IMPORTANT POINT
Formulation of substantial question of law is a condition precedent for entertaining and deciding a second appeal.

JUDGMENT

R.M. Lodha, J. —

Leave granted.

2. The purchaser, who was not party to the suit but impleaded as 2nd respondent in the first appeal and was arrayed as such in the second appeal, is the appellant being aggrieved by the judgment and order of the High Court of Punjab and Haryana whereby the Single Judge of that Court allowed the second appeal preferred by the plaintiff (1st respondent) and set aside the concurrent judgment and decree of the courts below and remanded the suit to the trial court for fresh disposal after giving the plaintiff an opportunity to lead evidence.

3. In the month of May, 1991, the 1st respondent — M/s. Tirgun Auto Plast Private Limited - applied to the Punjab Financial Corporation (for short, ‘Corporation’) for a term loan of Rs. 47.60 lac and special capital assistance (soft loan) of Rs. 4 lac. The term loan of Rs. 46 lac and soft loan of Rs. 4 lac was disbursed by the Corporation to the 1st respondent in the month of October, 1991 on execution of the mortgage deed. Vide this mortgage deed, the 1st respondent mortgaged its various assets in favour of the Corporation. On the 1st respondent’s failure to pay the due amount along with interest, the Corporation on March 19, 1998 took over the mortgaged property comprising land, building and machinery in exercise of its power under Section 29 of the State Financial Corporations Act, 1951 (for short, ‘1951 Act’).

4. The 1st respondent (hereinafter referred to as ‘plaintiff’), on February 17, 2001, filed a suit for declaration, mandatory injunction and other reliefs against the Corporation - 2nd respondent in the Court of Civil Judge (Junior Division), Chandigarh. Inter alia, the plaintiff prayed that the takeover of its assets and all subsequent sale proceedings by the Corporation be declared illegal, null and void and inoperative; the direction be issued to the Corporation to charge interest at the rate of 12.5 per cent per annum (prevailing rate) on the loan from the date of commencement of production to the date of takeover and the Corporation be also directed to restore back the possession of the suit property to it.

5. The Corporation (sole defendant) in the suit traversed the plaintiff’s claim and set up the plea that plaintiff could not pay the due amount under the loan despite repeated notices necessitating the action under Section 29 of the 1951 Act. The Corporation asserted that fair procedure was followed and no illegality was committed by it in proceeding under Section 29 of the 1951 Act. The Corporation also raised objections regarding the maintainability of the suit on the grounds of limitation and jurisdiction of the Civil Court.

6. The trial court having regard to the pleadings of the parties framed issues (six in all) on July 19, 2006. Issue no. 1 was to the following effect:

“Whether impugned action of defendant is illegal and if it is proved, whether plaintiff is entitled for decree of declaration and mandatory injunction?”

The burden to prove the above issue was kept on the plaintiff.

7. Thereafter, the suit was fixed for the evidence of the plaintiff on November 1, 2006. However, no evidence was let in on that day. The matter was then adjourned for the evidence of the plaintiff on March 2, 2007. On that day also the plaintiff did not produce evidence and the matter was adjourned to May 10, 2007. On May 10, 2007 again plaintiff did not produce any evidence. The trial court was, thus, constrained to proceed under Order XVII Rule 3(a) of the Code of Civil Procedure, 1908 (for short, ‘CPC’) and passed the following order :

“Matter is fixed for conclusion of the plaintiff’s evidence being last opportunity. No plaintiff’s witness is present and neither any cogent reason has been put forth for such failure fully knowing the fact that today is the third effective opportunity for conclusion of plaintiff’s evidence. Hence, matter is ordered to be proceeded under Order 17, Rule 3(a) C.P.C. and plaintiff’s evidence is deemed to be closed. Hear