Australian Trade Marks Office-Actuators (electric switches); air break switches; air operated electric switches; apparatus and instruments for switching electricity; audio switching apparatus; automatic time switches; automatic timing switches; change-over switches for use in demagnetising electromagnetic apparatus; change-over switches for use in demagnetizing electromagnetic instruments; circuit switches being operated by invertors; circuit switches being operated by motors; clip switches; coaxial switches; data packet switching apparatus; data packet switching installations; data switches; data switching apparatus; decade switches; devices for switching over energy tariffs; digital cross-connected switching apparatus; digital telephone switching apparatus; dimmer switches; domestic switches (electric); double pole switches; driving apparatus for switch points; electric breakers (switches); electric contact switches; electric lock switches; electric switchboxes; electric switches; electric switches being leaf switches; electric switches for electronic power control; electric switching apparatus; electrical devices for the switching of data; electrical push button switch assemblies; electrical push button switches; electrical push leaf switches; electrical push switches; electrical switch apparatus protected by synthetic covers; electrical switch assemblies; electrical switch boards; electrical switch boxes; electrical switch cabinets; electrical switch timers; electrical switches; electrical switchgear; electrical switching apparatus; electrical switching instruments; electrical time switches; electronic digital switching apparatus; electronic switches; electronic switching amplifiers; electronic switching apparatus; elevator switches; enclosed switch mode power supply apparatus; enclosed switchboards; fitted electrical switchboards; fittings for lights (switches); flexible circuits switches being electrical apparatus; grid switch panels; light switches; limit switches; liquid level switches; low voltage switching devices; mechanical contact switches; open and closed-loop switching apparatus; photo-electric switches; speaker switches; switch panels (electric); switch points (electric); switch socket outlets (electric); switchboards; switchboxes (electricity); switches, electric; switchgear (electric); switching boxes for use in electrical engineering; switching devices for electric contactors; switch-over circuits (electric); telephone switchboards; time switches, automatic; timers for switching on electrical devices at pre-programmed times; toggle switches (electric) (‘The Relevant Goods’) -The evidence satisfies me that there has been genuine commercial use of the trade mark with respect to the goods specified in the registration during the relevant period. The opposition is accordingly established and I therefore refuse to remove the trade mark. As the successful party, the opponent is entitled to his costs and I award costs against the applicant as per Schedule 8 of the Trade Marks Regulations 1995.

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS

Re: Opposition by Mazen Abdul-Kader to an application under section 92 of the Act by Clipsal Australia Pty Ltd to remove trade mark number 1267136(9) -CLIPSO - in the name of Mazen Abdul-Kader

DELEGATE:	Jock McDonagh
REPRESENTATION:	Opponent: Phoebe Arcus of counsel instructed by Breen & Breen Solicitors Applicant: Margaret Shearer of Banki Haddock Fiora Solicitors
DECISION:	2012 ATMO 2 Section 92 - use of trade marks - ownership – intention to use in good faith - use in good faith – trade mark to remain on register

Background

1. Mazen Abdul-Kader (‘the opponent’) is the registered owner of a trade mark, current details of which appear below:

Trade mark number: 1267136
Registered from: 27 October 2008
Trade mark: CLIPSO
Goods: Class 9:

Actuators (electric switches); air break switches; air operated electric switches; apparatus and instruments for switching electricity; audio switching apparatus; automatic time switches; automatic timing switches; change-over switches for use in demagnetising electromagnetic apparatus; change-over switches for use in demagnetizing electromagnetic instruments; circuit switches being operated by invertors; circuit switches being operated by motors; clip switches; coaxial switches; data packet switching apparatus; data packet switching installations; data switches; data switching apparatus; decade switches; devices for switching over energy tariffs; digital cross-connected switching apparatus; digital telephone switching apparatus; dimmer switches; domestic switches (electric); double pole switches; driving apparatus for switch points; electric breakers (switches); electric contact switches; electric lock switches; electric switchboxes; electric switches; electric switches being leaf switches; electric switches for electronic power control; electric switching apparatus; electrical devices for the switching of data; electrical push button switch assemblies; electrical push button switches; electrical push leaf switches; electrical push switches; electrical switch apparatus protected by synthetic covers; electrical switch assemblies; electrical switch boards; electrical switch boxes; electrical switch cabinets; electrical switch timers; electrical switches; electrical switchgear; electrical switching apparatus; electrical switching instruments; electrical time switches; electronic digital switching apparatus; electronic switches; electronic switching amplifiers; electronic switching apparatus; elevator switches; enclosed switch mode power supply apparatus; enclosed switchboards; fitted electrical switchboards; fittings for lights (switches); flexible circuits switches being electrical apparatus; grid switch panels; light switches; limit switches; liquid level switches; low voltage switching devices; mechanical contact switches; open and closed-loop switching apparatus; photo-electric switches; speaker switches; switch panels (electric); switch points (electric); switch socket outlets (electric); switchboards; switchboxes (electricity); switches, electric; switchgear (electric); switching boxes for use in electrical engineering; switching devices for electric contactors; switch-over circuits (electric); telephone switchboards; time switches, automatic; timers for switching on electrical devices at pre-programmed times; toggle switches (electric) (‘The Relevant Goods’)

