Part Performance under the Transfer of Property Act & Limitation : The Law

Justice VN Khare

The Supreme Court in Shrimant Shamrao Suryavanshi vs Pralhad Bhairoba Suryavanshi has discussed the law relating to Part Performance under S. 53 A of the Transfer of Property Act and whether such a defence could be taken by a person to protect his property, even though the limitation to bring an action for specific performance to enforce such contract has expired. The Supreme Court while examining the law in England has held as under;

A perusal of Section 53-A shows that it does not forbid a defendant transferee from taking a plea in his defence to protect his possession over the suit property obtained in part performance of a contract even though the period of limitation for bringing a suit for specific performance has expired. It also does not expressly provide that a defendant transferee is not entitled to protect his possession over the suit property taken in part performance of the contract if the period of limitation to bring a suit for specific performance has expired. In absence of such a provision, we have to interpret the provisions of Section 53-A in a scientific manner. It means to look into the legislative history and structure of the provisions of Section 53- A of the Act.

Earlier, the assistance of historical facts or any document preceding the legislation was very much frowned upon for purposes of construction of statutes. At that time, there was some injunction against applying principle of looking into the historical facts or reports preceding the legislation in construing a statute. However, by passage of time, this embargo has been lifted.

In R.S. Nayak vs. A.R. Antulay - 1984 (2) SCC 183, it was held thus :

" Report of the Committee which preceded the enactment of a legislation reports of Joint Parliament Committee report of a commission set up for collecting information leading to the enactment are permissible external aid to construction. If the basic purpose underlying construction of legislation is to ascertain the real intention of the Parliament why should the aids which Parliament availed of such as report of a Special Committee preceding the enactment existing State of Law, the environment necessitating enactment of legislation and the object sought to be achieved be denied to Court whose function is primarily to give effect to the real intention of the Parliament in enactment of the legislation. Such denial would deprive the Court of a substantial and illuminating aid to constructions.

The modern approach has to a considerable extent eroded the exclusionary rule even in England."

Now the accepted view is that the document or report preceding the legislation can legitimately be taken into consideration while construing the provisions of an Act.

We, therefore, proceed to examine the question before us in the light of facts stated hereinafter.

In England, the provisions of the law of Property Act of the Statute of Fraud provided that no suit or action would be brought on agreement relating to a property which was not in writing signed by the parties. The aim and object of the statute was to protect a party against fraud. However, certain difficulties were experienced when it was found that under an oral agreement a party has performed his part of the contract, yet he was unable to bring any action or suit against other party viz., transferor for a specific performance of the agreement which was not in writing in view of the provisions contained in the Statute of Fraud. Under such situations, transferors managed to play fraud on innocent buyers who entered into an oral agreement and performed their part of the contract. In view of such prevailing circumstances in England, the Court of Equity intervened on the ground of equity and took action to enforce specific performance of a parole agreement. The view taken by the Court of Equity was that the object behind the Law of Property of the Statute of Fraud was to protect against a fraud, but the provisions of Law of Property of Statute of Fraud were being used as an instrument to help and protect fraud. Thus, the Court of Equity did not permit the Statute of Fraud to be used as an instrument to cover the fraud by the transferors where there was a part performance of a parole agreement.

When the Transfer of Property Act was enacted, Section 53-A did not find place in it. In the absence of Section 53-A, there arose difference of opinion between various courts in India as regards the application of English doctrine of part performance of contract as it was then prevailing in England. Since there was a difference of opinion on question of the application of English equitable doctrine of part performance in various courts of India, the Govt. of India resolved to set up a Special Committee for making recommendations amongst others whether the British equitable doctrine of part performance be extended in India also. The Special Committee was of the view that an illiterate or ignorant buyer who had partly performed his part of contract required statutory protection. The Committee was of the further view that where a transferee in good faith that lawful instrument i.e. a written contract would be executed by the transferor takes possession over the property, the equity demanded that the transferee should not be treated as trespasser by the transferor and subsequently evict him through process of law in the absence of lawful transfer instrument. The Special Committee also considered the question whether protection under the proposed Section 53-A to a transferee would also be available even if the period of limitation for bringing an action for specific performance of an agreement to sell has expired. On the said question, the Committee was of the view that even after expiry of period of limitation, the relationship between the transferor and transferee remains the same as it was within the period of limitation and, therefore, the possession over the property taken in part performance of an agreement is required to be protected even if the period of limitation for bringing an action for specific performance has expired.

