan And 2 Others Petitioners v. M.S Chandra Bose And Another S

    1. Respondents 1, 3 and 4 in I.A No. 480 of 1996 who are defendants 1, 3 and 4 in O.S No. 158 of 1996 on the file of Subordinate Judge, Tuticorin, are the petitioners in the above revision filed under Article 227 of the Constitution of India. The court below at the instance of the plaintiff 1st respondent herein has granted injunction restraining the petitioners herein from taking part in any meeting including the meeting of the Board of Directors pending disposal of the suit. The present revision was filed on 5.9.96 On the very same day the Registry after processing the papers since there is a provision for appeal against the order in I.A No. 480 of 1996 raised an objection regarding maintainability of the present revision under Article 227 of the Constitution of India. At the request of the learned counsel for the petitioners, the matter has been listed for hearing on 6.9.96 even without numbering the revision.

    2. Mr. R. Gandhi, learned senior counsel appearing for the petitioners, at the outset submits that in view of extraordinary urgency, namely, the meeting of the Board of Directors is being held on 6th and 7th of September, 1996 and in view of the absence of appellate Judge till 8.9.96, the petitioners have approached this Court under Article 227 of the Constitution of India. For filing the revision before this Court and by-passing the appeal provision, the learned senior counsel has raised the following submissions:—

    (1) Even though there is effective appeal remedy, in view of urgency and of the facts and circumstances involved in the present case, this court has ample power to entertain revision under Article 227 of the Constitution of India. For the above said proposition, he relied on the following decisions:—

    (i) Abanindra Kumar v.A.K Biswas, AIR 1954Cal. 355. (ii) Walaiti Ram v. Siri Krishnan, AIR 1976 Delhi 50. (iii) Bhagirath Singh v. State of Punjab, AIR 1965 Punj. 170. (iv) Vasudeo Ganu v. Returing Officer, AIR 1968 Bom. 259.

    (2) Even on merits because of the following irregularities, the petitioners are entitled to straight away approach this Court without resorting to filing appeal before the appellate court.

    (i) The plaintiff, who is only a share-holder, has filed the present suit without impleading the Bank, namely, Tamil Nadu Mercantile Bank Limited. Hence, in the absence of bank as a party to the suit, the suit as laid is not maintainable.

    (ii) The plaintiff has not explained how he has aggrieved or prejudiced with regard to the continuance of Defendants 1 to 4 as Directors of the said Bank.

    (iii) In view of various provisions under the Indian Companies Act, 1956, the Civil Court has no jurisdiction.

    (iv) As per Section 256 of the Companies Act, the defendants are entitled to continue as Directors until the next general body meeting is convened.

    3. In the light of the broad submissions made by the learned senior counsel, now it is useful to refer the factual aspects of the case. The plaintiff calling himself as a share-holder and customer of the Tamil Nadu Mercantile Bank has filed the said suit O.S No. 158 of 1996 on the file of Subordinate Judge, Tuticorin, for declaration to declare that defendants ceased to be Directors of the Tamil Nadu Mercantile Bank Limited on or from 1.4.95 and 31.12.95 and for consequential injunction restraining them from taking part in any board meeting as Directors and also any committee meeting as well as any ad hoc committee of the Bank. He also filed I.A No. 480 of 1996 in the said suit for interim injunction restraining the respondents therein (petitioners herein) from taking part in any meeting including the meeting of the Board of Directors, Committee meeting and Ad hoc meeting as Directors pending disposal of the suit. The petitioners herein filed a counter-affidavit disputing the various averments made by the respondents herein. They have also raised the jurisdiction of the court as well as the locus standi or prejudice caused to the plaintiff. In other words, according to the, the suit as laid by the plaintiff as well as the application for injunction are not maintainable and liable to be dismissed. On the basis of the case of both sides, by order dated 3.9.96, the learned Subordinate Judge allowed I.A No. 480 of 1996 and made injunction absolute till the disposal of the said suit. The said order is being challenged in the present revision.