2. On 12 March 2010, Clipsal Australia Pty Ltd (‘the applicant’) filed an application under section 92(4)(a) of the Trade Marks Act 1995 (‘the Act’) for removal of the trade mark from the register.
3. On 7 May 2010, the opponent filed Notice of Opposition to the removal, claiming use of the trade mark in good faith.
4. The matter came before me, as a delegate of the Registrar of Trade Marks, for hearing in Sydney on 18 October 2011. The opponent was represented by Phoebe Arcus of Counsel, instructed by Breen & Breen Solicitors. The applicant was represented by Margaret Shearer of Bianki Haddock Fiora Lawyers.

Evidence

5. The following evidence was filed and served pursuant to legislation:
   • Evidence in support of the Opposition being a statutory declaration by Mazen Abdul-Kader made 4 May 2010 (First Abdul-Kader declaration).
   • Evidence in answer comprising:
     • a statutory declaration by Gary Busbridge made 3 November 2010 (Busbridge declaration); and
     • a statutory declaration by Sarah Derderyan made 3 November 2010 (Derderyan declaration).
   • Evidence in reply being a statutory declaration by Mazen Abdul-Kader made 4 May 2011 (Second Abdul-Kader declaration).
   • Further evidence being a statutory declaration of Mazen Abdul-Kader made 4 May 2011 (Third Abdul-Kader declaration).

Relevant Legislation

6. These proceedings were commenced after the date the 2006 amendments to the Act received Royal Assent, so the relevant legislation is as follows:

Application for removal of trade mark from Register etc.

92.(1) Subject to subsection (3), a person may apply to the Registrar to have a trade mark that is or may be registered removed from the Register.

(2) The application:

(a) must be in accordance with the regulations; and

(b) may be made in respect of any or all of the goods and/or services in respect of which the trade mark may be, or is, registered.

(3) An application may not be made to the Registrar under subsection (1) if an action concerning the trade mark is pending in a prescribed court, but the person may apply to the court for an order directing the Registrar to remove the trade mark from the Register.

Note: For prescribed court see section 190.

(4) An application under subsection (1) or (3) (non-use application) may be made on either or both of the following grounds, and on no other grounds:

(a) that, on the day on which the application for the registration of the trade mark was filed, the applicant for registration had no intention in good faith:

(i) to use the trade mark in Australia; or

(ii) to authorise the use of the trade mark in Australia; or

(iii) to assign the trade mark to a body corporate for use by the body corporate in Australia;

in relation to the goods and/or services to which the non-use application relates and that the registered owner:

(iv) has not used the trade mark in Australia; or

(v) has not used the trade mark in good faith in Australia;

in relation to those goods and/or services at any time before the period of one month ending on the day on which the non-use application is filed;

(b) ....

7. The removal application was made only under s.92(4)(a), under which it is necessary to establish that the trade mark was registered without the necessary intention in good faith that it should be used, and that there had in fact been no use, or use in good faith, earlier than one month before the application for removal.
8. Use, and authorized use, of a trade mark are dealt with in the following provisions:

Use of trade mark

7.(1) ...

(2) ...

(3) An authorised use of a trade mark by a person (see section 8) is taken, for the purposes of this Act, to be a use of the trade mark by the owner of the trade mark.

(4) In this Act:

use of a trade mark in relation to goods means use of the trade mark upon, or in physical or other relation to, the goods (including second-hand goods).

(5) ...

Definitions of authorised user and authorised use

8.(1) A person is an authorised user of a trade mark if the person uses the trade mark in relation to goods or services under the control of the owner of the trade mark.

(2) The use of a trade mark by an authorised user of the trade mark is an authorised use of the trade mark to the extent only that the user uses the trade mark under the control of the owner of the trade mark.

(3) If the owner of a trade mark exercises quality control over goods or services:

(a) dealt with or provided in the course of trade by another person; and

(b) in relation to which the trade mark is used;

the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner.

(4) If:

(a) a person deals with or provides, in the course of trade, goods or services in relation to which a trade mark is used; and

(b) the owner of the trade mark exercises financial control over the other person's relevant trading activities;

the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner.

(5) Subsections (3) and (4) do not limit the meaning of the expression ``under the control of'' in subsections (1) and (2).

Relevant Dates

9. The relevant non-use period for the purposes of paragraph 92(4)(a) of the Act is from the day on which the trade mark application was filed to one month ending on the day on which the non-use application is filed. Therefore, the relevant non-use period of the trade mark is from 27 October 2008 to 12 February 2010.
10. Pursuant to paragraph 92(4)(a), the opponent’s intention to use the trade mark is to be determined as at 27 October 2008.

Onus

11. Section 100 of the Act provides that the opponent bears the onus of rebutting an allegation under paragraph 92(4)(a) of the Act.

