Supreme Court Restores Specific Performance Decree in Land Sale Dispute: Randhir Kaur vs. Prithvi Pal Singh (2019)

Date of the Judgment: July 24, 2019

Citation: 2019 INSC 731

Judges: L. Nageswara Rao, J. and Hemant Gupta, J.

Can a High Court overturn factual findings in a second appeal merely because it holds a different view? The Supreme Court addressed this question in a case concerning a land sale agreement. The core issue revolved around whether the High Court was justified in reversing the lower court’s decree for specific performance, based on its assessment of facts and the authority of an attorney to act on behalf of the plaintiff. This judgment, delivered by a two-judge bench comprising Justices L. Nageswara Rao and Hemant Gupta, clarifies the limits of High Court’s jurisdiction in second appeals, emphasizing that factual findings should not be disturbed unless there is an error in law or procedure.

Case Background

The case involves a dispute over an agreement to sell land, dated November 5, 2004. Randhir Kaur, the appellant, sought specific performance of this agreement, which concerned land measuring 193 kanals and 18 marlas, at a rate of Rs. 1,27,000 per acre. She had paid Rs. 12,50,000 and Rs. 1,00,000 as earnest money to the defendants, Prithvi Pal Singh and others. The sale deed was to be registered by January 30, 2005. However, the sale did not materialize, leading Randhir Kaur to file a suit for specific performance on April 3, 2006.

Timeline

Course of Proceedings

The trial court initially decreed the suit in favor of Randhir Kaur on April 13, 2010. The first appeal against this decision was also unsuccessful, being dismissed on August 11, 2012. However, in the second appeal, the High Court reversed the decree for specific performance. Instead, it granted a decree for the recovery of Rs. 13,50,000, along with 12% interest. The High Court acknowledged that Randhir Kaur was ready and willing to perform the agreement, but it held that Dhanwant Singh was not authorized to act on her behalf.

Legal Framework

The Supreme Court examined the scope of Section 41 of the Punjab Courts Act, 1918, which governs second appeals in Punjab and Haryana. This section outlines the grounds on which a High Court can interfere with the findings of a lower appellate court. The Court noted that the scope of interference under Section 41 is similar to that of Section 100 of the Code of Civil Procedure (CPC) as it existed before the 1976 amendment. The relevant parts of Section 41 of the Punjab Act are:

• (a) the decision being contrary to law or to some custom or usage having the force of law;
• (b) the decision having failed to determine some material issue of law or custom or usage having the force of law;
• (c) a substantial error or defect in the procedure provided by the Code of Civil Procedure 1908, or by any other law for the time being in force which may possibly have produced error or defect in the decision of the case upon the merits;

The Court also referred to Section 100 of the CPC, as it existed prior to the 1976 amendment, which stated:

• (a) the decision being contrary to law or to some usage having the force of law;
• (b) the decision having failed to determine some material issue of law or usage having the force of law;
• (c) a substantial error or defect in the procedure provided by this Code or by any other law for the time being in force, which may possibly have produced error or defect in the decision of the case upon the merits.

The court noted that the effect of the Constitution Bench judgment in Pankajakshi (D) through LRs & Ors. v. Chandrika & Ors. [(2016) 6 SCC 157] is that substantial questions of law are not required to be framed in second appeal, but the jurisdiction of the High Court is not to reverse the findings of fact in terms of Section 41 of the Punjab Act. The Court emphasized that the provisions of Section 41 of the Punjab Act and Section 100 of the CPC are pari materia.

Arguments

Appellant’s Arguments:

• The appellant argued that the High Court erred in reversing the findings of fact, as it did not meet the criteria specified in Section 41 of the Punjab Act.
• It was contended that while the initial power of attorney (dated September 29, 1999) did not cover the land in question, the subsequent power of attorney (dated September 14, 2005) ratified all actions of Dhanwant Singh, including the purchase of property.
• The appellant asserted that the agreement was entered into by her through her son, Dhanwant Singh, who also made the payments to the defendants.
• The appellant pointed out that the defendants accepted the payment from Dhanwant Singh, and therefore, their plea that he was not authorized was untenable.
• The High Court had accepted that Rs. 13,50,000 was paid by the appellant through Dhanwant Singh.

Respondents’ Arguments:

• The respondents argued that the first power of attorney did not pertain to the land in question, nor did it authorize Dhanwant Singh to purchase land.
• They contended that the second power of attorney was for future purchases and did not validate the agreement already executed.
• The respondents claimed that they were not informed that Dhanwant Singh was the attorney of the plaintiff.
• They argued that the High Court was justified in interfering in the second appeal as the findings of the lower courts were not based on facts on record.

Issues Framed by the Supreme Court

The Supreme Court did not frame specific issues but considered the following:

• The scope of interference in a second appeal under Section 41 of the Punjab Courts Act.
• Whether the High Court was justified in reversing the findings of fact recorded by the first appellate court.
• Whether the plaintiff had proven her readiness and willingness to perform the contract.
• Whether Dhanwant Singh was authorized to act on behalf of the plaintiff.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court considered the following authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The Supreme Court relied on Pankajakshi (D) through LRs & Ors. v. Chandrika & Ors. [(2016) 6 SCC 157]* to emphasize that while substantial questions of law are not required in second appeals, the High Court cannot reverse findings of fact under Section 41 of the Punjab Act.
• The Court cited Kirodi (since deceased) through his LR v. Ram Parkash & Ors. [2019 SCC OnLine SC 759]* to support its view that previous judgments contradicting the Pankajakshi case are not correct law.
• The Court referred to Deity Pattabhiramaswamy v. S. Hanymayya & Ors. [AIR 1959 SC 57]*, Kshitish Chandra Bose v. Commissioner of Ranchi [(1981) 2 SCC 103]*, Gurdev Kaur & Ors. v. Kaki & Ors. [(2007) 1 SCC 546]* and Sadhu v. Mst. Kishni [1980 AIR (Punjab) 85]* to reiterate that the High Court cannot interfere with factual findings in second appeals, even if they appear erroneous.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the principle that a High Court’s jurisdiction in second appeals is limited to questions of law and procedure, not factual findings. The Court emphasized that the first appellate court had correctly assessed the evidence and that the High Court had no basis to interfere with those findings. The acceptance of payment by the defendants from Dhanwant Singh and the subsequent ratification of his actions through the power of attorney were also key factors.

