Judges: B.K. Mukherjea, M.C. Mahajan, M. Patanjali Sastri, Sudhi Ranjan Das and Saiyid Fazl Ali, JJ.

Facts:

First respondent presented a plaint to the High Court for filing a summary suit against the second respondent to recover a sum of Rs. 11,704 alleged to be due under promissory notes. This suit was instituted in the High Court, in contravention of a notification issued under Section 4 of the Bombay City Civil Court Act, 1948 (hereinafter Act of 1948), under which suits up to the pecuniary limit of Rs. 25,000 could be heard only by the City Civil Court, and not by the High Court.

The matter was referred to the sitting Judge in Chambers, who admitted the plaint holding that Section 4 of Act of 1948 was ultra vires the Provincial Legislature and the notification issued under it was consequently inoperative. When the State of Bombay was impleaded as defendant, the proceedings were transferred to a Division Bench of the High Court, which upheld the view of the Judge in Chambers.

This appeal originated from the judgment of the High Court of Bombay holding that Section 4 of the Act of 1948 is ultra vires the Provincial Legislature.

Issues:

(i) Whether the Act of 1948 is ultra vires the legislature of the Province of Bombay in so far as it deals with the jurisdiction and powers of the High Court and City Civil Court with respect to matters in List I of the Seventh Schedule of the Government of India Act, 1935 (hereinafter, 'GIA')?

(ii) Whether Section 4 of the Act of 1948 is void as it purports to delegate to the Provincial Government legislative authority in the matter of investing the City Civil Court with extended jurisdiction?

(iii) Whether the Bombay City Civil has jurisdiction to try a suit based on a promissory note?

Laws:

Bombay City Civil Court Act, 1948 - Section 4 - State Government may invest the City Court with jurisdiction to receive, try and dispose of all suits and other proceedings of a civil nature arising within the Greater Bombay and of such value not exceeding twenty-five thousand rupees.

Government of India Act, 1935 - Section 100 - Concurrent power of legislation to the Federal as well as to the Provincial Legislature with respect to matters enumerated in List III in VIIth Schedule of GIA.

Government of India Act, 1935 - Entry 28 of List I in Seventh Schedule - Cheques, bills of exchange, promissory notes and other like instruments.

Government of India Act, 1935 - Entry 53 of List I in Seventh Schedule - Jurisdiction and powers of all courts, excepts the Federal Court, with respect to any of the matters in this list and, to such extent as is expressly authorized by Part IX of GIA, the enlargement of the appellate jurisdiction of the Federal Court, and the conferring thereon of supplemental powers.

Government of India Act, 1935 - Entry 1 of List II in Seventh Schedule - Public order; the administration of justice; constitution and organization of all courts, except the Federal Court etc.,

Government of India Act, 1935 - Entry 2 of List II in Seventh Schedule - Jurisdiction and powers of all courts except the Federal Court, with respect to any of the matters in this list; procedure in Rent and Revenue Courts.

Government of India Act, 1935 - Entry 15 of List III in Seventh Schedule - Jurisdiction and powers of all courts except the Federal Court, with respect to any of the matters in this list.

Contentions:

Appellants

(i) Act of 1948 is intra vires the Bombay Legislature under Entry 1 of List II and under Entries 4 and 15 of List III of GIA, it having received the assent of the Governor-General.

(ii) Provincial Legislature had exclusive legislative power on the subject of administration of justice and constitution and organization of all courts. This power necessarily included the power to make a law in respect to the jurisdiction of courts established and constituted by it.

(iii) Act of 1948 in pith and substance being on the subject of administration of justice could not be held ultra vires even if it trenched on the field of legislation of the Federal Legislature.

(iv) Entry 53 of List I, Entry 2 of List II and Entry 15 of List III of the VIIth Schedule of GIA conferred legislative power on the respective Legislatures to confer special jurisdiction on established courts in respect of particular subjects only if it was considered necessary to do so.

(v) Provincial Government could create a court of general jurisdiction legislating under Entry 1 of List II. It was then open to both the Central and the Provincial Legislatures to confer special jurisdiction on courts in respect to particular matters that were covered by the respective lists.

(vi) Amongst the subjects included in Item 1 of the Provincial List are "the administration of justice and constitution and organization of all courts except the Federal Court". These expressions obviously include within their ambit the conferring of general jurisdiction to hear and decide cases upon courts which are set up by the Provincial Legislature, and without which they cannot function as courts at all.

(vii) High Court placed an erroneous construction on Sections 3 and 4 of the Act of 1948.