Narrowing the Issues

12. At the beginning of the hearing, Ms Shearer made certain concessions in order to narrow the focus of the issues in dispute.
13. Ms Shearer advised that the applicant did not wish to rely on “Wayback Machine” searches referred to in the Derderyan declaration as there was no context in which to interpret the results of searches.
14. Ms Shearer made a further concession regarding the use of the trade mark. She stated that there was no “part use” issue, in that use of the trade mark was either on all of the relevant goods or none of them. The real issues, according to Ms Shearer, were whether the use was by the owner of the trade mark or an authorized user, or if so, whether such use was in good faith. The applicant’s position was also that the opponent’s application to register the trade mark was not in good faith.

Opponent’s Case in Rebuttal

15. The opponent declared that he devised the trade mark and applied to register it. He then authorized the companies HEM Group Australia Pty Ltd and Clipso Electrical Pty Ltd to use the trade mark and distribute goods bearing the trade mark in Australia.
16. The opponent exhibited company searches that show that he is one of the two directors of both companies and holds 50% shareholding in both companies. He is also the company secretary of HEM Group Australia
17. The opponent exhibited examples of approvals gained by the companies to sell various electrical devices, a product guide brochure and websites, along with invoices for sales of various products comprising the Relevant Goods.
18. Ms Arcus submitted that there was an abundance of evidence that the opponent, by way of the use of authorized users, used the trade mark in the relevant period in Australia in relation to the relevant goods. She further submitted that the opponent had maintained a connection with the goods in the course of trade by his selection of goods, his quality control of the goods, his selection and design of the advertising and packaging of the goods, his financial control over the goods and his position as director of the authorized users.
19. Further, Ms Arcus pointed to the evidence demonstrating more than ‘token’ commercial use, rather it was a continuous course of genuine trade of goods sold under the trade mark.

Applicant’s Case

20. As stated earlier, the applicant accepted that the companies - HEM Group Australia Pty Ltd and Clipso Electrical Pty Ltd - had used the trade mark during the relevant period for all of the relevant goods. However, the applicant did not accept that this was use by the opponent, or use in good faith.
21. Ms Shearer put forward two alternative, but not mutually exclusive, premises for the use of the trade mark in Australia.
22. The first is that the opponent never intended to use nor has he used the CLIPSO mark during the relevant period and any use of the CLIPSO mark cannot enure to his benefit as registered owner. It was submitted that use of the CLIPSO mark is not use by the opponent in good faith or otherwise. At best, Ms Shearer said, the company or companies of which the opponent is a director use the CLIPSO trade mark in Australia as a distributor/agent/licensee of goods sourced from Ningbo Clipso Electrical Co Ltd of China (“Ningbo Clipso). Accordingly, the opponent’s filing of the application was not with a good faith intention because he was not at the filing date the owner of the trade mark and did not intend to use the trade mark himself (nor authorize others to do so or assign the trade mark to a body corporate for its use). Further, it was submitted, the opponent has not subsequently used the mark in good faith or otherwise since the fundamental flaw in the choice of applicant for the trade mark persists into the use.
23. The alternative submission was that the intention on filing the CLIPSO application could not have been in good faith and the subsequent use could not be use in good faith because the opponent’s intended use was not in good faith nor was the use based on that intention. Ms Shearer submitted that this was because adoption and use of the CLIPSO trade mark by the opponent, when considered against the range of goods upon which the applicant’s CLIPSAL trade mark is used by the applicant, the reputation of the CLIPSAL mark and the CLIPSAL mark itself, can only have been in order to deceive or cause confusion to consumers and, additionally, infringes in many cases the registered trade mark of the applicant being Registration 982758 Dolly Switch.

Use of the Trade Mark

24. The first Abdul-Kader declaration satisfies me that there has been commercial use of the trade mark by HEM Group Australia Pty Ltd and Clipso Electrical Pty Ltd. In the first Abdul-Kader declaration, the opponent says that he authorized those companies to use the trade mark.
25. The use of a trade mark is authorized use only to the extent that the user uses the trade mark “under the control of the owner of the trade mark”: section 8(2) of the Act. The essential requirement is that there must be a connection in the course of trade with the registered proprietor even though the connection might be slight, such as selection or quality control or control of the user in the sense in which a parent company controls a subsidiary: Pioneer Kabishiki Kaisha v Registrar of Trade Marks [1977] HCA 56; (1977) 137 CLR 670 at 683. Additionally, at 684, Aicken J reiterates that there is no requirement for a registered proprietor to manufacture the goods.
26. In the third Abdul-Kader declaration, the opponent states, and exhibits relevant registrations, that he is managing director and 50% shareholder of HEM Group Australia Pty Ltd and Clipso Electrical Pty Ltd. In both of these companies, the other director and shareholder is the same person. I am satisfied that these companies are authorized users of the trade mark.
27. Ms Shearer submitted that the true owner of the trade mark is the Chinese manufacturer, identified as Ningbo Clipso. The submission was based on research into Ningbo Clipso described in the Derderyan declaration, combined with an alleged paucity of the opponent’s evidence regarding Ningbo Clipso.
28. While Ms Shearer’s submissions are based on a plausible hypothesis drawn from the research conducted, I am not satisfied that it amounts to evidence of fact. While the opponent has been very economical in describing his business connection with Ningbo Clipso, he has declared that he sources his goods from the Chinese manufacturer. None of the applicant’s evidence in answer contradicts the opponent’s evidence such that he might have been expected to provide further details of his relationship with the Chinese manufacturer.
29. There is no evidence to support the hypothesis that Ningbo Clipso existed prior to and/or independently from the opponent’s application to register the trade mark. Nor is there any evidence to support the submission that the CLIPSO trade mark was adopted in order to deceive or cause confusion to consumers; I shall discuss this aspect later in this decision

