REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL  APPEAL NO.  7532    OF 2011 (Arising out of SLP (Civil) No. 30105 of 2010)

M/s. Shiv Cotex …. Appellant

Versus

Tirgun Auto Plast P. Ltd. & Ors.          ….Respondents

JUDGMENT

     R.M. Lodha, J.  

Leave granted.

2. The  purchaser,  who  was  not  party  to  the  suit  but  

impleaded as 2nd respondent in the first appeal and was arrayed as  

such in the second appeal, is the appellant being  aggrieved by the  

judgment  and  order  of  the  High  Court  of  Punjab  and  Haryana  

whereby the Single Judge of that Court allowed the second appeal  

preferred  by  the  plaintiff  (1st respondent)  and  set  aside  the  

concurrent judgment and decree of the courts below and remanded  1

the suit to the trial court for fresh disposal after giving the plaintiff an  

opportunity to lead evidence.  

3. In  the  month  of  May,  1991,  the  1st respondent  —  

M/s.  Tirgun  Auto  Plast  Private  Limited  –  applied  to  the  Punjab  

Financial  Corporation  (for  short,  ‘Corporation’)  for  a  term loan  of  

Rs. 47.60 lac and special capital assistance (soft loan) of Rs. 4 lac.  

The term loan of Rs. 46 lac and soft loan of Rs. 4 lac was disbursed  

by the Corporation to the 1st respondent in the month of October,  

1991 on execution of the mortgage deed.  Vide this mortgage deed,  

the  1st respondent  mortgaged  its  various  assets  in  favour  of  the  

Corporation.  On the 1st respondent’s  failure to pay the due amount  

along with interest, the Corporation on March 19, 1998 took over the  

mortgaged  property  comprising  land,  building  and  machinery  in  

exercise  of  its  power  under  Section  29  of  the  State  Financial  

Corporations Act, 1951 (for short, ‘1951 Act’).

4. The 1st respondent (hereinafter referred to as ‘plaintiff’),  

on  February  17,  2001,   filed  a  suit  for  declaration,  mandatory  

injunction and other reliefs against the Corporation – 2nd respondent  

in the Court of Civil Judge (Junior Division), Chandigarh. Inter alia,  

the plaintiff prayed that the takeover of its assets and all subsequent  

sale proceedings by the Corporation be declared illegal,  null  and  2

void and inoperative;  the  direction be issued to the  Corporation to  

charge interest at the rate of 12.5 per cent per annum (prevailing  

rate) on the loan  from the date of commencement of production to  

the date of takeover and the Corporation be also directed to restore  

back the  possession of the suit property to it.  

5. The Corporation (sole defendant)  in  the suit  traversed  

the plaintiff’s claim and set up the plea that plaintiff could not pay the  

due amount under the loan despite repeated notices necessitating  

the  action  under  Section  29  of  the  1951  Act.  The  Corporation  

asserted  that  fair  procedure  was  followed  and  no  illegality  was  

committed by it in proceeding under Section 29 of the 1951 Act. The  

Corporation  also raised  objections regarding the maintainability of  

the suit on the grounds of limitation and jurisdiction of the Civil Court.  

6. The  trial  court  having  regard  to  the  pleadings  of  the  

parties framed issues (six  in all) on July 19, 2006.  Issue no. 1 was  

to the following effect:

“Whether impugned action of  defendant  is  illegal  and if it  is proved, whether plaintiff  is entitled for  decree of declaration and mandatory injunction?”

The burden to prove the above issue was kept on the plaintiff.

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7. Thereafter,  the  suit  was  fixed  for  the  evidence  of  the  

plaintiff on November 1, 2006. However, no evidence was let in on  

that  day.  The matter  was then adjourned for  the evidence of  the  

plaintiff  on  March  2,  2007.  On that  day also  the  plaintiff  did  not  

produce evidence and the matter was adjourned to May 10, 2007.  

On May 10, 2007 again plaintiff did not produce any evidence. The  

trial court was, thus, constrained to proceed under Order XVII Rule  

3(a)  of  the  Code of  Civil  Procedure,  1908 (for  short,  ‘CPC’)  and  

passed the following order :

“Matter is fixed for conclusion of the plaintiff’s evidence  being last opportunity.  No plaintiff’s witness is present  and neither any cogent reason has been put forth for  such failure fully knowing the fact that today is the third  effective  opportunity  for  conclusion  of  plaintiff’s  evidence.  Hence,  matter  is  ordered  to  be  proceeded  under  Order  17,  Rule  3(a)  C.P.C.  and  plaintiff’s  evidence is deemed to be closed. Heard. To come up  after lunch for orders.”   

