O.C.J. Suit No. 1859 of 1948 and Miscellaneous Application No. 231 of 1938. Case: Mulchand Kundanmal Jagtiani Vs Raman Hiralal Shah. High Court of Bombay (India)
| Case Number | O.C.J. Suit No. 1859 of 1948 and Miscellaneous Application No. 231 of 1938 |
| Judges | M.C. Chagla, C.J. and Bhagwati, J. |
| Issue | Code of Civil Procedure |
| Citation | AIR 1949 Bom 197, (1949) 51 BomLR 86 |
| Judgement Date | September 02, 1948 |
| Court | High Court of Bombay (India) |
Judgment:
M.C. Chagla, C.J.
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The plaintiff filed a suit on July 2, 1948, on two promissory notes. A. plaint was also prepared in respect of a suit on a promissory note on August 27, 1948, and an application was made to take that suit on the file of this Court, and the question that arises both in the suit and in the application is whether this Court has jurisdiction to try these two suits, and the question of jurisdiction can only be determined by considering whether a recent piece of legislation passed by the Provincial Legislature is intra vires with regard to certain of its provisions.
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Bombay Act XL of 1948, an Act to establish an additional City Civil Court for Greater Bombay, received the assent of the Governor General on May 10, 1948, and the Act came into force on August 16, 1948. The material provisions of the Act are that it sets up an additional Civil Court for the Greater Bombay for the trying of all suits of a civil nature not exceeding Rs. 10,000 in value and arising within the Greater Bombay. In Section 3 of the Act certain kinds of suits are excluded from the purview of this new Court, but we are not concerned with those excepted. suits. Section 12 bars the jurisdiction of this Court in all those suits which are made cognizable by the City Civil Court. Therefore the position is that whereas before the passing of this Act the High Court had jurisdiction to try all suits from Rs. 1,000 upwards on its Original Side, now suits up to the value of Rs. 10,000 would be solely triable by the City Civil Court. Section 18 provides for the transfer of suits pending in the High Court, and the effect of that section is that all suits, which were pending in this Court in which issues had not been settled or evidence had not been recorded on or before the date of the coming into force of the Act, were to be transferred to the new Court which was established.
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Now, the contention, very briefly put, of the plaintiff and the petitioner before us, is that it is not within the legislative competence of the Provincial Legislature to invest this new Court with the jurisdiction to try suits on promissory notes, nor is it within the legislative competence of the Provincial Legislature to deprive the High Court of its jurisdiction to try suits on promissory notes below the value of Rs. 10,000. In order to fully understand and appreciate this contention it is necessary to look at the scheme of the Government of India Act. The scheme of the Constitutional Act has been considered over and over again both by the Federal Court and by the Privy Council, and I do not think it will be right on my part to repeat and reiterate what have now come to be regarded as truisms in the interpretation of the Constitutional Act. The basic and fundamental idea underlying the Government of India Act is the creation of a Federation, and as is well known, Federation means distribution of powers, and the scheme adopted in the Government of India Act is that legislative power is distributed between the Center and the Provinces and the distribution is brought about in this way. Three Lists are prepared: List I which deals with subjects over which the Center alone has the egislative competence; List III which is the Concurrent List with regard to which both the Centre and the Provinces can legislate; and List II which is a purely Provincial List in regard to which only the Provincial Legislature can legislate. Section 100 deals with these Lists and the scheme of Section 100 also is fairly clear. It, as it were, lays down a hierarchy of these Lists. It gives priority to the different Lists and it provides that the dominant List shall be the Federal Legislative List; next comes the Concurrent Legislative List; and finally comes the Provincial Legislative List. It is also now a well recognised canon "of construction that as far as possible attempt should be made to reconcile different items in different Lists so as to avoid a conflict and overlapping and also that full effect must be given to each item in each of the Lists.
