NUSLI NEVILLE WADIA v. IVORY PROPERTIES & Ors.

Judgment

15 S.C.R. 795 795 NUSLI NEVILLE WADIA v. IVORY PROPERTIES & ORS. (Special Leave Petition (Civil) Nos. 31982-31983 of 2013) OCTOBER 04, 2019 [ARUN MISHRA, M. R. SHAH AND B. R. GAVAI, JJ.] Code of Civil Procedure, 1908: s.9A (as inserted by Maharashtra Amendment Act, 1977) – Jurisdiction – Preliminary issue of limitation – Held: Issue of limitation cannot be decided as preliminary issue – The decision in Kamlakar Shantaram has been correctly decided and cannot be said to be per incurium as held in Foreshore Cooperative Housing Society Limited. Code of Civil Procedure, 1908: s.9A (as inserted by Maharashtra Amendment Act, 1977) – Jurisdiction – Under the provisions of s.9A and Order XIV Rule 2, it is open to decide preliminary issues if it is purely a question of law not a mixed question of law and fact by recording evidence. Code of Civil Procedure, 1908: s.9A (as inserted by Maharashtra Amendment Act, 1977) – Jurisdiction – When considering what colour expression “jurisdiction” has in s.9A, it is clearly in the context of power to entertain, jurisdiction takes colour from accompanying word ‘entertain’; i.e. the Court should have jurisdiction to receive a case for consideration or to try it – In case there is no jurisdiction, court has no competence to give the relief, but if it has, it cannot give such relief for the reason that claim is time-barred by limitation or is barred by the principle of res judicata or by bar created under any other law for the time being in force. Code of Civil Procedure, 1908: s.9A (as inserted by Maharashtra Amendment Act, 1977) – Jurisdiction – When a case is barred by res judicata or limitation, it is not that the Court has no power to entertain it, but it is not possible to grant the relief – Due to expiry of limitation to file a suit, extinguishment of right to property is provided under s.27 of the Limitation Act – When Court 795 A B C D E F G H 796 SUPREME COURT REPORTS [2019] 15 S.C.R. A B C D E F G H dismisses a suit on the ground of limitation, right to property is lost, to hold so the court must have jurisdiction to entertain it – The Court is enjoined with a duty under s.3 of the Limitation Act to take into consideration the bar of limitation by itself – The expression “bar to file a suit under any other law for the time being in force” includes the one created by the Limitation Act – It cannot be said to be included in the expression “jurisdiction to entertain” suit used in s.9A – The Court has to receive a case for consideration and entertain it, to look into the facts constituting limitation or bar created by any other law to give relief, it has to decide the question on merits; then it has the power to dismiss the same on the ground of limitation or such other bar created by any other law – Thus, the meaning to be given to jurisdiction to entertain in s.9A is a narrow one as to maintainability, the competence of the court to receive the suit for adjudication is only covered under the provisions. Code of Civil Procedure, 1908: Or.XIV r.2(2)(b) and s.9 – Preliminary issue – In a case question of limitation can be decided based on admitted facts, it can be decided as a preliminary issue under Or.XIV r.2(2)(b) – However, when facts are disputed about limitation, the determination of the question of limitation also cannot be made under Or.XIV r.2(2)(b) as a preliminary issue or any other such issue of law which requires examination of the disputed facts – In case of dispute as to facts, is necessary to be determined to give a finding on a question of law – Such question cannot be decided as a preliminary issue – Thus, a mixed question of law and fact cannot be decided as a preliminary issue, either under s.9A or under Or.XIV r.2 – Before or after its amendment of CPC concerning both provisions, the position is the same – Limitation. Jurisdiction: Meaning of – Held: Jurisdiction is the authority by which a judicial officer takes cognizance and decides the cases. It only presupposes the existence of a duly constituted court having control over subject-matter which comes within classification limits of the law under which court has been established. It should have control over the parties litigant, control over the parties’ territory, it may also relate to pecuniary as well as the nature of the class of cases. NUSLI NEVILLE WADIA v. IVORY PROPERTIES & ORS. 797 Jurisdiction: Existence of jurisdiction and the exercise of jurisdiction – Distinction between – Held: The jurisdiction to entertain has different connotation from the jurisdictional error committed in exercise thereof – The existence of jurisdiction is reflected by the fact of amenability of the judgment to attack in the collateral proceedings – If the court has an inherent lack of jurisdiction, its decision is open to attack as a nullity – While deciding the issues of the bar created by the law of limitation, res judicata, the Court must have jurisdiction to decide these issues – In case jurisdiction is exercised with material irregularity or with illegality, it would also constitute jurisdictional error. Code of Civil Procedure (Maharashtra Amendment) Act, 2018: s.2 – s.2 of Amendment Act, 2018 which provides that where consideration of preliminary issue framed under s.9A is pending on the date of commencement of the CPC, the said issue shall be decided and disposed of by the court under s.9A as if the provision under s.9A has not been deleted, does not change the legal scenario as to what can be decided as a preliminary issue under s.9A, CPC, as applicable in Maharashtra – The saving created by the provision of s.2 where consideration of preliminary issue framed under s.9A is pending on the date of commencement of the Amendment Act, 2018, can be decided only if it comes within the parameters on the interpretation of s.9A – No issue can be decided only under the guise of the provision that it has been framed under s.9A and was pending consideration on the date of commencement of the Amendment Act, 2018. Words and Phrases: Expression ‘Jurisdiction to entertain the suit’ – Meaning of – Explained. Words and Phrases: Expression ‘entertain’ – Meaning of – Held: The word ‘entertain’ means to admit for consideration – It means to adjudicate upon or to proceed to consider on merits. Answering the reference, the Court HELD: IN RE: MEANING OF WORD JURISDICTION

