Holding

The High Court was not justified in dismissing the second appeal by a non‑speaking order; the appeal is remanded for fresh determination of any substantial question of law.

Summary

The defendant appealed a decree for specific performance of a sale agreement, which had been upheld by the trial court and a first appeal under Section 96 CPC. The defendant filed a second appeal under Section 100 CPC, which the High Court dismissed summarily on the ground that no substantial question of law was involved. The Supreme Court held that the High Court was not justified in dismissing the appeal without reasons, noting that questions such as the court's discretion to grant specific performance under the Specific Relief Act can constitute a substantial question of law affecting the parties' rights. The Court set aside the High Court's order and remanded the second appeal for fresh consideration of whether any substantial question of law exists. It also observed that amendments to Sections 100 and 115 CPC have unduly curtailed appellate jurisdiction and suggested legislative reconsideration.

Issues considered

Whether the High Court was justified in dismissing the second appeal summarily without addressing the alleged substantial question of law.
Whether the question of a court's discretion to decree specific performance under the Specific Relief Act constitutes a substantial question of law.
Interpretation of the amended Section 100 CPC regarding the concept of 'substantial question of law' in second appeals.
Effect of the amendment to Section 115 CPC on the High Court's revisional jurisdiction.

Legislation cited

Code of Civil Procedure, 1908s. 100, s. 115, s. 96
Limitation Act
Specific Relief Act, 1963s. 10, s. 16, s. 20

Subjects

specific performancesecond appealsubstantial question of lawSection 100 CPCSection 115 CPCSpecific Relief Actdiscretionappellate jurisdictionlimitation

Judgment

A RAJESHWARI
V.
PURAN INDORIA

AUGUST 25, 2005

B [G.P. MATHUR AND P.K. BALASUBRAMANYAN, JJ.]

Code of Civil Procedure, 1908 :

Section 100-Second appeal arising out of suii for specific performance
C ofagreement for sale ofimmovable property-Summary dismissal ofthe same
by High Court on grounds that it did not invol~e any substantial question of
/aw-Propriety of-Held, improper-Questiqn whether a court could exercise
discretion for decreeing specific performance, could be a question oflaw that
substantially affects the rights ofparties-Hence, High Court not justified in
dismissing the second appeal by a non-speaking order-Matter remanded
D back for fresh disposal-Specific Relief Act, 1963--Sections JO, 16 & 20.

Sections 100 & 115-Jurisdiction of High Court to interfere in second
appeal and in revision-Suggestion given to legislature to consider restoring
Section 115 as it existed prior to its amendment by Act 2212002 and confer
E a broader right of second appeal as it existed prior to introduction of the
concept of "substantial question of law" into Section JOO by Act 10411976.

Respondent filed suit for specific performance of agreement for sale
of immovable property. Trial Court decreed the suit. The decision was
upheld in appeal under Section 96 CPC. Appellant filed second appeal
F before High Court under Section 100 CPC which summarily dismissed the
same on grounds that the appeal did not involve any substantial question
of law and lacked merit. Hence the present appeal.

Allowing the appeal and remanding the matter back to High Court,
G the Court

HELD : 1. The High Court was not justified in dismissing the second
appeal by a non-speaking order.

2.1. The right to specific performance of an agreement for sale of
H immovable property, when filed, raises questions of substantial importance

1016
RAJESHW ARI v. PURAN INDORIA 1017

between the parties as to whether the plaintiff has satisfied the requirements A
of Section 16 of the Specific Relief Act, whether it is a case in which specific
performance of the contract is enforceable in terms of Section 10, whether •
in terms of Section 20 of the Act, the discretion to decree specific
performance should be exercised by the court and in some cases, whether
the suit was barred by limitation and even if not, whether the plaintiff has B
been guilty of negligence or latches disentitling him to a decree for specific
performance. These questions, by and large, may not be questions of law
of general importance. But they cannot also be considered to be pure
questions of fact based on an appreciation of the evidence in the case. They
are questions which have to be adjudicated upon, in the context of the
relevant provisions of the Specific Relief Act and the Limitation Act (if C
the question of limitation is involved). Though, an order in exercise of
discretion may not involve a substantial question of law, the question
whether a court could, in law, exercise a discretion at all for decreeing
specific performance, could be a question of law that substantially affects
the rights of parties in that suit. Therefore, in the case on hand, the High D
/ C?urt was not justified in dismissing the second appeal in the manner in
wliich it has done. [1022-H; 1023-A, B, C]

