Lachhman Das v. State of Punjab (1962)

Many statutes set up their own authorities and then say that no civil court shall have jurisdiction over those matters. Students have to know what such a clause can and cannot do. Lachhman Das gives a short answer that is often quoted: a clause excluding civil courts leaves the constitutional writ jurisdiction untouched. The High Court under Art. 226 and the Supreme Court under Arts. 32 and 136 can still step in.

Most of the judgment deals with other questions: the merger of the princely States into Pepsu, Art. 363, and equality under Art. 14. For Interpretation of Statutes, the part that matters is the Court's treatment of s. 11 of the Patiala Act.

The Patiala State Bank was set up in 1917 by the Ruler of Patiala. Patiala then merged with seven other States to form the Pepsu Union under a Covenant of 5 May 1948. Pepsu later became part of Punjab under the States Reorganisation Act 1956. The Patiala Recovery of State Dues Act was a Patiala law made before the merger. Under s. 3 of that Act, debts owed to the Bank counted as "State dues". Section 4 let the Bank's Managing Director fix the amount due. Section 5 allowed the dues to be recovered as arrears of land revenue. Under s. 6, his certificate was conclusive proof. Section 11 barred the civil courts.

The appellants had borrowed from the Bank and did not repay. The Managing Director certified the sums due and sent them for recovery as land revenue. The appellants challenged the Act by writ petitions in the Punjab High Court. That court dismissed the petitions but granted a certificate under Art. 133. They also filed petitions under Art. 32 in the Supreme Court. A debtor of the Bank's Nabha branch filed a connected petition. All of these were heard together.

1. Did the Act stop being in force when the Raj Pramukh's Ordinance lapsed? Could the Rulers validly make the Supplementary Covenant of 9 April 1949? Did Art. 363 bar the courts from deciding that question?
2. Did the Act discriminate against the Bank's debtors, in breach of Art. 14?
3. Was the Act an unreasonable restriction under Art. 19(1)(f) and (g)? That included the argument that ousting the civil courts under s. 11 was unreasonable and contrary to natural justice.

The appeals and the writ petitions were dismissed by majority. The final order records: "In view of the opinion of the majority, the appeals and the writ petitions are dismissed with costs, one hearing fee."

Covenant and Art. 363. The Court held that the Covenant of 5 May 1948 fully divested the Rulers of their sovereign rights. As a result, the Supplementary Covenant could not modify it. However, the dispute was one "arising directly on a provision in the Covenant, and Art. 363 will apply." So the civil court had no jurisdiction to go into it.

Art. 14. When a State sets up a bank, it uses State funds. Such a bank therefore "forms a category in itself". Following Mannalal v. Collector of Jhalawar, the majority said the Act, "in setting up separate authorities for determination of the disputes and in prescribing a special procedure to be followed by them for the recovery of the dues by summary process", did not breach Art. 14. The Act applied only in the former Pepsu area and not in the rest of Punjab. That was not discrimination either, because different laws in different parts of a State "is due to historical reasons".

Art. 19 and the bar on civil courts. This is the passage you need for Interpretation of Statutes. The appellants argued that s. 11 was unreasonable because it took away the civil courts' jurisdiction. The Court answered:

It said it was too late in the day to contend that "provisions in statutes creating a special jurisdiction and taking away the jurisdiction of Civil courts in respect of matters falling within that jurisdiction are unreasonable, or opposed to rules of natural justice."

It went on:

"It has only to be remembered that provisions excluding the jurisdiction of Civil courts in such cases do not affect the jurisdiction of either the High Court under Art. 226 or of this Court under Art. 32"

The sentence goes on to add Art. 136, and says these courts can interfere when grounds for it are established.

The Court also explained why the certificate under s. 6(2) was made conclusive: at that stage the question is recovery of an amount already determined, which is "analogous to the provision in the Civil Procedure Code that a Court executing a decree cannot go behind it." Looking at the Act and Rules as a whole, the Court said "they are reasonable and do not violate any Rules of natural justice." It added that if the proceedings had actually been conducted in breach of natural justice and caused prejudice, "the appellants would have been entitled to obtain redress in the present proceedings under Art. 226."

A statute can validly create a special tribunal and exclude the civil courts from the matters it entrusts to that tribunal. Such a clause is not unreasonable for that reason alone. But a clause excluding the civil courts cannot touch the constitutional jurisdiction of the High Court under Art. 226, or of the Supreme Court under Arts. 32 and 136. Those courts can still intervene where grounds are shown, including a breach of natural justice that causes prejudice.

• Discuss the construction of statutory provisions ousting the jurisdiction of civil courts. Use Lachhman Das for the rule that such a clause cannot reach Arts. 226, 32 and 136. Then move to the tests for when a civil court's jurisdiction is excluded, as set out in Dhulabhai v. State of M.P., which relies on this case for that point.
• Problem question: a statute makes an officer's certificate conclusive and bars civil suits, and the debtor says he was never heard. Advise him that a civil suit is barred. His remedy is a writ, and he must show that the breach of natural justice caused him prejudice.
• Cross-reference: in Constitutional Law, the case is a leading authority on State-owned banks as a reasonable class under Art. 14. Subba Rao J's dissent is a well-known warning against the "doctrine of classification" taking over the guarantee of equality.