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Raghu Nath Gujrati And Others Decree-Holders v. Rai Chatraput Singh Judgment-Debtor.
Opinion Summary
Factual and Procedural Background
This opinion arises from an application to make absolute a rule nisi obtained by an applicant who challenged an order dated 6th July 1896 made by the Sub-Judge of the District Court of the 24 Pergunnahs. The core dispute concerns the rateable division of proceeds of sale of certain properties of a judgment-debtor under section 295 of the Civil Procedure Code. There were three concurrent execution proceedings against the same judgment-debtor. Two decrees (Nos. 184 and 84) were sent to the District Court for execution and resulted in sales; the third decree (No. 98), held by the present applicant (the Petitioner), was sent to this and seven other District Courts with directions to attach but not to sell until further order of the High Court.
Decree-holders in the execution cases Nos. 184 and 84 opposed the applicant's claim to any share of the sale proceeds on the ground that the applicant's decree (No. 98) was not bona fide. The Sub-Judge admitted and heard evidence on bona fides and concluded the applicant's decree was not bona fide, thereby refusing her participation in the distribution of sale moneys. The applicant sought relief from the High Court under section 622 of the Civil Procedure Code, contending that the Sub-Judge had exercised jurisdiction not vested in him or had otherwise acted so as to bring the matter within section 622.
Legal Issues Presented
- Whether the Sub-Judge was entitled, in proceedings under section 295 CPC for rateable distribution of sale proceeds, to inquire into and decide upon the bona fides of the applicant's decree.
- If the Sub-Judge erred in so enquiring, whether that error amounted to an exercise of jurisdiction not vested in him, a failure to exercise jurisdiction vested in him, or action illegally or with material irregularity so as to bring the case within section 622 CPC (i.e., whether the High Court may call for the record under sec. 622).
Arguments of the Parties
Petitioner's (Applicant's) Arguments
- The Sub-Judge was not authorized to enquire into the validity or bona fides of the decree in execution proceedings under section 295; a Court of execution cannot enquire into the validity of the decree sought to be executed.
- Because the decree in favour of the Petitioner (No. 98) had been sent down to the Sub-Judge with directions merely to attach and not to sell until further order, the Petitioner was not an applicant for execution in the same sense as the other decree-holders and therefore not entitled to share under sec. 295.
- If the Sub-Judge improperly enquired into bona fides or otherwise erred, that constituted exercise of jurisdiction not vested in him or illegal/material irregularity bringing the case within sec. 622, permitting the High Court to call for the record and pass appropriate orders.
Opposing Decree-holders' Arguments
- Where rival decree-holders (not parties to the decree itself) challenge the bona fides of a decree, it is both competent and obligatory upon the Court conducting the rateable distribution under sec. 295 to enquire into the bona fides to determine whether anything is really payable to the holder of the questioned decree.
- The rule that a Court of execution cannot enquire into the validity of a decree is limited where the challenge is raised by rival decree-holders; sec. 295 requires the Court to see whether the applicant has or has not obtained satisfaction of his decree.
