R.S.A. No. 2414 of 1983 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH R.S.A. No. 2414 of 1983 Date of decision: 08.04.2010 Gurdial Singh and another ....Appellants versus Hazura Singh and others ....Respondents CORAM: HON'BLE MR. JUSTICE VINOD K. SHARMA Present: - Mr. Ashok Goel, Advocate, for the appellants. Mr. P.K. Gupta, Advocate, and Mr. Munish Gupta, Advocate, for respondent No.1. *** VINOD K. SHARMA, J. This is defendants' regular second appeal against the judgment and decree dated 8.8.1983, passed by the learned Courts below, vide which the suit filed by the plaintiff-Hazura Singh (now deceased) for specific performance of the contract, was ordered to be decreed. The plaintiff filed a suit on the pleadings, that Ram Kishan and Gurdial Singh, defendant/appellants executed an agreement to sell dated 30.12.1976 in favour of Hazura Singh, plaintiff, for sale of land measuring 20 kanals 8 marlas @ Rs.1,000/- (Rupees one thousand only) per bigha. The date of execution of the sale deed was fixed 31.12.1977. It was stipulated in the agreement, that on failure of the vendors to execute the sale deed, the vendee would be entitled to recover the advance amount along with damages @ Rs.100/- (Rupees one hundred R.S.A. No. 2414 of 1983 -2- only) per bigha. The earnest money paid was Rs.7,900/- (Rupees seven thousand and nine hundred only). The defendant/appellants failed to execute the sale deed, instead a collusive decree was suffered by the appellants in suit No.849/29.12.1977, which was filed by defendants No.4 and 5 i.e. the minor sons of Ram Kishan, vendor. In the suit, the respondent/plaintiff pleaded, that he was ready and willing to pay the balance sale consideration in terms of the agreement. It was also pleaded, that on the date fixed for execution of the sale deed, he appeared before the Sub Registrar, Sirhind, with balance sale consideration for getting the sale deed executed. In support of this, the plaintiff got his presence marked by getting the affidavit attested by the Sub Registrar. It was stated in the affidavit, that since the sale deed was to be executed on 31.12.1977, but 31.12.1977 and 1.1.1978 being the holidays he had appeared before the Sub Registrar on 2.1.1978. The case of the plaintiff/respondent was, that he even served a notice dated 26.12.1977 and another notice dated 3.6.1978, asking the defendant/appellants to execute the sale deed. The decree in favour of minors was also challenged, the decree-holders were impleaded as defendants No.4 and 5 in the suit. The vendors in their written statement denied the execution of the agreement to sell, and the payment of earnest money of Rs.7,900/- (Rupees seven thousand and nine hundred only). It was pleaded that the defendants borrowed an amount of Rs.7,900/- (Rupees seven thousand and nine hundred only) as loan, from the plaintiff and executed pronote and receipt for a sum of Rs.7,900/- (Rupees seven thousand and nine hundred only). The amount was agreed to be repaied by 31.12.1977. It R.S.A. No. 2414 of 1983 -3- was only on failure of the repayment of the said amount, that the vendors had agreed to execute the sale deed in favour of the plaintiff in respect of the suit land by 31.12.1977. This fact was duly incorporated in the agreement to sell. Thus, the agreement was merely a security for repayment of loan. On the pleadings of the parties, the learned trial Court framed the following issues: - “1. Whether the defendants No.1 and 2 have executed an agreement of sale dated 30.12.1976 in favour of the plaintiff? OPP 2. Whether the plaintiff has been ready and willing to perform his part of the contract? OPP 3. Whether the plaintiff is entitled to the specific performance of the contract? OPP 4. Whether the decree dated 29.12.1977 is not binding on the plaintiff and is null and void as alleged? OPP 5. Whether the agreement is null and void as alleged? OPD 6. Whether the plaintiff is entitled to Rs.9125/- as alternative relief? OPP 7. Relief.” On appreciation of evidence and documents brought on record, a finding was recorded that the defendant/appellants had borrowed a sum of Rs.7,900/- (Rupees seven thousand and nine hundred only) from the plaintiff, and had executed pronote and receipt, which were proved as Ex.P1 and Ex.P2. The learned trial Court also held on issue No.1, that the defendant/appellants, had also executed an agreement simultaneously on the date, on which the pronote and receipt were executed, agreeing to R.S.A. No. 2414 of 1983 -4- sell the land measuring 20 kanals and 8 marlas in the event of their failure to repay the loan amount of Rs.7,900/- (Rupees seven thousand and nine hundred only). The learned trial Court also found that the