Supreme Court clarifies jurisdiction in Small Causes Court cases after UP Civil Laws Amendment Act, 2015: Om Prakash Agarwal vs. Vishan Dayal Rajpoot (2018) INSC 892 (12 October 2018)

Date of the Judgment: 12 October 2018
Citation: (2018) INSC 892
Judges: A.K. Sikri, J., Ashok Bhushan, J.

Can a court’s decision be overturned on a technicality after a full trial? The Supreme Court of India addressed this crucial question regarding the jurisdiction of courts in small cause suits after amendments to the Uttar Pradesh Civil Laws. The core issue was whether an Additional District Judge could continue to hear a case after the pecuniary jurisdiction of the court was altered by the Uttar Pradesh Civil Laws (Amendment) Act, 2015. This judgment clarifies the interplay between procedural law and substantive justice. The bench comprised Justices A.K. Sikri and Ashok Bhushan.

Case Background

The appellant, Om Prakash Agarwal, was the landlord of a property. He filed a Small Causes Suit No. 1 of 2008 in the Court of Civil Judge (Senior Division), Small Cause Court, Firozabad, seeking eviction of the tenant, Vishan Dayal Rajpoot, along with rent and damages. The suit was initially valued at Rs. 21,175. On 05.04.2010, the District Judge transferred the suit to the Court of Additional District Judge, Firozabad, due to an increase in the valuation of the suit to Rs. 27,775. The Additional District Judge decreed the suit for eviction, rent, and compensation on 22.10.2016.

Timeline

Course of Proceedings

Aggrieved by the judgment of the Additional District Judge, the tenant filed a revision under Section 25 of the Provincial Small Cause Courts Act, 1887, before the Allahabad High Court. The tenant argued that after the enactment of the Uttar Pradesh Civil Laws (Amendment) Act, 2015, the Additional District Judge no longer had the jurisdiction to try the suit, as the value was below Rs. 1 lakh. The High Court allowed the revision on 07.12.2016, relying on its earlier judgment in Shobhit Nigam vs. Smt. Batulan and Another, and remanded the case back to the Small Causes Court presided over by a Civil Judge (Senior Division).

Legal Framework

The case revolves around the interpretation of the following statutes:

• The Bengal, Agra, Assam Civil Courts Act, 1887: This Act deals with the constitution and jurisdiction of civil courts. Section 25 empowers the High Court to confer jurisdiction of a Small Causes Court on District Judges or Additional District Judges.
• The Provincial Small Cause Courts Act, 1887: This Act was enacted to consolidate and amend the law relating to courts of small causes. Section 15 specifies the suits cognizable by such courts and their pecuniary limits.
• Uttar Pradesh Civil Laws (Amendment) Act, 2015: This Act amended the above two acts, increasing the pecuniary jurisdiction of Small Causes Courts.

Specifically, Section 15(2) of the Provincial Small Cause Courts Act, 1887, states:

“Subject to the exceptions specified in that Schedule and to the provisions of any enactment for the time being in force, all suits of a civil nature of which the value does not exceed five thousand rupees shall be cognizable by a Court of Small Causes.”

The Uttar Pradesh Civil Laws (Amendment) Act, 2015, increased this limit to Rs. 1 lakh for suits by a lessor for eviction of a lessee.

Arguments

Appellant (Landlord) Arguments:

• The Uttar Pradesh Civil Laws (Amendment) Act, 2015, is prospective and only applies to fresh suits.
• The amendment did not stipulate that pending cases before the District Judge should be transferred.
• The tenant did not object to the Additional District Judge’s jurisdiction, and is therefore estopped from raising this objection in revision under Section 21 of the Civil Procedure Code, 1908.

Respondent (Tenant) Arguments:

• The Uttar Pradesh Civil Laws (Amendment) Act, 2015, uses the word “cognizance,” meaning the court has jurisdiction to not only receive the plaint but also decide the suit.
• After the amendment, the Additional District Judge was not competent to decide Small Causes Suits valued up to Rs. 1 lakh.
• The High Court’s view in Shobhit Nigam’s case is correct, and the revision should be dismissed.
• The principles of pecuniary jurisdiction under Section 21(2) of the Civil Procedure Code, 1908, do not apply here.