    4. In view of the doubt regarding the maintainability of the revision under Article 227, first I shall consider the argument relating to maintainability. First of all, there is no dispute that against the order dated 3.9.96 an appeal lies to District Court. This has not been disputed by the learned senior counsel. However, he points out that since the meetings of the Board of Directors are going to take place on 6th and 7th September, 1996 and in view of the fact that the District Judge is on leave till 8th September, the petitioners are entitled to pursue their remedy before this Court by invoking the provisions under Article 227 of the Constitution. In other words, the learned senior counsel vehemently contended that inspite of effective alternative remedy, namely, appeal provision, the petitioners are entitled to approach this Court. For filling revision under the said provision, he has also attacked the order of the learned Subordinate Judge as mentioned above. Since I propose to deal with the maintainability aspect as a first issue, I am not going into the merits of the order of the learned Subordinate Judge. The first case relied on by the senior counsel is Abanindra Kumar Maity v. A.K Biswas, AIR 1954 Cal. 355. A Division Bench of the Calcutta High Court while considering the power of the High Court under Article 227 has expressed thus,

    “The existence of an alternative remedy, like a suit, does not preclude the High Court from exercising the powers under Art. 227 of the Constitution of India, provided that alternative remedy is not a speedy or effective as an application under Art. 227”

    5. The next decision cited by the learned senior counsel is Vasudeo Ganu v. Returning Officer, AIR 1968 Bom. 259. A Division Bench of the Bombay High Court have explained the power of the High Court under Article 226 and 227 of the Constitution of India in the light of existence of alternative remedy in the following manner:—

    “The limitation that the High Court will not ordinarily issue a writ in favour of a person who has an adequate alternative remedy in a self-imposed limitation, its reason being that the remedy by way of a writ is an extra-ordinary remedy. The normal rule, however, can be relaxed in appropriate cases. Thus, where the petitioner who had an alternative remedy of appeal could not avail of it successfully as there was no designated authority appointed to accept it within limitation, the High Court in the interest of justice would entertain the petition as one against the original order or the Returning Officer rejecting his nomination paper”.

    6. The other decision referred to by the learned senior counsel is Bhagirath Singh v. State of Punjab, AIR 1965 Punj. 170. Here also the Division Bench of Punjab High Court has held that existence of an alternative remedy is not a per se constitutional bar to exercise the jurisdiction under Article 226 as well as 227 of the Constitution. Finally, the learned senior counsel has referred to Walaiti Ram v. Siri Krishnan, AIR 1976 Delhi 50. In the said decision, a single Judge of the Delhi High Court while construing the power of the High Court under Article 227 has observed thus,

    “ Even if the plaintiff omitted to file a revision or review against the order, the High Court can interfere under Art. 227 of the Constitution. It is a settled law that the ambit of the power under Article 227 is so wide as to permit interference in cases where the ends of justice do require such a course, even in cases where an appeal lay but was not filed, or an appeal had become barred by time. Even if a revision petition is not filed in time, the same result must follow.”

    With these decisions, the learned senior counsel very much emphasizes that the petitioners are justified in approaching this Court.

    7. No doubt, it is true that in the above referred decisions, various High Courts have held that the power under Article 227 is wide and inspite of specific provision for appeal, it is open to the High Court to exercise the power under Article 227 of the Constitution. However, with regard to the scope and power of the High Court under Article 227 there are number of judgments of the Apex Court directly on this point. Though the learned senior counsel has not cited any decision of the Supreme Court at the bar since it relates to jurisdiction of this Court, I refer the following decisions in order to solve the controversy:—

    (1) Nagendra Nath v. Commissioner of Hills Division, AIR 1958 SC 398

    (2) Bhutnath Chatterjee v. State of West Bengal and others, 1969 (3) S.C.C 675

    (3) Babhutmal v. Laxmibai, AIR 1975 S.C 1297

    (4) Maneck Custodji v. Sarafazali, AIR 1976 S.C 2446

    (5) Mohd. Yunus v. Mohd. Mustaqim, AIR 1984 S.C 38.

    8. In the first case, namely, N. Agendra Nath v. Commissioner of Hills Division, AIR 1958 S.C 398, the Constitutional Bench of the Supreme Court have explained the power of the High Court under Article 227 of the Constitution in the following manner:

    “The powers of judicial interference under Art. 227 with orders of judicial or quasi judicial nature are not greater than the powers under Art. 226. Under Art. 226, the power of interference may extend to quashing an impugned order on the ground of a mistake apparent on the face of the record. But under Art. 227 the power of interference is limited to seeing that the tribunal functions within the limits of its authority.”

    9. In B. Chatterjee v. State of West Bengal and others, 1969 (3) S.C.C 675 the Supreme Court has held.

    “The District Court held that compensation payable to the owners of land had to be determined on the basis of the market-value on the dates of the notifications, dated November 2, 1956 and June 3, 1958 and not on the basis of the notification, dated January 12, 1955. To revise that decision, jurisdiction of the High Court under Article 227 of the Constitution could not be exercised. Normally, the High Court exercises jurisdiction under Article 227 of the Constitution to ensure that a subordinate court of tribunal does not transgress the limits of its jurisdiction. The jurisdiction with which the High Court is invested is not appellate; it cannot seek to correct what it regards as merely an error of law or fact.”