presence of the vendee before the Sub Registrar on 2.1.1978, proved his willingness to perform his part of the contract. The suit was decreed on 14.8.1981, by directing the plaintiff/respondent to pay a sum of Rs.4337.50 (Rupees four thousand three hundred thirty seven and fifty paise), to defendants No.1 and 2 by 31.8.1981, and the sale deed be executed by 10.9.1981, failing which the liberty was given to the plaintiff, to get the sale deed executed through the Court. The judgment and decree passed by the learned trial Court became a subject matter of challenge in two appeals, one preferred by the defendant-vendors and another by the plaintiff/respondent. While the defendant/appellants challenged the decree for specific performance, the plaintiff/respondent filed an appeal for modification of decree, to the extent that he was entitled to recover the damages from the defendants, therefore, the amount payable towards sale consideration should be Rs.3,112/- (Rupees three thousand one hundred and twelve only), after deducting Rs.1,225/- (Rupees one thousand two hundred and twenty five only) as damages. The learned first appellate Court vide its judgment and decree dated 8.8.1983, dismissed the appeal filed by the defendants, and allowed the appeal filed by the plaintiff, and directed the defendant/appellants to execute the sale deed in favour of the plaintiff, within one month from the date of the decree, failing which the plaintiff R.S.A. No. 2414 of 1983 -5- was held entitled to get the sale deed executed through the Court. The learned lower appellate Court also held, that the plaintiff had deposited a sum of Rs.4337.50 (Rupees four thousand three hundred thirty seven and fifty paise) in the learned trial Court in terms of its judgment. The defendant/appellants challenged the judgments by filing one regular second appeal. The appeal was admitted by this Court on 17.1.1984, when the following order was passed: - “Having heard the learned counsel for the parties, I find that instead of disturbing the possession of the appellants/applicant on the suit land, it would be in the interest of justice if they are made to refund the earnest money (Rs.7,900/-) alleged to have been paid at the time of execution of the agreement, Exhibit P-3, dated December 30, 1976. Decree-holders are also allowed to withdraw the amount of Rs.4,337/- which they have deposited in the lower court in terms of the decree. All this is without prejudice to the rights of either of the parties to this litigation. The learned counsel for the applicant seeks time to make the payment of the above noted amount of Rs.7,900/-. The case is adjourned to February 20, 1984. In the meantime, the respondents/decree-holders may also take steps for the withdrawal of the above noted amount lying deposited in the trial court. Stay of dispossession to continue. January 17, 1984 Sd/-Judge” Another order was passed on 22.2.1984, which reads as under: “CM No.2948-C/1983 in RSA No.2414/1983 Present:Mr.Viney Mittal for the applicant-appellants Mr.Puran Chand for the respondents. The learned counsel for the respondents accepts that in R.S.A. No. 2414 of 1983 -6- terms of my order dated 17th January, 1984, the appellants have paid Rs.7900/- to the respondents. He, however, prays that the stay order granted vide order dated 8th December, 1983 be affirmed subject to the condition that the appellants are restrained from transferring the suit property in any manner till the final disposal of this appeal. The appellants through their counsel undertake not to transfer the suit land till the final disposal of this appeal and, thus, the abovenoted stay order dated 8th December, 1983, stands affirmed. 22.2.1984 Sd/-Judge” This Court, in view of the order passed at the time of admission of the regular second appeal, came to the conclusion, that this Court at the time of hearing of this appeal was of the opinion that instead of disturbing the possession of the appellants, it was in the interest of justice, if they were made to refund the earnest money along with interest. The earnest money was accordingly refunded and the balance sale consideration deposited by the plaintiff/respondent was also withdrawn. The defendant/appellants also paid interest on the amount. This Court was of the view, that this act on the part of the plaintiff/respondent amounted to waiver of his right to seek the specific performance. In order to come to this conclusion, this Court placed reliance on the judgment of the Hon'ble Supreme Court in Basheshar Nath v. Commissioner of Income Tax, Delhi and Rajasthan and another, AIR 1959 Supreme Court 149, wherein the connotation “waiver” was interpreted to mean as under: - “53..... The