8. On May 10, 2007 itself in light of the above order, the  

trial court dismissed the suit in its post lunch session.

9. After  dismissal  of  the  suit,  the  Corporation  sold  the  

mortgaged property by auction to  the appellant  for  Rs.  64.60 lac  

(Sixty four lac and sixty thousand only).    

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10. Against  the  judgment  and  decree  of  the  trial  court  

passed on May 10, 2007, the plaintiff  preferred civil  appeal in the  

court of  Additional District  Judge, Chandigarh.  In the appeal,  the  

plaintiff made an application on December 21, 2007 for impleadment  

of the appellant and its partners as respondent nos. 2 to 5.  The  

application  for  impleadment  was  granted  and  the  appellant  and  

respondent nos. 3 to 5 herein were added as parties.

11. The Additional District Judge, Chandigarh after hearing  

the parties, dismissed the civil appeal on March 20, 2008.   

12. Being  not  satisfied  with  the  concurrent  judgment  and  

decree of the two courts below, the plaintiff preferred second appeal  

before the High Court which, as noticed above, has been allowed by  

the Single Judge on September 20,  2010 and the suit  has been  

remanded to the trial court for fresh decision in accordance with law.

13. The judgment of the High Court  is gravely flawed and  

cannot be sustained for more than one reason.   In the first place,  

the High Court, while deciding the second appeal, failed to adhere to  

the necessary requirement of Section 100 CPC and interfered with  

the  concurrent  judgment  and  decree  of  the  courts  below without  

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formulating  any  substantial  question  of  law.   The  formulation  of  

substantial question of law is a must before the second appeal is  

heard and finally disposed of by the High Court.   This Court  has  

reiterated and restated the legal  position time out  of  number that  

formulation of  substantial question of law is a condition precedent  

for entertaining and deciding a second appeal.    Recently,  in the  

case of  Umerkhan v.  Bismillabi @ Babulal  Shaikh and Ors. (Civil  

Appeal No. 6034 of 2011) decided by us on July 28, 2011, it has  

been held  that the judgment of the High Court is rendered patently  

illegal,  if  a  second  appeal  is  heard  and  judgment  and  decree  

appealed  against  is  reversed  without  formulating  the  substantial  

question of law. The legal position with regard to second appellate  

jurisdiction of the High Court was stated by us thus:

“13. In our view, the very jurisdiction of the High Court in  hearing a second appeal is founded on the formulation of  a substantial question of law.   The judgment of the High  Court  is  rendered patently illegal,  if  a  second appeal  is  heard  and  judgment  and  decree  appealed  against  is  reversed without formulating a substantial question of law.  The second appellate  jurisdiction of the High Court  under  Section 100 is not akin to the appellate jurisdiction under  Section 96 of the Code; it is restricted to such substantial  question  or  questions  of  law  that  may  arise  from  the  judgment and decree appealed against.  As a matter of  law, a second appeal is entertainable by the High Court  only upon its satisfaction that a substantial question of law  is  involved  in  the  matter  and  its  formulation  thereof.  Section 100 of the Code provides that the second appeal  

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shall  be  heard  on  the  question  so  formulated.  It  is,  however,  open to the High Court  to reframe substantial  question of law or frame substantial question of law afresh  or hold that no substantial question of law is involved at  the time of hearing the second appeal but reversal of the  judgment  and  decree  passed  in  appeal  by  a  court  subordinate to it in exercise of jurisdiction under Section  100  of  the  Code  is  impermissible  without  formulating  substantial  question  of  law  and  a  decision  on  such  question. This Court has been bringing to the notice of the  High Courts the constraints of  Section 100 of the Code  and the mandate of the law contained in Section 101 that  no  second  appeal  shall  lie  except  on  the  ground  mentioned  in  Section  100,  yet  it  appears  that  the  fundamental  legal  position concerning jurisdiction of  the  High Court in second appeal is ignored and overlooked  time and again. The present appeal is unfortunately one  of  such  matters  where  High  Court  interfered  with  the  judgment and decree of the first appellate court in total  disregard of the above legal position.”   

14. Unfortunately, the High Court failed to keep in view the  

constraints of second appeal and overlooked the requirement of the  

second appellate jurisdiction as provided in Section 100 CPC and  

that   vitiates its decision.  