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Now, turning to these Lists, Mr. Joshi has argued that these Lists display a peculiar feature in our Constitution, that whereas the distribution of legislative and executive power is carried out, as is ordinarily carried out in most Federal Constitutions, by dividing the subjects between the Federation and the Provinces, with regard to the distribution of judicial power the scheme presents certain novel features. The administration of justice is made a Provincial subject. It falls under List II, item 1, and the constitution and organisation of all Courts are also within the legislative competence of the Province. But Mr. Joshi contends that as far as the jurisdiction of the Courts set up by the Provinces is concerned, that is distributed between the Province and the Federation. Before the passing of the Act of 1985 India was governed by an unitary constitution and therefore the question of distribution of powers did not arise, and so by Section 223 of the Act the jurisdiction of existing High Courts has been saved. But according to Mr. Joshi, with regard to the future the Courts in India can only derive their power and their jurisdiction with regard to different subjects according as those subjects are Federal subjects or Provincial subjects or fall in the Concurrent List. It is pointed out to us that in List I, the Federal List, item 53 provides with regard to jurisdiction and powers of all Courts, except the Federal Court, with respect to any of the matters in this List and, to such extent as is expressly authorised by Part IX of this Act, the enlargement of the appellate jurisdiction of the Federal Court, and the conferring thereon of supplemental powers. Therefore item 53 confers upon the Federal Legislature the sole power of conferring jurisdiction and power upon all Courts with respect to each one of the items that figure in List I. Mr. Joshi says that that power cannot be encroached upon by the Provincial Legislature. That establishes the paramountcy of the Federation, and although the Provinces may set up new Courts, the Federal Legislature alone can confer jurisdiction upon those Courts with regard to the items enumerated in List I. Then we turn to List II, which is the Provincial List, and there too we have a similar provision, being item 2, which states: "Jurisdiction and powers of all courts except the Federal Court, with respect to any of the matters in this list," and says Mr. Joshi that under this power the Provincial Legislature can confer jurisdiction and that Legislature alone can confer jurisdiction upon the Courts set up by the Province with regard to matters enumerated in List II. And in the Concurrent List we have item 15 which also speaks of jurisdiction and powers of all Courts with respect to any of the matters in this list, and here both the Province and the Federation can confer jurisdiction and power upon the Courts. Mr. Joshi and also Mr. Mistree therefore argue that inasmuch as promissory notes is item 28 in List I, it is only the Federal Legislature that can confer jurisdiction upon the City Civil Court to hear and dispose of suits on promissory notes, and it is also only the Federal Court that can deprive the High Court of its jurisdiction to hear suits on promissory notes.
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Now, in order to determine whether the impugned legislation falls within List I and therefore ultra vires of the Provincial Legislature, we have to consider what the nature of the legislation is. It is entirely fallacious to argue, as was sought to be argued at one stage, that the well-known argument of pith and substance does not apply to the case before us. The pith and substance argument really amounts to this. The Court must look at the true nature and effect of the legislation which it is considering. It must consider its scope and ambit, it must consider its true aspect from the point of view of the Legislature and must come to the conclusion what is the legislation about. It must not be misled by mere technicalities or by legal phraseology which may conceal the true intent of the Legislature, but must fairly arrive at 8 conclusion as to what is the true nature and character of the legislation which it is considering. The Privy Council in a very recent case has very clearly enunciated this principle. The decision is to be found in Prafulla Kumar Mukherjee v. Bank of Commerce Lid., Khulna (1947) L.R. 74. IndAp 23. The judgment was delivered by Lord Porter, and it would indeed be audacity of the highest order for me to try and improve upon what has been so lucidly and succinctly stated by Lord Porter as the true principles which should govern the consideration of whether a particular piece of legislation is ultra vires or not. Reading the Privy Council case I find certain principles that emerge which I will briefly state. The first is that although it is not always wise to construe the Indian Constitution Act by analogy with the Canadian or the Australian Constitution Acts, even so both in the interpretation of the Canadian and the Australian Acts and in the Indian Act the pith and substance argument fully applies. The second principle that emerges is that when you have different subjects mentioned in different lists, subjects are bound to overlap, and when they do overlap, what the Court must do is to find out what is the nature of the enactment in pith and substance and in which List does it fall according to its true nature and character. The Privy Council also clearly asserts that a Provincial Act may encroach upon the Federal field, but what the...
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