HARDEEP KAURversusMALKIAT KAUR

                        [2012) 2 S.C.R. 478


A                        HARDEEP KAUR
                                  v.
                           MALKIAT KAUR
                  ~Civil Appeal No. 2870 of 2012)

                         MARCH 16, 2012
B
            [R.M. LODHA AND H. L. GOKHALE, JJ.]

       Code of Civil Procedure, 1908 - s. 100 - Second appeal
  - Formulation of substantial question of law - Requirement of
C - Held: Formulation of substantial question of law at the initial
  stage before hearing the second appeal is mandatory -
  Decision of the High Court is vitiated because no substantial
  question of law was formulated.

        The question for consideration in the present appeal
0
    was whether a second appeal lies only on a substantial
    question of law and is it essential for the High Court to
    formulate a substantial question of law before interfering
    with the judgment and decree of the lower appellate court.

E       Allowing the appeal, the Court
       HELD: 1. 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
F that the matter deserves to be admitted and the second
  appeal has to be heard and decided on such substantial
  question of law. 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
G that no substantial question of law is involved. The High
  Court cannot proceed to hear the second appeal without
  formulating a substantial question of law in the light of


H                                478
        HARDEEP KAUR v. MALKIAT KAUR                     479


the provisions contained in Section 100 CPC. [Para 10)          A
[484-H; 485-A-D]
     2. The High Court ignored and overlooked the
mandatory requirement of the secohd appellate
jurisdiction as provided in Section 100 CPC and that
vitiates its decision as no substantial question of law was     8
framed and yet the judgment and decr~e of the first
appellate court was reversed. [Para 13) [489-E-F]
     Kshitish Chandra Purkait v. Santosh Kumar Purkait and
Ors.(1997) 5 SCC 438: 1997 (1) Suppl. SCR 201; Dnyanoba         C
Bhaurao Shemade v. Maroti Bhaurao Marnor (1999) 2 SCC
471; Panchugopal Barua and Ors. v. Umesh Chandra
Goswami and Ors. (1997) 4 SCC 713: 1997 (2) SCR 12;
Sheet Chand v. Prakash Chand (1998) 6 SCC 683: 1998 (1)
Suppl. SCR 297; Kanai Lal Garari and Ors. v. Murari Ganguly     D
and Ors. (1999) 6 SCC 35; /shwar Dass Jain (Dead) through           .·
L.Rs. v. Sohan Lal (Dead) by L.Rs. (2000) 1 SCC 434: 1999
(5) Suppl. SCR 24; Roop Singh (Dead) through L.Rs. v. Ram
Singh (Dead) through L.Rs. (2000) 3 SCC 708: 2000 (2) SCR
605; Santosh Hazari v. Purushottam Tiwari (Deceased) by
L.Rs. (2001) 3 SCC 179: 2001 (1) SCR 948; Chadat Singh          E
v. Bahadur Ram and Ors. (2004) 6 SCC 359: 2004 (3) Suppl.
SCR 298; Sasikumar and Ors. v. Kunnath Chellappan Nair
and Ors. (2005) 12 sec 588: 2005 (4) Suppl. SCR 363; C.A.
Sulaiman and Ors. v. State Bank of Travancore, Alwayee and
Ors. (2006) 6 SCC 392: 2006 (4) Suppl. SCR 152; Bokka           F
Subba Rao v. Kukkala Balakrishna and Ors. (2008) 3 SCC
99: 2008 (2) SCR 753; Narayanan Rajendran and Anr. v.
Lekshmy Sarojini and Ors. (2009) 5 SCC 264: 2009 (2) SCR
71; Municipal Committee, Hoshiarpur v. Punjab State
Electricity Board and Ors. (2010) 13 SCC 216: 2010 (13)         G
SCR 658; Umerkhan v. Bismillabi alias Babula/ Shaikh and
Ors. (2011) 9 SCC 684; Shiv Cotex v. Tirgun Auto Plast
Private Limited and Ors. (2011) 9 sec 678- relied on.
    M. S. V. Raja and Anr. v. Seeni The var and Ors. (2001) 6
SCC 652 :2001 (1) Suppl. SCR 513 - distinguished.               H
    480       SUPREME COURT REPORTS              [2012] 2 S.C.R.