Use of the Trade Mark in Good Faith

30. The major issue in contention in these proceedings was that of using the trade mark “in good faith”. The opponent submitted that since the use of the trade mark was real, as opposed to token, commercial use, it was therefore in good faith. The applicant submitted that the opponent’s intention at the time of filing was in bad faith and subsequent use of the trade mark could not repair the fundamental flaw with the filing intention.
31. Counsel for the opponent pointed to the opponent’s application to register his trade mark and his declaration to that effect as satisfying the requisite intention to use the trade mark in good faith. Ms Arcus rejected the applicant’s allegation of colourable activity and submitted, in any event, that such an allegation was not relevant to section 92(4) of the Act. She submitted that use in good faith must be real or genuine use in the commercial sense, rather than colourable activity and ‘token’ use: Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd [1991] FCA 310; (1991) 30 FCR 326, at 354 per Gummow J.
32. Ms Arcus also referred to the Full Federal Court decision in Liquideng Farm Supplies Pty Ltd & Ors v Liquid Engineering 2003 Pty Ltd [2009] FCAFC 7; (2009) 79 IPR 437, in which the Court considered a submission that the use of the trade marks in question was not ‘in good faith’ since those words were wide enough to cover circumstances in which the trade marks were used by the registered proprietor in relation to the same goods in order to take advantage of the positive association between those goods and the removal applicant. In rejecting this submission, the Court held (at [51] – [56] ) that the main concern of section 92(4) is with the genuineness of actual use as opposed to motives or conduct leading to or concerning that use. At [56] the Court concluded:

“[Section] 92(4) of the Act requires no more than a genuine intent to use the mark for commercial purposes, and that the reference to bona fide intention to use is not sufficiently wide to encompass the circumstances of the present case.’

33. To support the applicant’s submission, outlined in paragraph 23 above, Ms Shearer referred to a number of decisions of this office where bad faith has been found to preclude an intention in good faith or use in good faith[1]. However, those decisions involved registrations for trade marks that were identical to those of other parties. In any event the later Full Federal Court judgment in Liquideng Farm Supplies Pty Ltd & Ors v Liquid Engineering 2003 Pty Ltd, supra, is clear as to the meaning of good faith for the purposes of section 92 of the Act.
34. A low threshold has been set with regard to intention to use in that the act of making the application is prima facie evidence of an intention to use. Here, we also have the declaration of the opponent as evidence of the intention. Further, as the section 92(4)(a) ground requires both lack of intention to use and lack of use, proof of use rebuts the allegation, regardless of whether lack of intention can be shown.
35. Having regard to the Act and relevant judicial authorities, along with the evidence and submissions of the parties, I am satisfied that the opponent has rebutted the applicant’s allegation of non-use.
36. The similarity or otherwise of the trade marks of the parties is not relevant in these proceedings. Section 92(4) specifically limits the grounds for removal to those specified in the section. This is not the appropriate forum in which to deal with issues relating to whether or not the trade mark should have been registered: Edwards v Liquid Engineering 2003 Pty Ltd [2008] FCA 970. Removal proceedings are not meant to provide a ‘second bite at the cherry’ for parties who have missed time limits for initiating oppositions to registration of trade marks.

Decision and Costs

37. The evidence satisfies me that there has been genuine commercial use of the trade mark with respect to the goods specified in the registration during the relevant period. The opposition is accordingly established and I therefore refuse to remove the trade mark.
38. As the successful party, the opponent is entitled to his costs and I award costs against the applicant as per Schedule 8 of the Trade Marks Regulations 1995.

Jock McDonagh
Hearings Officer
Trade Marks Hearings
17 January 2012

TELECOM DISPUTES SETTLEMENT & APPELLATE TRIBUNAL=Petitioner, a Multi Service Operator operating in the town of Shadnagar in the State of Andhra Pradesh, has filed these petitions inter-alia praying for a direction upon the Respondents herein to supply signals of their respective channels to its network as provided under Clause 3.2 of the Telecommunication (Broadcasting & Cable Services) Interconnection Regulations, 2004, as amended from time to time (‘The Regulations’).=The cable operator has no valid registration certificate, no valid permissions, no required equipment installed, no business house, no proper documents presented as per rules, Hence not entitled for any relief as prayed for.