The aforesaid recommendation of the Special Committee were accepted by the Govt. of India as the same is well reflected in the aims and objects of amending Act 1929 whereby Section 53-A was inserted in the Act.

The Special Committee's report which is reflected in the aims and objects of amending Act 1929 shows that one of the purposes of enacting Section 53-A was to provide protection to a transferee who in part performance of the contract had taken possession of the property even if the limitation to bring a suit for specific performance has expired. In that view of the matter, Section 53-A is required to be interpreted in the light of the recommendation of Special Committee's report and aims, objects contained in amending Act 1929 of the Act and specially when Section 53-A itself does not put any restriction to plea taken in defence by a transferee to protect his possession under Section 53-A even if the period of limitation to bring a suit for specific performance has expired.

But there are certain conditions which are required to be fulfilled if a transferee wants to defend or protect his possession under Section 53-A of the Act. The necessary conditions are

1) there must be a contract to transfer for consideration any immovable property;

2) the contract must be in writing, signed by the transferor, or by someone on his behalf;

3) the writing must be in such words from which the terms necessary to construe the transfer can be ascertained;

4) the transferee must in part performance of the contract take possession of the property, or of any part thereof;

5) the transferee must have done some act in furtherance of the contract; and

6) the transferee must have performed or be willing to perform his part of the contract.

We are, therefore, of the opinion that if the conditions enumerated above are complied with, the law of limitation does not come in the way of a defendant taking plea under Section 53-A of the Act to protect his possession of the suit property even though a suit for specific performance of a contract has barred by limitation.

Decision on Questions Regarding Admissibility of Document in Evidence : The Appropriate Stage

Justice KT Thomas

Questions as to admissibility of a document in evidence are often raised during a trial. Most Courts while recording such objection tend to delay / postpone the decision as to the admissibilty of the document, at the stage of final arguments. The Supreme Court in Bipin Shantilal Panchal vs State Of Gujarat And Anr has laid down the procedure to be followed by the trial courts while dealing with such objections. The relevant extracts from the said judgment are reproduced hereinbelow;

"On that day the defence raised another objection regarding admissibility of another document. The trial judge heard elaborate arguments thereon and upheld the objection and consequently refused to admit that particular document. What the prosecution did at that stage was to proceed to the High Court against the said order and in the wake of that proceeding respondent filed an application on 9.11.2000, for enlarging him on bail on the strength of the order passed by this Court on 31.3.2000 (extracted above).

We are compelled to say that the trial judge should have shown more sensitivity by adopting all measures to accelerate the trial procedure in order to reach its finish within the time frame indicated by this Court in the order dated 31.3.2000 since he knew very well that under his orders an accused is continuing in jail as an under-trial for a record period of more than seven years. Now, we feel that the Additional Judge, whether the present incumbent or his predecessor, was not serious in complying with the directions issued by this Court, though the parties in the case have also contributed their share in bypassing the said direction.

As pointed out earlier, on different occasions the trial judge has chosen to decide questions of admissibility of documents or other items of evidence, as and when objections thereto were raised and then detailed orders were passed either upholding or overruling such objections. The worse part is that after passing the orders the trial court waited for days and weeks for the concerned parties to go before the higher courts for the purpose of challenging such interlocutory orders.

It is an archaic practice that during the evidence collecting stage, whenever any objection is raised regarding admissibility of any material in evidence the court does not proceed further without passing order on such objection. But the fall out of the above practice is this: Suppose the trial court, in a case, upholds a particular objection and excludes the material from being admitted in evidence and then proceeds with the trial and disposes of the case finally. If the appellate or revisional court, when the same question is re-canvassed, could take a different view on the admissibility of that material in such cases the appellate court would be deprived of the benefit of that evidence, because that was not put on record by the trial court. In such a situation the higher court may have to send the case back to the trial court for recording that evidence and then to dispose of the case afresh. Why should the trial prolong like that unnecessarily on account of practices created by ourselves. Such practices, when realised through the course of long period to be hindrances which impede steady and swift progress of trial proceedings, must be recast or re-moulded to give way for better substitutes which would help acceleration of trial proceedings.

