Hardeep Kaur vs Malkiat Kaur

Hardeep Kaur ....

Appellant

Vs.

Malkiat Kaur ....

Respondent

JUDGMENT

R.M. Lodha, J.

Leave granted.

2. The defendant is in appeal aggrieved by the

judgment dated March 9, 2011 of the High Court of Punjab

and Haryana whereby the Single Judge of that Court allowed

the second appeal filed by the respondent - plaintiff; set

aside the judgment and decree dated January 5, 2001

passed by the District Judge, -

Sangrur and restored the judgment and decree dated April

21, 1997 passed by the Civil Judge, Junior Division, Dhuri.

3. The short question that arises for consideration in

this appeal by special leave is whether a second appeal lies

only on a substantial question of law and it is essential for the

High Court to formulate a substantial question of law before

interfering with the judgment and decree of the lower

appellate court. This question arises in this way. The

respondent (hereinafter referred to as `plaintiff') filed a suit for

specific performance of the contract dated May 22, 1993.

According to the plaintiff, the appellant (hereinafter referred to

as `defendant') being co-owner having 1/12th share in the

agricultural land admeasuring 183 bighas 19 biswas situate in

Ferozepur Kuthala, Tehsil Dhuri, by an agreement dated May

22, 1993, agreed to sell 15 bighas 4 biswas of land to the

plaintiff at the rate of Rs. 15000/- per bigha. The defendant

received Rs. 1,48,000/- as earnest money. The sale deed

was to be executed on or before March 10, 1994 and the

possession of the land was also to be delivered at the time of

registration of the sale deed on receipt of remaining

consideration of Rs. 80,000/-. The defendant got the time for

execution of sale deed extended upto May 10, -

1995 with the consent of the plaintiff. However, despite

repeated requests by the plaintiff, she did not execute the

sale deed. It is the plaintiff's case that she had been always

ready and willing to perform her part of the contract, but since

the defendant failed to perform her part of the contract, the

suit for specific performance of the contract had to be filed.

4. The defendant contested the suit and denied the

execution of the agreement of sale dated May 22, 1993.

She also denied having received any earnest money. She

stated that she was illiterate lady and did not know how to

write and sign and the subject agreement was false and

fabricated document. On the pleadings of the parties, the

trial court framed the following issues:-

1. Whether the defendant executed an

agreement to sell on 22.5.93 and executed

writing dated 10.3.94 on the back of the

agreement and received Rs. 1,48,000/- as

earnest money?

2. Whether plaintiff is entitled to specific

performance of the agreement and for

possession?

3. Whether the plaintiff has got no cause of

action to file the present suit?

4. Whether the plaintiff is ready and willing

and is still ready and willing to perform her

part of contract?

5. Relief.

5. On recording the evidence and thereafter hearing

the parties, the trial court decided issue nos. 1 to 4 in favour

of the plaintiff and decreed the plaintiff's suit on April 21, 1997

by directing the defendant to execute the sale deed by May

31, 1997, failing which it was declared that plaintiff would be

entitled to get the same executed through court on payment

of remaining consideration.

6. The defendant challenged the judgment and

decree of the trial court in appeal before the District Judge,

Sangrur. The District Judge, Sangrur, on hearing the parties,

although did not interfere with the finding of the trial court in

respect of the execution of agreement dated May 22, 1993,

but held that both the parties had contributed towards

frustration of the execution of the sale deed and, therefore,

the plaintiff was not entitled to specific performance of the

agreement. The District Judge, accordingly, modified the

decree of the trial court by directing refund of Rs. 1,48,000/-

along with interest at the bank rate from the date of the

agreement until realization.

-

7. Being not satisfied with the judgment and decree

dated January 5, 2001 passed by the District Judge, Sangrur,

the plaintiff preferred second appeal before the Punjab and

Haryana High Court. As noted above, the Single Judge

allowed the appeal; set aside the judgment and decree of the

first appellate court and restored the judgment and decree of

the trial court.

8. The perusal of the judgment of the High Court

shows that no substantial question of law has been framed

and yet second appeal was allowed.

9. Sections 100, 101 and 103 of the Code of Civil

Procedure, 1908 (for short, `CPC') read as follows:-

"S.-100.- Second appeal.--(1) Save as

otherwise expressly provided in the body of this

Code or by any other law for the time being in

force, an appeal shall lie to the High Court from

every decree passed in appeal by any Court

subordinate to the High Court, if the High Court

is satisfied that the case involves a substantial

question of law.