Page 1 of 20

TELECOM DISPUTES SETTLEMENT & APPELLATE TRIBUNAL
NEW DELHI
DATED 13TH MARCH, 2012
Petition No.376 (C) of 2011
Shri Hanuman Communications … Petitioner
Vs.
Sun 18 Media Services South Pvt. Ltd. … Respondent
Petition No.377 (C) of 2011
Shri Hanuman Communications … Petitioner
Vs.
Maa Television Network Ltd. … Respondent
Petition No.378 (C) of 2011
Shri Hanuman Communications … Petitioner
Vs.
Ushodaya Enterprises Pvt. Ltd. … Respondent
Page 2 of 20
BEFORE:
HON’BLE MR. JUSTICE S.B. SINHA, CHAIRPERSON
HON’BLE MR.P.K. RASTOGI, MEMBER
In Petition No. 376 (C) of 2011
For Petitioner : Mr. Yoginder Handoo, Advocate
For Respondent : Mr. Nitin Bhatia, Advocate
In Petition No. 377 (C) of 2011
For Petitioner : Mr. Yoginder Handoo, Advocate
For Respondent : Ms. Vismai Rao, Advocate
In Petition No. 378 (C) of 2011
For Petitioner : Mr. Yoginder Handoo, Advocate
For Respondent : Mr. Balaji Srinivasan, Advocate
J U D G E M E N T
Petitioner, a Multi Service Operator operating in the town of Shadnagar
in the State of Andhra Pradesh, has filed these petitions inter-alia praying for a
direction upon the Respondents herein to supply signals of their respective
channels to its network as provided under Clause 3.2 of the
Telecommunication (Broadcasting & Cable Services) Interconnection
Regulations, 2004, as amended from time to time (‘The Regulations’).
Page 3 of 20
2. We would notice the factual matrix involved in Sun 18 Media Services
Pvt. Ltd. case.
Petitioner made a request to the predecessor in interest of the
Respondent on or about 20.4.2011. However, the same was addressed to a
wrong entity namely M/s. Sun Distribution Systems. Along with the said
purported letter, several documents were said to have been annexed.
Respondent, however, denies and disputes the receipt thereof.
3. A reminder thereto was sent on 05.6.2011, wherewith also no document
was annexed. Reference, however, was made therein to the purported letter of
request dated 20.4.2011. A second reminder was sent to the Respondent on or
about 28.6.2011, wherewith again no document was annexed.
Inter-alia on the premise that the Respondent has failed and/or
neglected to comply with their statutory obligations, as is provided under
Clause 3.5 of the Regulations, this petition has been filed on or about
19.9.2011.
4. Respondent in its reply, inter-alia, contends that on receipt of the
documents annexed to the petition for the first time, it made verification
thereof, whereupon it was found that the LCOs of the Petitioner do not have the
Page 4 of 20
requisite infrastructure to run their respective networks and in fact some of
them have illegally been set up in their residential houses.
Some of the subscribers, according to the Respondent, have been
obtaining supply of signals from another MSO namely M/s. Shadnagar
Communications, which goes to show that the informations furnished by the
Petitioner were wrong.
5. Maa TV and Ushodaya Enterprises, beside raising discrepancies in
various documents filed by the Petitioner, contend that the Registration
Certificate possessed by it is illegal having been granted by the Postal
Authorities for a period of two years, which is impermissible in terms of Rule 3
of the Cable Television Networks (Regulation) Rules, 1994.
6. By reason of an order dated 17.10.2011 having regard to the pleadings of
the parties, the following issues were framed :-
(i) Whether the petitioner has provided the contact details to the
respondent in terms of the TRAI Regulations?
ii) Whether the respondent has denied supply of its signals to the
petitioner?
Page 5 of 20
7. The parties hereto have adduced their respective evidences.
Whereas the Petitioner has examined Shri G. Srinivas Yadav, Sun 18 has
examined Mohd. Amer Siddique, Ushodaya has examined Shri A. Sadanandam
and Maa TV has examined Shri K. Siva Adinarayana.
8. Mr. Handoo, learned counsel appearing on behalf of the Petitioner, would
contend :-
(i) Petitioner having supplied to the Respondent requisite
documents including Registration Certificate, List of
equipments, SLRs, Cable Registration Certificate of the
LCOs, the map showing the manner in which the cable has
been laid as also the subscription agreement with Zee Turner
Ltd., there is absolutely no reason as to why they should not
be directed to supply signals of their respective channels to
its network;
(ii) In terms of Clause 3.5 of the Regulations, the Broadcaster
being under a statutory obligation to respond to such
request within a period of 60 days and except Ushodaya, no
other Respondent having done so, it must be held that they
failed to perform their statutory obligations.
Page 6 of 20
9. Mr. Nitin Bhatia, learned counsel appearing on behalf of Sun 18 Media
Services South Pvt. Ltd., urged :-
(i) Petitioner having not made a valid request, the purported
letter dated 20.4.2011 having been addressed to a wrong
person, this petition must be held to be pre-mature;
(ii) It is incorrect to contend that despite receipt of the letter of
request, the Respondent did not make any effort to verify the
informations supplied by the Petitioner, as PW-1 himself has
categorically stated that a reply from the Respondent had
been received;
(iii) Some of the LCOs/subscribers having taken supply of
signals from another MSO, no direction as has been sought
for by the Petitioner, should be issued;
(iv) Petitioner having not supplied the details of the agreement
with Zee Turner, nor having proved the same in accordance
with law, no reliance can be placed thereupon;
Page 7 of 20
(v) RW-1, Mohd. Amer Siddique having clearly proved that the
premises, from which the LCOs are stated to have been
operating, are situated in a residential area and some of
them are not even in habitable conditions, the Petitioner is
not entitled to any relief;