When so recast, the practice which can be a better substitute is this: Whenever an objection is raised during evidence taking stage regarding the admissibility of any material or item of oral evidence the trial court can make a note of such objection and mark the objected document tentatively as an exhibit in the case (or record the objected part of the oral evidence) subject to such objections to be decided at the last stage in the final judgment. If the court finds at the final stage that the objection so raised is sustainable the judge or magistrate can keep such evidence excluded from consideration. In our view there is no illegality in adopting such a course. (However, we make it clear that if the objection relates to deficiency of stamp duty of a document the court has to decide the objection before proceeding further. For all other objections the procedure suggested above can be followed.)

The above procedure, if followed, will have two advantages. First is that the time in the trial court, during evidence taking stage, would not be wasted on account of raising such objections and the court can continue to examine the witnesses. The witnesses need not wait for long hours, if not days. Second is that the superior court, when the same objection is re-canvassed and reconsidered in appeal or revision against the final judgment of the trial court, can determine the correctness of the view taken by the trial court regarding that objection, without bothering to remit the case to the trial court again for fresh disposal. We may also point out that this measure would not cause any prejudice to the parties to the litigation and would not add to their misery or expenses.

We, therefore, make the above as a procedure to be followed by the trial courts whenever an objection is raised regarding the admissibility of any material or any item of oral evidence.

Registration of a Document & Admissibility in Evidence : The Law

Justice Mathur

The Supreme Court in K.B. Saha & Sons v. Development Consultant Ltd. has explained the law pertaining to Registration of Documents and its effect on the admissibility of such unregistered documents in evidence. While examining the various sections of the Indian Registration Act and the Indian Evidence Act, the court opined that though a document, being unregistered, cannot be admitted in evidence, the same can be looked into for collateral purposes. The analysis of the law, as aforesaid, enabled the Bench to cull out the principles involved, while dealing with unregistered documents. The relevant extracts from this judgment are reproduced hereinbelow; 

15. Section 49 clearly provides that a document purporting to be a lease and required to be registered under Section 107 will not be admissible in evidence if the same is not registered. Proviso to this section, however, as noted hereinabove, provides that an unregistered lease deed may be looked into as evidence of collateral facts. Mr. Mukherjee, learned Counsel for the appellant argued before us that the tenancy in question was exclusively granted for the benefit of the named officer and his family and unless the landlord gave his consent, no other person could use it and such condition in the lease agreement is admissible for ascertaining the purpose of allotting the suit premises which according to the appellant is a collateral fact.

16. Having heard the learned Counsel for the appellant, we are of the view that the decision of this Court in Smt. Juthika Mullick's case [supra], on which strong reliance was placed by the learned Counsel for the appellant is of no help to the appellant because as rightly pointed out by the High Court, the said decision was based on a registered deed of lease. In Smt. Juthika Mulick's case [supra], as noted herein earlier, it has been held that the language of Section 13 of the Act makes it clear that notwithstanding anything to the contrary contained in any other law, an order or decree for the recovery of possession of any premises shall be made by the court in favour of the landlord against a tenant on the grounds mentioned in that section. It was further observed that in view of the language of Section 13(1) of the Act, the parties have freedom to contract out of the Section. In the aforesaid judgment of this Court, on which strong reliance was placed by the appellant, the fact was that the predecessor-in-interest of the respondents in that appeal leased out the premises in question in favour of one Lal Bihari Mulick in a registered deed of lease at a monthly rental of Rs. 160/- and the lease deed contained a covenant that the lease was for the lifetime of the lessee and his heirs, executors, administrators, representatives and the heirs must yield up and deliver quiet, peaceful and vacant possession of the demised premises within three months from the date of death of the lessee unconditionally and without any objection whatsoever. It was further stipulated that they shall have no right to handover the demised premises after the said period under any circumstances. The lessee died on 16th of December, 1970 and his heirs did not deliver vacant possession in favour of the lessors or their successors in interest and this necessitated filing of the suit for eviction of the defendants. In that decision, the main defence raised in the written statement was that the original lessee Lal Bihari Mulick, having died on 16th of December, 1970, the registered lease dated 11th of July, 1966 shall fall under the category of the West Bengal Premises Tenancy Act and the tenants were residing in the demised premises with the said lessee namely Lal Bihari Mullick during his lifetime became monthly tenants under the plaintiffs of that case by operation of law. In view of the aforesaid facts and considering the fact that the aforesaid decision of this Court was rendered on the basis of a registered lease deed, we are of the view that the said decision is clearly distinguishable from the present case because of the fact that in the present case, there was no registered deed of lease nor was there any such covenant as mentioned hereinabove. Therefore, we do not find any ground to place any reliance on the aforesaid decision of this Court.

