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Judgment Summary — Regular Second Appeals Nos. 1017, 1019 & 1020 of 1964

Factual and Procedural Background

The three Regular Second Appeals arise from four separate suits instituted in the Court of the Senior Sub-ordinate Judge, Hissar. The suits sought a declaration challenging an order dated 30th March 1961 of the Additional Director, Consolidation of Holdings, Punjab, purportedly passed under section 42 of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948 ("the Act"), which varied an earlier order of the Consolidation Officer to the detriment of the plaintiffs. The plaintiffs alleged that the impugned order was ultra vires and without jurisdiction because, contrary to the proviso to section 42, no notice was served on them and they were not afforded an opportunity of being heard by the Additional Director.

At trial, Suit Nos. 383, 380 and 387 were decreed for the plaintiffs on the ground that no notice or opportunity of hearing had been given; Suit No. 382 was dismissed on the ground that notice had been served on one plaintiff (Harchand). The defendant(s) appealed against the decrees in Suits 380, 383 and 387; the plaintiffs appealed the dismissal of Suit No. 382. The Additional District Judge, Hissar (judgment dated 7 February 1964), accepted the defendants' appeals and dismissed Suits 387, 380 and 383, and also dismissed the plaintiffs' appeal arising out of Suit No. 302 (as recorded in the opinion). The plaintiffs in Suits 383, 380 and 387 brought Regular Second Appeals Nos. 1017, 1019 and 1020 to this Court; a separate Regular Second Appeal (No. 1018) arising from Suit No. 382 was to be dealt with separately.

Legal Issues Presented

  1. Whether the orders passed by the Additional Director under section 42 of the Act, which varied earlier consolidation orders to the detriment of the plaintiffs, were ultra vires or without jurisdiction for want of notice and opportunity to be heard as required by the proviso to section 42.
  2. Whether the civil courts were barred from entertaining the suits by operation of section 44 of the Act, as amended up to 1 August 1961, when the State or its officer acted under section 42.
  3. Whether the plaintiffs had discharged the initial onus of proof in showing that they had not been served with notice and were not heard before the passing of the impugned order.

Arguments of the Parties

Plaintiffs' (Appellants') Arguments

  • Mr. D.N. Aggarwal, counsel for the plaintiffs-appellants, argued that the finding of the Additional District Judge — that the plaintiffs had failed to prove by conclusive and positive evidence that they had not been served with notice or heard — was manifestly erroneous and perverse.
  • The plaintiffs testified (swore) that they never received any notice nor were they given any opportunity to be heard; the plaintiffs relied on the records from the office of the Additional Director which, when produced, showed no issuance of such notices in respect of Suit Nos. 387, 380 and 383.

Defendant / State (Respondent) Arguments

  • Mr. Agnihotri (respondent's counsel) defended the Additional District Judge's finding and argued that the plaintiffs had not proved the negative fact by positive evidence.
  • He further contended that the civil courts were not competent to entertain or determine these suits because their jurisdiction was expressly barred by section 44 of the Act (as amended), which precludes civil court jurisdiction in matters the State or an officer is empowered by the Act to determine.
  • He also argued that a mere error by the State or the Additional Director in the exercise of jurisdiction under section 42 would not permit civil court interference, since the State had the necessary jurisdiction to decide wrong as well as right within its exclusive statutory domain.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Secretary of State v. Mask & Co., A.I.R. 1440 P.C. 105 The civil courts have jurisdiction to examine and intervene where statutory provisions have not been complied with or where a statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure. Used as authority to support the proposition that civil courts can interfere where the statutory procedure (here, notice and hearing required by the proviso to s.42) was not followed.
State of Kerala v. N. Ramaswami Iyer & Sons, A.I.R. 1936 S.C. 1738 Approval by the Supreme Court of the rule that civil courts may intervene where statutory tribunals fail to act in accordance with fundamental judicial principles. Cited to show recent judicial approval of the same rule relied upon in Secretary of State v. Mask & Co.
Gobindparsad v. Pawankumar, AIR 152 Nag. 278 (Full Bench) Distinction between the jurisdiction to act at all (power to act) and erroneous action in the exercise of that jurisdiction; conditions precedent to the exercise of jurisdiction fall within the conception of jurisdiction itself. Relied upon to hold that where a condition necessary for the exercise of statutory power (such as notice and hearing) is absent, the action is one of usurpation of jurisdiction and civil courts can inquire into it.
Smt. Raj Rani v. Union of India, AIR 1952 Punj. 383 Affirmation that a civil court has power to ascertain whether pre-requisite conditions for exercise of jurisdiction by a statutory tribunal exist. Cited as an additional authority supporting the proposition that civil courts may determine whether mandatory conditions precedent to statutory jurisdiction were satisfied.