- The decisions relied upon by the Sub-Judge (Sundar Das and Chhagan Lal v. Fazar Ali) are not dependent on whether the Court in question was the one that passed the decree.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| In re Sundar Dass | Authority for the proposition that the Court may inquire into the bona fides of a decree in a rateable distribution under sec. 295. | The Sub-Judge below relied on this case to justify enquiring into bona fides; the Chief Justice stated he entertained doubt about its soundness but assumed (for argument) it might not be well founded. |
| Chhagan Lal v. Fazar Ali | Similar authority to Sundar Dass, supporting competence to inquire into bona fides under sec. 295. | The Sub-Judge relied upon it; the Court noted these decisions support the Sub-Judge's approach but the Chief Justice expressed doubt about their soundness and proceeded on the assumption they might be unsound. |
| Amir Hassan Khan v. Sheo Baksh Singh (Privy Council) | Establishes that a mere mistake in law by a Judge below does not by itself bring a case within section 622. | The Court (both judges) treated this as settled law: mere legal error (without more) is not ground for interference under sec. 622; relied upon to hold that the Sub-Judge's possible error was not enough to invoke sec. 622. |
| Birj Mohun Thakur v. Rai Uma Nath Chawdhry (Privy Council) | Illustrates a case where a Subordinate Judge declined to exercise a jurisdiction he had and exercised one which did not belong to him; used to define jurisdictional excess under sec. 622. | The Chief Justice compared the present case to this authority and concluded the present Sub-Judge did not in fact exercise a jurisdiction not vested in him in the same way as in that case; thus Birj Mohun Thakur did not support making the rule absolute here. |
| Gopi Koeri v. Gopi Lal | Authority cited for the proposition that acting as the Sub-Judge did (admitting evidence on bona fides and refusing participation) did not amount to acting illegally or with material irregularity. | The Chief Justice relied on this case to support the conclusion that the Sub-Judge had not acted illegally or with material irregularity. |
| Badami Keor v. Dinu Rai (Allahabad High Court) | Held that the third clause of sec. 622 is limited to exercise by a Court of jurisdiction not vested in it or decline to exercise vested jurisdiction. | Banerjee, J. cited this authority when discussing competing views on the scope of the third clause, but he declined to adopt an unduly narrow view; he refused to limit the clause strictly to such cases. |
| Kristamma Naidu v. Chapa Naidu (Madras Full Bench) | Majority view there limited the third clause of sec. 622 to cases of 'perversity' or procedural error (a conscious departure from a rule of law). | Banerjee, J. noted this view but explicitly disagreed, stating he would not accept that narrow construction of the clause. |
Court's Reasoning and Analysis
The High Court considered the application under section 622 CPC, which empowers the High Court to call for the record of any case in which no appeal lies to it if the court below appears to have:
- exercised a jurisdiction not vested in it by law,
- failed to exercise a jurisdiction vested in it, or
- acted in the exercise of its jurisdiction illegally or with material irregularity.
Chief Justice Maclean's analysis:
- The Sub-Judge clearly had jurisdiction under section 295 to divide the assets rateably and to make an order for distribution; in doing so he accepted and acted on evidence about the bona fides of the applicant's decree and rejected the applicant's claim.
- That conduct, even if founded on an incorrect legal principle, amounted at most to an error of law. The Privy Council authority in Amir Hassan Khan v. Sheo Baksh Singh establishes that a mere mistake in law does not bring a case within section 622.
- Maclean contrasted the present situation with Birj Mohun Thakur v. Rai Uma Nath where the Subordinate Judge actually exercised a jurisdiction not vested in him; he found no analogous jurisdictional excess here.
- Maclean further observed that section 295 itself provides a remedy—suit to recover money improperly withheld—indicating the legislature's view of the appropriate remedy for errors in division rather than a sec. 622 application.
- Conclusion: the Sub-Judge's decision was at most a legal error and did not amount to acting illegally or with material irregularity; therefore the rule nisi must be discharged with costs.
Justice Banerjee's analysis:
- He summarised the three grounds relied upon by the Sub-Judge for disallowing the petitioner's application: (1) the decree was not bona fide (relying on Sundar Das and Chhagan Lal), (2) the decree had been sent down with directions only to attach (not to sell), which might mean the petitioner was not in the same position under sec. 295 as other decree-holders, and (3) there was no proof the petitioner had not already received satisfaction elsewhere.
- Banerjee accepted there is force in the argument that a Court conducting rateable distribution may need to enquire into bona fides where rival decree-holders challenge a decree; nevertheless, even if the Sub-Judge was wrong in that particular respect (and thus exercised jurisdiction not vested in him), the order could stand on the independent second and third grounds.
- On the scope of the third clause of section 622, Banerjee reviewed conflicting authorities and concluded that the clause should be read liberally to permit High Court intervention in non-appealable cases where an error is so gross and palpable and produces grave manifest injustice that interference is desirable. He declined to confine the clause to cases of procedural perversity only.
- Applying this standard, Banerjee found that the Sub-Judge's errors, if any, did not amount to such gross and manifest injustice, particularly given the availability of a regular suit under section 295; therefore the case did not fall within the scope of the third clause of sec. 622.
- Conclusion: for these reasons he agreed the rule should be discharged with costs.
Both judges therefore reached the same practical outcome, albeit through somewhat different emphases: Maclean relied on the principle that mere legal error is not enough for sec. 622, while Banerjee accepted a broader remedial scope for sec. 622 but found the present facts insufficiently egregious to warrant intervention.
