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Durga Prasad And Another v. Banaras Bank Ltd.
Factual and Procedural Background
The Benaras Bank Ltd. was ordered to be wound up by the Allahabad High Court. A committee of inspection under Section 178-A of the Indian Companies Act, 1913 was constituted to assist the Official Liquidator; Durga Prasad (first appellant) was a member of this committee.
The Official Liquidator advertised for the sale of two houses belonging to the Bank. Roshan Lal (second appellant) offered Rs 18,000, and, with court sanction, the sale was completed on 2 August 1941. Roshan Lal later conveyed the properties to Durga Prasad, stating that the purchase had been made benami for Durga Prasad, the “real owner.”
Upon discovering this transaction, the Official Liquidator sought a declaration from the High Court that the sale was void on the ground that Durga Prasad, as a committee member and thus a trustee for the Bank, could not purchase its assets. A Single Judge upheld the Liquidator’s request and ordered Durga Prasad to re-convey the houses to the Bank. A Division Bench affirmed the order in Letters Patent Appeal.
The High Court nonetheless issued a certificate of fitness for appeal to the Supreme Court under Article 133(1)(a) of the Constitution, relying on its earlier decision in Deoki Nandan v. State of U.P.
Legal Issues Presented
- Whether the certificate granted by the Allahabad High Court under Article 133(1)(a) was valid when the High Court did not certify that the case involved a substantial question of law.
- Consequently, whether the appeal to the Supreme Court was competent.
Arguments of the Parties
Official Liquidator (Respondent)
- The appeal was incompetent because the High Court lacked jurisdiction to issue a certificate under Article 133(1)(a) without also certifying that the case involved a substantial question of law.
The opinion does not contain a detailed account of the appellants’ legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Deoki Nandan v. State of Uttar Pradesh, ILR (1958) All 567 | Held by Allahabad HC that an appeal lies as of right under Art. 133(1) if the property value exceeds Rs 20,000, even without a substantial question of law. | The Supreme Court regarded this view as incorrect and implicitly overruled it, holding that a substantial question of law is necessary when the appellate judgment affirms the judgment below. |
| Toolsey Persaud Bhuckt v. Benayek Misser (Privy Council) | Interpreted analogous provisions to require a substantial question of law where the appellate court affirms concurrent findings. | Cited to support the requirement of a substantial question of law for certification. |
| Probhawati Kunwar v. Panmal Lodhe (Calcutta HC) | Same principle: certificate cannot issue on mere valuation when the appellate court confirms the lower court. | Used as persuasive authority reinforcing the Privy Council’s interpretation. |
| Ladli Prasad Jaiswal v. Karnal Distillery Co. Ltd. (Supreme Court) | Clarified that “court immediately below” in Art. 133(1)(a) refers to the court whose decision is under appeal, not to courts subordinate to the High Court. | Relied upon to explain why a Single Judge of the High Court is the “court immediately below” a Division Bench for certification purposes. |
Court's Reasoning and Analysis
The Supreme Court observed that the judgment under appeal merely affirmed the Single Judge’s decision. Under Article 133(1)(a), where an appellate judgment affirms the decree or order of the court immediately below, a certificate of fitness can be granted only if the case involves a substantial question of law. The High Court had granted a certificate solely on the ground of monetary value, following its earlier ruling in Deoki Nandan.
Analyzing past authority, including Privy Council decisions and its own precedent in Ladli Prasad Jaiswal, the Court held that the phrase “court immediately below” denotes the court whose decision is being appealed, not a court subordinate to the High Court. Consequently, when the appellate court merely confirms the lower court’s findings, the constitutional requirement of a substantial question of law must be satisfied for certification.
Because the High Court failed to certify any substantial question of law, the certificate was defective, rendering the appeal incompetent. The appellants’ alternative request for special leave under Article 136 was also declined; the Court found no circumstances warranting the exercise of its discretionary jurisdiction.
Holding and Implications
APPEAL DISMISSED. No order as to costs.
The decision invalidates the certificate issued by the Allahabad High Court and confirms that, where an appellate judgment affirms the decision of the court immediately below, certification under Article 133(1)(a) is permissible only if a substantial question of law is expressly identified. The ruling reinforces procedural rigor but does not establish new substantive law; its direct effect is to bar the present appeal.
