Gujarat High Court
State Of Gujarat vs M/S Ashwin Coal Corporation on 13 November, 2025
NEUTRAL CITATION
C/SA/10/2015 ORDER DATED: 13/11/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SECOND APPEAL NO. 10 of 2015
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STATE OF GUJARAT & ANR.
Versus
M/S ASHWIN COAL CORPORATION
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Appearance:
MS NIDHI VYAS, AGP for the Appellant(s) No. 1,2
MS PRUTHA BHAVSAR FOR MR ANKIT SHAH(6371) for the
Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE J. C. DOSHI
Date : 13/11/2025
ORAL ORDER
1. Present Second Appeal under section 100 of Code of Civil Procedure, 1908 ('CPC' for short) is filed by original defendants challenging judgment and decree delivered in Regular Civil Appeal No.507 of 2006, whereby, learned Additional District Judge, Anand partly allowed the appeal filed by the original defendants and confirmed the judgment and decree delivered in Special Civil Suit No.83 of 1983 by learned Joint Civil Judge, Nadiad whereby, suit of plaintiff was allowed.
2. M/s. Ashwin Coal Corporation was working as middleman in movement of coal wagons for Narmada Project, Kavadia Colony since 1980. It was considered as middleman by Executive Engineer, Pethlad for identical work on the terms and conditions on which M/s.Ashwin Coal Corporation was working with Narmada project. Perusal of certain work assigned to M/s. Ashwin Coal Corporation, it appears that in total 225 coal wagons movement was made from Western Coal field to Page 1 of 11 Uploaded by SATISH C. VEMULLA(HC00206) on Tue Nov 18 2025 Downloaded on : Tue Nov 18 22:49:40 IST 2025 NEUTRAL CITATION C/SA/10/2015 ORDER DATED: 13/11/2025 undefined Executive Engineer, Irrigation Department, Petlad, whereby M/s. Ashwin Coal Corporation played as middleman, had paid Rs.3 lakhs in regard to carrying work as middleman for transfer of coal wags from Western Coal Field to Irrigation Department, Pethlad. Certain adjustment was carried by Western Coal Field and ultimately, as stated in the plaint, M/s. Aswhin coal Corporation has raised 20 bills of different dates for the charge of work done and in total Rs.4,23,666.63 ps. was outstanding against State of Gujarat and Irrigation Department, Pethlad and out of which after adjustment of Rs.1,03,085.84 ps., remaining outstanding comes to Rs.3,20,580.79 ps. and adding interest thereon and other charges, M/s.Aswhin Coal Corporation claimed Rs.3,98,451.72 ps. with running interest at 18% from State of Gujarat and Irrigation Department, Petlad.
3. Statutory notice under section 80 of CPC was issued on 19.07.1992. Officers of State of Gujarat or Irrigation Department have not reciprocated to such statutory notice.
4. In view of aforesaid averments, M/s. Ashwin Coal Corporation filed Special Civil Suit No.83 of 1983 before the learned Civil Judge, Nadiad seeking recovery of Rs.3,89,451. 72 ps. arraigning State of Gujarat and Executive Engineer, Irrigation Department, Petlad as defendants. Usual defence was raised by the State of Gujarat by filing Written Statement at Exh.11. Bone of contention raised in Written Statement is that no terms and conditions were executed between the parties governing work of M/s. Ashwin Coal Corporation as middlemen and no terms and conditions which was executed for Narmada project was ever breached. It is also contended that coal which Page 2 of 11 Uploaded by SATISH C. VEMULLA(HC00206) on Tue Nov 18 2025 Downloaded on : Tue Nov 18 22:49:40 IST 2025 NEUTRAL CITATION C/SA/10/2015 ORDER DATED: 13/11/2025 undefined was received was of inferior quality and it caused damage to State of Gujarat and Irrigation Department, Petlad. Notice under section 80 was replied and it was contended that plaintiff is entitled for Rs.8965.15 ps. Learned Trial Court after raising issues between the parties, decreed the suit and directed defendants to pay Rs.3,89,415.72 ps. with interest @ 18% from the date of suit till realization. The appellant herein carried judgment and decree to challenge under section 96 of CPC by filing First Appeal No.1202 of 1987 which was renumbered as First Appeal No.507 of 2006. The appeal was partly allowed and judgment and decree passed by learned Trial Court was modified to the extent that grant of interest at 18% p.a. is exhorbitant, was slashed to interest at 9% p.a. Being aggrieved, State of Gujarat and Irrigation Department, Petlad are before this Court by way of Second Appeal under section 100 of CPC challenging concurrent finding of facts passed by Courts below raising various grounds in appeal memo and posing following questions as substantial question of law :-
