REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 7532 OF 2011
(Arising out of SLP (Civil) No. 30105 of 2010)
M/s. Shiv Cotex .... Appellant
Versus
Tirgun Auto Plast P. Ltd. & Ors. ....Respondents
JUDGMENT
R.M. Lodha, J.
Leave granted.
2. The purchaser, who was not party to the suit but
impleaded as 2nd respondent in the first appeal and was arrayed as
such in the second appeal, is the appellant being aggrieved by the
judgment and order of the High Court of Punjab and Haryana
whereby the Single Judge of that Court allowed the second appeal
preferred by the plaintiff (1st respondent) and set aside the
concurrent judgment and decree of the courts below and remanded
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the suit to the trial court for fresh disposal after giving the plaintiff an
opportunity to lead evidence.
3. In the month of May, 1991, the 1st respondent --
M/s. Tirgun Auto Plast Private Limited - applied to the Punjab
Financial Corporation (for short, `Corporation') for a term loan of
Rs. 47.60 lac and special capital assistance (soft loan) of Rs. 4 lac.
The term loan of Rs. 46 lac and soft loan of Rs. 4 lac was disbursed
by the Corporation to the 1st respondent in the month of October,
1991 on execution of the mortgage deed. Vide this mortgage deed,
the 1st respondent mortgaged its various assets in favour of the
Corporation. On the 1st respondent's failure to pay the due amount
along with interest, the Corporation on March 19, 1998 took over the
mortgaged property comprising land, building and machinery in
exercise of its power under Section 29 of the State Financial
Corporations Act, 1951 (for short, `1951 Act').
4. The 1st respondent (hereinafter referred to as `plaintiff'),
on February 17, 2001, filed a suit for declaration, mandatory
injunction and other reliefs against the Corporation - 2nd respondent
in the Court of Civil Judge (Junior Division), Chandigarh. Inter alia,
the plaintiff prayed that the takeover of its assets and all subsequent
sale proceedings by the Corporation be declared illegal, null and
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void and inoperative; the direction be issued to the Corporation to
charge interest at the rate of 12.5 per cent per annum (prevailing
rate) on the loan from the date of commencement of production to
the date of takeover and the Corporation be also directed to restore
back the possession of the suit property to it.
5. The Corporation (sole defendant) in the suit traversed
the plaintiff's claim and set up the plea that plaintiff could not pay the
due amount under the loan despite repeated notices necessitating
the action under Section 29 of the 1951 Act. The Corporation
asserted that fair procedure was followed and no illegality was
committed by it in proceeding under Section 29 of the 1951 Act. The
Corporation also raised objections regarding the maintainability of
the suit on the grounds of limitation and jurisdiction of the Civil Court.
6. The trial court having regard to the pleadings of the
parties framed issues (six in all) on July 19, 2006. Issue no. 1 was
to the following effect:
"Whether impugned action of defendant is illegal
and if it is proved, whether plaintiff is entitled for
decree of declaration and mandatory injunction?"
The burden to prove the above issue was kept on the plaintiff.
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7. Thereafter, the suit was fixed for the evidence of the
plaintiff on November 1, 2006. However, no evidence was let in on
that day. The matter was then adjourned for the evidence of the
plaintiff on March 2, 2007. On that day also the plaintiff did not
produce evidence and the matter was adjourned to May 10, 2007.
On May 10, 2007 again plaintiff did not produce any evidence. The
trial court was, thus, constrained to proceed under Order XVII Rule
3(a) of the Code of Civil Procedure, 1908 (for short, `CPC') and
passed the following order :
"Matter is fixed for conclusion of the plaintiff's evidence
being last opportunity. No plaintiff's witness is present
and neither any cogent reason has been put forth for
such failure fully knowing the fact that today is the third
effective opportunity for conclusion of plaintiff's
evidence. Hence, matter is ordered to be proceeded
under Order 17, Rule 3(a) C.P.C. and plaintiff's
evidence is deemed to be closed. Heard. To come up
after lunch for orders."
8. On May 10, 2007 itself in light of the above order, the
trial court dismissed the suit in its post lunch session.
9. After dismissal of the suit, the Corporation sold the
mortgaged property by auction to the appellant for Rs. 64.60 lac
(Sixty four lac and sixty thousand only).
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10. Against the judgment and decree of the trial court
passed on May 10, 2007, the plaintiff preferred civil appeal in the
court of Additional District Judge, Chandigarh. In the appeal, the
plaintiff made an application on December 21, 2007 for impleadment
of the appellant and its partners as respondent nos. 2 to 5. The
application for impleadment was granted and the appellant and
respondent nos. 3 to 5 herein were added as parties.
11. The Additional District Judge, Chandigarh after hearing
the parties, dismissed the civil appeal on March 20, 2008.