17. As we have already noted that under the proviso to Section 49 of the Registration Act, an unregistered document can also be admitted into evidence for a collateral fact/collateral purpose, let us now look at the meaning of "collateral purpose" and then ascertain whether Clause 9 of the lease agreement can be looked into for such collateral purpose. In Haran Chandra Chakrvarti v. Kaliprasanna Sarkar AIR 1932 Cal 83(2), it was held that the terms of a compulsorily registrable instrument are nothing less than a transaction affecting the property comprised in it. It was also held that to use such an instrument for the purpose of proving such a term would not be using it for a collateral purpose and that the question as to who is the tenant and on what terms he has been created a tenant are not collateral facts but they are important terms of the contract of tenancy, which cannot be proved by admission of an unregistered lease-deed into evidence.

18. The High Court in the impugned Judgment relied on a decision of the Allahabad High Court in the case of Ratan Lal and Ors. v. Harisankar and Ors.MANU/UP/0198/1980 : AIR1980All180 to hold that since the appellant wanted to extinguish the right of the respondent with the help of the unregistered tenancy, the same was not a collateral purpose. In Ratan lal's case [supra], while discussing the meaning of the term "Collateral Purpose", the High Court had observed as follows:

The second contention was that the partition deed, even if it was not registered could certainly be looked into for a collateral purpose, but the collateral purpose has a limited scope and meaning. It cannot be used for the purpose of saying that the deed created or declared or assigned or limited or extinguish the right to immovable property...term collateral purpose would not permit the party to establish any of these acts from the deed.

19. In the case of Bajaj Auto Limited v. Behari Lal Kohli MANU/SC/0327/1989 : [1989]3SCR730 , this Court observed that if a document is inadmissible for non-registration, all its terms are inadmissible including the one dealing with landlord's permission to his tenant to sub-let. It was also held in that decision that if a decree purporting to create a lease is inadmissible in evidence for want of registration, none of the terms of the lease can be admitted in evidence and that to use a document for the purpose of proving an important clause in the lease is not using it as a collateral purpose. Again this Court in Rai Chand Jain v. Chandra Kanta Khosla MANU/SC/0185/1991 : AIR1991SC744 reiterated the above and observed in paragraph 10 as under:

...the lease deed Ex. P1 dated 19th May, 1978 executed both by the appellant and the respondent i.e. the landlady and the tenant, Rai Chand Jain, though unregistered can be considered for collateral purposes and as such the findings of the Appellate Authority to the effect that the said deed cannot be used for collateral purposes namely to show that the purpose was to lease out the demised premises for residential purposes of the tenant only is not at all legally correct. It is well settled that unregistered lease executed by both the parties can be looked into for collateral purposes. In the instant case the purpose of the lease is evident from the deed itself which is as follows: "The lessor hereby demises House No. 382, Sector 30-A, Chandigarh, to lessee for residential purposes only". This clearly evinces that the property in question was let out to the tenant for his residence only....

20. In the case of Rana Vidya Bhushan Singh v. Ratiram MANU/SC/0562/1969, the following has been laid down:

A document required by law to be registered, if unregistered, is inadmissible as evidence of a transaction affecting immovable property, but it may be admitted as evidence of collateral facts, or for any collateral purpose, that is for any purpose other than that of creating, declaring, assigning, limiting or extinguishing a right to immovable property. As stated by Mulla in his Indian Registration Act, 7th En., at p. 189:

The High Courts of Calcutta, Bombay, Allahabad, Madras, Patna, Lahore, Assam, Nagpur, Pepsu, Rajasthan, Orissa, Rangoon and Jammu & Kashmir; the former Chief Court of Oudh; the Judicial Commissioner's Court of Peshawar, Ajmer and Himachal Pradesh and the Supreme Court have held that a document which requires registration under Section 17 and which is not admissible for want of registration to prove a gift or mortgage or sale or lease is nevertheless admissible to prove the character of the possession of the person who holds under it.

21. From the principles laid down in the various decisions of this Court and the High Courts, as referred to hereinabove, it is evident that:

1. A document required to be registered, if unregistered is not admissible into evidence under Section 49 of the Registration Act.