1. Whether the both the Courts below have failed to consider the evidence produced before them.
2. Whether both the Courts below have made error of law in not considering that original plaintiff was required to make stock of goods and therefore, he was liable for inferiors quality of goods.
3. Whether the both the courts below have made error of law while not putting obligation of such of stock on the plaintiff as no evidence was produced to show that how much stock Page 3 of 11 Uploaded by SATISH C. VEMULLA(HC00206) on Tue Nov 18 2025 Downloaded on : Tue Nov 18 22:49:40 IST 2025 NEUTRAL CITATION C/SA/10/2015 ORDER DATED: 13/11/2025 undefined of coal was filled up by the plaintiff.
4. Whether both the Courts below have made error of law in granting claim the plaintiff whether he had already asked for interest at the rate of 18% for which he had added Rs.53.151/- thereby amount of interest on interest have been granted.
5. Whether both the Courts below have made error of law on not putting liability on the plaintiff to prove that wagons were filled up at its full capacity to show that stock as asked for was provided.
5. Order sheet indicates that though notice for final hearing was issued on 18.03.2015 by Co-ordinate Bench, no substantial question of law was ever framed, therefore, this appeal remains for admission.
6. Learned AGP Ms.Nidhi Vyas for the appellant - State of Gujarat raised solitary contention that while calculating amount of arrears, plaintiff separately assessed interest in tune of Rs.53,151.78 ps. and then added interest on principle amount and claimed entire outstanding amount and claimed interest at 18% p.a.. It is submitted that learned Trial Court as well as learned Appellate Court has committed serious error in granting interest on interest i.e. granting compounding interest. She referred to the pleadings and submitted that specific amount of Rs.53,157.78 ps is assessed towards interest upon amount of Rs.3,36,049.94 ps. being principle outstanding amount.
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6.1. Except above submissions, learned AGP Ms.Vyas did not canvass any other submission.
7. As against aforesaid arguments, learned advocate Ms.Bhavsar supported concurrent findings arrived by learned Court below and State Government and Irrigation Department has purposefully not paid amount to M/s. Ashwin Coal Corporation. It is submitted that said Corporation is engaged in business activity and amount which remained outstanding could have invested in any other business activity, therefore, M/s. Ashwin Coal Corporation has suffered huge loss. It is submitted that M/s. Ashwin Coal Corporation though was required to act as middlemen had paid amount on behalf of State Government to Western Coal Field. It is submitted that charging of interest would be at the most factual aspect and on that ground, appeal cannot be admitted.
