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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

Palais de Justice de Chandigarh, Inde

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                                                             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.

                                                                                           3

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).   

                                                                                          4

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 

                                                                                        5

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 

                                                                                          6

         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 

                                                                                         7

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 

                                                                                               8

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 

                                                                                     10

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.

                                                                                   11

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