Raghunath Prasad Singh v. Deputy Commissioner of Patabgarh, 54
Indian Appeals 126 PC; DeputyCommissionerv. Rama Krishna. AIR(l953)
SC 521 and Cfmni/al V. Mehta and Sons Ltd v. Century Spinning and E
Manufacturing Co. Ltd, AIR (1962) SC 1314, referred to.

2.2. The proper course to adopt is to set aside the judgment and
decree of the High Court in· the second appeal and remand the second
appeal to the High Court for a consideration of the question whether any F
substantial question of law is involved in the case in the light of the
pleadings and the facts established and if it arises, to decide whether any
interference in second appeal under Section 100 CPC is warranted or
justified. (1023-E, FJ

3.1. The amendment brought to Section 100 of the Code with effect G
from 1.2.1977 by Act I 04 of 1976, has really not advanced the cause of
justice. Earlier, interference could be had under Section 100 of the Code if
the decision was contrary to law or some usage having the force of law; or
the decision had failed to determine some material issue of law or usage
having the force of law; or suffered from a substantial error or defect in H
1018 SUPREME COURT REPORTS [2005] SUPP. 2 S.C.R.

A procedure provided by the Code or any other law for the time being in
force, which may possibly have produced the error or defect in the decision
of the case upon the merits. The provision enabled the court to correct
errors oflaw or ofpr:ocedure in an appropriate case and even unreasonable
appreciation of evidence could have been brought within the contours of
B error of law in the circumstances of a given case. But by introducing the
concept of "substantial question of law" in Section 100 of the Code, the
right of the litigant to have a decision after a re-appraisal of the relevant
materials by the High Court has been curtailed. [1024-B, C, DJ

3.2. It is true that it is in consonance with public policy, to curtail
c a right of appeal (that too, a second appeal) so as to ensure that a litigation
attains finality as early as possible. At the same time, it has also to the be
ensured that justice, according to law, is made available to the litigant who
approaches the court. More often than not, first appellate courts, simply,
mechanically, reiterate what is stated by the trial court and confirm
D finding of fact rendered by the trial court without making an independent
reappraisal of the pleadings and the evidence in the case as they are bound
to do as courts of appeal. But even in such cases, the High Courts find it
difficult to interfere, though, they do interfere, when the injustice caused
to the litigant is so apparent that the same could not be overlooked and
the judgment under appeal allowed to pass muster. There have also been
E occasions when the High Courts had felt compelled to interfere,
notwithstanding the limitation imposed by the wording of Section 100
CPC and on occasions such decisions have been interfered with by this
Court, on the ground that the High Court has exceeded its jurisdiction
under Section 100 CPC. [1025-E, F, GJ
F
3.3. When a substantial question of law as expounded by this Court
is only an open question of law substantial as between the parties, a
restoration of the position as it existed period to 1.2. 1977 does not appear
to be re-opening of the door too wide. [1024-G, HJ