Judgment

The Supreme Court held that the High Court had exceeded its jurisdiction by interfering with the factual findings of the first appellate court. The Court emphasized that the High Court’s role in a second appeal is limited to addressing errors in law or procedure, not to re-evaluate factual evidence. The Court noted that the first appellate court had correctly found that the plaintiff was ready and willing to perform the contract and that the defendants could not dispute the authority of Dhanwant Singh after accepting payment from him.

The Court observed that the High Court had interfered with the findings of fact recorded after appreciation of evidence merely because the High Court thought that another view would be a better view. The Court stated that the first appellate court had considered the absence of a clause in the first power of attorney to purchase land on behalf of the plaintiff and the fact that the plaintiff had not appeared as a witness.

The Court also noted that the first appellate court had returned a finding that the plaintiff was ready and willing to perform the contract and that the defendants could not take the plea that they were not aware that Dhanwant Singh was the power of attorney holder. The Court held that these findings could not be considered contrary to law, which would confer jurisdiction on the High Court to interfere with the findings of fact recorded by the first appellate court.

The Supreme Court quoted the following from the judgment:

• “The jurisdiction to interfere in the second appeal is only where there is an error in law or procedure and not merely an error on a question of fact.”
• “The High Court was not within its jurisdiction to interfere with the findings of fact only for the reason that plaintiff has failed to prove power of attorney in favour of Dhanwant Singh.”
• “Therefore, the High Court was not within its jurisdiction to interfere in second appeal only for the reason that on the date of agreement, there was no specific power of attorney in favour of son of the plaintiff, Dhanwant Singh.”

The Court set aside the High Court’s judgment and restored the decree passed by the lower appellate court. The appellant was granted two months to pay the balance sale consideration, and upon receiving the amount, the defendants were directed to execute the sale deed. If the defendants failed to receive the amount, the plaintiff would be at liberty to deposit the amount with the executing court and seek execution of the decree.

Key Takeaways

• High Courts have limited jurisdiction in second appeals and cannot interfere with factual findings unless there is an error in law or procedure.
• Acceptance of payment by a party can be construed as an acknowledgment of the payer’s authority to act on behalf of another.
• A subsequent power of attorney can ratify previous actions of the attorney.
• The readiness and willingness to perform a contract is a finding of fact based on evidence.

Directions

The Supreme Court directed the following:

• The appellant is granted two months to pay the balance sale consideration to defendant Nos. 1 and 2.
• Upon receiving the amount, the defendants shall execute the sale deed in favor of the plaintiff.
• If the defendants fail to receive the amount, the plaintiff will be at liberty to deposit the amount with the executing court and seek execution of the decree in accordance with law.

Development of Law

The ratio decidendi of this case is that the High Court’s jurisdiction in second appeals is limited to addressing errors in law or procedure, not factual findings. This judgment reinforces the principle that appellate courts should not re-evaluate evidence unless there is a clear error of law or procedure. This case also clarifies that subsequent ratification of actions by an attorney can validate prior transactions, even if the attorney did not have explicit authority at the time of the transaction. This is a reaffirmation of the existing position of law.

Conclusion

In conclusion, the Supreme Court’s decision in Randhir Kaur vs. Prithvi Pal Singh & Ors. underscores the limited scope of interference in second appeals. The Court restored the decree for specific performance, emphasizing that High Courts cannot overturn factual findings unless there is a clear error in law or procedure. This judgment reinforces the principle that factual findings of lower appellate courts should be respected and not disturbed lightly.

Category

✓ Civil Law

• ✓ Specific Performance
• ✓ Second Appeal
• ✓ Power of Attorney

✓ Punjab Courts Act, 1918

• ✓ Section 41, Punjab Courts Act, 1918

✓ Code of Civil Procedure, 1908

• ✓ Section 100, Code of Civil Procedure, 1908

FAQ

Q: What is a second appeal?
A: A second appeal is an appeal filed in the High Court against the judgment of a lower appellate court. It is different from a first appeal, which is filed against the judgment of a trial court.

Q: What is the scope of interference in a second appeal?
A: In a second appeal, the High Court can only interfere if there is an error in law or procedure. It cannot re-evaluate the factual findings of the lower appellate court.

Q: What is specific performance?
A: Specific performance is a legal remedy where a court orders a party to fulfill their obligations under a contract. In this case, it means that the defendants were ordered to sell the land as agreed.

Q: What is a power of attorney?
A: A power of attorney is a legal document that authorizes a person to act on behalf of another person. In this case, Dhanwant Singh was given the power of attorney to act on behalf of his mother, Randhir Kaur.

Q: Can a power of attorney be ratified?
A: Yes, a power of attorney can be ratified. This means that even if the attorney did not have explicit authority at the time of a transaction, a subsequent power of attorney can validate those actions.

Q: What does ‘readiness and willingness’ mean in a contract?
A: ‘Readiness and willingness’ means that a party to a contract must be prepared and willing to fulfill their obligations under the contract. In this case, it meant that Randhir Kaur was prepared to pay the balance amount and complete the purchase.