    10. In Babhutmal v. Laxmibai, AIR 1975 S.C 1297 a Bench consisting of three Judges have explained the scope and power of the High Court under Article 227 in the following manner:—

    “The power of superintendence of High Court under Art. 227 being extraordinary is to be exercised most sparingly and only in appropriate cases. This power, as in the case of certiorari jurisdiction, cannot be invoked to correct an error of fact which only a superior court can do in exercise of its statutory power as a court of appeal. The High Court cannot is guise of exercising its jurisdiction under Art. 227 convert itself into a court of appeal when the legislature has not conferred a right of appeal and made the decision of the subordinate court or tribunal final on facts. The High Court cannot, while exercising jurisdiction under Art. 227 interfere with findings of fact recorded by the subordinate court or tribunal. It's function is limited to seeing that the subordinate court or tribunal functions within the limits of its authority. It cannot correct mere errors of fact by examining the evidence the reappreciating it.”

    11. In Maneck Custodji v. Sarafazali, AIR 1976 S.C 2446. Their Lordships have explained the interference of the High Court under Article 227 in the following manner:—

    “Held that the respondent had clearly a legal remedy available to him by way of an appeal against the decree of the City Civil Court and that remedy was not only adequate but was more comprehensive than the one under Art. 227 of the Constitution. It is true that, despite the existence of an alternative legal remedy, the High Court may interfere in favour of an applicant under Article 227 of the Constitution, but this was certainly not one of such extra-ordinary cases. It was not proper for the High Court to entertain an application under Art. 227 against a decree passed by a subordinate Court when the procedural law allows an appeal against it and that appeal lay to the High Court itself.”

    “The jurisdiction under Art. 227 of the Constitution is an extraordinary jurisdiction which is to be exercised sparingly and in appropriate cases and it is not to be exercised as if it were an appellate jurisdiction or as if it gave unfettered and unrestricted power to the High Court to do whatever it liked.”

    12. In Mohd. Yunus v. Mohd. Mustaqim, AIR 1984 S.C 38 the Apex Court has explained the power and scope under Article 227 in the following manner:—

    “A mere wrong decision without anything more is not enough to attract the jurisdiction of the High Court under Art. 227. The supervisory jurisdiction conferred on the High Courts under Art. 227 of the Constitution is limited “to seeing that an inferior Court or Tribunal function within the limits of its authority” and not to correct an error apparent on the face of the record much less an error of law. In exercising the supervisory power under Art. 227, the High Court does not act as an Appellate Court or Tribunal. It will not review or re-weigh the evidence upon which the determination of the inferior court or Tribunal purports to be based or to correct errors of law in the decision.”

    13. In view of the law laid down by the Apex Court in the various decisions, I am unable to accept the contention of the learned senior counsel that this Court can entertain revision under Article 227 of the Constitution when there is a provision for appeal. I make it clear that it is settled that the power of superintendence conferred upon the High Court by Article 227 is not confined to administrative superintendence only but includes the power of judicial revision also. The power involves a duty on the High Court to keep the inferior courts and Tribunals within the bounds of their authority and to see that they do what their duty requires and that they do in a legal manner (Italics supplied). But the said power does not vest with the High Court with any unlimited prevarication to correct all species of hardship of wrong decisions made within the limits of the jurisdiction of the Court. In view of various judicial pronouncement by the Apex Court with regard to the scope and power of this Court under Article 227 of the Constitution of India in the light of the admitted fact namely against the impugned order, an effective appeal provision is there, I am unable to accept the argument of the learned senior counsel. Considering the nature of the impugned order, the fact that appeal provision is there to the aggrieved parties and in view of the guidelines as formulated by the Apex Court, I hold that the present revision under Art. 227 of the Constitution of India against the order granting injunction in I.A No. 480 of 1996 in O.S No. 158 of 1996 by the Sub Court, Tuticorin, is not maintainable and liable to be rejected. In view of my conclusion on the maintainability, I am not expressing my view with regard to the merits of the order passed by the learned Subordinate Judge. It is open to the petitioners herein to raise all these objections before the appellate court, more particularly with regard to the “jurisdiction” of the Civil Court and the “prejudice” caused to the plaintiff. If such objections are made, it is needless to mention that the appellate court is bound to consider the same. Accordingly, the C.R.P.SR 61701 of 1996 is rejected as not maintainable. The Registry is directed to return the certified copy of the impugned order to enable the petitioners to approach the appellate court, it they are so advised.

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    D. Ganesan And 2 Others Petitioners v. M.S Chandra Bose And Another S
    (Sep 10, 1996)