CARONA LTD. v. M-S PARATHY SWAMINATHAN & SONS

Citation: [2007] 10 S.C.R. 656

Court: Supreme Court of India

Bench: C.K. THAKKER, P. SATHASIVAM

Case summary

CARONA LTD. v. M-S PARATHY SWAMINATHAN & SONS.pdf

Judgment text

-~. --- -- 20. The learned counsel for the appellant-Company submitted that the fact as to 'paid up share capital' of Rs. one crore or more of Company is a 'jurisdictional fact' and in absence ofsuch fact, the Court has no jurisdiction to proceed on the basis that the Rent Act is not applicable. The learned counsel is right. The fact as to 'paid up share capital' ofa Company can be said to be a 'preliminary' or 'jurisdictional fact' and said fact would conferjurisdiction on the Court to consider the question whether the provisions of the Rent Act were applicable. The question, however, is whether in the present case, the learned counsel for the appellant tenant is right in submitting that the 'jurisdictional fact' did not exist and the Rent Act was, therefore, applicable. 21. Stated simply, the fact or facts upon which the jurisdiction of Court, a Tribunal or an Authority depends can be said to be a 'jurisdictional fact'.

Ifthe jurisdictional fact exists, a Court, Tribunal or Authority has jurisdiction to decide other issues. Ifsuch fact does not exist, a Court, Tribunal or Authority cannot act. It is also well settled that a Court or ·· Tribunal cannot wrongly assume existence ofjurisdictional fact and proceed to decide a matter. The underlying principle is that by erroneously assuming existence ofajurisdictional fact, a subordinate Court or an inferior Tribunal cannot confer upon itselfjurisdiction which it otherwise does not possess. 22. In Halsbury's Laws ofEngland, (4th Edn. ), Vol. I, para 55, p. 61; Reissue, Vol. 1(1), para 68, pp. 114-15, it has been stated: "Where the jurisdiction of a tribunal is dependent on the existence of a particular state ofaffairs, that state ofaffairs may be described as preliminary to, or collateral to the merits ofthe issue.

If, at the inception of an inquiry by an inferior tribunal, a challenge is made to its jurisdiction, the tribunal has to make up its mind whether to act or not and can give a ruling on the preliminary or collateral issue; but that ruling is not conclusive". 23. The existence of a jurisdictional fact is thus a sine qua non or condition precedent to the assumption of jurisdiction by a Court or Tribunal. JURISDICTIONAL FACT AND ADJUDICATORYFACT 24. But there is distinction between 'jurisdictional fact' and 'adjudicatory fact' which cannot be ignored. An 'adjudicatory fact' is a 'fact in issue' and can be detennined by a Court, Tribunal or Authority on 'merits', on the basis ofevidence adduced by the parties. It is no doubt true that it is very difficult to distinguish 'jurisdictional fact' and 'fact in issue' or 'adjudicatory fact'. Nonetheless the difference between the two cannot be overlooked. 25. In Halsbury's Laws ofEngland, (4th Edn. ), Vol. I, para 55, p. 61; Reissue, Vol.

1(1), para 68, pp. 114-15, it is stated: "There is often great difficulty in determining whether a matter is collateral to the merits or goes to the merits. The distinction may still be important; for an erroneous decision on the merits ofthe case will be unimpeachable unless an error oflaw is apparent on the face ofthe record ofthe detennination or unless a right ofappeal lies to a court in respect of the matter alleged to have been erroneously determined. An error of law or fact on an issue collateral to the merits may be impugned on an application for an order ofcertiorari to quash the decision or in any other appropriate fonn ofproceedings, including indirect or collateral proceedings.

