Vs. The Karnataka Electricity Board & Ors  Insc 1156 (20 November 2007)
Sinha & Harjit Singh Bedi
out of SLP (Civil) No. 24595 of 2005] S.B. SINHA, J:
Defendant in a suit for specific performance of contract is before us aggrieved
by and dissatisfied with a judgment and order dated 15.09.2005 passed by the
High Court of Karnataka in R.S. A. No. 238 of 2000 whereby and whereunder the
appeal preferred by Respondent No. 1 herein arising out of a judgment and
decree dated 25.01.2000 passed in R.A. No. 5 of 1992 was dismissed.
agreement for sale was entered into by and between the defendant - appellant
and the plaintiff - Respondent No. 1 for sale of 4 acres, 4 guntas of land in
Survey No. 112/A, Chhidri village. A suit for specific performance of contract
was filed by the plaintiff - Respondent No. 1 on the premise that the appellant
did not perform his part of contract. The said suit was dismissed. It was,
however, inter alia held by the Trial Court that Respondent No. 1 was all along
ready and willing to perform its part of contract. An appeal preferred thereagainst
by the respondent No. 1 was dismissed.
First Appellate Court in arriving at its decision inter alia held:
Respondent No. 1 without any reason withheld payment of balance consideration
of Rs. 13,100/- and, thus, failed to perform its part of contract.
Respondent No. 1 was not always ready and willing to perform its part of
contract and somehow wanted to transfer liability on the defendant as regards
conversion fine and measurement charges.
The findings of the Trial Court that the plaintiff Respondent No.
always ready and willing to perform its part of contract was not correct.
The plaintiff Respondent No. 1 did not approach the court with clean hands
and, thus, was not entitled to the discretionary relief of specific performance
a second appeal having been preferred by Respondent No. 1 before the High
Court, the following substantial questions of law were framed:
Whether both the courts have erred in refusing the specific performance
although the respondents received full consideration amount and a sum of Rs.
8,000/- towards development charges?
Whether the appellate court is justified in holding that the plaintiff was not
ever ready and willing to perform his part of the contract? iii) Whether the
courts below have not committed any error in directing to refund the earnest
High Court inter alia considering the stipulations made in agreement for sale
and other evidences brought on records, opined:
was for the defendant to bear the conversion expenses.
when the amount of Rs. 94,000/- and odd was paid to him, he was bound to
perform his part of contract by executing a deed of sale in favour of the
plaintiff Respondent No. 1.
The First Appellate Court failed to interpret the clauses of the agreement in
their proper perspective.
It applied the provisions contained in Section 22 of the Specific Relief Act
directing refund of the earnest amount only in a mechanical manner.
plea of Respondent No. 1 that it was ready and willing to forgo four guntas of
land was held by the High Court sufficient to meet the demand of the defendant appellant
For the foregoing reasons, it is to be held that both the Court below have
erred in interpreting Ex. P.1 in the proper perspective and rejecting for
specific performance. Hence, the substantial question No. 1 rests in favour of
the appellant and further the finding of the lower appellate court for the
plaintiff was not ready and willing to perform his part of contract is with a
basis and as such the same is to be reversed and as also the 2nd substantial
question of law to be held in favour of the appellant. In so far as the 3rd
substantial question of law is concerned in the event if the courts below have
considered the fact of hardship and in the event if the courts below would have
ordered for specific performance, then order for refund of money instead of
ordering for specific performance would be perverse. Accordingly, it is held
necessarily in favour of the appellant.
Nagendra Rai, learned senior counsel appearing on behalf of the appellant
submitted that the purported substantial questions of law formulated by the
High Court do not meet the requirements of Section 100 of the Code of Civil
Procedure (Code). It was further urged that having regard to the factual
findings arrived at by the First Appellate Court, the High Court should not
have interfered therewith in exercise of its power under Section 100 of the
Basava Prabhu S. Patil, learned counsel appearing on behalf of the respondents,
on the other hand, drew our attention to the factual matrix involved in the
matter. It was contended that Respondent No. 1 was put in possession pursuant
to the agreement for sale. A question, however, arose as to who on conversion
of the user of the land would pay the conversion fine.
submitted that Respondent No. 1 paid the said amount also.
aforementioned situation, interpretation of Clause 3 of the agreement arose for
consideration in the factual matrix obtaining in the matter, viz., Respondent
No. 1 not only paid a sum of Rs. 73,000/- out of the total amount of
consideration of Rs. 86,100/- but also paid a sum of Rs. 21,431.55 and Rs.