(2) An appeal may lie under this section from

an appellate decree passed ex parte.

(3) In an appeal under this section, the

memorandum of appeal shall precisely state

the substantial question of law involved in the

appeal.

-

(4) Where the High Court is satisfied that a

substantial question of law is involved in any

case, it shall formulate that question.

(5) The appeal shall be heard on the question

so formulated and the respondent shall, at the

hearing of the appeal, be allowed to argue that

the case does not involve such question :

Provided that nothing in this sub-section

shall be deemed to take away or abridge the

power of the Court to hear, for reasons to be

recorded, the appeal on any other substantial

question of law, not formulated by it, if it is

satisfied that the case involves such question."

"S.101.-Second appeal on no other grounds.-

No second appeal shall lie except on the ground

mentioned in section 100."

"S.103.- Power of High Court to determine

issues of fact. - In any second appeal, the

High Court may, if the evidence on the record is

sufficient, determine any issue necessary for the

disposal of the appeal, -

(a) which has not been

determined by the lower

Appellate Court or both by

the Court of first instance

and the lower Appellate

Court, or

(b) which has been wrongly determined by such

Court or Courts by reason of a decision on

such question of law as is referred to in

section 100."

10. The jurisdiction of the High Court in hearing a

second appeal under Section 100 CPC has come up for

consideration before this Court on numerous occasion. In

long line of cases, this Court has reiterated that the High

Court has a duty to formulate -

the substantial question/s of law before hearing the second

appeal. As a matter of law, the High Court is required to

formulate substantial question of law involved in the second

appeal at the initial stage if it is satisfied that the matter

deserves to be admitted and the second appeal has to be

heard and decided on such substantial question of law. The

two decisions of this Court in this regard are: Kshitish

Chandra Purkait v. Santosh Kumar Purkait and Others1,

and Dnyanoba Bhaurao Shemade v. Maroti Bhaurao

Marnor2. It needs to be clarified immediately that in view

of sub-section (5) of Section 100, at the time of hearing of

second appeal, it is open to the High Court to re-formulate

substantial question/s of law or formulate fresh substantial

question/s of law or hold that no substantial question of law is

involved. This Court has repeatedly said that the judgment

rendered by the High Court under Section 100 CPC without

following the procedure contained therein cannot be

sustained. That the High Court cannot proceed to hear the

second appeal without formulating a substantial question

of law in light of the provisions contained in Section 100

CPC has been reiterated in -

1 (1997) 5 SCC 438

2

(1999) 2 SCC 471

Panchugopal Barua and Others v. Umesh Chandra

Goswami and Others;3, Sheel Chand v. Prakash Chand4;

Kanai Lal Garari and Others v. Murari Ganguly and

Others5; Ishwar Dass Jain (Dead) through L.Rs. v. Sohan

Lal (Dead) by L.Rs.6; Roop Singh (Dead) through L.Rs. v.

Ram Singh (Dead) through L.Rs.;7 Santosh Hazari v.

Purushottam Tiwari (Deceased) by L.Rs.8; Chadat Singh v.

Bahadur Ram and Others9; Sasikumar and Others v.

3 (1997) 4 SCC 713

4

(1998) 6 SCC 683

5

(1999) 6 SCC 35

6

(2000) 1 SCC 434

7

(2000) 3 SCC 708

8

(2001) 3 SCC 179

9

(2004) 6 SCC 359

Kunnath Chellappan Nair and Others10; C.A. Sulaiman

and Others v. State Bank of Travancore, Alwayee and

Others11; Bokka Subba Rao v. Kukkala Balakrishna and

Others12; Narayanan Rajendran and Another v.

Lekshmy Sarojini and Others13 and Municipal

Committee, Hoshiarpur v. Punjab State Electricity Board

and Others14.