G 3.4. After the amendment of the Code by Act 22 of2002, interference
in revision under Section 115 of the Code of Civil Procedure, 1908 has also
been substantially curtailed. Even if the High Court is satisfied that there
would be failure of justice if the order is allowed to stand, the High Court
cannot interfere under Section 115 of the Code, in view of the deletion of
H the particular proviso which existed prior to the amendment. Therefore,
RAJESHWARI v. PURAN INDORIA [BALASUBRAMANYAN, J.] !019

the High Courts cannot correct errors that could lead to a mis-trial or a A
finding of fact to be arrived at based on an erroneous approach that is
proposed then and there by exercising a revisional jurisdiction, even at
the initial stage so that at a later stage, a remand by the first appellate
court is avoided. The curtailment of the right to interfere under Section
115 of the Code has only resulted in the High Courts being flooded with B
proceedings under Article 227 of the Constitution of India challenging all
sorts of interlocutory orders. It is for the law makers to consider whether
it would not be more appropriate to restore Section 115 of the Code as
it existed prior to its amendment by Act 22 of 2002 and confer a broader
right of second appeal as it existed prior to the introduction of the concept
of substantial question of law into Section 100 of the Code, by Act 104 c
of 1976. [1025-A, B, q

CIVIL APPELLATE JURISDICTION: Civil AppeatN6:51<J5 6f2002.

From the Judgment and Order dated 12.12.200 I of the Rajasthan High D
Court in S.B. Civil Second Appeal No. 168 of 2001.

Anil Karanwal and Dr. Sushi! Balwada for the Appellant.

B.D. Sharma for the Respondent.
E
The Judgment of the Court was delivered by

P.K. BALASUBRAMANYAN, J. : Leave granted.

I. This appeal is by the defendant. The plaintiff-respondent sued for F
specified performance of an agreement to sell the suit property having an
extent of 2000 sq.feet. The price fixed was Rs. 2,500. A sum of Rs.1,000 was
paid as advance. The agreement was entered into on 23.2.1981. The agreement
did not fix any date for performance. The plaintiff issued a notice to the
defendant on 31.7.1989, more than seven years after the agreement, calling
upon the defendant to execute the sale deed on receipt of the balance G
consideration. The defendant not having responded, the plaintiff filed the suit
on 01.11.1990 for special performance.

2. The defendant having denied the claim for specific performance made
by the plaintiff and having raised several defences the trial court raised the H
1020 SUPREME COURT REPORTS [2005] SUPP. 2 S.C.R.

A following issues for trial :

( 1) Whether the plaintiff had been ready and willing to perform his
part of the contract in pursuance of the agreement dated 23rd February, 1981
with respect to the part of the land measuring to 50 x 40 ft. described in
B paragraph No. 2 of the plaint?

(2) Whether the plaintiff cancelled the aforesaid agreement to sell the
land after receiving a sum of Rs. 3,500 form the defendant?

(3) Whether the suit had been filed by the plaintiff within time,?
c
(4) Relief.

The trial court answered these issues is favour of the plaintiff and
decreed the suit. The defendant filed an appeal under Section 96 of the Code
Q of Civil Procedure, 1908. The Additional District Judge concurred with the
decision of the trial court and dismissed the appeal, thus, confirming the
decree of the trial court Feeling aggrieved, the defendant filed a second appeal
before the High Court under Section 100 of the Code of Civil Procedure,
1908. The defendant submitted in his memorandum of second appeal that the
following substantial questions of law were involved in the case.
E
"A. Whether the courts below have committed a grave legal error in
not taking into consideration the great variance between the
pleading and the proof of the plaintiff which was sufficient for
dismissing the suit of the plaintiff for specific performance of the
F agreement for sale?

B. Whether the courts below were wrong in passing a decree for
specific performance of the agreement for sale in favour of the
plaintiff as a matter of course by ignoring the legal position that
the grant of relief of specific performance is always discretionary
G and the courts are not bound to grant the same in all cases?

C. Whether the courts below have committed a grave legal error in
holding the suit of the plaintiff to be within the period oflimitation
although the same was filed after 7 years of the agreement for sale
H which was clearly time barred?
RAJESHWARI v. PURAN INDORIA [BALASUBRAMANYAN, J.] 1021

D. Whether the courts below have committed a grave legal error in A
not dismissing the suit of the plaintiff on the ground of delay and
latches even assuming that the same was filed within the period
of limitation?