(vi) Even the Municipal authorities having clearly stated that no
cable operation business having been going on from the
premises in question, the Petitioner’s case must be held to
be incorrect.
10. Ms. Vismai Rao, learned counsel appearing on behalf of Maa TV,
submitted :-
(i) The Cable Registration Certificate having been granted in
favour of the Petitioner for a period of two years, although in
terms of the Rule, it could have only be granted only for
twelve months, it must be held to be not possessing any
valid certificate after 07.6.2011;
(ii) From a comparison of the documents filed by the Petitioner
and, in particular the Registration Certificates of the LCOs
which were granted on the same day on 18.3.2011 vis-à-vis
the franchise agreements which have been entered into by
Page 8 of 20
and between the Petitioner and the said LCOs being dated
28.3.2011, it would appear that as LCOs were being supplied
signals three months prior thereto i.e. at a point of time
when they did not possess valid Registration Certificates,
which would clearly go to show that the agreements are
forged and fabricated ones;
(iii) Petitioner, having not filed the pole permissions nor having
supplied the photographs of its network, is not entitled to
any relief as prayed for or otherwise;
11. Mr. Balaji Srinivasan, learned counsel appearing on behalf of Ushodaya
Enterprises, pointed out :-
(i) As on the Petitioner’s own showing, the equipments installed
in its Headend do not satisfy the standard specified by the
BIS, no relief should be granted in its favour;
(ii) From the certificate issued by the Customs & Excise
Department, it would appear that the proprietor of the
Petitioner concern is Shri G. Srinivas Yadav, but the Pan
Card being in the name of Shri Srinivasulu Gaddam, it is
evident that the Petitioner is not a person with whom
business relationship can be grown.
Page 9 of 20
12. The core question herein is as to the validity of the Registration
Certificates issued by the Postal Authorities under the 1994 Rules.
Petitioner was granted a certificate on 08.6.2010 by the Post Master,
Jedcharla, which reads as under :-
“Shri Hanuman communication Represented by G. Srinivas Yadav
Resident of Shadnagar is Registered as a Cable Operator individual
for running the Cable Television Network at the following address :
H. No.3-56/14/2 Satellite Channels Maa TV, ETV & Gemini TV for a
period of Twelve months with effect from 08.06.2010 to
07.06.2012.His Registration Number is 38.
This Certificate is only valid for the premises stated as above.
This Certificate is not transferable.
This Certificate shall remain valid for the period.”
13. Grant of such certificate is governed by a Parliamentary Act known as
Cable Television Networks (Regulations) Act, 1995.
The term ‘prescribed’ has been defined in Section 2 (f) of the said Act to
mean ‘prescribed under the rules made’ thereunder.
Sections 3 and 4 of the said Act occurring in Chapter II thereof, read as
follows :-
“3.Cable television network not to be operated except after
registration.-No person shall operate a cable television network
unless he is registered as a cable operator under this Act:
Page 10 of 20
Provided that a person operating a cable television network,
immediately before the commencement of this Act, may continue to
do so for a period of ninety days from such commencement; and if
he has made an application for registration as a cable operator
under section 4 within the said period, till he is registered under that
section or the registering authority refuses to grant registration to
him under that section.
4.Registration as cable operator.-(1) Any person who is operating
or is desirous of operating a cable television network may apply for
registration as a cable operator to the registering authority.
(2) An application under sub-section (1) shall be made in such form
and be accompanied by such fee as may be prescribed.
(3) On receipt of the application, the registering authority shall
satisfy itself that the applicant has furnished all the required
information and on being so satisfied, register the applicant as a
cable operator and grant to him a certificate of such registration:
Provided that the registering authority may, for reasons to be
recorded in writing and communicated to the applicant, refuse to
grant registration to him if it is satisfied that he does not fulfill the
conditions specified in clause (e) of section 2.”
14. Rules were framed by the Central Government in 1994 known as Cable
T.V. Networks (Regulation) Rules, 1994, in terms of Section 22 of the Cable
Television Networks (Regulation Ordinance), 1994.
We may notice Rule 3 of the said Rules :-
Page 11 of 20
“3. Application for registration as a cable television
network in India.—(1) Every application for registration as a
cable television network in India shall be made in writing in
Form 1 and shall be renewable after every twelve months.
(2) The application shall be addressed to the Registering
Authority and delivered to his officer in Form 1.
(3) (a) Every application for registration or renewal of
registration shall be accompanied by—
1(i) a fee of rupees five hundred only; and
(ii) the requisite documents mentioned in Forms 1
and 2.
(b) Every application for issue of duplicate certificate of
registration shall be accompanied by—
(i) a fee of rupees two hundred and fifty only; and
(ii) the requisite documents mentioned in Form 1.
(4) The amount of fee shall be deposited under the Head Post
Office where the application for registration or renewal of
registration or issue of duplicate certificate of registration is
being made.
(5) The amount of the fees shall be deposited under the head
‘un-classified receipts (U.C.R.);]”
15. Form 1 issued under Rule 3(1) prescribes the manner in which an