generally accepted connotation is that to R.S.A. No. 2414 of 1983 -7- constitute “waiver”, there must be an intentional relinquishment of a known right or the voluntary relinquishment or abandonment of a known existing legal right, or conduct such as warrants an inference of the relinquishment of a known right or privilege. Waiver differs from estopped in the sense that it is contractual and is an agreement to release or not to assert a right, estoppel is a rule of evidence....” This Court accordingly recorded a finding that the plaintiff/respondent dis-entitled himself to seek relief of specific performance. This Court directed that the interest be also paid within one month of the passing of the orders by this Court. The judgment passed by this Court was challenged by the plaintiff/respondent before the Hon'ble Supreme Court by way of Civil Appeal No.1356 of 2009. The Hon'ble Supreme Court set aside the judgment and decree passed by this Court, for framing substantial questions of law and thereafter deciding the appeal in accordance with law. The judgment passed by the Hon'ble Supreme Court reads as under: - “Leave granted. The suit for specific performance of an agreement to sell land measuring 12 bighas 4 biswas situated in village Basan, Tehsil – Sirhind, District – Patiala filed by the plaintiffs (respondents herein) was decreed by Sub Judge, Bassi against the defendants (appellants herein) with a direction to them to execute the sale deed on payment of the balance price. The appeal preferred by the appellants was dismissed by Additional District Judge, Patiala. However, the second appeal filed by the appellants was R.S.A. No. 2414 of 1983 -8- allowed by the High Court and the judgments and decrees of the Courts below were modified by directing that the respondents shall be entitled to interest on the balance amount deposited by him in the trial Court. We have heard learned counsel for the parties. A perusal of the impugned order shows that the High Court disposed of the second appeal without framing any substantial question of law. It is settled that in terms of Section 100 of the Code of Civil Procedure, the High Court is required to frame substantial question of law and then only second appeal can be allowed. Since, the High Court has failed to frame substantial question of law, the order under challenge is liable to be set aside. Accordingly, the appeal is allowed, impugned order rendered by the High Court is set aside and the matter is remanded back to the High Court. Now, the High Court shall consider whether any substantial question of law arises in the second appeal or not and if it comes to the conclusion that any substantial question of law arises, the same shall be framed and, thereafter, the appeal shall be decided in accordance with law after giving opportunity of hearing to the parties.” The learned counsel for the appellants contended, that following substantial questions of law arise for consideration by this Court: - “1. Whether the learned Courts below mis-interpreted the agreement of sale to record a finding that the defendant/appellants had intention to sell their land though it was merely executed by way of security for refund of the loan along with interest? 2. Whether the act of the plaintiff/respondent in withdrawing the earnest money and the sale consideration deposited in Court and getting the R.S.A. No. 2414 of 1983 -9- interest in terms of the pronote and receipt, amounts to waiver, which dis-entitled the plaintiff/respondent to seek relief of specific performance? 3. Whether the judgment and decree passed by the learned lower appellate Court in granting damages in addition to relief of specific performance is outcome of mis-reading of Section 21 of the Specific Relief Act, 1963? 4. Whether the judgment and decree passed by the learned Courts below is hit by Section 20 of the Specific Relief Act, 1963 for the reason of hardship to the defendants, which they could not foresee at the time of execution of the agreement?” Mr. P.K. Gupta, learned counsel, appearing on behalf of respondent No.1, raised a preliminary objection to the maintainability of this appeal, on the plea that as two appeals were filed against the judgment and decree passed by the learned trial Court i.e. one by defendant/appellants against the decree of specific performance and other by plaintiff/respondent seeking damages on account of non- execution of the sale deed, but the defendant/appellants have chosen to challenge the decree passed in the appeal filed by the defendant/appellants, whereas no appeal was filed against the judgment and decree passed on the appeal filed by the plaintiff/respondent No.1, therefore, the judgment