Supreme Court Sets Aside Kerala HC Second Appeal Order for Skipping Mandatory Question of Law Formulation

A bench of Justices Pardiwala and Misra remits a property title dispute to the Kerala High Court, faulting it for deciding a second appeal without formulating any substantial question of law and for misreading Section 68 of the Evidence Act.

The Supreme Court has set aside a judgment of the Kerala High Court that allowed a second appeal in a property title dispute without formulating any substantial question of law, as required by Section 100 of the Code of Civil Procedure. The Court additionally recorded that the High Court misread Section 68 of the Indian Evidence Act by applying its proviso to a registered sale deed — a document that does not require attestation by law and is therefore entirely outside the scope of that provision. The matter has been remitted to the Kerala High Court for a fresh hearing to be completed within three months, and the Registry has been directed to circulate the judgment to all High Courts.

The Property Dispute and Its Path Through the Courts

The dispute centres on 13 cents of land in Nedumangad. Under a partition deed dated 13 July 1978, 6.5 cents fell to one Rajeswari (defendant no. 3) and the remaining 6.5 cents to Ashok Kumar and Lalitha. On 19 December 1978, Rajeswari sold her 6.5 cents to Vanajakshi by registered sale deed no. 4477/1978. On 31 December 1979, Ashok Kumar, Lalitha and Vanajakshi jointly executed a sale deed in favour of the original plaintiff — respondent no. 1 before the Supreme Court — conveying the entire 13 cents by registered sale deed no. 5 of 1980.

Trouble arose when Rajeswari again purported to sell the very same 6.5 cents to the appellants (original defendants) by a sale deed dated 24 January 1996 bearing document no. 276/96 (Ext. A4). The appellants then took possession of the “B” Schedule property and began construction. The original plaintiff filed Original Suit No. 88 of 1996 in the Court of the Munsif, Nedumangad seeking a declaration of title, recovery of possession and cancellation of Ext. A4 as void.

At trial, the plaintiff examined herself and two witnesses, including PW3 — the husband of the deceased Vanajakshi and one of the attesting witnesses to the 1978 sale deed. The defendants led no oral or documentary evidence. The trial court accepted the plaintiff's case entirely: it declared Ext. A4 null and void, declared the plaintiff the lawful owner of the entire plaint schedule property, directed the defendants to remove their constructions, and restrained them by permanent injunction from putting up further construction or felling trees.

In the first appeal before the Sub-Judge, Nedumangad (Appeal Suit No. 59 of 1998), the appellate court reversed. It found that the Advocate Commissioner had not correctly identified the plaint schedule properties and, more importantly, that PW3's evidence did not inspire confidence. Since the execution of the 1978 sale deed (Ext. A3) was specifically denied by defendant no. 3 in the written statement, the first appellate court held that the plaintiff had failed to prove it and set aside the trial court's decree.

The plaintiff then filed Second Appeal No. 163 of 2007 before the Kerala High Court. The High Court allowed it, restored the trial court's decree, and set aside the first appellate court's judgment. The appellants approached the Supreme Court.

The Kerala High Court's Two-Pronged — and Flawed — Reasoning

The High Court allowed the second appeal on two grounds. First, it interpreted the proviso to Section 68 of the Evidence Act as requiring that a denial of execution be not merely a bald denial in a written statement but a specific denial raised in a suit or proceeding initiated by the person who purports to have executed the document. Since defendant no. 3 had not filed any suit or counter-claim, the High Court held the denial in the written statement was insufficient to attract the proviso.

Second, on the property identification issue, the High Court found that the Commissioner's mahazar showed both plaint “E” and “G” schedule properties as a single compact plot on the eastern part of one acre 93 cents, consistent with the title deeds, and saw no intervening property between them.

The High Court then proceeded to allow the second appeal, set aside the first appellate court's decree, and restore the trial court's decree. It did not formulate any substantial questions of law at any stage of the second appeal.

The Court's Finding on Section 100 CPC

Before the Supreme Court, counsel for the appellants, Mr. Prakash Ranjan Nayak, pressed two main points: that the High Court had no jurisdiction to allow the second appeal without first formulating substantial questions of law under Section 100 read with Order XLII Rule 2 CPC, and that the High Court's interpretation of Section 68 of the Evidence Act was wrong.

Counsel for the respondents, Mr. Ankur S. Kulkarni, defended the High Court's reading of Section 68 and submitted that the 1978 sale deed had stood unquestioned for seventeen years before 1995.

The Supreme Court found the procedural failure decisive. Section 100(4) CPC mandates that where the High Court is satisfied that a substantial question of law is involved, it shall formulate that question. Order XLII Rule 2 reinforces this, directing that the second appeal be heard on the question so formulated. The Court surveyed a line of its own precedents establishing that this requirement is not directory but mandatory.