A                         Case Law Reference:
      1997 (1) Suppl. SCR 201       Relied on          Para 10
      (1999) 2 sec 471              Relied on          Para 10
      1997 (2) SCR 12               Relied on          Para 10
B
      1998 (1) Suppl. SCR 297       Relied on          Para 10
      (1999) 6 sec 35               Relied on          Para 10
      1999 (5) Suppl. SCR 24        Relied on          Para 10
c
      2000 (2) SCR 605              Relied or.         Para 10
      2001 (1) SCR 948              Relied on          Para 10
      2004 (3) Suppl. SCR 298       Relied on          Para 10
D     2005 (4) Suppl. SCR 363       Relied on          Para 10
      2006 (4) Suppl. SCR 152       Relied on          Para 10
      2008 (2) SCR 753              Relied on          Para 10

E     2009 (2) SCR 71               Relied on          Para 10
      2010 (13) SCR 658             Relied on          Para 10
      (2011 > 9 sec 684             Relied on          Para 11
      (2011 > 9 sec 678             Relied on          Para 11
F
      2001 (1) Suppl. SCR 513       Distinguished      Para 13
        CIVIL APPELLATE JURISDICTION : Civil Appeal No.
    2870 of 2012.
G       From the Judgment & Order dated 09.03.2011 of the High
    Court of Punjab & Haryana at Chandigarh in Regular Second
    Appeal No. 1679 of 2001.

          Gagan Gupta for the Appellant.
H
                 HARDEEP KAUR v. MALKIAT KAUR                           481


          Neeraj Kumar Jain, Umang Shankar, Ugra Shankar                        A
··    Prasad for the Respondent.

            The Judgment of the Court was delivered by

            R.M. LODHA, J. 1. Leave granted.
                                                                                B
            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                   c
      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        D·
     · 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                E
       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               F
       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                    G
       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 plaintiffs
       case that she had been always ready and willing to perform her           H
      482        SUPREME COURT REPORTS               [2012] 2 S.C.R.


 A. 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
 8
      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:-
 C
            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?
. D
            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?
 E
            4.    Whether the plaintiff is ready and willing and is still
                  ready and willing to perform her part of contract?

            5.    Relief.

 F      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 plaintiffs 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
 G 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
 H District Judge, Sangrur, on hearing the parties, although did not
          HARDEEP KAUR v. MALKIAT KAUR                         483
                 [R.M. LODHA, J.]

interfere with the finding of the trial court in respect of the       A
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      B
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               C
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.
                                                                      D
     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
                                                                      E
     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              F
    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        G
    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.
                                                                      H
    484          SUPREME COURT REPORTS               [2012) 2 S.C.R.


A         (4) Where the High Court is satisfied that a substantial
          question of law is involved in any case, it shall formulate
          that question.

          (5) Tbe appeal shall be heard on the question so
          formulated and the respondent shall, at the hearing of the
B
          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
c         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
D         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
E         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
F
           (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
G 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
H to formulate substantial question of law involved in the second
           HARDEEP KAUR v. MALKIAT KAUR                      485
                  [R.M. LODHA, J.]
appeal at the initial stage if it is satisfied that the matter       A
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 Others 1, and Dnyanoba
Bhaurao Shemade v. Maroti Bhaurao Marnor2. It needs to be            B
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             c
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
                                                                     0
in Section 100 CPC has been reiterated in Panchugopal
Barua and Others v. Umesh Chandra Goswami and Others; 3 ,
Sheet Chand v. Prakash Chand4; Kanai Lal Garari and Others
v. Murari Gangu/y and Others 5; /shwar 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;            E
Santosh Hazari v. Purushottam Tiwari (Deceased) by L.Rs. 8;
Chadat Singh v. Bahadur Ram and Others9; Sasikumar and
Others v. Kunnath Chel/appan Nair and Others 10; C.A.
Su/aiman and Others v. State Bank of Travancore, A/wayee
                                                                     F
1.   (1997) 5 sec 438.
2.   (1999) 2 sec 471.
3.   (1997) 4 sec 713.
4.   (1998) 6 sec 683.
5.   (1999) 6 sec 35.                                                G
6.   c20ooi 1 sec 434.
7.   c2000) 3 sec 708.
8.  c2001i 3 sec 179.
9. (2004) 6 sec 359.
10. (2005) 12 sec 588.                                               H
    486      SUPREME COURT REPORTS                  [2012] 2 S.C.R.