Affidavit evidence is admissible on a disputed issue ofjurisdictional fact, although the superior courts are reluctant to make an independent detennination ofan issue offact on which there was a conflict ofevidence before the inferior tribunal or which has been found by an inspector after a local inquiry". 26. In R. v. Fulham Rent Tribunal, (1950) 2 All ER 211, it was held that the question whether premium for renewal oftenancy was or -t .. was not paid was ajurisdictional fact and, therefore, was held to be a condition precedent for the lawful exercise ofjurisdiction by a Rent Tribunal. In Brittain v. Kinnaird, (1819) 1B&B432, however, the factum as to possession of a 'boat' with gunpowder on board was held to be a part ofthe offence charged and thus a finding offact or adjudicatory fact. )- CARONALTD. v. MIS.

PARVATHY SWAMINATHAN & 673 t-- It was stated: "The logical basis for discriminating between these cases and other falling on opposite sides of the line, is not easily discernible". (emphasis supplied) 27. Likewise, the fact whether the petitioner was an 'adult' in adoption proceedings was not held to be a 'jurisdictional' fact (Eversole v. Smith, 159 SW 2nd 35). / 28. InJagdish Prasadv. Ganga Prasad, [1959] Supp 1 SCR 733, the questin was whether the landlord was entitled to enhancement ofrent. Under the Act, he was not entitled to such rent unless a 'new construction' had been made after June 30, 1946. It was held by this Court that the question whether construction was new or not was a 'jurisdictional fact' and if the court wrongly decided the said fact and thereby conferred jurisdiction not vested in it, the High Court could interfere with the order.

The Court stated that "once it had the power it could determine whether the question ofthe date ofconstruction was rightly or wrongly decided". [See also Arun Kumar v. Union ofIndia, [2007] -1 SCC 732]. 29. But, in Roshanlal v. Ishwardas, [1962] 2 SCR 947, this Court held that the Rent Controller had jurisdiction to fix standard rent for new construction made after March 24, 1947. The question was as to when the construction was made. The Rent Controller recorded a finding of fact that the construction was put up after March 24, 1947. The finding . -:... 4, was confirmed by the District Judge. But the High Court interfered in revision. 30.

Setting aside the decision ofthe High Court, this Court stated: "It is clear from the orders of the Rent Controller and of the District Judge in appeal that the question whether the second floor was newly constructed or not was really a question offact, though • >undoubtedly ajurisdictional fact on which depended the power of the Rent Controller to take action under s. 7A. If the Rent Controller had wrongly decided the fact and assumed jurisdiction where he had none, the matter would be open to reconsideration in revision. The High Court did not, however, go into the evidence, ··~ -~ nor did it say that the finding was not justified by the evidence on - terminated, the tenant (Public Limited Company) was having a paid up share capital ofrupees more than one crore. Under clause (b) ofSection 3(1) ofthe Act, therefore, the provisions ofthe Act were not applicable to the suit-premises.

It is true that a resolution was passed by the Company to reduce the paid up share capital to less than rupees one crore, but the said resolution was never approved by BIFR. But even otherwise, once it is proved that the tenancy was legally terminated and the Act would not apply to such premises, a unilateral act oftenant would '). -not take away the accrued right in favour ofthe landlord. Unless compelled, Court ofLaw would not interpret a provision which would frustrate the legislative intent and primary object underlying such provision. We, therefore, see no infirmity in the conclusions arrived at by the courts below. EQUITABLE CONSIDERATIONS 45. The learned counsel for the respondent-landlord is also right in submitting that the appellant-tenant does not deserve equitable reliefunder Article 136 of the Constitution. The tenant has not paid 'rent'/'mesne ·profits' since more than ten years.

Even after approaching this Court, it had made part payment pursuant to interim order made in April, 2005. f- '>-- But nothing was paid/deposited thereafter even though two years have A passed. These facts have not been disputed by the appellant. We are, therefore, ofthe view that even on that ground, the appellant-tenant cannot ask for discretionary and equitable reliefand we are not inclined to grant such relief. B 46. For the foregoing reasons, the appeal deserves to be dismissed and is, accordingly, dismissed with costs. K. K. T. Appeals dismissed. -~