Holding and Implications
HOLDING: RULE NISI DISCHARGED WITH COSTS.
Implications (direct effect and remedial consequences):
- The applicant's challenge to the Sub-Judge's order disallowing her participation in the rateable distribution of sale proceeds is dismissed; the High Court refused to make the rule nisi absolute.
- The High Court held that the Sub-Judge had jurisdiction under section 295 to divide assets rateably and that any mistake in law in rejecting the applicant's claim was not of the sort that would justify intervention under section 622. The applicant's appropriate remedy for any error in the division is a suit to recover money, as indicated by the last clause of section 295.
- No broader or novel judicial principle was established; the decision applies existing authorities and interpretative views about the limits of sec. 622 to the facts of this case and therefore does not purport to create a new precedent beyond those applications stated.
- The Court assessed the hearing fee at three gold mohurs for each set of decree-holders, and ordered the usual costs as indicated in the opinion.
The Judgments of the Court were as follows:—
Maclean, C.J:— This is an application to make absolute a rule nisi obtained by the applicant, who complains of an order made by the Sub-Judge of the District Court of the 24 Pergunnahs on the 6th July 1896. We are asked by the applicant in this case to call for the record of the case under sec. 622 of the Civil Procedure Code. It is contended on behalf of those, who oppose the rule being made absolute, that the case is not within that section. That is the short point we have to decide. Sec. 622 runs as follows:— “The High Court may call for the record of any case in which no appeal lies to the High Court, if the Court by which the case was decided appears to have exercised a jurisdiction not vested in it by law, or to have failed to exercise a jurisdiction so vested, or to have acted in the exercise of its jurisdiction illegally or with material irregularity, and may pass such order in the case as the High Court thinks fit.”
The question arises in connection with the rateable division of this proceeds of sale of certain properties belonging to a certain judgment-debtor under sec. 295 of the Civil Procedure Code. There are three execution cases against the same judgment-debtor. The properties were sold in two of these executions. All the decrees were made by the High Court, and two of these decrees, Nos. 184 and 84, ware sent to the District Court for execution. The other, No. 98, was sent to this and seven other. District Courts, with a direction to attach, but not to sell until further order of the High Court.
The decree-holders, in the execution cases 184 and 84, opposed the claim of the present applicant, being the decree-holder in case No. 98, to any share of the proceeds of sale, on the ground that her decree was not obtained bona fide and is not a bona fide one, and consequently that she cannot come in and share in the sale moneys under sec. 295. The applicant contends that it was open to the Sub-Judge to enter, in any way, into the question of the bona fides of her decree, but the Sab-Judge held that he ought to do so, and did so, and admitted and heard evidence on the point, and arrived at the conclusion that the decree was not a bona fide one, and refused to allow the present applicant to participate in the distribution of the sale moneys. In this state of circumstances, two questions arise: (1) Was the Sub-Judge right in going into the question of the bona fides of the applicant's decree? (2) If he were wrong was his mistake merely an error of law, or has he exercised a jurisdiction not vested in him by law, or failed to exercise a jurisdiction so vested in him, or has he acted illegally or with material irregularity in the proceedings? According to the case of In re Sundar Dass (5) and that of Chhagan Lal Fazar Ali (6) the Judge below was quite right in going into the question. The Calcutta case says the Court is bound to do so.
We are invited to say that these cases are not law. If they be law, there is an end of the present application. I must say for myself, that I entertain some doubt as to the soundness of these decisions, but I will assume in the applicant's favour that those decisions are not well founded. If so, has the Judge in the Court below merely gone wrong on a point of law, or has he exercised some jurisdiction or failed to exercise some jurisdiction vested in him, or not vested in him by law?