application is to be filed. Clause 4(a) provides for the amount of fee paid for
registration/renewal/issue of duplicate certificate.
Page 12 of 20
Clause 10 provides for enclosure of a copy of the Registration Certificate
to be filled in, only for renewal of registration.
Clause 12 provides for declaration in Form 2 both for registration and
renewal thereof.
We may notice Clauses 4 (b), 5 and 6 of Form 1 prescribed under the
Rule as under :-
“4.(b) Name of Head Post Office (Attach copy of challan vide
which the fees have been deposited)
5. Area in which cable television network is working/
proposed to be set up……….
6. Date from which the cable television network is
operating/proposed to be set up……………”
16. The Registration Certificate is granted in Form 3.
It clearly provides that the same is to be granted for a period of twelve
months.
17. For all intent and purport, the Registration Certificate is a licence to a
cable operator to run its cable business. No person can carry on such a
business without such a certificate. The Act, when rule is validly famed and
Page 13 of 20
forms are prescribed thereunder, must be construed harmoniously to provide
effective meaning thereto.
(See Chief Conservator of Forests (Wild Life) and Others Vs. Nisan
Kher 2003 (4) SCC 595. See also Francis Bennion, Fifth Edition,
Page 263-264).
It is now well settled that licence is granted so as to permit a person to
do something, which is not otherwise permissible. When an occupation or a
business is governed by a statute, the same cannot be carried out except in
terms thereof.
18. Requirements for prescription of rules are well known. It is necessary
having regard to the increasing complexity of mode of administration. It is now
a normal feature.
19. The reasons for delegated legislation are :-
“(i) Pressure on parliamentary time. In these days of
intensive legislation Parliament can only concentrate on
essentials, leaving the details to be worked out, subject to
suitable parliamentary control, by the various Ministers and
Page 14 of 20
their departments. This was very apparent in the
nationalization Acts of 1946-48.
(ii) Technical character of modern legislation. A body of 600
members (to take the House of Commons alone) is not well
fitted to deal with matters of technical detail, which are often
quite unconnected with political considerations.
(iii) Need for flexibility. The law must be capable of rapid
adjustment to meet changing circumstances. In an official
minute in 1893, Sir Henry Jenkyns, First Parliamentary
Counsel, wrote: “Statutory rules are in themselves of great
public advantage because the details…and minuteness and
with better adaptation to local or other special circumstances
than they can possibly be in the passage of a Bill through
Parliament. Besides, they mitigate the inelasticity which
would otherwise make an Act unworkable and are
susceptible of modifications…session and its processes
involve delay, o that any rapid adjustment of the law by
direct legislation to meet unknown future conditions is not
normally feasible. “The method of delegated legislation
permits of the rapid utilization of experience and enables the
results of consultation with interests affected by the
operation of new Acts to be translated into practice…It also
permits of experiment being made and thus affords an
opportunity, otherwise difficult to ensure, of utilizing the
lessons of experience.”
(iv) Emergency powers. In modern times the national need may
call for sudden legislative action which Parliament of itself
cannot provide. Often the possibility of the emergency can be
Page 15 of 20
foreseen and legislation is passed in anticipation, making
immediate action by departments possible the moment the
emergency arises: cf. Emergency Powers Act 1920 and
Emergency Powers (Defence) Act 1939.”
(Craies on Statute Law pg. 291)
20. The Act provides for verification of the details furnished by the Applicant
in his application. Such verification, keeping in view the renewal clause, is
necessary to be carried out every twelve months. A fixed fee therefor has been
prescribed.
21. Mr. Handoo would contend that when a certificate is granted for a period
of two years, the only requirement is to pay two years’ fees namely Rs.1,000/-
in stead and in place of Rs.500/-.
It is difficult to accept the said proposition.
22. A statutory authority, as is well known, must act within the four corners
of the statute. Any act done by a statutory authority, which is not specified in
the statute, must be held to be ultra-vires and, thus, coram non-judice. The
statutory authority, therefore, could not have granted a certificate having
duration of two years, only on payment of an enhanced registration fees.
Page 16 of 20
If such an argument is accepted, an application can also be filed for
grant of certificate for a number of years.
23. Rule 3 specifies that the application should be renewable every twelve
months, which is itself suggestive of the fact that initial certificate must also be
for a period of twelve months and not more.
We are not unmindful of the fact that right of renewal is a valuable right,
but such a right has to be exercised. Renewal in an ordinary parlance would
mean a fresh grant. For obtaining the renewal, it must undergo the same
procedure unless the statute otherwise specifies, which were required for the
purpose of original grant. The statutory authorities, therefore, in our opinion,
could not have granted a certificate which was valid for more than twelve
months, the law, having prescribed otherwise.
24. Petitioner, therefore, does not possess any valid certificate. Moreover, the
phraseology used in Section 3 of the Act is absolutely clear and unambiguous.
No person is permitted to carry on with the cable TV business without
obtaining a registration certificate.
