[2025:RJ-JP:13527] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR S.B. Civil Second Appeal No. 249/2016 M/s Mehta Associated “A” Class Contractor, Oswali, Mohalla, Madanganj, Kishangarh, Partnership Firm through its Partner Sh. Narendra Mehta ----Appellant-Plaintiff Versus 1. State of Rajasthan through Collector, Ajmer. 2. Additional Chief Engineer, Public Works Department Ajmer. 3. Executive Engineer, Public Works Department, Division-I, Bhilwara. ----Respondents-Defendants For Appellant(s) : Mr. Satish Chandra Mittal For Respondent(s) : HON'BLE MR. JUSTICE ASHOK KUMAR JAIN Judgment 23/01/2025 1. The instant second appeal is preferred by appellant-plaintiff aggrieved from dismissal of civil regular appeal No.9/2013 (231/2003) passed by learned Additional District Judge No.3, Jaipur on 18.03.2016 affirming the judgment and decree dated 03.11.2003 in civil suit No.420/1997 whereby suit preferred by plaintiff was dismissed. 2. Learned counsel for the appellant while relying upon grounds of appeal would submit that respondents have issued a NIT for construction of high level bridge and plaintiff has submitted tender for approval but neither the work order was issued nor agreement was executed. He further submitted that the defendant No.2 has [2025:RJ-JP:13527] (2 of 9) [CSA-249/2016] forfeited 2% earnest money amounting to ₹ 1.80 Lakhs and debarred plaintiff from taking part in further proceedings of the work. He also submitted that the defendant No.3 has informed plaintiff to deposit ₹1.8 Lakh within 15 days failing which recovery will be made. He also referred the grounds and submitted that demand of performance guarantee is contrary to PWD Manual Part II and the act of defendant is contrary to principle of law as settled by Hon’ble Supreme Court. Learned counsel has further referred evidence of DW-1 and submitted that the admission is sufficient to decree the suit of plaintiff. He further referred Ex.A-2, tendered document and submitted that only after acceptance of tender a performance guarantee can be demanded. He also referred the proceedings relating to tender and submitted that since proposal was not accepted and tender remained unconcluded, therefore, the stage of performance guarantee never arise in the instant case, but the defendants have acted contrary to the terms and conditions of the tender document. At last, he submitted that at the most Ex.A2 was singed by one party and to make it a binding contract, it is necessary that both the parties must put signature and accept terms and conditions which give rise to substantial question of law as mentioned in para 5 of memo of appeal. Learned counsel for the appellant while referring judgment in case of Zuari Cement Ltd vs Regional Director, E.S.I Corp.& Ors : AIR 2015 SC 2764 has submitted that the general law of interpretation of statute clearly shows that the power has to be exercised to do a certain thing in certain way and if same is not exercised in way prescribed under the Rule then [2025:RJ-JP:13527] (3 of 9) [CSA-249/2016] same is contrary to law. He further referred judgment in case of M/S Gangotri Enterprises Ltd vs Union Of India & Ors : AIR 2016 SC 2199 submitted that a bank guarantee for performance guarantee cannot be encashed when the contract has not been concluded and work order was not issued. 3. Heard learned counsel for the appellant and perused the record and also perused the judgments of Hon’ble Supreme Court as referred by learned counsel for appellant. 4. Brief facts of the case given rise to instant second appeal are that the plaintiff who is a “A” Grade Contractor has filed a civil suit for permanent injunction to restrain defendants from execution of order dated 27.06.1997 and 27.11.1997 with a further prayer not to issue any work order in pursuant to tender No.4/1997-98 dated 22.09.1997. The defendants have filed their written statement wherein they have pleaded that the offer of plaintiff in NIT was accepted by the defendants and plaintiff was asked to deposit performance guarantee. The plaintiff has not deposited amount of performance guarantee despite reminder. The defendants have defended their action against the plaintiff. 5. Learned trial court has framed as many as five issues on basis of pleadings of the parties. Plaintiff Narendra Mehta has examined himself as PW-1 and exhibited two documents whereas Jaswant Lal Khatri was examined by defendant as DW-1 and exhibited two documents. 6. Issue No.1 was decided against the plaintiff whereas relief of issue No.2 rendered infructuous and issue No.3 was decided in favour of defendants and issue No.4 was decided against the [2025:RJ-JP:13527] (4 of 9) [CSA-249/2016] defendants. As a result, the suit of plaintiff was dismissed. Aggrieved from dismissal of civil suit, an appeal under Section 96 of CPC was filed by plaintiff before learned District Judge and same was transferred to learned Additional District Judge No.3, Ajmer. After considering the submissions of both the parties, appeal was dismissed and the findings recorded on issue Nos 1 to 4 were affirmed. Thus, the instant appeal is preferred against the concurrent finding of fact recorded by both the courts below. 7. In case of Zuari Cement Ltd vs Regional Director,E.S.I Corp.