E. Whether the courts below have committed a grave legal error in B
rejecting the document Ex-A-l on irrelevant considerations which
was executed by the plaintiff after obtaining a consideration of Rs.
3500?

When the second appeal came up before the High Court, the High Court
dismissed the same in the following words : C

- "Heard Learned Counsel.

I do not find the appeal to be involving any substantial
question of law. The appeai thus lacks merit and is hereby D
dismissed summarily."

Aggrieved by this dismissal, the defendant filed the petition for special leave
before this Court invoking Article 136 of the Constitution oflndia. This Court
issued notice thereon in the following words.
E
"Issue notice to the respondent to show cause why tlie appeal
be not remanded to the High Court for examining, if any, the
question of law suggested in the memorandum of second appeal
deserves to be heard as substantial question of law".
F
On receipt of the notice, the plaintiff-respondent appeared and sought an early
hearing of the matter and with the consent of counsel, it was heard in detail,
and the matter is being disposed of finally by this judgment.

3. Normally, a suit for specific performance of an agreement for sale
of immovable property, involves the question whether the plaintiff was ready G
and willing to perform his part of the contract in terms of Section 16 of the
Specific Relief Act, whether it was a case for exercise of discretion by the
court to decree specific performance in terms of Section 20 of the Specific
Relief Act and whether there were latches on the part of the plaintiff in
approaching the court to enforce specific performance of the contract. In some H
1022 SUPREME COURT REPORTS [2005] SUPP. 2 S.C.R.
....
A cases, a question of limitation may also arise in the context of Article 54 of
the Limitation Act on the terms of the agreement for sale. Other questions
like the genuineness of the agreement, abandoning of the right to specific
performance, a novation and so on, may also arise in some cases. No doubt,
a finding on the three primary aspects indicated earlier would depend upon
the appreciation of the pleadings and the evidence in the case in the light of
B
the surrounding circumstances. Could it be appropriate to understand these
questions purely as questions of fact in the context of Section 100 of the Code
of Civil Procedure, 1908? In Raghunath Prasad Singh v. Deputy Commissioner
of Pratabgarh, (54 Indian Appeals 126), the Privy Council, though, in the
context of Section 110 of the Code of Civil Procedure, negatived the theory
c that to be a sub.stantial question of law, a question of law has to be of general
importance and stated that "a substantial question of Law" is a substantial
question of law as between the parties in the case involved. This approach
was adopted by this Court in Deputy Commissioner v. Rama Krishna, AIR
( 1953) SC 521. This Court held, again in the context of Section 110 of Code
D of Civil Procedure, that since the ground on which the appeal was dismissed
by the High Court raised a question of law of importance to the parties, on
that ground alone the appellant was entitled to a certificate under Section 11 O
of the Code. In Chunilal v. Mehta and Sons Ltd. v. Century Spinning and
Manufacturing Co. Ltd., AIR ( 1962) SC 1314 this Court, again in the context
of Section 110 ofthe Code and Article 133(1)(a) ofthe Constitution of India,
E had occasion to consider the question. A Constitution Bench of this Court held
that the proper test for determining whether a question of law raised in the
case is substantial would be whether it is of general public importance or
whether it directly and substantially affects the .rights of the parties and if so
whether it is either an open question in the sense that it is not finally settled
F by this Court or by the Privy Council or by the Federal Court or is not free
from difficulty or calls for discussion of alternative views. If the question is
settled by the highest Court or the general principles to be applied in
determining the question are well settled and there is a mere question of
applying those principles or that the plea raised is palpably absurd, the
question would not be a substantial question of law. Thus, it was accepted
G that a question of law would be a substantial question of law if it directly and
substantially affects the rights of the parties and if it was not covered by a
decision of the Supreme Court or of the Privy Council or of the Federal Court.

