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Types of Jurisdiction of Civil Courts under CPC and Neglected Principle of Equitable Jurisdiction

The term Jurisdiction refers to the power of a court to hear and adjudicate matters and pass consequent orders and judgments.[1] The term is derived from the Latin words juris which means Law and dicere, which means to speak.[2] Such a power is usually regulated by the procedural code applicable to that Court. In India, the Civil Procedure Code, 1908 regulates all procedural aspects of Civil Courts, while Tribunals may be governed by the statute under which they are established, in addition to the code.

The concept of Jurisdiction seems to arise out of various facets of Natural Law, Public International Law and Constitutional Principles applied throughout the world[3], but in fact, it arises mainly out of the Latin Maxim, Ubi Jus Ibi Remedium. This means that wherever there exists a right in law, there must exist a remedy as well. Thus, for a breach or infringement of any right guaranteed to any person by law, there has to be a remedy.[4] This maxim forms a vital part of the Common Law[5] and gives rise to the Inherent Jurisdiction of Civil Courts to try cases.

Jurisdiction of The Civil Courts Under The Code Of Civil Procedure, 1908

The principle of Ubi Jus Ibi Remedium is embodied within Section 9 of the Code of Civil Procedure, 1908. This provision gives to the Civil Courts inherent jurisdiction to adjudicate cases of civil nature and pass consequent orders as necessary.[6] Therefore, a court must take cognizance of any matter that is civil in nature, hear the parties and pass consequent orders as it deems fit. It is mandatory for the court to adjudicate upon cases brought before it, unless barred Statute, due to the use of the word “shall” in Section 9.[7] The Supreme Court of India, in the case of Pankaj Bhargav v. Mahendra Nath[8] held that a court has Jurisdiction over a Subject Matter if it has the authority to hear and decide all such cases in which a controversy regarding that Subject Matter arises.

However, Section 9 also states that a court cannot exercise jurisdiction over a matter if it is expressly or impliedly barred under statute. There are four aspects to this, viz., subject-matter, pecuniary, territorial and original and appellate jurisdictions. For example, a civil court cannot take cognizance of a criminal matter, as this is implied under Section 9 of the code, which gives civil courts the power to adjudicate upon civil matters only. This is an example of Jurisdiction over Subject Matter. On the other hand, an example of an express bar to Jurisdiction would be Section 6 of the code, which clearly states that a civil court is barred from adjudicating upon matters outside its Pecuniary Jurisdiction.

A recent example of a situation where this provision was applied was when a Notification amending Section 3 Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Ordinance, 2018 was passed, which raised the pecuniary jurisdiction of District Courts in Delhi to up to ₹2 Crores, increasing it from the previous limit of ₹ 1 Crore, above which the jurisdiction lay with the High Court of Delhi.[9] As a result, the Delhi High Court transferred many cases which involved disputes valued at less than ₹2 Crores to the lower courts.[10]

Apart from the above-mentioned bars to Jurisdiction, the power of a civil court to adjudicate upon matters is also limited by the area in which the court is located and to what extent of territory it can exercise its inherent powers. The General Principle laid down in the Code of Civil Procedure is that a suit must be brought before a court of the lowest competency as possible[11] and within the local limits of the court where the immovable property part of a dispute is situated[12] or where the cause of action arises.[13] The territorial and pecuniary jurisdiction of a civil court are regulated mainly by Sections 15 to 25 of the Code of Civil Procedure, while Section 9 deals with the Subject-Matter Jurisdiction.

Another major bar to the exercise of the inherent jurisdiction by a civil court is whether a court can exercise original or appellate jurisdiction. As mentioned above, according to the Commercial Courts Act in Delhi, The High Court exercises Original Civil Jurisdiction over matters with dispute value of ₹2 Crores or more, while the lower courts exercise Jurisdiction over other matters. The High Court also exercises appellate Jurisdiction for cases previously instituted before the lower courts, while the Supreme Court of India exercises Civil Appellate Jurisdiction under Article 133 of the Constitution of India for matters previously before any High Court.

The exercise of inherent jurisdiction is a broad doctrine allowing a court to control its own process and to control the procedures before it. The power sterns not from any particular statute or legislation, but rather from inherent powers vested in a court to control the proceedings brought before it.

In A.R. Antulay v. R .S. Nayak[14], the question of who decides whether a civil court has jurisdiction or not was answered. It was held that a civil court has inherent jurisdiction to entertain the suit. Thus, it is for a civil court to decide whether it is barred from taking cognizance over a particular type of civil suit, either expressively or implicitly.