& Ors (supra), Hon’ble Supreme Court while referring judgments in case of Babu Verghese and Ors. Vs. Bar Council of Kerala and Ors. (1999) 3 SCC 422 has observed that it is basic principle of law long settled that if the manner of doing a particular act is prescribed under any statute, the act must be done in that manner or not at all. The rule is based on decision in case of Taylor v. Taylor, (45 LJCH 373) and followed in case of in Nazir Ahmed V. King Emperor, (AIR 1936 PC 253). After approval of this principle in several judgments, this rule has been applied to the exercise of jurisdiction by Courts and recognised as a salutary principle of administrative law. 8. In case of M/S Gangotri Enterprises Ltd vs Union Of India & Ors (supra) while considering a petition under Section 9 of the Arbitration And Conciliation Act, 1996, Hon’ble Supreme Court has restrained from encashment of bank guarantee which was in nature of performance guarantee furnished for execution work of earlier contract. [2025:RJ-JP:13527] (5 of 9) [CSA-249/2016] 9. A perusal of referred material and admission in the evidence of PW-1 Narendra Mehta shows that since he was a registered contractor so it was not required for him to deposit two per cent earnest money at the time of filing of tender. PW-1 has further pleaded ignorance about outcome of the tender but he admitted that cost of his tender was lowest one. The admission of PW-1 indicate that there was a negotiation about said tender. The admission also indicate that the plaintiff has not deposited performance guarantee. The admission further reflected that ₹1.8 lakhs has already been recovered from him and same has been adjusted from other work. The evidence of DW-1 Jaswant Lal suggests that the tender of plaintiff was accepted and 5% performance guarantee was demanded from him. The evidence further suggested that the plaintiff has sought time to deposit performance guarantee. The admission of DW-1 also indicate that on 05.04.1987, the tender was accepted and information was supplied to plaintiff on 06.05.1997. Then the witness has amended his version and stated that information was supplied on 10.04.1997 and on other dates. The DW-1 has denied that after issuance of work order, performance guarantee is required to be deposited. This witness has made it clear that as per terms, the performance guarantee was deposited and then work order was issued. 10. We have considered the documents as referred by learned counsel for the appellant, particularly, Rule No.33.9.11 relating to work order. The provision provides that the contractor must not be [2025:RJ-JP:13527] (6 of 9) [CSA-249/2016] allowed to start work until formal agreement and necessary documents have been signed by him. 11. Here in this case, the plaintiff is not aware about acceptance of tender, though he was aware that his quote was lowest one and there was a negotiation. The evidence of DW-1 is near to factual situation whereas PW-1 has tried to avoid the question or tried to conceal the material facts. Herein, the plaintiff has not filed any document relating to tender rather the evidence of both the parties clearly suggest that the evidence of DW-1 is more trustworthy than PW-1 Narendra Metha. 12. Having considered the material on record and also the provision relating to work contracts, as referred by learned counsel for the appellant, I am of considered view that the matters relating to facts and were duly considered by the courts below and after considering material, the findings on issue Nos.1 and 3 were recorded by the trial court and same was affirmed by the Appellate Court, the relief with regard to Issue No.2 has rendered infrucutuous, whereas and the suit is only for permanent injunction. 13.. The judgments as referred hereinabove are not applicable on the facts of the instant case, as the plaintiff has not able to establish his case, therefore the grounds do not give rise to any substantial question of law either referred by learned counsel for the appellant or suggested in memo of appeal. 14. Section 100 of CPC provides for second appeal in case wherein the High Court is satisfied that the case involves a substantial question of law. Thus, the First Appellate Court is final [2025:RJ-JP:13527] (7 of 9) [CSA-249/2016] court on facts and in second appeal normally cannot re-appreciate the evidence or facts. 15. Just to determine whether a question is substantial question of law or not, was laid down by a Constitution Bench of Hon’ble Supreme Court in case of Chunilal V. Mehta & Sons. Ltd. Vs. Century Spg. and Mgf. Co. Ltd. AIR 1962 SC 1314, as under: "The proper test for determining whether a question of law raised in the case is substantial would, in our opinion, be whether it is of general public importance or whether it directly and substantially affects the rights of the parties and if so whether it is either an open question in the sense that it is not finally settled by this Court or by the Privy Council or by the Federal Court or is not free from difficulty or calls for discussion of alternative views. If the question is settled by the highest court or the general principles to be applied in determining the question are well settled and there is a mere question