2. Such unregistered document can however be used as an evidence of collateral purpose as provided in the Proviso to Section 49 of the Registration Act.

3. A collateral transaction must be independent of, or divisible from, the transaction to effect which the law required registration.

4. A collateral transaction must be a transaction not itself required to be effected by a registered document, that is, a transaction creating, etc. any right, title or interest in immoveable property of the value of one hundred rupees and upwards.

5. If a document is inadmissible in evidence for want of registration, none of its terms can be admitted in evidence and that to use a document for the purpose of proving an important clause would not be using it as a collateral purpose.

Cross Objections under the Code of Civil Procedure : The Law

Justice Wadhwa

The Supreme Court examined the nature and scope of cross objections as provided in Order 41 of the Code of Civil Procedure, 1908, in Superintending Engineer & Ors. vs B. Subba Reddy. The Supreme Court, speaking through Justice D.P. Wadhwa, has culled out the principles applicable to cross objections, and the relevant extracts from the judgment are reproduced hereunder;

12. In Sahadu Gangaram Bhagade v. Special Deputy Collector. Ahmadnagar and Anr. , this Court was considering the question of nature of cross-objections in the context of payment of court fee under the Bombay Court Fees Act, 1959. It was submitted that Article 3 of Schedule 1 of the said Act was inapplicable because that article referred to "plaint, application or petition (including memorandum of appeal), to set aside or modify any award otherwise than under the Arbitration Act, 1940" and that no court fee was payable on cross-objections, This Court held as under ;

Before Article 3 of Schedule 1 can be attracted, there must be (1) a plaint, application or petition (including a memorandum of appeal); (2) in that plaint, application or petition (including memorandum of appeal), there must be a prayer to set aside or modify any award; and

(3) the award in question must not be one under the Arbitration Act, 1940. There is no dispute that the proceedings with which we are concerned in this case fulfil two out of the three requirements enumerated above. The award concerned in the proceedings is not one made under the Arbitration Act, 1940 and through his cross-objection the appellant seeks to get the award modified. The only point in controversy is whether the cross-objection filed by the appellant can be considered as "application or petition" within the meaning of Article 3 of Schedule I. The words in the bracket "including memorandum of appeal" in our opinion refer to the word 'petition' immediately preceding those words. In other words the word 'petition' includes the memorandum of appeal as well. The question is whether a cross-objection filed by a respondent in an appeal can be considered as a memorandum of appeal. We have no doubt that it is a memorandum of appeal in substance though not in form. It is a right given to a respondent in an appeal to challenge the order under appeal to the extent he is aggrieved by that order. The memorandum of cross-objection is but one form of appeal. It takes the place of a cross-appeal. It is true that while Article 1 of Schedule 1 refers to 'cross-objection', Article 3 of that Schedule does not refer to cross-objection as such but that in our opinion make no difference. It is only an inartistic drafting.

13. In Hakam Singh v. Gammon (India) Ltd. , the appellant was aggrieved by the order of the Allahabad High Court directing that a petition filed under Section 20 of the Arbitration Act, 1940 in a subordinate ' court be returned to him for presentation to the proper court. This Court upheld the order of the High Court and said, with reference to Section 41 of the Act, that the Code in its entirety applied to proceedings under that Act and that the jurisdiction of the courts under the Act to entertain a proceeding for filing an award was accordingly governed by the provisions of the Code.

14. In N. Jayaram Reddy and Anr. v. Revenue Divisional Officer and Land Acquisition Officer, Kurnool , this Court was considering the nature of cross-appeals and cross-objections. It said:

Cross-appeal and cross-objections provide two different remedies for the same purpose and that is why under Order 41, Rule 22, cross-objections can be preferred in respect of such points on which that party could have preferred an appeal. If such be the position of cross-objections and cross-appeal a differentiation in the matter of their treatment under Rules 3 and 4 cannot be justified merely on the ground that in case of cross-objections they form part of the same record while cross-appeals are two independent proceedings.

To say that cross-appeals are independent of each is to overlook the obvious position which parties adopt in cross-appeals. Interdependence of cross-appeals is the same as interdependence appeal and cross-objections because as in the case of appeal and cross-objections a decision with regard to appeal would directly impinge upon the decision in cross-objections and vice versa. Indubitably the decision in one of the cross-appeals would directly impinge upon the decision in the other because both ultimately arise from the same decree. This is really the interdependence of cross-appeals and it is impossible to distinguish cross-appeals from appeal and cross-objections".