Respondents

(i) Act of 1948 is ultra vires the Legislature of the State of Bombay, because it confers jurisdiction on the new court in respect of matters which the Provincial Legislature is competent to legislate upon under List II of the VIIth Schedule to GIA. It also confers jurisdiction on the new court in respect of matters in respect of which only the Central or Federal Legislature can legislate under List I.

(ii) Effect of Entries 28 and 53 of List I, when they are read together, is that no court can try a suit relating to a promissory note, unless it is invested with the jurisdiction to try such a suit by the Central Legislature by virtue of the power given by Entry 53 of List I of the VIIth Schedule to GIA.

(iii) Expressions 'administration of justice' and 'constitution and organisation of courts' in Entry 1 of List II, should not be construed to include 'jurisdiction and powers of courts', as such construction would give no effect to the limiting words in Entry 2 which would then become meaningless.

(iv) Provincial Legislatures were to have the power of constituting courts and providing for administration of justice. Power to invest the courts with jurisdiction was to rest with the Federal Legislature in respect of the matters mentioned in List I and with the Provincial Legislature in respect of the matters mentioned in List II, while both the Federal and the Provincial Legislatures were to have such power with respect to the matters mentioned in List III subject to the provisions of Section 107.

(v) Section 3 of the Act of 1948 is void because it directly trenches on the exclusive legislative powers of the Centre conferred on it by List I of the VIIth Schedule to GIA inasmuch as it confers jurisdiction on the new court in respect to all cases of a civil nature.

(vi) Section 4 of act of 1948 is invalid, because the Provincial Legislature has thereby delegated its legislative powers to the Provincial Government which it cannot do.

(vii) In view of Section 100 of the GIA, the Provincial Legislature had no power to make any law conferring jurisdiction on courts in respect to subjects covered by List I.

(viii) Section 12 of the Act of 1948 by which the High Court was deprived of all jurisdictions on matters that fell within the jurisdiction of the City Civil Court is void.

Analysis:

Provincial Legislature - Whether competent to make a law with respect to the general jurisdiction of courts

I. Legislative power conferred on the Provincial legislature by Entry 1 of List II has been conferred by use of language which is of the widest amplitude (administration of justice and constitution and organization of all courts).

II. The phrase employed would include within its ambit legislative power in respect to jurisdiction and power of courts established for the purpose of administration of justice.

III. Legislation on the subject of administration of justice and constitution of courts of justice would be ineffective and incomplete unless and until the courts established under it were clothed with the jurisdiction and power to hear and decide causes.

IV. The Parliament by making administration of justice a provincial subject could not be considered to have conferred power of legislation on the Provincial Legislature of an ineffective and useless nature.

V. A court without powers and jurisdiction would be an anomaly as it would not be able to discharge the function of administration of justice and the statute establishing such a court could not be said to be a law on the subject of administration of justice.

VI. By making administration of justice a provincial subject and by conferring on the Provincial Legislature power to legislate on this subject and also on the subject of constitution and organization of courts, Parliament conferred on that Legislature an effective power which included within its ambit the law-making power on the subject of jurisdiction of courts.

VII. Provincial Legislature, could therefore, bring into existence a court with general jurisdiction to administer justice on all matters coming before it within certain territorial and pecuniary limits, subject to the condition that such general jurisdiction may be expressly or impliedly taken away by the provisions of other laws.

VIII. If a Legislature could exclusively legislate in respect to particular subjects, as a necessary consequence it should also have the power to legislate in respect to jurisdiction and power of the court dealing with that subject. It is this power that has been conferred by Entry 2 of List II and entry 53 of List I.

IX. Under item 1 of List II the Provincial Legislature has complete competence not only to establish courts for the administration of justice but to confer on them jurisdiction to hear all causes of a civil nature, and that this power is not curtailed or limited by power of legislation conferred on the two Legislatures under Entry 2 of List II and Entry 53 of List I.

Section 12 of Act of 1948 - Whether unconstitutional

I. If the Legislature has power to bring into existence a court and confer jurisdiction and power on it, a fortiori it has power to take away the jurisdiction and power, that already exist in other courts.

II. Section 3 of the Act of 1948 has exempted, from the jurisdiction of the new court, all cases which the High Court can hear under any special law.

III. Act of 1948 is a statute which is wholly within the legislative field of the Province under Item 1 of List II and its validity cannot be affected even if it incidentally trenches on other fields of legislation. It is not a statute dealing with any of the subjects mentioned in List I and therefore it cannot be said that the Provincial Legislature has in any way usurped the power demarcated for the Centre.