A and Others 11 ; Bokka Subba Rao v. Kukkala Balakrishna and
  Others 12; Narayanan Rajendran 13 and Another v. Lekshmy
  Sarojini and .Others and Municipal Committee, Hoshiarpur v.
  Punjab State Electricity Board and Others 14 .

       11. Some of the above decisions and the provisions
8
  contained in Sections 100, 101 and 103 CPC were considered
  in a recent decision of this Court in Umerkhan v. Bismillabi
  alias Babula/ Shaikh and Others. 15• One of us (R.M. Lodha,J.)
  speaking for the Bench in Umerkhan 15 stated the legal position
  with regard to the jurisdiction of the High Court in hearing a
C 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
D        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
E        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
F         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
G
    11. c2006) 6 sec 392.
    12. (2008) 3 sec 99.
    13. (2009) s sec 264.
    14. c2010) 13 sec 216:
H   1s. c2011) 9 sec 684.
         HARDEEP KAUR v. MALKIAT KAUR                         487
                [R.M. LODHA, J.]
    substantial question of law is involved at the time of            A
    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".                 B

                                            (emphasis supplied)

    12. This Court has been bringing to the notice .of the Higti
    Courts the constraints of Section 100 of the Code and the
    mandate of the law contained in Section 101 that no               C
    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         D
    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        E
Court under Section 100 CPC laid down in Umerkhan 15 has
been reiterated in a subsequent decision in Shiv Cotex v.
Tirgun Auto Plast Private Limited and Others. 16 • This Court
through one of us (R.M. Lodha,J.) observed in paragraph 11
of the Report (page 681) as follows:-
                                                                      F
    "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           G
    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

16. (2011r9 sec 678.                                                  H
    488       SUPREME COURT REPORTS                 [2012] 2 S.C.R.


A         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
                      "
          appea I.......
B
        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
c         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
D         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
E
          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
F         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
G         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
H         she usually thumb marked the documents and had not
         HARDEEP KAUR v. MALKIAT KAUR                          489
                [R.M. LODHA, J.]

    signed the agreement to sell (Exhibit P .1) and the                A
    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            B
    already"been paid at the time of execution of the
    agreement to sell (Exhibit P.1 ). The remaining amount of
    saie consideration of Rs. 80,000/- was deposited by the
    plaintiff in the trial court. It sho~s that the plaintiff has
    always been ready and willing to perform her part of the           c
    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          D
     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         E
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               F
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         G
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,
                                                                       H
    490        SUPREME COURT REPORTS                [2012] 2 S.C.R.


A   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 Others 17.

         14. In paragraph 18 (pages .659-660) of the Report in
8
    M.S. V. Raja 17 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
C         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
D         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
E         law did not arise for consideration and they were not
          formulated. Maybe, substantial questions of law were not
          specifically and separately formulated. In this view, we do
          not find any merit in the argument of the learned counsel
          in this regard."
F      15. In M.S. V. Raja 17 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
  obse~d that the finding recorded by both the courts below with
  no evidence to support it was itself considered as a substantial
G 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,

H   11. (2001) e sec 652.
           HARDEEP KAUR v. MALKIAT KAUR                        491
                  [R.M. LODHA, J.]
  it was held by this Court that it could not be said that the         A
· 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. Raja 17 must be understood in the above
  context and peculiarity of the case under consideration. The law     B
  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
                                                                       c
  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.
                                                                           ...
                                                                       D
      17. Consequently, the appeal is allowed and the impugned
   judgment of the High Court is set aside. The second appeal
   (RS.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.                       E
  K.K.T.                                         Appeal allowed.