4. The right to specific performance of an agreement for sale of
H immovable property, when filed, raises questions of substantial importance
RAJESHW ARI v. PURAN lNDOR!A [BALASUBRAMANYAN, J.] l 023

between the parties as to whether the plaintiff has satisfied the requirements A
of Section 16 of the Specific Relief Act, whether it is a case in which specific
performance of the contract is enforceable in terms of Section 10, whether
in terms of Section 20 of the Act, the discretion to decree specific performance
should be exercised by the court and in some case, whether the suit was barred
by limitation and even if not, whether the plaintiff has been guilty of B
negligence or latches disentitling him to a decree for specific performance.
These questions, by and large, may not be questions of law of general
importance. But they cannot also be considered to be pure questions of fact
based on an appreciation of the evidence in the case. They are questions which
have to be adjudicated upon, in the context of the relevant provisions of the
. Specific Relief Act and the Limitation Act (if the question of limitation is C
involved). Though, an order in exercise of discretion may not involve a
substantial question of law, the question whether a court could, in law,
.'
exercise a discretion at all for decreeing specific performance, could be a
question of law that substantially affects the rights of parties in that suit.
Therefore, in the case on hand, the High Court was not justified in dismissing D
the second appeal in the manner in which it has done. Be it noted, that the
High Court has also not spoken while dismissing the second appeal. We are
therefore of the view that it is necessary for the High Court to consider
whether a substantial question of law is involved or not and to give its reasons
for coming to its conclusion either way, and if it finds that a substantial
question of law or substantial questions of law is or are involved, to frame E
that question or those questions and to answer it or them in accordance with
law. In the context of the notice issued by this Court while entertaining the
Petition for Special Leave to Appeal, the proper course to adopt is to set aside
the judgment and decree of the High Court in the second appeal and remand
the second appeal to the High Court for a consideration of the question F
whether any substantial question of law is involved in the case in the light
of the pleadings and the facts established and if it arises, to decide whether
any interference in second appeal under Section 100 of the Code of Civil
Procedure, 1908 is warranted or justified.

5. In view of the fact that we are remanding the second appeal for a G
proper decision by the High Court, we are not adverting to the contentions
raised on behalf of the plaintiff-respondent that there is no question of
\imitation in this case and that no substantial question of law· arose for
decision. It is open to the plaintiff-respondent to raise all available contentions
before the High Court, while that court considers the second appeal afresh H
1024 SUPREME COURT REPORTS [2005] SUPP. 2 S.C.R.

A pursuant to the remand. We once again clarify that this remand is based only
on the argument that the H4gh Court has not properly applied its mind to the
aspects that may have to be considered in the second appeal and has dismissed
the second appeal in a cursory and unsatisfactory manner.

B 6. Before parting, we feel that we would be justified in pointing out that
the amendment brought to Section I 00 of the Code with effect from 1.2.1977
by Act 104 of 1976, has really not advanced the cause of justice. Earlier,
interference could be had under Section 100 of the code if the decision was
decision was contrary to law or some usage having the force of law; or the
decision had failed to determine some material issue of law or usage having
C the force of law; or suffered from a substantial error or defect in procedure
provided by the Code or any other law for the time being in force, which may
possibly have produced the error or defect in the decision of case upon the
merits. The provision enabled the court to correct errors oflaw or of procedure
in an appropriate case and even unreasonable appreciation of evidence could
D have been brought within the contours of error of law in the circumstances
of a given case. But by introducing the concept of "substantial question of
Jaw" in Section I 00 of the Code, the right of the litigant to have a decision
after a re-appraisal of the relevant materials by the High Court has been
curtailed. Though, courts of first appeal are made the final courts of facts,
there are instances when first appellate courts merely, mechanically, confirm
E the findings of fact rendered by the trial court without an independent
reappraisal of the pleadings and the evidence in the case. Since a judgment
of affirmance need n0t be as elaborate as a judgment reversing the decision
of the court below, it is often contended that the judgment of the appellate
court satisfies the requirements of Order XLI Rule 31 of the Code. There are
F occasions when the High Court feels the constraint of Section I 00 and
reluctantly declines to interfere though interference would have been proper
to render justice between the pa:ties. High Courts are often confronted with
an argument that even if what was involved was a mixed question of fact and
law or even a question of law, that did not constitute a substantial question
of law justifying interference under Section I 00 of the Code. Why not an error
G of law committed by the appellate court be corrected in Second Appeal? Why
should not a litigant have a opportunity of having the decision in his case
corrected for an error of law by the High Court at the second appellate stage?
When a substantial question of law as expounded by this Court is only an
open question of law substantial as between the parties, a restoration of the
H position as it existed prior to 1.2.1977 does not appear to be re-opening of
RAIESHWARI v. PURAN INDORIA [BALASUBRAMANYAN, J.] 1025