1.1 Jurisdiction is the power to decide and not merely the power to decide correctly. Jurisdiction is the authority of law to A B C D E F G H 798 SUPREME COURT REPORTS [2019] 15 S.C.R. A B C D E F G H act officially, in a particular matter in hand. It is the power to take cognizance and decide the cases. It is the power to decide rightly or wrongly. It is the power to hear and determine. Same is the foundation of judicial proceedings. It does not depend upon the correctness of the decision made. It is the power to decide justiciable controversy and includes questions of law as well as facts on merits. Jurisdiction means power to entertain a suit, consider merits, and render binding decisions, and “merits” means the various elements which enter into or qualify plaintiff’s right to the relief sought. If the law confers a power to render a judgment or decree, then the court has jurisdiction. [Para 16] [823-D-F]

1.2 Jurisdiction is generally understood as the authority to decide, render a judgment, inquire into the facts, to apply the law, and to pronounce a judgment. When there is the want of general power to act, the court has no jurisdiction. When the court has the power to inquire into the facts, apply the law, render binding judgment, and enforce it, the court has jurisdiction. Judgment within a jurisdiction has to be immune from collateral attack on the ground of nullity. It has co-relation with the constitutional and statutory power of tribunal or court to hear and determine. It means the power or capacity fundamentally to entertain, hear, and determine. [Para 17] [824- B-C]

1.3 Jurisdiction to entertain is distinguished from merits, error in the exercise of jurisdiction or excess of jurisdiction. Section 9 of the Code of Civil Procedure deals with jurisdiction and empowers the courts to try all civil suits unless barred. The words used in section 9 of the Code of Civil Procedure of 1882 “barred by any enactment for the time being in force” are substituted in the Code of Civil Procedure of 1908 by “either expressly or impliedly barred.” Thus, the word “jurisdiction” under section 9 correlates with the cognisance, i.e., is not barred either expressly or impliedly. [Paras 18-20] [824-D-G-H] Raja Soap Factory v. S.P. Shantharaj, AIR 1965 SC 1449 : [1965] SCR 800 ; A.R. Antulay v. R.S. Nayak and Anr., (1988) 2 SCC 602 : [1988] 1 Suppl. SCR 1 ; Delhi Special Police Establishment, New Delhi v. NUSLI NEVILLE WADIA v. IVORY PROPERTIES & ORS. 799 Lt. Col. S.K Loraiya, (1972) 2 SCC 692 : [1973] 1 SCR 1010 ; Smt. Ujjam Bai v. State of Uttar Pradesh, AIR 1962 SC 1621 : [1963] SCR 778 ; Anowar Hussain v. Ajay Kumar Mukherjee, AIR 1965 SC 1651 – referred to.

1.4 The jurisdiction in Section 9A must be considered in the context it has been used. The word jurisdiction has to be interpreted in the context which has been used in the various provisions. The word “jurisdiction” has been used in CPC in several provisions. Section 9 deals with the jurisdiction to try all suits by a civil court except those which are barred. Section 10 prohibits a Court from proceeding with the trial. Section 11 and Explanation VIII are based upon the principle of res judicata. Order II Rule 3(2) contains a provision concerning the jurisdiction of the Court as regards the suit. Order VII Rule 11(d) deals with the rejection of the plaint on the ground being barred by law. Order XIV Rule 2 distinguishes between preliminary issues relating to the jurisdiction of the Court or a bar to the suit created by any law for the time being in force. There are various other provisions in which the expression has been used. [Para 27] [828-B-E] IN RE: “ENTERTAIN THE SUIT”