Shah, J.— The Benaras Bank Ltd. — hereinafter called “the Bank” was directed to be wound up by order of the Allahabad High Court. A committee of inspection was appointed under Section 178-A of the Indian Companies Act, 1913 to act with the Official Liquidator, and one of the members of the Committee was Durga Prasad the first appellant in this appeal. The Official Liquidator advertised for sale two house which formed part of the assets of the Bank. Roshan Lal the second appellant made an offer to purchase the two houses for Rs 18,000. This offer was accepted by the Official Liquidator and with the sanction of the court the two houses were sold to Roshan Lal on August 2, 1941. Roshan Lal thereafter transferred the houses to Durga Prasad reciting in the deed that the latter was “the real owner” of the houses and that the sale deed from the Official Liquidator was obtained by him “benami” for Durga Prasad. On coming to learn about this conveyance, the Official Liquidator moved the High Court of Allahabad for an order that the sale be declared null and void and that Durga Prasad be called upon to surrender the two houses and to re-transfer the same to the Bank. The High Court held that the sale deed was obtained by Durga Prasad who was the real purchaser, that he had suppressed its interest in the purchase, and that being a member of the committee for inspection, qua the Bank he occupied the position of a trustee and was on that account precluded from buying the property of the Bank. The High Court accordingly directed Durga Prasad to convey the houses to the Official Liquidator of the Bank. This order was confirmed in appeal under clause 10 of the Letters Patent by a Division Bench of the High Court. The High Court, however, certified the case under Article 133(1) of the Constitution for appeal to this Court. The High Court observed:
“It is not in dispute that the judgment of this Court involves directly or indirectly a claim respecting property of a value of not less than Rs 20,000 and, in view of the decision of this Court in Deoki Nandan Shri v. State of Uttar Pradesh ILR (1958) All 567) the applicants are entitled as of right to a certificate under Article 133(1) of the Constitution without an additional certificate that the case gives rise to a substantial question of law. The requisite certificate will accordingly issue.”
2. At the hearing before this Court Counsel for the Official Liquidator submitted that the appeal is incompetent, for the High Court had no jurisdiction to grant the certificate under Article 333(1)(a) of the Constitution without certifying that the appeal involved some substantial question of law. In our view this contention must succeed.
3. In Deoki Nandan v. State of Uttar Pradesh ILR (1958) All 567) the Allahabad High Court held:
“The words ‘the court immediately below' within the meaning of clause (1) of Article 133 of the Constitution must be a court other than the High Court. A Single Judge of a High Court is not a court subordinate to the High Court.
An appeal against an order of an Appellate Bench of the High Court dismissing an appeal from an order of a Single Judge of the court on its original side rejecting a petition under Article 226 of the Constitution lies as a matter of right under Article 133(1) of the Constitution, if the claim is in respect of property of a value in excess of Rs 20,000 and it is not necessary that the case should give rise to a substantial question of law.”
But the expression “court immediately below” in Article 133(1) has not the same connotation as the expression ‘court subordinate to the High Court'. In Toolsey Persaud Bhuckt v. Benayek Misser the Privy Council appears to have expressed the view that a Single Judge of a High Court trying an original proceeding was a court immediately below the High Court hearing an appeal under the Letters Patent from his judgment and therefore an appeal under Section 596 of the Code of Civil Procedure Act 14 of 1882 (of which the terms were in substance identical with the terms of Article 133(1) could be certified for appeal to the Privy Council only if a substantial question of law was involved. The Judicial Committee observed:
“Their Lordships think that no question of law, either as to construction of documents or any other point, arises on the judgment of the High Court, and that there are concurrent findings of the two courts below on the oral and documentary evidence submitted to them. That being so, the present appeal cannot be entertained.”
In Probhawati Kunwar v. Panmal Lodhe the High Court of Calcutta held that an appeal to the Privy Council cannot be certified if the High Court confirms the judgment of a Single Judge trying an original proceeding, unless it involves a substantial question of law. In a recent case Ladli Prasad Jaiswal v. Karnal Distillery Company Ltd., this Court held that a Single Judge hearing a second appeal under Section 100 of the Code of Civil Procedure, 1908 is for purposes of Article 133(1) the court immediately below a Division Bench of the High Court hearing an appeal against his judgment under the Letters Patent. It was observed in that case that the expression “Court immediately below” used in Article 133(1)(a) does not mean Court subordinate to the High Court, “A court subordinate to the High Court is a court subject to the superintendence of the High Court whereas a court immediately below is the court from whose decision the appeal has been filed.” In that case the Attorney General appearing for the respondents conceded that a Single Judge of a High Court trying a suit or proceeding as a court of original jurisdiction was a court immediately below the High Court hearing an appeal from his decision, and it was observed in the Judgment of this court that the concession was properly made.
4. In the appeal before us, the judgment of the High Court affirms the judgment of the Single Judge and the High Court has not certified that the decision appealed from involves any substantial question of law. The appeal cannot accordingly be entertained. Counsel for the appellant requested that in any event special leave to appeal under Article 136 of the Constitution be granted. But we are of the view, having regard to all the circumstances, that this is not a fit case for granting leave to appeal.
5. The appeal is therefore dismissed. There will be no order as to costs.
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