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.