Exercise of Jurisdiction Limited By Governing Statute – The Principle of Equitable Jurisdiction

One aspect of Jurisdiction that most people tend to overlook is the power of the Courts to exercise Equitable Jurisdiction. Equitable Jurisdiction refers to the power of the courts to take certain actions and pass certain orders in order to bring out a just and fair outcome.[15] These decisions are usually outside the purview of the law, in the sense that the remedy provided by the courts may not necessarily be guaranteed by statute.

In England, Courts exercising jurisdiction of law and equity are separate. In England, Courts of Equity or the Chancery Courts exercise equitable jurisdiction, where the remedies provided are equitable in nature, such as injunctions and specific performance.[16] These courts were created in order to overcome the inadequacies of law due to which certain remedies could not be provided. Thus, these courts were created to uphold the principle of Ubi Jus Ibi Remedium, in order to ensure that there exists a remedy for every right.[17]

The legal system in India, on the other hand, provides for equitable remedies such as injunction and specific performance under Contract Law and the Specific Relief Act[18], which does not leave much room for the exercise of equitable jurisdiction in India. Yet, these laws do not cover all aspects of Civil Remedies, which also include those under other statues like Consumer Laws, Company laws, etc. Furthermore, the Code of Civil Procedure does not lay down any criteria for the exercise of Equitable Jurisdiction by Civil Courts. Thus, the question that arises is when and how can Civil Courts in India exercise Equitable Jurisdiction in order to grant remedies of equitable nature.

It is well-settled that the Supreme Court of India, along with all High Courts in India can exercise Equitable Jurisdiction when exercising Writ Jurisdiction by virtue of Articles 32[19] and 226[20] of the Constitution of India, respectively. Both these provisions state that these courts may pass “directions or orders” in addition or instead of writs in order to enforce Fundamental Rights or in the case of High Courts, for any other purpose as well.

Section 151 of the Code of Civil Procedure provides that nothing in the code can limit the power of a civil court to pass any orders as it may deem necessary to meet the ends of justice.[21] A plain reading of this provision clearly shows that a court can exercise Equitable Jurisdiction, but what the court fails to do is lay down the scope of such a wide discretionary power. In order to solve this problem, judicial decisions must be looked into.

In K.K. Velusamy v. N. Palaanisamy[22] the Supreme Court of India held that Section 151 does not confer any special jurisdiction on Civil Courts, but only provides for the exercise of discretionary power to secure the ends of justice, in accordance with law. This means that a court cannot pass any such order that may be prohibited under any law in order to secure the ends of Justice. This would lead to the conclusion that such equitable jurisdiction is subordinate to the authority of the courts to enforce the law.

This position is best explained by the Supreme Court in Shiv Kumar Sharma v. Santosh Kumar[23]. The court clearly held that while in England Courts of Equity possess Equitable Jurisdiction, Courts in India do not have any such exclusive power. It further held that Courts in India exercise jurisdiction in both equity and in law, but the Equitable Jurisdiction is always subject to the provisions of law. Equitable Jurisdiction, similar to Courts of Equity in England, can only be exercised when no law operates in the field.

The Court, in order to reach such a finding, relied on the case of Shamsu Suhara Beevi v. G. Alex & Anr.[24], where the High Court granted compensation as a remedy in addition to the remedy provided under the Specific Relief Act. The Supreme Court held that such a relief is not possible when the provisions of a statute already provide for such relief. It further stated that the provisions of a statute cannot be overlooked in the name of equity and that equity must always yield to law.

Thus, on the basis of the above stated decisions, it is clear that even though Civil Courts technically possess Equitable Jurisdiction, it is always subject to provisions of law. No court can grant a remedy outside the purview of a statute, unless the statute does not provide for any situation. This rule applies to tribunals as well, as most tribunals possess similar powers as those of civil courts, when it comes to adjudication of disputes and passing consequent orders. This can be seen in the case of Morgan Stanley Mutual Fund v. Kartick Das[25], where the Supreme Court held that Consumer Forums cannot provide for any interim relief because the governing statute, i.e., Section 14 of the Consumer Protection Act[26], does not provide for such a relief.

The Supreme Court of India very recently, in the case of K Sashidhar v. Indian Overseas Bank & Ors.[27] presented a similar view, where it held that the National Company Law Tribunal and National Company Law Appellate Tribunal cannot exercise Equitable Jurisdiction as it is governed by the Insolvency & Bankruptcy Code[28], which does not provide for the tribunals to grant any equitable reliefs. Thus, even in the case of Tribunals, it is clear that they cannot exercise Equitable Jurisdiction unless the statute under which they are governed expressly allows the same.