would operate as res judicata. In support of this contention, the learned counsel for plaintiff/respondent No.1 placed reliance on the judgment of the Hon'ble Orissa High Court in Sumi Debi Vs. Pranakrushna Panda, AIR 1956 R.S.A. No. 2414 of 1983 -10- Orissa 68, wherein the Hon'ble Orisa High Court was pleased to lay down as under: - “Section 11 applies to the determination of the issue in appeal. Where two suits are tried together and are disposed of by the same judgment, but two decrees are drawn up and there is an appeal in only one suit, the appeal is barred as the appellant did not prefer an appeal against the other decree which was against him. The existence of an inconsistent decree which will support the bar under the plea of res judicata as being the important point is to be taken into consideration in coming to a conclusion whether the plea of res judicata is available under such circumstances. Case law discussed. Views of Lahore, Madras, Nagpur and Oudh Courts dissented from. Decision in 'AIR 1953 SC 419', held not binding as being not of the Supreme Court of India.” Reliance was also placed on the judgment of the Hon'ble Supreme Court Badri Narayan Singh Vs. Kamdeo Prasad Singh and another, AIR 1962 Supreme Court 338(1), which was a case arising out of an election petition, wherein the Hon'ble Supreme Court was pleased to lay down as under: - “15. It is true that both the appeals Nos. 7 and 8 before the High Court arose out of one proceeding before the Election Tribunal. The subject matter of each appeal was, however, different. The subject matter of appeal No.7 filed by the appellant related to the question of his election being bad or good, in view of the pleadings raised before the Election Tribunal. It had nothing to do with the question of right of respondent No.1 to be declared as duly elected candidate. The claim on such a right is to follow the decision of the question in appeal No.7 in case the appeal was dismissed, if appeal No.7 R.S.A. No. 2414 of 1983 -11- was allowed, the question in appeal No.8 would not arise for consideration. The subject matter of appeal No.8 simply did not relate to the validity or otherwise of the election of the appellant. It related to the further action to be taken in case the election of the appellant was bad, on the ground that a Ghatwal holds an office of profit. The decision of the High Court in the two appeals, though stated in one judgment, really amounted to two decisions and not to one decision common to both the appeals. It is true that in his appeal No.8, the respondent No.1 had referred to the rejection of his contention by the Election Tribunal about the appellant and respondent No.2 being holders of an office of profit. H had to challenge the finding on this point because if he did not succeed on it, he could not have got a declaration in his favour when respondent No.2 was also in the field and had secured a larger number of votes. He could, however, rely on the same contention in supporting the order of the Election Tribunal setting aside the election of the appellant and which was the subject matter of Appeal No.7. This contention was considered by the High Court in Appeal No.7 in that context and it was therefore that even though the High Court did not agree with the Election Tribunal about the appellant's committing a corrupt practice, it confirmed the setting aside of his election on the ground that he held an office of profit. The finding about his holding an office of profit served the purpose of both the appeals, but merely because of this the decision of the High Court in each appeal cannot be said to be one decision. The High Court came to two decisions. It came to one decision in respect of the invalidity of the appellant's election in Appeal No.7. It came to another decision in Appeal No.8 with respect to R.S.A. No. 2414 of 1983 -12- the justification of the claim of respondent No.1 to be declared as a duly elected candidate, a decision which had to follow the decision that the election of the appellant was invalid and also the finding that respondent No.2, as Ghatwal, was not a properly nominated candidate. We are therefore of opinion that so long as the order in the appellant's appeal No.7 confirming the order setting aside his election on the ground that he was a holder of an office of profit under the Bihar Government and therefore could not have been a properly nominated candidate stands, he cannot question the finding about his holding an office of profit, in the present appeal, which is founded on the contention that finding is incorrect.” Reliance was also placed on the judgment of the Hon'ble Supreme Court in Sheodan Singh Vs. Daryao Kunwar, AIR 