This Court then said that the cases which have taken the view that the view in cross-appeals the position is different than the one in appeal and cross-objections do not proceed on any discernible legal principle. Nor can they be explained by any demonstrable legal principle but in fact they run counter to the established legal principle.

15. In Ms. H.M. Kamaluddin Ansari & Co. v. Union of India and Ors. , this Court was again considering the ambit and scope of Section 41 of the Arbitration Act. It said:

The appellant in the instant case took the stand that there was no concluded contract between the parties including arbitration. Therefore, the order of injunction passed in the instant case could not be for the purpose of and in relation to arbitration proceedings. Faced with this difficulty Shri S.N. Kaicker, learned Counsel for the appellant, fell back upon Clause (a) of Section 41 to content that Clause (a) makes the CPC applicable to all proceedings before the court and to all appeals under the Act and, therefore, the appellant was entitled to invoke Order 39 of the Code to get an injunction order even if the conditions of Clause (b) of Section 41 were not satisfied. We are afraid this contention cannot be accepted.

Clause (a) of Section 41 makes only the procedural rules of the CPC applicable to the proceedings in court under the Arbitration Act. This Clause does not authorise the court to pass an order of injunction. The power is conferred by Clause (b) of Section 41. The source of power, therefore, cannot be traced to Clause (a). If the contention of Shri Kaicker is accepted, the appeals would lie under Sections 96, 100 or 104 of the CPC but the Arbitration Act itself provides for appeal under Section 39. Besides, if Clause (a) of Section 41 gave wide powers to pass an order of injunction, Clause (b) of Section 41 would become otiose.

16. In Alopi Nath and Ors. v. Collector, Varanasi [1986] Supp. SCC 693 this Court in a brief order said:

We have heard learned Counsel for the parties. The short question is as to the admissibility of the cross-objection under the provisions of the Uttar Pradesh Nagar Mahapalika Adhiniyam, 1959 where an appeal against quantum has been filed and the respondent has not preferred an appeal. We have looked into the provisions of Sections 377, 379 and 381 of the Act and are inclined to take the view that the provision of Order 41 Rule 22 of the CPC would be inconsistent with the provisions of the Act inasmuch as an appeal is admissible only by a certificate or special leave as provided in provisions (a) and (b) respectively of Section 381(1). It is difficult to contend that a cross-objection is anything other than an appeal as generally understood in law. In the circumstances, benefit of Section 377 or of Sub-section (4) of Section 381 of the Act is not available. The appeal therefore fails. There is no order as to costs.

17. In R. Modill & Company Pvt. Ltd. v. Gouri Shankar Sarda and Ors. , one of questions before the Court was whether the provisions of Order 23 of the Code apply to an application for stay of suit filed under Section 34 of the Act. It referred to Section 41 of the Act which provided that provisions of the Code shall apply to all proceedings before the court subject of course to the provisions of the Arbitration Act and of any rules made . thereunder. This Court in that case referred to a commentary by R.S. Bachawat on the Law of Arbitration wherein the author with reference to various decisions of the High Court pointed out as to which provisions of the Code have been held to be applicable to proceedings under the Act. Reference was also made to some early decisions of this Court and it was held that provision; of Order 23 of the Code were applicable in view of Section 41 of the Act.

18. In Ramanbhai Ashabhai Patel v. Debhi Ajitkumar Fulsinji and Ors. , the main question for consideration before this Court was whether the appellant could be said to be guilty of a corrupt practice as contemplated by Section 123(3) of the Representation of People Act, 1951. When counsel for the respondent referred to the finding of the High Court regarding the validity of the second respondent's nomination paper, counsel for the appellant raised a preliminary objection to the effect that the first respondent was not competent to challenge the correctness of the finding as he had not preferred an appeal therefrom. In the course of discussion in the judgment, this Court observed:

Apart from that we think that while dealing with the appeal before it this Court has the power to decide all the points arising from the judgment appealed against and even in the absence of an express provision like Order XLI, 22 of the CPC it can devise the appropriate procedure to be adopted at the hearing. There could be no better way of supplying the deficiency than by drawing upon the provisions of a general law like the CPC and adopting such of those provisions as are suitable. We cannot lose sight of the fact that normally a party in whose favour the judgment appealed from has been given will not be granted special leave to appeal from it. Considerations of justice, therefore, require that this Court should in appropriate cases permit a party placed in such a position to support the judgment in his favour even upon grounds which were negatived in that judgment.