Court's Reasoning and Analysis

The Court proceeded by first addressing the evidentiary question of who bore the initial onus and what evidence was produced. It held that the initial burden was on the plaintiffs to prove the central factual issue — whether they had not been served with notice and had not been heard before the Additional Director passed the impugned order. The plaintiffs gave sworn testimony to that effect, and the trial Court summoned and examined the Additional Director's records, which disclosed that no notice had been issued to the plaintiffs in Suit Nos. 387, 380 and 383. The Court treated this combination of sworn evidence and absence of official record as sufficient to discharge the plaintiffs' initial onus and to shift the burden to the defendants to prove the contrary.

The Additional District Judge's requirement that the plaintiffs prove the negative fact by "conclusive and positive evidence" was rejected. The Court stated that it was not clear what additional proof could reasonably have been expected once the plaintiffs had sworn to non-receipt and the official records showed no notice; the plaintiffs' sworn statements had not been effectively rebutted.

Turning to the jurisdictional objection under section 44 of the Act, the Court analysed the statutory text of sections 42 and 44. It emphasized two propositions drawn from those provisions as interpreted in authority:

  • Section 42 (including its proviso) makes the giving of notice and an opportunity to be heard a mandatory, condition precedent to the State (or its delegate) varying or reversing an order, scheme, or repartition.
  • Section 44 bars civil court jurisdiction only in matters where the State or an officer acts "by this Act empowered" to determine or dispose of them — that is, it bars interference where the State acts within the statutory framework, but not where the State or the officer acts illegally or in excess of powers conferred by the Act.

The Court explained the legal distinction between mere error in the exercise of jurisdiction and usurpation (absence of jurisdiction). It characterised the present case as one of usurpation of jurisdiction because the mandatory pre-requisite (notice and opportunity to be heard) had not been fulfilled; therefore the State (or its delegate) did not have the jurisdiction to vary the order at all. On that basis the civil court properly had jurisdiction to strike down the impugned order.

The Court relied on established authorities (Secretary of State v. Mask & Co.; State of Kerala v. N. Ramaswami Iyer & Sons; Gobindparsad v. Pawankumar; Smt. Raj Rani v. Union of India) to support the proposition that civil courts can examine whether conditions precedent to a statutory tribunal's jurisdiction existed and can intervene where the tribunal acts ultra vires or contrary to mandatory provisions.

Holding and Implications

Core Ruling: APPEALS ALLOWED; JUDGMENT AND DECREE OF THE ADDITIONAL DISTRICT JUDGE SET ASIDE; DECREE OF THE TRIAL COURT RESTORED IN FAVOUR OF THE PLAINTIFFS.

Direct consequences: The three Regular Second Appeals (Nos. 1017, 1019 and 1020 of 1964) were allowed; the judgment and decree of the Additional District Judge, Hissar (which had set aside the trial Court's decrees) were set aside; the trial Court's decrees in favour of the plaintiffs in Suit Nos. 383, 380 and 387 were restored. The Court directed that there would be no order as to costs.

Broader precedent note: The opinion applies and reaffirms existing principles (drawn from the authorities cited) concerning civil-court jurisdiction where a statutory authority acts ultra vires or in breach of mandatory procedural requirements; it does not, on its face, purport to establish a new legal principle beyond those cited authorities.

Appeal allowed.

    Lal Beg v. Pohlu And Others

    R.S Sarkaria, J.:— Regular Second Appeals 1017, 1019 and 1020 of 1964, arise out of common facts, and will be disposed of by this judgment. The facts in brief are as follows:—

    2. Four different suits were brought in the Court of the Senior Sub-ordinate Judge, Hissar, for a declaration against an order, dated 30th March, 1961 of the Additional Director, Consolidation of Holdings Punjab, purporting to have been passed under section 42 of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948, (hereinafter referred to as ‘the Act’), varying the order of the Consolidation Officer to the detriment of the plaintiffs. It was alleged that the said order was ultra vires, without jurisdiction, and illegal inasmuch as no notice as required by the proviso to section 42 of the statute, was ever served upon the plaintiffs, nor were they given any opportunity of being heard in those proceedings before the Director.