Innovativeness of the argument: The respondent’s argument that the term “cognizance” includes not only receiving but also deciding the suit is a novel interpretation of the statute, which the court ultimately rejected.

Issues Framed by the Supreme Court

The Supreme Court framed the following issues for consideration:

1. Whether the Uttar Pradesh Civil Laws (Amendment) Act, 2015, is only prospective and confined to the fresh institution of suits in the Court of Civil Judge (Senior Division) w.e.f. 07.12.2015 up to a valuation of Rs. 1 lakh and shall not affect the cognizance/hearing of pending suits up to the valuation of Rs. 1 lakh pending in the Court of District Judge/Additional District Judge?
2. Whether the Court of District Judge/Additional District Judge, which was vested with the jurisdiction of Small Causes suit of the valuation of more than Rs.25,000/- w.e.f. 08.02.1991, shall cease to have or could have still exercised the pecuniary jurisdiction on the Small Causes Suits of Valuation up to Rs. 1 lakh?
3. Whether the respondents (tenants), having not raised any objection regarding the jurisdiction of the Court of Additional District Judge where the suit was pending after amendments made by Uttar Pradesh Civil Laws (Amendment) Act, 2015, are precluded from questioning the competence of the Court of Additional District Judge to decide the suit vide his judgment dated 22.10.2016 in view of Section 21 of Code of Civil Procedure, 1908 in revision filed under Section 25 of the Provincial Small Causes Court Act?

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The court approved the view taken in M.P. Mishra Vs. Sangam Lal Agarwal, AIR 1975 Allahabad 425 regarding the legislative scheme of small causes courts.
• The court distinguished Raja Soap Factory v. S. P. Shantharaj, AIR (1965) SC 1449, stating it did not support the applicant’s contention.
• The court relied on Mt. Sukha v. Raghunath, AIR 1917 All. 62, D. D. Vidyarthi v. Ram Pearey Lal, AIR 1935 All 690, Badal Chandra v. Srikrishna Dey, AIR 1929 Cal 354, Bhagwan Das v. Keshwar Lal, AIR 1923 Pat 49, and Narayan Sitaram v. Bhagu, (1907) ILR 31 Bom 314, to hold that courts conferred with Small Cause Court powers are deemed to be Small Cause Courts.
• The court relied on State of Himachal Pradesh vs. M.P.Gupta, (2004) 2 SCC 349, to define the word “cognizance.”
• The court relied on S.S. Bola v. B.D. Sardana, (1997) 8 SCC 522, Subha Ram vs. state of maharastra, (2003) 1 SCC 506, and Bhaiji vs. Sub-Divisional Officer, (2003) 1 SCC 692, to explain the use of the Statement of Objects and Reasons in statutory interpretation.
• The court relied on Kiran Singh v. Chaman Paswan, AIR 1954 SC 340, Hiralal vs. Kalinath, AIR (1962) SC 199, and Bahrain Petroleum Co. vs. P.J.Pappu and Another, AIR 1963 SC 634 to explain the policy behind Section 21 of the Civil Procedure Code, 1908.
• The court relied on R.S.D.V. Finance Company Private Limited vs. Shree Vallabh Glass Works Ltd., (1993) 2 SCC 130, Harshad Chiman Lal Modi vs. DLF Universal Ltd., (2005) 7 SCC 791, and Subhash Mahadevasa Habib v. Nemasa Ambasa Dharmadas, (2007) 13 SCC 650, to explain the application of Section 21 of the Civil Procedure Code, 1908.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by a combination of statutory interpretation and procedural law. The court emphasized the importance of the term “cognizance” in Section 15(2) of the Provincial Small Cause Courts Act, 1887, interpreting it to include all stages of a suit, not just its institution. This interpretation led the court to conclude that the Additional District Judge’s jurisdiction ceased after the 2015 amendment for suits valued under Rs. 1 lakh. However, the court also strongly emphasized the importance of Section 21 of the Civil Procedure Code, 1908, which prevents a party from raising an objection to jurisdiction at a later stage if it was not raised at the earliest opportunity.