7.1. Upon above submissions, it is submitted to dismiss the appeal.
8. To be noted that State Government has accepted judgment passed by learned Trial Court as well as learned Appellate Court on the ground that middleman is required to be paid as M/s. Ashwin Coal Corporation paid to Western Coal Field on behalf of State Government. Defence of the State Government that inferior quality of coal was received has not been considered by learned Courts below on the ground that role of M/s. Ashwin Coal Corporation was limited to play as middleman and facilitate supply of coal wagons. He is nowhere responsible for quality of coal supplied through Western Coal Field. Officer of State Page 5 of 11 Uploaded by SATISH C. VEMULLA(HC00206) on Tue Nov 18 2025 Downloaded on : Tue Nov 18 22:49:40 IST 2025 NEUTRAL CITATION C/SA/10/2015 ORDER DATED: 13/11/2025 undefined Government entered into witness box at Exh.70, where he admitted that deal was executed and services of M/s. Ashwin Coal Corporation was taken. It is also admitted that M/s. Aswhin Coal Corporation has paid amount on behalf of State Government. Learned Trial Court while giving reasons issue no.3 widely discussed the issue after referring oral and documentary evidence, more particularly, Exh.38 to 43, 60, 23 to 36, 67 to 69 as well as Exh.79 to 85. Thus, learned AP Ms. Nidhi Vyas submits that Staet has no dispute in this regard. Learned Trial Court granted 18% interest on principle amount. Learned Appellate Court believed that interest of 18% passed by learned Trial Court is exorbitant as no such relief was claimed by the plaintiff, modified the judgment and decree to that extent by granting 9% yearly interest. Learned Appellate Court did not find any reason to interfere with findings of learned Trial Court in regards to outstanding amount of Rs.Rs.3,89,451. 72 ps. Contention of learned AGP if examined, such contention is first time raised in Second Appeal. No such defence was specifically raised in written statement filed by State Government or Irrigation Department. Even perusal of judgment and decree arrived by learned Courts below, no such argument was ever raised. Even otherwise, such contention based on facts of the case, cannot be examined in Second Appeal.
9. In view of above, contention raised by learned AGP is devoid of merits. No other and further contentions are raised.
10. This Court in the case of LH of Harji Murji, Gami Ramji Harji Gami v/s. Shamji Ratna Arjan Bhudiya [2024 LawSuit Page 6 of 11 Uploaded by SATISH C. VEMULLA(HC00206) on Tue Nov 18 2025 Downloaded on : Tue Nov 18 22:49:40 IST 2025 NEUTRAL CITATION C/SA/10/2015 ORDER DATED: 13/11/2025 undefined (Guj) 1040], referring to dictum of Hon'ble Apex Court in para 7 and in para 10 held as under :-
"7. In Narayananan Rajendran v/s. Lekshmy Sarojini [(2009) 5 SCC 264], the Hon'ble Apex Court has examined scope of Second Appeal prior to amendment and post amendment. After referring catena of judgments, in para 38 to 42, the Hon'ble Apex Court has held as under :-
"38. "66.The primary cause of the accumulation of arrears of second appeal in the High Court is the laxity with which second appeals are admitted without serious scrutiny of the provisions of Section 100 C.P.C. It is the bounden duty of the High Court to entertain second appeal within the ambit and scope of Section 100 C.P.C.
67. The question which is often asked is why should a litigant have the right of two appeals even on questions of law? The answer to this query is that in every State there are number of District Courts and courts in the District cannot be final arbiters on questions of law. If the law is to be uniformly interpreted and applied, questions of law must be decided by the highest Court in the State whose decisions are binding on all subordinate courts."
Rationale behind permitting second appeal on question of law:
39. "68. The rationale behind allowing a second appeal on a question of law is, that there ought to be some tribunal having a jurisdiction that will enable it to maintain, and, where necessary, re-establish, uniformity throughout the State on important legal issues, so that within the area of the State, the law, in so far as it is not enacted law, should be laid down, or capable of being laid down, by one court whose rulings will be binding on all courts, tribunals and authorities within the area over which it has jurisdiction. This is implicit in any legal system where Page 7 of 11 Uploaded by SATISH C. VEMULLA(HC00206) on Tue Nov 18 2025 Downloaded on : Tue Nov 18 22:49:40 IST 2025 NEUTRAL CITATION C/SA/10/2015 ORDER DATED: 13/11/2025 undefined the higher courts have authority to make binding decisions on question of law.
69. The analysis of cases decided by the Privy Council and this court prior to 1976 clearly indicated the scope of interference under Section 100 C.P.C. by this Court. Even prior to amendment, the consistent position has been that the courts should not interfere with the concurrent findings of facts.
70. Now, after 1976 Amendment, the scope of Section 100 has been drastically curtailed and narrowed down. The High Courts would have jurisdiction of interfering under Section 100 C.P.C. only in a case where substantial questions of law are involved and those questions have been clearly formulated in the memorandum of appeal. 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.