    3. Suit Nos. 383, 380 and 387, out of which R.S As 1017, 1019 and 1020, have arisen, were decreed by the trial Court on the ground that the order in question had been passed to the detriment of the plaintiffs by the Director of Consolidation of Holdings, without giving the plaintiffs any notice or an opportunity of being heard, as is peremptorily required by the proviso to section 42 of the Act. The trial Court, however, dismissed Suit No. 382; instituted by Harchand son of Indrai, Pohlu sin of Udmi, and Chandgi, son of Jawala, on the ground, that the necessary notice had been served by the Director of Consolidation on Harchand, plaintiff.

    4. The defendant went up in appeal to the District Judge against the decrees passed in Suit Nos. 380, 383 and 387. The plaintiffs also appealed against the dismissal of Suit No. 382. The Additional District Judge, Hissar, by his judgment, dated 7th February, 1964, accepted the appeals of the defendants and dismissed Suit Nos. 387, 380 and 383. By the same judgment, he also dismissed the plaintiffs' appeal arising out of Suit No. 302.

    5. Aggrieved by that judgment and decree of the Additional District Judge, the plaintiffs of Suit Nos. 383, 380 and 387, have preferred Regular Second Appeals 1017, 1019 and 1020 to this Court, while Harchand, Pohlu, etc. plaintiffs, whose Suit No. 382, was dismissed by the Courts below, have preferred Regular Second Appeal No. 1018 of 1964 which shall be disposed of separately, while the other 3 appeals will be disposed of by this judgment.

    6. Mr. D.N Aggarwal, the learned counsel for the plaintiffs-appellants contends that the finding of the learned Additional District Judge, that plaintiffs had failed to prove by conclusive and positive evidence that they were not served with notice or heard before the passing of the impugned order, was manifestly erroneous, if not perverse. Mr. Aguihotri's reply to this objection is more or less an aplogia for the Additional District Judge.

    7. I find force in the contention of Mr. Aggarwal, true, that the initial onus for proving the real issue, viz., whether the plaintiffs had not been served with notice or heard before the passing of the impugned order by the Additional Director of Consolidation of Holdings, was on the plaintiffs. The plaintiffs appeared in the witness-box and swore that they never received any such notice, nor were they given any opportunity of being heard by the Additional Director. The records of the case from the office of the Additional Director were also summoned and perused by the trial Court. The records revealed that no such notice had been issued to the plaintiffs in Suit Nos. 387, 380 and 383. That was sufficient to discharge the initial onus for proving this issue that lay on the plaintiffs, and to shift the burden on to the defendants to show to the contrary. The Additional District Judge says that the plaintiffs had failed to prove this negative fact by positive evidence. I fail to understand what more was required of the plaintiffs. The sworn statements of the plaintiffs had not been effectively rebutted. This issue was thus, rightly found by the trial Court in favour of the plaintiffs.

    8. Another objection has been raised by Mr. Agnihotri. He says that the civil court was not competent to entertain and determine these suits, because their jurisdiction had been expressly barred by section 44 of the Act, as amended up to 1st August, 1961.

    9. Let me examine this contention.

    10. Section 44 of the Act reads as follows:—

    “No civil court shall entertain any suit instituted or application made, to obtain a decision or order in respect of any matter which the State Government or any officer is, by this Act empowered to determine, decide, or dispose of”.

    11. It will be useful to reproduce here section 42 of that Act, also:—

    “The State Government may at any time for the purpose of satisfying itself as to the legality or propriety of any order passed, scheme prepared or confirmed or repartition made by any officer under this Act, call for and examine the record of any case pending before or disposed of by such officer and may pass such order in reference thereto as it thinks fit.

    Provided that no order, scheme or repartition shall be varied or reversed without giving the parties interested notice to appear and opportunity to be heard (except in cases where the State Government is satisfied that the proceedings have been vitiated by unlawful consideration).”