1966 Supreme Court 1332(1), in which the judgment of the Hon'ble Lahore High Court in Khushi Ram-Karam Chand Vs. Commissioner of Income-Tax, Punjab, AIR 1927 Lahore 228 was overruled by laying down as under: - “Where the trial Court has decided two suits having common issued on the merits and there are two appeals therefrom and one of them is dismissed on some preliminary ground, like limitation or default in printing, with the result that the trial Court's decision stands confirmed, the decision of the appeal Court will be res judicata and the appeal Court must be deemed to have heard and finally decided the matter. In such a case the result of the decision of the appeal Court is to confirm the decision of the trial Court given on merits, and if that is so, the decision of the appeal Curt will be res judicata. AIR 1947 Oudh 74, Rel. on; (1897 24 Ind App 50 (PC) R.S.A. No. 2414 of 1983 -13- and AIR 1917 PC 201 and AIR 1923 All 490(2) (FB) and AIR 1962 Orissa 141, Disting; AIR 12946 Oudh 33 (FB) and AIR 1927 Lah 1, Overruled.” Reliance was also placed on the judgments of the Hon'ble Supreme Court in Premier Tyres Limited Vs. Kerala State Road Transport Corporation, AIR 1993 Supreme Court 1202 and in Ram Parkash Vs. Smt. Charan Kaur and another, AIR 1997 Supreme Court 3760. Finally, reliance was also placed on the judgment of the Hon'ble Supreme Court in ,1999(2) Civil & Rent Judicial Reports 121, wherein the Hon'ble Supreme Court was pleased to lay down, that when the decree is based on a common issue against the appellants in six appeals, the failure to bring legal representatives of one of the deceased appellants in one appeal results in abatement of other appeals. On the other hand, the learned counsel for the defendant/appellants vehemently contended, that the principle of res judicata cannot apply to the judgment and decrees arising out of a single suit. Though reliance was placed on the judgment of the Hon'ble Lahore High Court in Khushi Ram-Karam Chand Vs. Commissioner of Income-Tax, Punjab (supra), however, as it stood overruled, therefore, no notice can be taken of this judgment. The learned counsel for the defendant/appellants placed strong reliance on the judgment of the Hon'ble Supreme Court in Narhari and others Vs. Shanker and others, AIR 1953 S.C. 419, wherein the Hon'ble Supreme Court was pleased to lay down as under: - “4. In the judgment of the High Court, though reference is given to some of these decisions, it is merely R.S.A. No. 2414 of 1983 -14- mentioned that the appellant relies on these decisions. The learned Judges perhaps thought that in the presence of the Hyderabad Judicial Committee decision in – '17 Deccan L R 322 (A)', they need not comment on these decisions at all. There is also a later decision of the Judicial Committee of the State in – 'Bansilal v. Mohanlal', 33 Deccan LR 603 (F-G), where the well known and exhaustive authority of the Lahore High Court in - ' Mst. Lachmi v. Mst. Bhuli', AIR 1927 Lah 289 (H) was followed. In the Lahore case, there were two cross suits about the same subject matter, filed simultaneously between the same parties, whereas in the present case, there was only one suit and one judgment was given by the trial court and even in the first appeal to the Sadar Adalat, there was only one judgment in spite of there being two appeals by the two sets of defendants. The plaintiffs in their appeal to the High Court have impleaded all the defendants as respondents and their prayer covers both the appeals and they have paid consolidated court-fee for the whole suit. It is now well settled that where there has been one trial, one finding, and one decision, there need not be two appeal even though two decrees may have been drawn up. As has been observed by Tek Chand J. in his learned judgment in – AIR 1927 Lah 289 (H)', mentioned above, the determining factor is not the decree but the matter in controversy. As he puts it later in his judgment, the estoppel is not created by the decree but it can only be created by the judgment. The question of res judicata arises only when there are two suits. Even when there are two suits, it has been held that a decision given simultaneously cannot be a decision in the former suit. When there is only one suit, the question of res judicata does not arise at all and in the present case, both the R.S.A. No. 2414 of 1983 -15- decrees are in the same case and based on the same judgment, and the matter decided concerns the entire suit. As such, there is no question of the application of the principle of res judicata. The same judgment cannot remain effect just because it was appealed against with a different number or a copy of it was attached to a