Section 25 CPC ensures inter-state transfer of suits under Articles 214 and 231, says Supreme Court

In the Shah Newaz Khan vs the State of Nagaland case, the Supreme Court sorted the issue related to the direct transfer of a suit, appeal, or other proceedings from a Civil Court to another Civil Court or State. The bench stated that the power under section 24 of the CPC (Code of Civil Procedure) can be exercised by the High Court even for inter-State transfer of a suit, appeal, or other proceedings. It can be done if it is the common High Court for two or more States under Article 231 of the Constitution and both the Civil Courts (transferor and transferee) are subordinate to it. The bench hearing the case includes Justice Dipankar Datta and Hrishikesh Roy. The bench further highlighted that Section 25 CPC applies to inter-State transfer where both States have a High Court and not to transfer where both States have a common High Court under Article 214 and Article 231 of the Indian Constitution respectively.

In this case, appellants instituted a suit for declaration of right, title, and interest as well as for perpetual injunction and damages in the Court of the District Judge failed to prosecute it due to hostile circumstances created by the private defendants in the suit. This resulted in dismissal and restoration thereof on three occasions. The High Court rejected the application for transfer as stated in the order passed on December 10, 2015.  While so rejecting, the learned Judge followed a previous decision of the Gauhati High Court in Pomi Sengupta vs. Biswajit Sengupta which, in turn, had entirely relied on the decision of the Gauhati High Court in Durgesh Sharma vs. Jayshree.  The judgment and order of rejection of the application under section 24 of the CPC were under challenge in the current appeal addressed by the top Court on February 28, 2023. 

The Apex Court illustrated that the common thread which runs through the developments of 1962, 1971, and 1986 was when the jurisdiction of the HC of Assam and thereafter the Gauhati HC came to be enlarged and extended to States other than Assam.  All seven sister States in the North-Eastern part of the country agreed to bear the expenditure in respect of the salaries and allowances of the judges of the common HC as shall be allocated amongst the States in such proportion by an order of the President. It was determined that the Gauhati High Court was the common High Court that was exercising jurisdiction throughout Assam, Nagaland, Mizoram and Arunachal Pradesh, all Civil Courts in these four States were subordinate to the same High Court. This, by itself, was a unique feature that stands unmatched in the judicial annals of the country post-independence. 

The Supreme Court further added that “Where several courts having jurisdiction are subordinate to one appellate court, an application for transfer may be made to such appellate court and the court may transfer a case from one court subordinate to it to another court subordinate to it. Likewise, where such courts are subordinate to the same High Court, an application may be made and action may be taken by the High Court transferring a case from one court subordinate to it to any other court subordinate to that High Court. But where such courts are subordinate to different High Courts, it is only the Supreme Court (this Court) which may pass an order of transfer.” The bench determined that Section 25, as originally enacted in the Code of 1908 and the decisions prior to the Amendment Act of 1976, had no application after the substitution of Section 25 as it stands today. 

During the hearing of the case, the Supreme Court highlighted that an approach construing Section 25 of the CPC should be fair, pragmatic, reasonable, and realistic. The bench added, “Any construction of Section 25 which would impede “access to justice”, considered to be a Fundamental Right, has to be eschewed.” The transfer petition under Section 25 of the CPC was rendered infructuous; hence, it stands dismissed. The Supreme Court ordered the Gauhati HC to assign reasonable priority to the application under Section 24 of the CPC and to dispose of the same as early as possible. The impugned judgment and order being unsustainable in law were set aside and the civil appeal stands allowed.