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.