Section 3, moreover, is couched in negative terms. It uses the words
‘shall’ and ‘unless’, which also clearly goes to show that the same is imperative
in character.
Page 17 of 20
Section 4 postulates the mode and manner in which the application is to
be filed. The procedures are laid down in the rules.
25. Mr. Handoo, however, would contend that from a perusal of Sections 11
and 12 of the Act it would appear that in the event a person is found to be
carrying on the cable TV business without obtaining a valid registration
certificate, his equipments may be seized but the same shall not be confiscated
if he obtains a registration certificate within four weeks from the date of seizure
thereof.
26. Submissions of Mr. Handoo cannot be accepted for more than one
reason. Firstly, because violation of the provisions of Section 3 of the Act
entails penal consequences as envisaged under Section 16 thereof, which itself
is a pointer to the fact that obtaining of a cable registration certificate is
imperative in character; secondly because, Section 13 provides that nonseizure
or non-confiscation would not be a ground for not proceeding against
the person carrying on business in Cable TV from criminal prosecution.
Page 18 of 20
27. An act, which is violative of the provisions of the Statute, would be nonest
in the eye of law. It has, however, been correctly submitted that the
certificate has not been contended to be a forged one. It may be so, but, if a
certificate has been granted contrary to the provisions of a statute, the
consequences arising therefrom shall ensue.
28. Petitioner may be a victim of a mistake committed on the part of the
Postal Authorities, but when the same has been brought to the notice of this
Tribunal, it is its duty to see that no order is passed which would violate the
provisions of a validly made statute or statutory rules.
29. Petitioner, so far as Sun TV is concerned, did not supply all the
documents. Keeping in view that such documents were required to be supplied
to the broadcaster, which had been annexed with the petition, as the same
would enable it (the Broadcaster) to verify the same and, thus, in absence of
any basic information, clause 3.5 of the Regulations could not have been
complied with. We would have made an exception in the case of the Petitioner;
but, there are other aspects of the matter which cannot be lost sight of. As
indicated heretobefore, the Petitioner as a Multi Service Operator is bound to
comply with the other statutory requirements. It, in terms of law, cannot
permit an LCO to do something which is otherwise prohibited.
Page 19 of 20
30. It may be true that the photographs filed by the Respondent have not
been proved.
It has, however, been stated that some of the LCOs have been carrying
on the business from a premise which are not commercial establishments.
Moreover, as has rightly been pointed out by Ms. Vismai Rao that the
agreements entered by and between the Petitioner and the LCOs raise
suspicion about their genuineness.
If the stipulations made therein are correct, the parties have been
carrying on business even prior to obtaining the registration certificate. The
registration certificate of the affiliates and the affiliate agreements, therefore,
are discrepant.
PW-1 in his deposition has clearly admitted that he does not have the
pole permission from the competent authority. He made inconsistent statement
in his cross-examination as firstly he stated that he had obtained such
permission, then stated that he had not and supplemented the same with an
explanation that the same was not required.
Such pole permission from the Electricity authorities are required, as has
been held by this Tribunal in Sree Devi Enterprises Vs. Channel Plus (Petition
No. 156 (C) of 2010).
31. There is another aspect of the matter.
A discrepancy has also been pointed on the identity of the Petitioner
being the proprietor of the Petitioner concern vis-à-vis his Pan Card Number.
Page 20 of 20
According to PW-1, he got the Pan Card modified, but he did not produce the
same although according to him, he had been carrying it with him.
If Pan Card issued to him stands corrected, he should have produced it,
particularly when he had been carrying the same.
Moreover, he did not have any certificate to show that the equipments
installed at his Headend satisfy the standards laid down by the Bureau of
Indian Standards.
32. For the reasons aforementioned, there is no merit in these petitions,
which are dismissed. However, there shall be no order as to costs.
33. We may, however, observe that this order shall not stand on the way of
the Petitioner to obtain supply of signals of the channels of the Respondents
herein if a valid request is made in terms of the Regulations.
.……….......
(S.B. Sinha)
Chairperson
……………….
(P.K. Rastogi)
Member
rkc

without framing substantial question of law , no second appeal is to be decided. in a specific performance suit, when a lower court order for refund of the earnest money, the appellant court set aside the lower court decree and order for specific performance of the sale agreement. which was reversed by the High court in a second appeal with out framing any substantial question of law- which was set aside by the apex court by this judgement and further strongly retreated that no court should go liberally interfering the appellant court judgement in second appeal with out framing a substantial question of law.

                                                         REPORTABLE




              IN THE SUPREME COURT OF INDIA


                CIVIL APPELLATE JURISDICTION

             CIVIL  APPEAL NO.    2870      OF 2012

          (Arising out of SLP (Civil) No. 15574 of 2011)




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.