Doctrine of pith and substance - Whether Act of 1948 qualifies this test

I. This doctrine postulate that the impugned law must be within the legislative competence of a particular Legislature, which not only made it but also incidentally encroached upon the legislative field of another Legislature.

II. The doctrine, therefore, saves this incidental encroachment if only the law is in pith and substance within the legislative field of the particular Legislature which made it.

III. When once the Provincial Legislature is found competent to make a law with respect to the general jurisdiction of courts, the apparent conflict with the central legislative power under Entry 53 of List I can be resolved in a given case by invoking the doctrine of pith and substance and the incidental encroachment.

IV. Accordingly, if the Legislature of Bombay was, in conferring jurisdiction on the City Civil Court to hear and determine all suits of a civil nature, really legislating on a subject which was within the ambit its legislative power, and if in doing so, it encroached on the forbidden field marked off by Entry 53 of List 1, the encroachment should be taken to be only incidental.

V. Act of 1948, must, in its pith and substance, be attributed to List II, as the legislators of Bombay were certainly not conferring on the new court, which they were constituting, jurisdiction with respect to any of the matters in List I. They were, as Section 3 of Act of 1948 clearly indicates constituting a new court and investing it with the general jurisdiction to try all suits of a civil nature within certain pecuniary and territorial limits. If they were acting within the scope of the legislative power conferred on them under Entry 2 read with Entry 1 of List II, it seems immaterial that the enactment, so far as one aspect of jurisdiction, namely, its conferment, encroaches practically on the whole of the federal field marked out by Entry 53 of List I.

VI. The encroachment, however, would still leave ample room for the exercise by the Centre of its legislative power under Entry 53 in regard to other aspects of jurisdiction and powers of courts.

Section 4 of Act of 1948 - Whether valid

I. Section 4 of Act of 1948 itself shows that the Provincial Legislature having exercised its judgment and determined that the new court should be invested with jurisdiction to try suits and proceedings of a civil nature of a value not exceeding Rs. 25,000, left it to the Provincial Government to determine when the Court should be invested with this larger jurisdiction, for which the limit had been fixed.

II. If and when the New Court has to be invested with the larger jurisdiction, that jurisdiction would be due to no other authority than the Provincial Legislature itself and the court would exercise that jurisdiction by virtue of the Act of 1948 itself.

III. The fixation of the maximum limit of the court's pecuniary jurisdiction is the result of exercise of legislative will, as without arriving at this judgment it would not have been able to determine the outside limit of the pecuniary jurisdiction of the new court.

IV. The policy of the legislature in regard to the pecuniary jurisdiction of the court that was being set up was settled by Sections 3 and 4 of the Act of 1948. It was to the effect that initially its pecuniary jurisdiction will be limited to Rs. 10,000 and that in future if circumstances make it desirable, which was left to the determination of the Provincial Government, it could be given jurisdiction to hear cases up to the value of Rs. 25,000.

V. High Court was not right in saying that the legislative mind was never applied as to the conditions subject to which and as to the amount up to which the new court could have pecuniary jurisdiction. All that was left to the discretion of the Provincial Government was the determination of the circumstances under which the new court would be clothed with enhanced pecuniary jurisdiction.

VI. The section does not empower the Provincial Government to enact a law as regards the pecuniary jurisdiction of the new court and it can in no sense be held to be legislation conferring legislative power on the Provincial Government.

VII. Legislature in empowering the Provincial Government to invest the City Court, by notification, with jurisdiction of such value not exceeding Rs. 25,000 as may be specified in the Notification, has not delegated its legislative authority to the Provincial Government.

VIII. High Court was in error in holding that Section 4 of the City Civil Court Act was void and ultra vires the Provincial Legislature.

Conclusions:

I. Bombay City Civil Court Act, 1948 is wholly within the legislative field of the Province under Item 1 of List II. Its validity cannot be affected even if it incidentally trenches on other fields of legislation.

II. It is not a statute dealing with any of the subjects mentioned in List I and therefore it cannot be said that the Provincial Legislature has in any way usurped the power demarcated for the Centre.

III. High Court was in error in holding that Section 4 of the Act of 1948 was void and ultra vires the Provincial Legislature.

Important Precedents:

I. Chunnilal Kasturchand Marwadi vs. Dundappa Damappa Navalgi, MANU/MH/0074/1951

II. Mulchand Kundanmal Jagtiani v. Raman Hiralal Shah