11. Some of the above decisions and the provisions

contained in Sections 100, 101 and 103 CPC were

considered in a -

10 (2005) 12 SCC 588

11

(2006) 6 SCC 392

12

(2008) 3 SCC 99

13

(2009) 5 SCC 264

14

(2010) 13 SCC 216

recent decision of this Court in Umerkhan v. Bismillabi alias

Babulal Shaikh and Others.15. One of us (R.M. Lodha,J.)

speaking for the Bench in Umerkhan15 stated the legal

position with regard to the jurisdiction of the High Court in

hearing a second appeal in paragraphs 11 and 12 of the

Report (page 687) thus:

"11. In our view, the very jurisdiction of the

High Court in hearing a second appeal is

founded on the formulation of a substantial

question of law. The judgment of the High

Court is rendered patently illegal, if a second

appeal is heard and judgment and decree

appealed against is reversed without formulating

a substantial question of law. The second

appellate jurisdiction of the High Court under

Section 100 is not akin to the appellate

jurisdiction under Section 96 of the Code; it is

restricted to such substantial question or

questions of law that may arise from the

judgment and decree appealed against. As a

matter of law, a second appeal is entertainable

by the High Court only upon its satisfaction that

a substantial question of law is involved in the

matter and its formulation thereof. Section 100

of the Code provides that the second appeal

shall be heard on the question so formulated. It

is, however, open to the High Court to reframe

substantial question of law or frame substantial

question of law afresh or hold that no substantial

question of law is involved at the time of hearing

the second appeal but reversal of the judgment

15

(2011) 9 SCC 684

and decree passed in appeal by a court

subordinate to it in exercise of jurisdiction under

Section 100 of the Code is impermissible

without formulating substantial question of law

and a decision on such question".

(emphasis

supplied)

-

12. This Court has been bringing to the notice

of the High Courts the constraints of Section

100 of the Code and the mandate of the law

contained in Section 101 that no second appeal

shall lie except on the ground mentioned in

Section 100, yet it appears that the fundamental

legal position concerning jurisdiction of the High

Court in second appeal is ignored and

overlooked time and again. The present appeal

is unfortunately one of such matters where the

High Court interfered with the judgment and

decree of the first appellate court in total

disregard of the above legal position."

The above principle of law concerning jurisdiction of the High

Court under Section 100 CPC laid down in Umerkhan15 has

been reiterated in a subsequent decision in Shiv Cotex v.

Tirgun Auto Plast Private Limited and Others. 16. This

16

(2011) 9 SCC 678

Court through one of us (R.M. Lodha,J.) observed in

paragraph 11 of the Report (page 681) as follows:-

"The judgment of the High Court is gravely

flawed and cannot be sustained for more than

one reason. In the first place, the High Court,

while deciding the second appeal, failed to

adhere to the necessary requirement of Section

100 CPC and interfered with the concurrent

judgment and decree of the courts below without

formulating any substantial question of law. The

formulation of substantial question of law is a

must before the second appeal is heard and

finally disposed of by the High Court. This Court

has reiterated and restated the legal position

time out of number that formulation of

substantial question of law is a condition -

precedent for entertaining and deciding a second

appeal......".

12. The relevant discussion in the judgment by the

High Court reads as follows:

"After hearing learned counsel for the parties

and going through the records of the case, this

appeal deserves acceptance and the judgment

and decree passed by the trial court deserves

to be restored for the reasons to be given

hereinafter.

In this case, the defendant-respondent could

not produce any evidence on record to show

that the said agreement to sell was forged or a

fabricated document or it was the result of

fraud or misrepresentation. The plaintiff-

appellant proved on record that she had

always been ready and willing to perform her

part of the agreement. In fact, filing of the suit

by the plaintiff-appellant itself showed that she

was ready and willing to perform her part of

the agreement. The defendant-respondent

had denied her signatures on the agreement

to sell (Exhibit P.1) and the endorsement

(Exhibit P.3) made on the back of the

agreement, vide which the date of execution of

the sale deed was extended from 10.3.1994 to

10.5.1995 by claiming that she did not know

how to write and sign. However, there is

evidence of Telu Ram (P.W.4), produced by

the plaintiff. Telu Ram (P.W.4) had brought the

original file No. 2110 concerning the

defendant-respondent Hardeep Kaur whereby

she had taken loan. On the application

(Exhibit P.5) for taking loan, on the receipt of

payment of loan amount (Exhibit P.6) and on

the other documents pertaining to the sanction

of loan (Exhibits P.7 to P.12), the defendant

had put her signatures. It, thus, belied the

stand of the defendant that she usually thumb

marked the documents and had not signed the

agreement to sell (Exhibit P.1) and the

endorsement (Exhibit P.3). -

Both these documents i.e., Exhibit P.1 and P.3

prove in certain terms that the defendant had

agreed to sell the land measuring 15 Bighas 4

Biswas to the plaintiff for Rs. 2,38,000/-. Major

part of the sale consideration i.e., Rs.