From Kondiba Dagadu Kadam v. Savitribai Sopan Gujar (1999) 3 SCC 722 the Court recalled that second appeals decided without formulating substantial questions of law are vitiated, and that concurrent findings of fact, however erroneous, cannot be disturbed in a second appeal. From Biswanath Ghosh v. Gobinda Ghosh (2014) 11 SCC 605 it recalled that a judgment in second appeal passed without such formulation is vitiated in law. From Ishwar Dass Jain v. Sohan Lal (2000) 1 SCC 434 the Court reaffirmed that it is not permissible to reverse a first appellate court's judgment without doing so.

The impugned judgment showed no formulation of any substantial question of law and no answer to any such question. The Court acknowledged that the memorandum of second appeal did contain four substantial questions of law framed by the plaintiff, but the High Court's judgment made no reference to them. The Court noted that once a High Court decides to hear a second appeal on merits, it is mandatory to incorporate the substantial questions of law in the judgment and answer them. That had not been done. The judgment was accordingly vitiated.

Section 68 of the Evidence Act Has No Application to a Sale Deed

The Supreme Court said it could have stopped at the Section 100 finding but chose not to, because the High Court's analysis of Section 68 of the Evidence Act contained errors likely to mislead subordinate courts if left uncorrected.

Section 68 of the Indian Evidence Act governs proof of documents required by law to be attested. Its proviso carves out an exception: for registered documents other than wills, it is not necessary to call an attesting witness unless execution is specifically denied by the person who purports to have executed the document. The High Court had proceeded as though the proviso applied to the registered sale deed of 1978 (Ext. A3) and had then constructed a rule that a "specific denial" for the purpose of the proviso must be made in a suit or proceeding initiated by the executant, not merely in a written statement.

The Supreme Court found an anterior error: Section 68 does not apply to a registered sale deed at all. Section 54 of the Transfer of Property Act, 1882 defines a sale and requires a registered instrument for tangible immoveable property of one hundred rupees or more in value. It does not require attestation. Section 68 opens with the words “if a document is required by law to be attested”; a sale deed carries no such requirement.

The Court drew support from two earlier decisions. In Hans Raji (Smt.) v. Yosodanand (1996) 7 SCC 122 the Court had held that a sale deed does not attract Section 68, which in terms applies only to documents required by law to be attested, so there was no occasion to examine any attesting witness and no need to consider whether execution was specifically denied. In Bayanabai Kaware v. Rajendra s/o Baburao Dhote (2018) 1 SCC 585 the Court had similarly held that the execution of a sale deed does not need an attesting witness and that Section 68 does not apply to it, being governed instead by Section 54 of the Transfer of Property Act.

The Supreme Court found that the High Court had misconstrued the phrase “execution of any document, not being a Will” in the proviso to Section 68 as covering a registered sale deed. The correct reading is that this phrase refers only to documents that require compulsory attestation by law — such as gift deeds, mortgage deeds and settlement deeds — for which the proviso relaxes the requirement of examining an attesting witness unless execution is specifically denied. A will stands outside even that relaxation: an attesting witness must always be examined for a will, regardless of denial. A sale deed, requiring no attestation, stands entirely outside Section 68 and its proviso.

The Court reinforced this with a general principle of statutory interpretation: a proviso cannot travel beyond the field covered by the main enactment to which it is attached. Citing Ram Narain Sons Ltd. v. STO (1955) 2 SCC 64 and CIT v. Indo-Mercantile Bank Ltd. 1959 SCC OnLine SC 5, as well as Justice V.R. Krishna Iyer's formulation in Dwarka Prasad v. Dwarka Das Saraf (1976) 1 SCC 128, the Court restated that a proviso must be read in relation to the principal matter to which it is attached and cannot be construed as an independent enactment creating new substantive rules.

Since Section 68 as a whole does not apply to a registered sale deed, the proviso to Section 68 cannot apply either. The High Court's entire analysis of whether the denial in the written statement was sufficiently "specific," and whether it needed to be raised by way of a separate suit or counter-claim, was therefore built on a mistaken foundation. The Court said it was expressing these views precisely so that the High Court, when it rehears the second appeal, and subordinate courts more broadly, are not misled by the now-set-aside reasoning.

Order

The Supreme Court allowed Civil Appeal No. 6526 of 2024, set aside the Kerala High Court's judgment and order dated 11 July 2018 in Regular Second Appeal No. 163 of 2007, and remitted the second appeal to the High Court for a de novo hearing. The High Court is directed to formulate substantial questions of law and dispose of the second appeal within three months of receiving the writ of the order. The High Court must thereafter inform the Supreme Court of the disposal. The Registry has been directed to forward a copy of the judgment to all High Courts.