A mere mistake in law made by the Judge below does not bring the case within sec. 622. This is quite dear from the Privy Council case, Amir Hassan Khan v. Sheo Baksk Singh . There is no conflict between that case and the later Privy Council case, Birj Mohun Thakur v. Rai Uma Nath Chawdhry . The ground of the latter decision is summed up at page 8. Lord Hannen, delivering the judgment of the Committee and speaking of the Subordinate Judge, says:— “In so doing, he declined to exercise a jurisdiction which he had, and exercised one which did not belong to him.” In that case the Subordinate Judge made an order which he had no jurisdiction to make. But where or how has the Subordinate Judge in the present case exercised his jurisdiction. He clearly had power under sec. 295 to divide the assets rate ably, he had jurisdiction to make an order dividing those assets, and in the exercise of that jurisdiction and with a view to what he conceives to be the right division, he has rejected the claim of the applicant. That is all he has done. He may have been right, or he may have been wrong in the principles upon which he rejected the claim; but he certainly had jurisdiction under sec. 295, to divide the assets, and if, with a view to that division of assets, he has made a mistake in the principle upon which they ought to have been divided, if he have by error rejected a particular claim, such an error is one of law merely, and not subject to review under the terms of sec. 622, It is clear that in acting as he did, he was not acting illegally or with material irregularity. See Gopi Koeri v. Gopi Lal (7). In fact, it is not suggested that he had. He has not made any order affecting to set aside the applicant's decree: he has refused to allow the applicant to participate in the division of the assets, having rightly or wrongly allowed evidence to be gone into as to the bona fides of the applicant's decree. The case, to my mind, is covered in principle, by that in the Privy Council, Amir Hassan Khan v. Sheo Baksh Singh . We are asked to distinguish that case from the present, but I can see no ground for so doing. I am not in favour of whittling away by fanciful distinctions the effect of decisions, which in themselves are clear and precise. I may point out that, under the last clause of sec. 295 of the Code, the applicant is not without remedy, If there have been any error of law, he can still obtain all is entitled to. This clause at least affords some indication as to what the Legislature regarded as the proper remedy for any mistake made in the division of assets under sec. 295, viz., a suit to recover the money, not an application under sec. 622.
The rule nisi must be discharged with Costs.
Banerjee, J.:— I also am of opinion that this rule Ought to be discharged with costs.
The Petitioner asks us to set aside an order of the Court below disallowing her application under sec. 295 of the Code of Civil Procedure to participate in the distribution of certain assets realized by the sale of properties belonging to the judgment-debtor, his son, against whom she has obtained a decree.
The learned Judge below, in disallowing the application, has based his decision upon three grounds:— First of all, he holds that the decree in favour of the Petitioner is not a bona fide decree, but is a fictitious and colourable one: and in support of his view that he is competent under sec. 295 of the Code to enquire into the bona fides of that decree, he has relied upon the cases of Sundar Das and Chhagan Lal v. Fazar Ali . In the second place, he holds that as the decree in favour of the Petitioner, which was sent down for execution to his Court, was sent down by the High Court with directions merely to hold under attachment the property of the judgment debtor, but not to proceed to sell the property until further instructions were received, the Petitioner cannot be regarded as one who has applied for execution of decree against the judgment-debtor, within the meaning of sec. 295, or, at any rate, as a decree-holder whose position is similar to that of the other decree-holders, who have unconditionally applied for execution. And, in the third place, he finds that there is nothing to show that the Petitioner has not obtained satisfaction of her decree in whole or in part in any of the other districts to which her decree has been simultaneously sent for execution.
The learned Counsel for the Petitioner contends that the Court below, in enquiring into the bona fides of her decree has exercised a jurisdiction not vested in it by law in proceedings under sect 295 Of the Code; that in so far as the learned Judge below has based, his decision upon the other two reasons, he has acted illegally or with material irregularity, within the meaning of sec. 622 of the Code of Civil Procedure, and that we should, therefore, set aside his order under the last-mentioned section. In support of the contention that the Court below, in enquiring into the bona fides of the decree under sec. 295, has exercised a jurisdiction not vested in it by law, the learned Counsel for the Petitioner urges, in the first place, that a Court of execution has no authority to enquire into the validity of the decree sought to be executed, and in the second place that the cases relied upon by the Court below are distinguishable from the present, inasmuch as here the Court that enquired into the bona fides of the decree was not the Court by which that decree was passed. On the other hand, it is argued by the learned vakil for the opposite party that the rule of law relied upon by the Counsel for the Petitioner, that a Court of execution is not authorized to enquire into the validity or bona fides of the decree is limited in its application to cases where the validity or bona fides of the decree is impugned by one of the parties to it; and that where, as in this case, the question arises not between the parties to the decree, but between the holder of the decree and rival decree-holders it is not only competent to the Court, but obligatory upon it to enquire into the bona fides of the decree, in order to see whether anything is really payable to the holder of the decree of which the bona fides is called in question, sec. 295 requiring the Court to See whether the applicant for rateable distribution has or has not obtained satisfaction of his decree, and it is further argued for the opposite party that the cases relied upon by the Court below are not based upon any consideration as to whether the Court that proceeded to enquire into the bona fides of the decree was the Court that had passed the decree or not.