The court’s reasoning was heavily based on the legal provisions and their interpretation, with a lower emphasis on the factual aspects of the case.

Logical Reasoning

The court rejected the argument that the amendment was purely prospective, emphasizing the term “cognizable.” It also clarified that while the Additional District Judge had jurisdiction over cases above Rs. 1 lakh, they could not hear cases below this threshold after the amendment. However, the court held that the tenant was barred from raising objections due to Section 21 of the Civil Procedure Code, 1908.

The court’s reasoning was based on the following points:

• The term “cognizable” in Section 15(2) of the Provincial Small Cause Courts Act, 1887, includes all stages of a suit, not just institution.
• The legislative scheme intends for cases up to Rs. 1 lakh to be heard by Civil Judges (Senior Division) and cases above Rs. 1 lakh by District/Additional District Judges.
• Section 21 of the Civil Procedure Code, 1908, is designed to prevent technical objections to jurisdiction at a later stage unless there has been a failure of justice.

The Supreme Court explicitly disagreed with the view taken in Pankaj Hotel vs. Bal Mukund, which held that the Additional District Judge retained jurisdiction even after the amendment.

The court quoted the following from the judgment:

“When a Small Cause suit not exceeding value of Rs.1 lac is cognizable by Court of Small Causes, obviously, no other court can take cognizance.”

“Section 21 has been enacted to thwart any such objection by unsuccessful party who did not raise any objection regarding competence of court and allowed the matter to be heard on merits.”

“The object is also to avoid retrial of cases on merit on basis of technical objections.”

There were no dissenting opinions in this case.

Key Takeaways

The practical implications of this judgment are:

• After the Uttar Pradesh Civil Laws (Amendment) Act, 2015, Small Causes Suits up to a valuation of Rs. 1 lakh should be heard by Civil Judges (Senior Division).
• District Judges/Additional District Judges only have jurisdiction over Small Causes Suits above Rs. 1 lakh.
• Section 21 of the Civil Procedure Code, 1908, prevents parties from raising objections to pecuniary jurisdiction at a later stage if they did not raise it in the trial court.
• Parties must raise objections to jurisdiction at the earliest possible opportunity to avoid being estopped from raising them later.

This judgment clarifies the jurisdictional aspects of small causes courts in Uttar Pradesh and emphasizes the importance of raising objections to jurisdiction at the earliest stage. It also reinforces the principle that procedural technicalities should not be used to overturn judgments on merits unless there is a failure of justice.

Directions

The Supreme Court set aside the judgment of the Allahabad High Court and restored the judgment of the Additional District Judge.

Development of Law

The ratio decidendi of this case is that while the pecuniary jurisdiction of the Small Causes Court was altered by the Uttar Pradesh Civil Laws (Amendment) Act, 2015, the failure to raise an objection regarding jurisdiction at the earliest opportunity, as per Section 21 of the Civil Procedure Code, 1908, precludes the party from raising it later. This judgment also clarifies the interpretation of the term “cognizable” in Section 15(2) of the Provincial Small Cause Courts Act, 1887, and its impact on the jurisdiction of courts. This judgment overrules the view taken by the High Court in Pankaj Hotel vs. Bal Mukund.

Conclusion

The Supreme Court allowed the appeal, setting aside the Allahabad High Court’s judgment. The court clarified that while the Additional District Judge did not have jurisdiction to hear the case after the 2015 amendment, the tenant was barred from raising this objection due to Section 21 of the Civil Procedure Code, 1908. The judgment emphasizes the importance of raising jurisdictional objections at the earliest possible opportunity and upholds the principle that procedural technicalities should not be used to overturn judgments on the merits unless there is a failure of justice.