12. Being not satisfied with the concurrent judgment and
decree of the two courts below, the plaintiff preferred second appeal
before the High Court which, as noticed above, has been allowed by
the Single Judge on September 20, 2010 and the suit has been
remanded to the trial court for fresh decision in accordance with law.
13. 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
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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. Recently, in the
case of Umerkhan v. Bismillabi @ Babulal Shaikh and Ors. (Civil
Appeal No. 6034 of 2011) decided by us on July 28, 2011, it has
been held that 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 the substantial
question of law. The legal position with regard to second appellate
jurisdiction of the High Court was stated by us thus:
"13. 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
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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 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. 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 High Court interfered with the
judgment and decree of the first appellate court in total
disregard of the above legal position."
14. Unfortunately, the High Court failed to keep in view the
constraints of second appeal and overlooked the requirement of the
second appellate jurisdiction as provided in Section 100 CPC and
that vitiates its decision.
15. Second, and equally important, the High Court upset the
concurrent judgment and decree of the two courts on misplaced
sympathy and non - existent justification. The High Court observed
that the stakes in the suit being very high, the plaintiff should not be
non-suited on the basis of no evidence. But, who is to be blamed for
this lapse? It is the plaintiff alone. As a matter of fact, the trial court
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had given more than sufficient opportunity to the plaintiff to produce
evidence in support of its case. As noticed above, after the issues
were framed on July 19, 2006, on three occasions, the trial court
fixed the matter for the plaintiff's evidence but on none of these
dates any evidence was let in by it. What should the court do in
such circumstances? Is the court obliged to give adjournment after
adjournment merely because the stakes are high in the dispute?
Should the court be a silent spectator and leave control of the case
to a party to the case who has decided not to take the case forward?
It is sad, but true, that the litigants seek - and the courts grant -
adjournments at the drop of the hat. In the cases where the judges
are little pro-active and refuse to accede to the requests of
unnecessary adjournments, the litigants deploy all sorts of methods
in protracting the litigation. It is not surprising that civil disputes drag
on and on. The misplaced sympathy and indulgence by the
appellate and revisional courts compound the malady further. The
case in hand is a case of such misplaced sympathy. It is high time
that courts become sensitive to delays in justice delivery system and
realize that adjournments do dent the efficacy of judicial process and
if this menace is not controlled adequately, the litigant public may
lose faith in the system sooner than later. The courts, particularly
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trial courts, must ensure that on every date of hearing, effective
progress takes place in the suit.
16. No litigant has a right to abuse the procedure provided in
the CPC. Adjournments have grown like cancer corroding the entire
body of justice delivery system. It is true that cap on adjournments
to a party during the hearing of the suit provided in proviso to Order
XVII Rule 1 CPC is not mandatory and in a suitable case, on
justifiable cause, the court may grant more than three adjournments
to a party for its evidence but ordinarily the cap provided in the
proviso to Order XVII Rule 1 CPC should be maintained. When we
say `justifiable cause' what we mean to say is, a cause which is not
only `sufficient cause' as contemplated in sub-rule (1) of Order XVII
CPC but a cause which makes the request for adjournment by a
party during the hearing of the suit beyond three adjournments
unavoidable and sort of a compelling necessity like sudden illness of
the litigant or the witness or the lawyer; death in the family of any
one of them; natural calamity like floods, earthquake, etc. in the area
where any of these persons reside; an accident involving the litigant
or the witness or the lawyer on way to the court and such like cause.
The list is only illustrative and not exhaustive. However, the absence
of the lawyer or his non-availability because of professional work in
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other court or elsewhere or on the ground of strike call or the change
of a lawyer or the continuous illness of the lawyer (the party whom
he represents must then make alternative arrangement well in
advance) or similar grounds will not justify more than three
adjournments to a party during the hearing of the suit. The past
conduct of a party in the conduct of the proceedings is an important
circumstance which the courts must keep in view whenever a
request for adjournment is made. A party to the suit is not at liberty
to proceed with the trial at its leisure and pleasure and has no right
to determine when the evidence would be let in by it or the matter
should be heard. The parties to a suit - whether plaintiff or
defendant - must cooperate with the court in ensuring the effective
work on the date of hearing for which the matter has been fixed. If
they don't, they do so at their own peril. Insofar as present case is
concerned, if the stakes were high, the plaintiff ought to have been
more serious and vigilant in prosecuting the suit and producing its
evidence. If despite three opportunities, no evidence was let in by
the plaintiff, in our view, it deserved no sympathy in second appeal
in exercise of power under Section 100 CPC. We find no
justification at all for the High Court in upsetting the concurrent
judgment of the courts below. The High Court was clearly in error in
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giving the plaintiff an opportunity to produce evidence when no
justification for that course existed.
17. In the result, the appeal is allowed and judgment and
order of the High Court passed on September 20, 2010 is set aside.
There shall be no order as to costs.
.........................J.
(Aftab Alam)
.......................... J.
(R.M. Lodha)
NEW DELHI.
AUGUST 30, 2011.
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