2011 (8) TMI 977 - SC - Companies Law

No Second Appeal Relief Under Section 100 CPC When Plaintiff Repeatedly Fails To Lead Evidence

SC allowed the appeal, setting aside the HC judgment and restoring the concurrent findings of the courts below dismissing the plaintiff's suit for ... Maintainability of the suit on the grounds of limitation and jurisdiction of the Civil Court - ‘justifiable cause’ - No sufficient opportunity to the plaintiff to produce evidence in support of its case - Entitlement for decree of declaration and mandatory injunction - plaintiff could not pay the due amount under the loan despite repeated notices necessitating the action u/s 29 of the 1951 Act - HELD THAT:- 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 trial courts, must ensure that on every date of hearing, effective progress takes place in 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 judgement of the courts below. The High Court was clearly in error in giving the plaintiff an opportunity to produce evidence when no justification for that course existed. Appeal is allowed and judgement and order of the High Court passed is set aside. Issues:1. Interpretation of Section 29 of the State Financial Corporations Act, 1951.2. Legality of the takeover of assets by the Corporation.3. Maintainability of the suit regarding limitation and jurisdiction.4. Adherence to procedural requirements under Order XVII Rule 3(a) of CPC.5. Formulation of substantial question of law in second appeal.6. Justifiability of High Court's decision in setting aside concurrent judgments.Analysis:1. The case involved the interpretation of Section 29 of the State Financial Corporations Act, 1951, concerning the Corporation's power to take over mortgaged property due to non-payment. The plaintiff, a company, had availed loans from the Corporation and failed to repay, leading to the Corporation exercising its rights under the Act to take over the assets.2. The legality of the takeover of the plaintiff's assets by the Corporation was challenged in the suit. The plaintiff sought a declaration that the takeover and subsequent sale proceedings were illegal and requested restoration of possession of the property. The Corporation defended its actions, stating that it followed due process under the law.3. The issue of maintainability of the suit was raised by the Corporation, questioning the jurisdiction of the Civil Court and the limitation period for filing the suit. These procedural aspects were crucial in determining the validity of the plaintiff's claims against the Corporation.4. The trial court's application of Order XVII Rule 3(a) of the CPC was significant in this case. The court closed the plaintiff's evidence after multiple adjournments due to the plaintiff's failure to produce evidence. This decision ultimately led to the dismissal of the suit by the trial court.5. The High Court's decision in the second appeal was challenged on the grounds of not formulating a substantial question of law as required under Section 100 CPC. The Supreme Court emphasized the importance of adhering to procedural requirements and formulating substantial questions of law before deciding a second appeal.6. The Supreme Court criticized the High Court's decision to set aside the concurrent judgments of the lower courts based on misplaced sympathy. The Court highlighted the plaintiff's failure to produce evidence despite multiple opportunities and stressed the need for courts to prevent abuse of procedural rules and unnecessary adjournments in litigation.In conclusion, the Supreme Court allowed the appeal, setting aside the High Court's judgment and emphasizing the importance of procedural adherence, formulation of substantial questions of law, and preventing delays in the judicial process.