71. The fact that, in a series of cases, this court was compelled to interfere was because the true legislative Page 8 of 11 Uploaded by SATISH C. VEMULLA(HC00206) on Tue Nov 18 2025 Downloaded on : Tue Nov 18 22:49:40 IST 2025 NEUTRAL CITATION C/SA/10/2015 ORDER DATED: 13/11/2025 undefined intendment and scope of Section 100 C.P.C. have neither been appreciated nor applied. A class of judges while administering law honestly believe that, if they are satisfied that, in any second appeal brought before them evidence has been grossly misappreciated either by the lower appellate court or by both the courts below, it is their duty to interfere, because they seem to feel that a decree following upon a gross misappreciation of evidence involves injustice and it is the duty of the High Court to redress such injustice. We would like to reiterate that the justice has to be administered in accordance with law.
72. When Section 100 C.P.C. is critically examined then, according to the legislative mandate, the interference by the High Court is permissible only in cases involving substantial questions of law.
73. The Judicial Committee of the Privy Council as early as in 1890 stated that there is no jurisdiction to entertain a second appeal on the ground of an erroneous finding of fact, however, gross or inexcusable the error may seem to be and they added a note of warning that no Court in India has power to add to, or enlarge, the grounds specified in Section 100.
74. The High Court seriously erred in interfering with the findings of facts arrived at by the trial court and affirmed by the first appellate court.
40. The scope of interference by the High Court in second appeal under section 100 CPC after 1976 Amendment is strictly confined to cases involving substantial questions of law. The High Court would not be justified in dealing with any second appeal without first formulating substantial question of law. The High Court would not be justified in dealing with any second appeal without first formulating substantial question of law. The legislative intention has been clearly spelt out in a series of cases of this court.
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41. In Gurdev Kaur (supra), this court exhaustively dealt with the cases before and after 1976 Amendment of CPC. This court clearly observed that the scope and ambit of section 100 CPC has been drastically changed after the amendment.
42. It is a matter of common experience in this court that despite clear enunciation of law in a catena of cases of this court, a large number of cases are brought to our notice where the High Court under section 100 CPC are disturbing the concurrent findings of fact without formulating the substantial question of law. "
10. Thus, it is admitted position that in Second Appeal jurisdiction of the High Court is confined to substantial question of law, a finding of fact is not open to challenge in second appeal, even if the appreciation of evidence is palpably erroneous and the finding of fact is incorrect as held by Hon'ble Apex Court in the case of V. Ramachandra Ayyar v/s. Ramalingam Chettiar [AIR 1963 SC 302].
11. Recently, in the case of Suresh Lataruji Ramteke v/s. Sau. Sumanbai Pandurang Petkar [2023 Live Law (SC) 821], the Hon'ble Apex Court in para 27 observed following :-
"27. The questions of law raised in the instant appeal are answered as under :
27.1 A Court sitting in second appellate jurisdiction is to frame substantial question of law at the time of admission, save and except in exceptional circumstances. Post such framing of questions the Court shall proceed to hear the parties on such questions, i.e., after giving them adequate time to meet and address them. It is only after such hearing subsequent to the framing that a second appeal shall come to be decided.
27.2 In ordinary course, the High Court in such jurisdiction does not interfere with finding of fact, however, if it does find any compelling reason to do so as regard in law, it can Page 10 of 11 Uploaded by SATISH C. VEMULLA(HC00206) on Tue Nov 18 2025 Downloaded on : Tue Nov 18 22:49:40 IST 2025 NEUTRAL CITATION C/SA/10/2015 ORDER DATED: 13/11/2025 undefined do but only after perusing the records of the Trial Court, on analysis of which the conclusion arrived at by such a Court is sought to be upturned. In other words, when overturning findings of fact, the Court will be required to call for the records of the Trial Court or if placed on record, peruse the same and only then question the veracity of the conclusions drawn by the Court below."
12. Applying above dictum on scope of second appeal under section 100 of CPC and for the foregoing reasons, this Court is of the opinion that the appellant has failed to make out case, as no substantial question of law emerges. Thus, the Second Appeal is dismissed at admission stage. Notice is discharged. Interim relief granted earlier, if any, stands vacated. Record and Proceedings, if any, be send back to learned Trial Court concerned.
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