35.00 towards the conversion fine and measurement fees respectively.
substantial question of law ordinarily would arise from the finding of facts
arrived at by the Trial Court and the First Appellate Court. The High
Courts jurisdiction in terms of Section 100 of the Code is undoubtedly
The question as to whether the plaintiff was ready and willing to perform its
part of contract by itself may not give rise to a substantial question of law.
Substantial question of law should admittedly be formulated relying on or on
the basis of findings of fact arrived at by the Trial Court and the First
However, there cannot be any doubt whatsoever that consideration of irrelevant
fact and non-consideration of relevant fact would give rise to a substantial
question of law. Reversal of a finding of fact arrived at by the First
Appellate Court ignoring vital documents may also lead to a substantial
question of law.
v. Manikrao and Another [(1999) 3 SCC 573], this Court held:
The findings of fact concurrently recorded by the trial court as also by the
lower appellate court could not have been legally upset by the High Court in a
second appeal under Section 100 CPC unless it was shown that the findings were
perverse, being based on no evidence or that on the evidence on record, no
reasonable person could have come to that conclusion. [See also Iswar Bhai
C. Patel alias Bachu Bhai Patel v. Harihar Behera and Another (1999) 3 SCC 457]
Ordinarily, we would have allowed the appeal on the failure of the High Court
to formulate substantial questions of law within the meaning of Section 100 of
the Code, but, we feel that as the plaintiff Respondent No. 1 had already
parted with a substantial portion of the consideration amount as also upon
having paid a large sum towards conversion charges, in the interest of justice
another opportunity should be given to the High Court to frame proper
substantial questions of law arising in the matter.
may, however, notice a few decisions in regard to the jurisdiction of the High
Court under Section 100 of the Code.
Commissioner of Customs (Preventive) v. Vijay Dasharath Patel [(2007) 4 SCC
118], this Court held:
are not oblivious of the fact that the High Courts jurisdiction in this
behalf is limited. What would be substantial question of law, however, would
vary from case to case.
Moreover, although, a finding of fact can be interfered with when it is
perverse, but, it is also trite that where the courts below have ignored the
weight of preponderating circumstances and allowed the judgment to be
influenced by inconsequential matters, the High Court would be justified in considering
the matter and in coming to its own independent conclusion. (See Madan Lal v. Gopi.)
The High Court shall also be entitled to opine that a substantial question of
law arises for its consideration when material and relevant facts have been ignored
and legal principles have not been applied in appreciating the evidence.
Arriving at a decision, upon taking into consideration irrelevant factors,
would also give rise to a substantial question of law. It may, however, be
different that only on the same set of facts the higher court takes a different
view. [See Collector of Customs v. Swastic Woollens (P) Ltd. and Metroark Ltd.
Even in a case where evidence is misread, the High Court would have power to
interfere. (See W.B. Electricity Regulatory Commission v. CESC Ltd. and also Commr.
of Customs v. Bureau Veritas.)
Dutta Cycle Stores v. Gita Devi Sultania this Court held: (SCC p. 587, para 4)
4. Whether or not rent for the two months in question had been duly paid
by the defendants is a question of fact, and with a finding of such fact, this
Court does not ordinarily interfere in proceedings under Article 136 of the
Constitution, particularly when all the courts below reached the same
conclusion. But where the finding of fact is based on no evidence or opposed to
the totality of evidence and contrary to the rational conclusion to which the
state of evidence must reasonably lead, then this Court will in the exercise of
its discretion intervene to prevent miscarriage of justice. [See also
P. Chandrasekharan and Others v. S. Kanakarajan and Others, (2007) 5 SCC 669].
We, therefore, set aside the impugned judgment and remit the matter back to the
High Court for consideration of the matter afresh upon formulation of a
substantial question of law. The appeal is allowed. No costs.