Conclusion
Section 9 of the Code of Civil Procedure gives inherent powers to civil courts to adjudicate upon all disputes of civil nature, but this is subject to limitations, both express and implied, within the Code itself, along with other statutes as well. The Code provides for the exercise of Equitable Jurisdiction as well, but does not lay down the scope of such a power.

The Supreme Court of India is of the view that Civil Courts and even Tribunals must be very careful in exercising powers of equity, and that Jurisdiction in Law always overrides Equitable Jurisdiction. This greatly limits the powers of the courts. Even though Section 151 of the Code exists to overcome any possible inadequacies in the law, such scenarios are few and far between, especially in this day and age when the law has developed to such an extent that remedies to almost all wrongs are contained within the provisions of statutes themselves.
Various provisions of the Code do demand that Civil Courts apply the principles of Equity in certain cases, such as deciding the amount of interest to be paid as part of a remedy under Section 34 of the Code[29]. Even though the Code expressly provides for application of principles of Equity in such cases, courts still have to adhere to the provisions of the existing law and cannot pass any orders that violate any statutory provisions. Thus, Equity must always yield to Law, and Law is Supreme.

End-Notes
[1] Jurisdiction, Wex Legal Dictionary, https://www.law.cornell.edu/wex/jurisdiction (last visited Jul 23, 2019)
[2] Shraddha Ojha, Jurisdiction Of Civil Court Under Civil Procedure Code Legalservicesindia.com, http://www.legalservicesindia.com/article/508/Jurisdiction-Of-Civil-Court-Under-Civil-Procedure-Code.html (Jul 23, 2019)
[3] Ibid.
[4] Shiv Kumar Chadha v. Municipal Corpn. Of Delhi, (1993) 3 SCC 161/at page 168
[5] Mainland v. Upjohn (1889), 58 L. J. Rep. (N. S.) C. D. 363.
[6] Code of Civil Procedure, 1908, §9
[7] P.M.A. Metropolitan v. Moran Mar Marthoma, (1995) Supp (4) SCC 286/at page 318
[8] Pankaj Bhargav v. Mahendra Nath, (1991) 1 SCC 556/at page 568
[9] Notification No. F.6/18/2018-Judl./827-830, amending Section 3(1) Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Ordinance, 2018, Govt. of NCT of Delhi, available at https://delhidistrictcourts.nic.in/Circulars/2018/july/4a.pdf (Jul 23, 2019)
[10] Delhi HC to Transfer Commercial Suits Valued at or Below Rs. 2 Crores to District Courts, LiveLaw, available at https://www.livelaw.in/news-updates/delhi-hc-to-transfer-commercial-suits-valued-at-or-below-rs2-crores-to-district-courts-read-circular-142539 (Jul 23, 2019)
[11] Code of Civil Procedure, 1908, §15
[12] Code of Civil Procedure, 1908, §17
[13] Code of Civil Procedure, 1908, §20
[14] A.R. Antulay v. R.S. Nayak, (1988) 2 SCC 602/ at page 690.
[15] Equitable Jurisdiction, US Legal, https://definitions.uslegal.com/e/equitable-jurisdiction/ (Jul 23, 2019)
[16]Equity, Wex Legal Dictionary, https://www.law.cornell.edu/wex/equity (Jul 23, 2019)
[17] Meenakshi Menon, Equitable Remedies, https://www.lawctopus.com/academike/equitable-remedies/ (Jul 23, 2019)
[18] Specific Relief Act, 1963; Indian Contract Act, 1872
[19] The Constitution of India, Art. 32
[20] The Constitution of India, Art. 226
[21] Code of Civil Procedure, 1908, §151
[22] K.K. Velusamy v. N. Palaanisamy, 2011 (11) SCC 275/at page 282
[23] Shiv Kumar Sharma v. Santosh Kumar, 2007 (8) SCC 600/at page 608
[24] Shamsu Suhara Beevi v. G. Alex and another (2004) 8 SCC 569/refer note 23.
[25] Morgan Stanley Mutual Fund v. Kartick Das, (1994) 4 SCC 225/at page 245
[26] Consumer Protection Act, 1986, §14
[27] K Sashidhar v. Indian Overseas Bank & Ors., AIR 2019 SC 1329; SCC OnLine SC 257/ at ¶45
[28] Insolvency and Bankruptcy Code, 2016
[29] Code of Civil Procedure, 1908, §34

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