    12. Two things may be noted. Firstly, if any order or scheme or repartition is to be varied or reversed in exercise of its powers under section 42 of the Act by the State Government or its delegate, it or he is imperatively required as a condition precedent to the exercise of such jurisdiction, to give notice to the parties interested to appear and also an opportunity of being heard. Secondly the jurisdiction of the civil Court under section 44 is barred in respect of any matter which the State Government or any officer is, by this Act, empowered to determine, decide, or dispose of. The crucial words are “by this Act empowered”. It follows, therefore, that the jurisdiction of the civil Court is barred only where the State Government or the officer concerned acts within the provisions of the Act, and not where he acts illegally in contravention of the mandatory provisions of the Act, or in excess of the powers conferred by it.

    13. There is a long array of judicial authorities which have firmly established the rule that, where the special Tribunal or Authority acts ultra vires or illegally, the civil Court has, by virtue of section 9 Civil Procedure Code, power to interfere and set matters right. In the case before me, the power of the State under section 42 of the Act for varying an order, passed by an officer in consolidation proceedings, is not untrammeled. Giving of notice or an opportunity of being heard to the person interested is the very foundation of, and a condition precedent to the exercise of such jurisdiction. That preliminary condition to the vesting of jurisdiction in the State has not been fulfilled. The proceedings before the Additional Director, whom the State had delegated its power under section 42, were, therefore nail and void, and could be declared as such by the civil Court. If any authority is needed, reference may be made to Secretary of State v. Mask & Co. . A.I.R 1440 P.C 105., where it was laid down that if the provisions of the statute have not been complied with or the statutory Tribunal has not acted in conformity with the fundamental principles of judicial procedure, the civil Courts have jurisdiction to examine those cases. This rule was recently approved by the Supreme Court in State of Kerala v. N. Ramaswami Iyer & Sons . A.I.R 1936 S.C 1738..

    14. Mr. Agnihotri contends that a mere error by the State or the Additional Director in the exercise of its or his jurisdiction under section 42, would not empower the civil Court to interfere, because the State had the necessity jurisdiction to decide wrong as well as right in respect of any matter within its exclusive jurisdiction under that Act.

    15. I am afraid, the contention is misconceived. There is a clear distinction between usurpation of jurisdiction and error in the exercise of jurisdiction. The present is a case which belongs to the former category inasmuch as the pre-requisite for the exercise of its jurisdiction by the State under section 42 did not exist.

    16. The ratio of the well-known Full Bench case Gobindparsad v. Pawankumar . AIR 152 Nag. 278. is a complete answer to the contention of Mr. Agnihotri. The following observations of Hidayatullah, J., (as he then was), who spoke for the Full Bench, at page 281 of the Report, Paragraph 16 are pertinent:—

    “We would point out that there is a clear distinction between the jurisdiction of the Court to try and determine a matter, and the erroneous action of Court in the exercise of that jurisdiction. The former involves the power to act at all, while the latter involves the authority to act in the particular way in which the Court does act. Therefore, the question whether a condition necessary for the exercise of that power exists or not, is a matter included in the conception of jurisdiction and is not related to the exercise of jurisdiction.”

    17. Further, in the penultimate paragraph, the same learned Judge has made it clear, that where exclusive jurisdiction is given to a special tribunal under statute, a Civil Court has power to ascertain whether conditions which are pre-requisite for the exercise of its jurisdiction by the tribunal, exist or not. A similar rule was laid down by Mr. Justice Kapur in Smt. Raj Rani v. Union of India . AIR 1952 punj. 383..

    18. To sum up, in the proviso to section 42 of the Act it has been laid down that the power of varying or reversing an order, scheme, or repartition, is to be exercised only after the fulfilment of the essential preliminary condition of giving notice to the parties interested to appear and also an opportunity of being heard. If that condition precedent was not satisfied, the order of the State varying an order or scheme to the detriment of the plaintiffs is totally without jurisdiction, and the civil Court has the necessary power to interfere and strike down the illegality.

    19. In the light of what has been said above, I would allow Regular Second Appeals Nos. 1017, 1019, and 1020 of 1964, set aside the judgment and decree of the Additional District Judge, Hissar, and restore the decree of the trial Court in favour of the plaintiffs. In the circumstances of the case, there will be no order as to costs.

    Appeal allowed.

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    Lal Beg v. Pohlu And Others
    (Sep 22, 1967)