I think that there is considerable force in this contention of the learned vakil for the opposite party. But granting that the Court below was not authorized under sec. 295 of the Code of Civil Procedure to enquire into the bona fides of the decree, and granting that the Court below in so doing exercised a jurisdiction not vested in it by law, within the meaning of the decision of the Judicial Committee in the case of Birj Mohan Thakur v. Rai Uma Nath , still I think that the order of the Court below may well stand upon the other two grounds upon which the Court below has rested it, and which are quite independent of the first mentioned ground.
That leads us to the consideration of the question, whether the Court below in resting its decision upon the second and third grounds stated above, had acted illegally or with material irregularity within the meaning of the third clause of sec. 622 of the Code. The question of the construction of this clause has given rise to much diversity of opinion One thing, however, must now be taken as settled by the decision of the Judicial Committee in the case of Amir Hassan Khan v. Sheo Bahsh Singh , namely, that it is not every error of law that will bring a case Within the scope of the third clause of sec. 622. But though that is so, I feel bound to say that does not necessarily imply that no error of law can bring a case within the scope of the third clause, and that the scope of that clause is limited, as the Allahabad High Court has held in the case of Badami Keor v. Dinu Rai to cases of the exercise by a Court of jurisdiction which is not vested in it or its declining to exercise a jurisdiction vested in it. If that were so, the third clause would become mere matter of surplusage. Nor am I preprared to accept the views expressed by the learned Judges of the Madras High Court in the case of Kristamma Naidu v. Chapa Naidu . In that case the majority of the Full Bench held that the third clause was limited in its application to cases where the decision of the Court below was vitiated by perversity, that is, a conscious departure from 9 rule of law. The learned Judges, who Were in a majority, were of opinion that the clause is limited in its operation to cases where the error is one of procedure; and they deduced that meaning from the use of the word “acted” as contra-distinguished from the word “decided.”
With all respect for the learned Judges who formed the majority of the Full Bench I feel bound to say that I fail to discover anything in the clause which would justify me in limiting its operation to cases of perversity in the sense the Word is used by them. Nor Would it be tight to say that the clause is limited to cases of error of procedure only; for, if that were be, the word “acted illegally” Would be wholly superfluous, all cases of Irregularity of procedure being included in the words “acted with material irregularity.”
The words “acted illegally” must have some meaning and it is easy to imagine cases in which a decision being vitiated by an error, other than an error of procedure, one may, without any undue straining of language say, that the Court, in deciding in that erroneous way, had acted illegally.
I have had occasion to consider this clause, recently, in two or three cases* and I adhere to the view I expressed in those cases. I think that this clause is intended to empower the High Court to interfere in non appealable cases with orders or decisions of lower Courts, where the orders or decisions are visiated by an error which is so gross and palpable, and which has led to injustice so grave and manifest, that it is desirable that the High Court should interfere with them; and I think that the language of the clause has been advisedly left indefinite, from the difficulty of defining, by any rigid rule, the class of cases to which such interference should extend. But taking the clause in this liberal sense, still I fail, to see that the error of the Court below, if any, in the present case, comes within the scope of that clause.
Having regard to all the circumstances of the case, and to the fact that sec. 295 provides a remedy by a regular suit, I must say that the case is not one which, so far as the decision rests upon the second and third reasons mentioned above, can be said to come within the scope of the third clause of sec. 622 of the Code. For these reasons, I agree with the learned Chief Justice in thinking that the rule ought to be discharged with, costs.
Maclean, C.J:— We assess the hearing fee at three gold mohurs for each set of decree-holders.
S.C.S
Rule discharged.
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