15. Second, and equally important, the High Court upset the  

concurrent  judgment  and  decree  of  the  two  courts  on  misplaced  

sympathy and non – existent justification.  The High Court observed  

that the stakes in the suit being very high, the plaintiff should not be  

non-suited on the basis of no evidence. But, who is to be blamed for  

this lapse?  It is the plaintiff alone. As a matter of fact, the trial court  

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had given more than sufficient opportunity to the plaintiff to produce  

evidence in support of its case.    As noticed above, after the issues  

were framed on July 19, 2006, on three occasions, the trial  court  

fixed the  matter  for  the  plaintiff’s  evidence but  on none of  these  

dates any evidence was let in by it.  What should the court do in  

such circumstances?  Is the court obliged to give adjournment after  

adjournment  merely  because the stakes are high in  the  dispute?  

Should the court be a silent spectator and leave control of the case  

to a party to the case who has decided not to take the case forward?  

It is sad, but true, that the litigants seek – and the courts grant –  

adjournments at the drop of the hat.  In the cases where the judges  

are  little  pro-active  and  refuse  to  accede  to  the  requests  of  

unnecessary adjournments, the litigants deploy all sorts of methods  

in protracting the litigation.  It is not surprising that civil disputes drag  

on  and  on.   The  misplaced  sympathy  and  indulgence  by  the  

appellate and revisional courts compound the malady further.  The  

case in hand is a case of such misplaced sympathy.  It is high time  

that courts become sensitive to delays in justice delivery system and  

realize that adjournments do dent the efficacy of judicial process and  

if  this menace is not controlled adequately,  the litigant public may  

lose faith in the system sooner than later.  The courts, particularly  

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trial  courts,  must  ensure  that  on  every  date  of  hearing,  effective  

progress takes place in the suit.   

16. No litigant has a right to abuse the procedure provided in  

the CPC. Adjournments have grown like cancer corroding the entire  

body of justice delivery system. It is true that  cap on adjournments  

to a party during the hearing of the suit provided in proviso to Order  

XVII  Rule  1  CPC  is  not  mandatory  and  in  a  suitable  case,  on  

justifiable cause, the court may grant more than three adjournments  

to  a  party  for  its  evidence  but  ordinarily  the  cap  provided  in  the  

proviso to Order XVII Rule 1 CPC should be maintained. When we  

say ‘justifiable cause’ what we mean to say is,  a cause which is not  

only ‘sufficient cause’ as contemplated in sub-rule (1) of Order XVII  

CPC but a cause which makes the request for adjournment by a  

party  during  the  hearing  of  the  suit  beyond  three  adjournments  

unavoidable and sort of a compelling necessity like sudden illness of  

the litigant or the witness or the lawyer; death in the family of any  

one of them; natural calamity like floods, earthquake, etc. in the area  

where any of these persons reside; an accident involving the litigant  

or the witness or the lawyer on way to the court and such like cause.  

The list is only illustrative and not exhaustive. However, the absence  

of the lawyer or his non-availability because of professional work in  9

other court or elsewhere or on the ground of strike call or the change  

of a lawyer or the continuous illness of the lawyer (the party whom  

he  represents  must  then  make  alternative  arrangement  well  in  

advance)  or  similar  grounds  will  not  justify  more  than  three  

adjournments  to  a  party  during  the  hearing  of  the  suit.  The past  

conduct of a party in the conduct of the proceedings is an important  

circumstance  which  the  courts  must  keep  in  view  whenever  a  

request for adjournment is made.  A party to the suit is not at liberty  

to proceed with the trial at its leisure and pleasure and has no right  

to determine when the evidence would be let in by it or the matter  

should  be  heard.   The  parties  to  a  suit  –  whether  plaintiff  or  

defendant – must cooperate with the court in ensuring the effective  

work on the date of hearing for which the matter has been fixed.   If  

they don’t, they do so at their own peril. Insofar as present case is  

concerned, if the stakes were high, the plaintiff ought to have been  

more serious and vigilant in prosecuting the suit and producing its  

evidence. If despite three opportunities, no evidence was let in by  

the plaintiff, in our view, it deserved no sympathy in second appeal  

in  exercise  of  power  under  Section  100  CPC.   We  find  no  

justification  at  all  for  the  High  Court  in  upsetting  the  concurrent  

judgment of the courts below. The High Court was clearly in error in  

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giving  the  plaintiff  an  opportunity  to  produce  evidence  when  no  

justification for that course existed.

17. In  the result,  the appeal  is  allowed and judgment and  

order of the High Court passed on September 20, 2010 is set aside.  

There shall be no order as to costs.

 …………………….J. (Aftab Alam)

 ...………………….. J.        (R.M. Lodha)  

NEW DELHI. AUGUST 30, 2011.

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