of applying those principles or that the plea raised is palpably absurd the question would not be a substantial question of law." 16. Recently Hon’ble Supreme Court in case of Suresh Lataruji Ramteke versus Sau. Sumabai Pandurang Petkar & Ors. (Civil Appeal No. 6070/2023, arising out of SLP(C)No.20183 of 2022 decided on 21.09.2023) considered the scope of Section 100 of CPC and summarised the law as under: 13. The jurisprudence on Section 100, CPC is rich and varied. Time and again this Court in numerous judgments has laid down, distilled and further clarified the requirements that must necessarily be met in order for a Second Appeal as laid down therein, to be maintainable, and thereafter be adjudicated upon. Considering the fact that numerous cases are filed before this Court which hinge on the application of this provision, we find it necessary to reiterate the principles. 13.1 The requirement, most fundamental under this section is the presence and framing of a “substantial question of law”. In other words, the existence of such a question is sine qua non for exercise of this jurisdiction. 13.2 The jurisdiction under this section has been described by this Court in Gurdev Kaur v. Kaki (2007) 1 SCC 546 (Two-Judge Bench) stating that [2025:RJ-JP:13527] (8 of 9) [CSA-249/2016] post 1976 amendment, the scope of Section 100 CPC stands drastically curtailed and narrowed down to be restrictive in nature. The High Court’s jurisdiction of interfering under Section 100 CPC is only in a case where substantial questions of law are involved, also clearly formulated/set out in the memorandum of appeal. It has been observed that: “At the time of admission of the second appeal, it is the bounden duty and obligation of the High Court to formulate substantial questions of law and then only the High Court is permitted to proceed with the case to decide those questions of law. The language used in the amended section specifically incorporates the words as “substantial question of law” which is indicative of the legislative intention. It must be clearly understood that the legislative intention was very clear that legislature never wanted second appeal to become “third trial on facts” or “one more dice in the gamble”. The effect of the amendment mainly, according to the amended section, was: (i) The High Court would be justified in admitting the second appeal only when a substantial question of law is involved; (ii) The substantial question of law to precisely state such question; (iii) A duty has been cast on the High Court to formulate substantial question of law before hearing the appeal; (iv) Another part of the section is that the appeal shall be heard only on that question.” Gurdev Kaur (supra) was referred to and relied upon in Randhir Kaur v. Prithvi Pal Singh & Ors. (2019) 17 SCC 71 13.3 In Santosh Hazari v. Purushottam Tiwari (2001) 3 SCC 179 a Bench of three Judges, held as under in regard to what constitutes a substantial question of law:- a) Not previously settled by law of land or a binding precedent. b) Material bearing on the decision of case; and (c) New point raised for the first time before the High Court is not a question involved in the case unless it goes to the root of the matter. Therefore, it will depend on facts of each case. Such principles stand followed in Government of Kerala v. Joseph 2023 SCC Online SC 961 and Chandrabhan v. Saraswati 2022 SCC Online SC 1273. 16.5 Interference on findings of fact permitted in exceptional cases, i.e., when finding is based on either inadmissible or, no evidence. This Court in Dinesh Kumar v. Yusuf Ali (2010) 12 SCC 740 referring to various other cases held:- a) It is not permissible for High Court to reappreciate evidence as if it was the first appellate court unless findings were perverse. [2025:RJ-JP:13527] (9 of 9) [CSA-249/2016] b) Finding of fact can be interfered in exceptional circumstances as rarity, rather than a regularity. c) Scrutiny of evidence in second appeal is not prohibited but has to be exercised upon proper circumspection. 17. In case of Amar Singh Vs. Dalip Singh (2012) 13 SCC 405, Hon’ble Supreme Court explained the purpose of framing question of law in following manner: “a) The purpose of framing of substantial question of law is to give the parties an opportunity to come prepared on that particular question. b) When a substantial question of law is formulated by the Court then the same must be made known to parties and thereafter they have to be given an opportunity to advanced arguments thereon. c) If any additional questions were framed at the time of hearing, the Court must hear the parties on that question as well.” 18. Hon’ble Court in case of Chandrabhan Vs. Saraswati 2022 SCC Online (SC) 1273 (decided on 22.09.2022) has summarised principle relating to Section 100 of CPC in following words:- “(i) the courts below have ignored material evidence or acted on no evidence; (ii) the courts have drawn wrong inferences from proved facts by applying the law erroneously; or (iii) the courts have wrongly cast the burden of proof.” 19. In view of aforesaid, the instant second appeal sans merits and hence same is hereby dismissed with pending application, if any. (ASHOK KUMAR JAIN),J MR/258-suppl.