19. Following this decision, this Court again in Bhanu Kumar Shastri v. Mohan Lal Sukhadia and Ors. , on the question of challenging of findings without preferring an appeal observed that the considerations of justice required that " this Court should in appropriate cases permit a party placed in such a position to support the judgment in his favour even upon grounds which are negatived in that judgment.

20. However, both the above cases are not the cases where the Court was considering the scope and substance of cross-objection.

21. We may also refer to two decisions of the High Courts--one of the Patna High Court and the other of the Calcutta High Court. A Division Bench of the Calcutta High Court in Ramasray Singh v. Bibhisan Sinha , was considering the objection that though statutory right of appeal is given under Section 38(3) of the Bengal Money Lenders Act, there is no right given to file cross-objection and that if a litigant is aggrieved by a decision of any court under Section 38 of the said Act his remedy is to file an appeal. High Court negatived the contention and held:

It is to be observed that by Section 38, Bengal Money-Lenders Act, a right of appeal is given in express terms. By Sub-section (3) of Section 38, a declaration under that section is to be subject to an appeal, if any, as if it were a decree of the Court. The right of appeal, under that section is given to an established Court, namely, the Court of the District Judge. Nothing is stated expressly in the Sub-section as to the procedure regulating such appeal. In our view, where nothing is stated expressly as to the procedure of an appeal before a District Judge, the law will import that the ordinary procedure of that Court on appeal will apply. The ordinary procedure of an appeal is that the respondent has the right to file cross-objection and therefore it is quite clear that the respondent has the right to file a cross-objection.

22. In Bihar State Electricity Board v. Khalsa Bros. , a Division Bench of the Patna High Court speaking through L.M. Sharma, J. (as His Lordship then was) said:

The Supreme Court cases arose under the Representation of the People Act, 1951 and the Calcutta case under the Bengal Money Lenders Act. The observations made- in these cases support the principle which Mr. Chatterjee is relying. So far the arbitration Act is concerned, the view in favour of the maintainability of a cross-objection appears to be stronger inasmuch as Section 41 of the Act says that subject to the provisions of, and the rules made under the Act, the Civil Procedure Code shall apply to all proceedings before the court and to all appeals under the Act. There does not appear to be any provision inconsistent with the application of the Civil Procedure Code. The decision of the Court so far it has gone against the plaintiff-respondent is clearly appealable under Section 39 and I, therefore, hold that the cross-objection is maintainable.

23. While there was no provision like Section 41 of the Arbitration Act in the Bengal Money Lenders Act in the Calcutta case. Patna case was under the Arbitration Act itself. As we will presently see Patna case does not appear to lay good law.

24. From the examination of these judgments and the provisions of Section 41 of the Act and Order 41 Rule 22 of the Code, in our view, following principles emerge:

(1) Appeal is a substantive right. It is a creation of the statute. Right to appeal does not exist unless it is specifically conferred.

(2) Cross objection is like an appeal. It has all the trappings of an appeal. It is filed in the form of memorandum and the provisions of Rule 1 of Order 41 of the Code, so far as these relate to the form and contents of the memorandum of appeal apply to cross-objection as well.

(3) Court fee is payable on cross-objection like that on the memorandum of appeal. Provisions relating to appeals by indigent person also apply to cross-objection.

(4) Even where the appeal is withdrawn or is dismissed for default, cross-objection may nevertheless be heard and determined.

(5) Respondent even though he has not appealed may support the decree on any other ground but if wants to modify it, he has to file cross-objection to the decree which objections he could have taken earlier by filing an appeal. Time for filing objection which is in the nature of appeal is extended by one month after service of notice on him of the day fixed for hearing the appeal. This time could also be extended by the Court like in appeal.

(6) Cross-objection is nothing but an appeal, a cross-appeal at that. It may be that the respondent wanted to give quietus to whole litigation by his accepting the judgment and decree or order even if it was partly against his interest. When, however, the other party challenged the same by filing an appeal statute gave the respondent a second chance to file an appeal by way of cross-objection if he still felt aggrieved by the judgment and decree or order.