the door too wide. It must be remembered, that now, after the amendment A
of the Code by Act 22 of 2002, interference in revision under Section 115
of the Code of Civil Procedure, 1908 has also been substantially curtailed.
Even if the High Court is satisfied that there would be failure of justice if
the order is allowed to stand, the High Court cannot interfere under Section
115 of the Code, in view of the deletion of the particular proviso ,._foch existed B
prior to the amendment. Therefore, the High Courts cannot correct errors that
could lead to a mis-trial or a finding of fact to be arrived at based on an
erroneous approach that is proposed then and there by exercising a revisional
jurisdiction, even at the initial stage so that at a later stage, a remand by the
first appellate court is avoided. The curtailment of the right to interfere under.
Section 115 of the Code has only resulted in the High Courts being flooded C
with proceedings under Article 227 of the Constitution of India challenging
all sorts of interlocutory orders. It is for the law makers to consider whether
it would not be more appropriate to restore Section 115 of the Code as it
existed prior to its amendment by Act 22 of 2002 and confer a broader right
of second appeal as it existed prior to the introduction of the concept of D
substantial question oflaw into Section I 00 of the Code, by Act 104 of 1976.

7. It is true that it is in consonance with public policy, to curtail a right
of appeal (that too, a second appeal) so as to ensure that a litigation attains
finality as early as possible. At the same time, it has also to be ensured that
justice, according to law, is made available to the litigant who approaches the E
court. Our experience, as lawyers and Judges of High Courts shows that more
often than not, first appellate courts, simply, mechanically, reiterate what is
stated by the trial court and confirm findings of fact rendered by the trial court
without making an independent reappraisal of the pleadings and the evidence
in the case as they are bound to do as courts of appeal. But even in such cases, F
the High Courts find it difficult to interfere, though, they do interfere, when
the injustice caused to the litigant is so apparent that the same could not be
overlooked and the judgment under appeal allowed to pass muster. There have
also been occasions when the High Courts had felt compelled to interfere,
notwithstanding the limitation imposed by the wording of Section I 00 of the
Code of Civil Procedure, and on occasions such decisions have been G
interfered with by this Court, on the ground that the High Court has exceeded
its jurisdiction under Section I 00 of the Code of Civil Procedure. After aJJ,
the purpose of the establishment of courts of justice is to render justice
between the parties. ls it necessary to unduly curtail the jurisdiction of the
High Courts, either under Section 100 of the Code of Civil Procedure or under H
1026 SUPREME COURT REPORTS [2005] SUPP. 2 S.C.R.

A Section 115 of the Code of Civil Procedure in that context? Of course, the
High Courts have to act with circumspection while exercising these jurisdictions.
Certainly, it is for the Parliament to take into account all the relevant aspects.
We are making these observations only with a view to highlight the position
that has emerged in the light of the amendments to Sections 100 and 115 of
B the Code of Civil Procedure as they are now obtaining.

8. In view of our conclusion in the present case that the High Court was
not justified in dismissing the second appeal by a non-speaking order, we
allow the appeal, set aside the judgment and decree of the High Court and
remand the second appeal to the High Court for a fresh hearing and disposal
c and we make it clear that we have not decided whether the second appeal
involves any substantial question of law or expressed any view on any of the
aspects on the merits of the case. The parties are directed to appear in the
High Court on 26.9.2005.

B.B.B. Appeal allowed.