2.1 When considering the provisions in Section 9A, the word jurisdiction is qualified with “to entertain the suit,” the expression used is ‘jurisdiction to entertain the suit.’ The Court has jurisdiction to entertain a suit when it has jurisdiction to receive it for consideration. If at the threshold, the Court cannot consider it, it can be said that the Court has no jurisdiction to entertain the case. It is like a suit is cognizable by Revenue Court, but it is filed in Civil Court, the Court cannot consider it nor can receive it for trial. When the separate statutory mechanism is provided for the consideration of a particular dispute and jurisdiction of Civil Court is barred, and if it is brought before the Civil Court whose jurisdiction is barred, it cannot entertain such a suit and receive it for consideration. It can be said that the Court has no jurisdiction to entertain such a suit. The expression “jurisdiction to entertain” is also used in Section 14 of the Limitation Act. The provisions of Section A B C D E F G H 800 SUPREME COURT REPORTS [2019] 15 S.C.R. A B C D E F G H 14 provide that in case a suit is filed in the wrong court and the Court from the defects of jurisdiction is unable to entertain it, the period to institute a suit can be extended. [Para 28-29] [828- F-H; 829-A-B]

2.2 The expression ‘entertain’ means to admit a thing for consideration. When a suit or proceeding is not thrown out in limine, but the court receives it for consideration for disposal under the law, it must be regarded as entertaining the suit or proceeding. It is inconsequential what is the final decision. The expression ‘entertain’ means to adjudicate upon or to proceed to consider on merits. [Para 31, 32] [830-F-H] The Premier Automobiles Ltd. v. Kamlakar Shantaram Wadke & Ors., AIR 1975 SC 2238 : [1976] 1 SCR 427 – affirmed. Lakshmiratan Engineering Works Ltd. v. Assistant Commissioner, Sales Tax, Kanpur AIR 1968 SC 488 : [1968] SCR 505 ; Hindusthan Commercial Bank Ltd. v. Punnu Sahu (Dead) through Legal Representatives (1971) 3 SCC 124 ; Kashiram v. Santokhbai AIR 1958 MP 91 ; Nakul Chandra Ghose v. Shyamapada Ghose AIR 1945 Cal 381 – referred to. IN RE: DIFFERENCE BETWEEN EXISTENCE AND EXERCISE OF JURISDICTION

3.1 There is a difference between the existence of jurisdiction and the exercise of jurisdiction. In case jurisdiction is exercised with material irregularity or with illegality, it would also constitute jurisdictional error. However, if a court has jurisdiction to entertain a suit but in exercise of jurisdiction, a mistake has been committed, though it would be a jurisdictional error but not lack of it. It may be a jurisdictional error open for interference in appellate or revisional jurisdiction. In a case, jurisdictional facts, as well as adjudicatory facts, may arise. When jurisdictional facts to entertain are missing, the court/tribunal cannot act at all. In the case of adjudicatory facts, the court can proceed with the trial of the case exercising jurisdiction, and the same implies that the court has the jurisdiction to deal with the matter, that is called the power to examine on merits. NUSLI NEVILLE WADIA v. IVORY PROPERTIES & ORS. 801 Adjudication is the power to proceed to consider on merits. [Paras 33, 36] [831-G; 832-H; 833-A] A Dabur India Limited v. K. R. Industries, (2008) 10 SCC 595 : [2008] 9 SCR 652 ; Bhai Jai Kishen Singh v. Peoples Bank of Northern India (in liquidation) through Bhagwati Shankar, Official Liquidator, AIR 1944 Lah 136 ; Union of India v. Tarachand Gupta and Bros., (1971) 1 SCC 486 : [1971] SCR 557 ; Official Trustee, West Bengal v. Sachindra Nath Chatterjee, AIR 1969 SC 823 : [1969] SCR 92 – referred to Anisminic Ltd. v. Foreign Compensation Commission, [1968] 2 Q.B. 862 – referred to.

3.2 When a claim is dismissed as barred by limitation, no doubt the refusal is within the realm of exercise of jurisdiction by the Court or Tribunal. It cannot be said that the Court has refused to exercise the jurisdiction to go into the merits by a wrong decision dismissing the case on the ground of limitation. An erroneous decision on the question of res judicata or limitation would not oust the jurisdiction of the Court nor render the decision a nullity liable to collateral attack. The test of having no jurisdiction by the Court is that its judgment is amenable to attack in collateral proceedings. In a case barred by limitation, Court has jurisdiction to decide the issue. In case it has no jurisdiction, it cannot decide such an issue on merits at all. [Paras 40-42] [837-A-B; 840-D-F]