1,48,000/- had already been paid at the time of

execution of the agreement to sell (Exhibit

P.1). The remaining amount of sale

consideration of Rs. 80,000/- was deposited

by the plaintiff in the trial court. It shows that

the plaintiff has always been ready and willing

to perform her part of the agreement. Under

the circumstances, the lower appellate court

was not justified in confining the relief of the

plaintiff to the return of earnest money only.

Under the circumstances, this appeal

succeeds. The same is, accordingly, allowed.

The judgment and decree passed by the lower

appellate court are set aside and those of the

trial court are restored. However, there shall

be no order as to costs."

13. Apparently, the High Court has ignored and

overlooked the mandatory requirement of the second

appellate jurisdiction as provided in Section 100 CPC and

that vitiates its decision as no substantial question of law has

been framed and yet the judgment and decree of the first

appellate court has been reversed. However, Mr. Neeraj

Kumar Jain, learned senior counsel for the respondent,

submitted that though no substantial question of law has

been expressly framed by the High Court while accepting the

second appeal, but the above discussion by the High Court

clearly shows that the High Court considered the questions

whether the -

plaintiff was entitled to the grant of decree of specific

performance of the contract once execution of agreement has

been duly proved and the plaintiff was always ready and

willing to perform her part of the contract and whether the

first appellate court has correctly exercised the discretion in

terms of Section 20 of the Specific Relief Act, 1963 while

refusing the decree for specific performance of the contract

as was ordered by the trial court. In this regard, he relied

upon a decision of this Court in M.S.V. Raja and Another v.

Seeni Thevar and Others17.

14. In paragraph 18 (pages 659-660) of the Report in

M.S.V. Raja17 this Court observed as follows:

"We are unable to accept the argument of the

learned Senior Counsel for the appellants that

the impugned judgment cannot be sustained as

no substantial question of law was formulated

as required under Section 100 CPC. In para 22

of the judgment the High Court has dealt with

substantial questions of law. Whether a finding

recorded by both the courts below with no

evidence to support it was itself considered as a

substantial question of law by the High Court. It

is further stated that the other questions

considered and dealt with by the learned Judge

were also substantial questions of law. Having

regard to the questions that were considered

and decided by the High Court, it cannot be

said that substantial questions of law did not

arise for consideration and they were not

formulated. Maybe, substantial questions of law

were -

17

(2001) 6 SCC 652

not specifically and separately formulated. In

this view, we do not find any merit in the

argument of the learned counsel in this regard."

15. In M.S.V. Raja17 this Court found that the High

Court in paragraph 22 of the judgment under consideration

therein had dealt with substantial questions of law. The Court

further observed that the finding recorded by both the courts

below with no evidence to support it was itself considered as

a substantial question of law by the High Court. It was further

observed that the other questions considered and dealt with

by the learned Judge were substantial questions of law.

Having regard to the questions that were considered and

decided by the High Court, it was held by this Court that it

could not be said that the substantial questions of law did not

arise for consideration and they were not formulated. The

sentence `maybe substantial questions of law were not

specifically and separately formulated' in M.S.V. Raja17 must

be understood in the above context and peculiarity of the

case under consideration. The law consistently stated by this

Court that formulation of substantial question of law is a sine

qua non for exercise of jurisdiction under Section 100 CPC

admits of no ambiguity and permits no departure.

-

16. In the present case, the High Court has allowed

the second appeal and set aside the judgment and decree of

the first appellate court without formulating any substantial

question of law, which is impermissible and that renders the

judgment of the High Court unsustainable.

17. Consequently, the appeal is allowed and the

impugned judgment of the High Court is set aside. The

second appeal (R.S.A. No. 1679 of 2001 - Malkiat Kaur vs.

Hardeep Kaur) is restored to the file of the High Court for

fresh consideration in accordance with law. No order as to

costs.

.............

................ J.

(R.M.

Lodha)

........................

.....J.

(H. L. Gokhale)

NEW DELHI

MARCH 16, 2012.