CASE NO.: Appeal (civil) 4306 of 2007 PETITIONER: Boodireddy Chandraiah and Ors RESPONDENT: Arigela Laxmi and Anr DATE OF JUDGMENT: 17/09/2007 BENCH: Dr. ARIJIT PASAYAT & D.K. JAIN JUDGMENT:
J U D G M E N T
CIVIL APPEAL NO. 4306 OF 2007
(Arising out of SLP (C) No. 25543 of 2004)
Dr. ARIJIT PASAYAT, J.
1. Leave granted.
2. The appellants call in question legality of the judgment of
a learned Single Judge of the Andhra Pradesh High Court
allowing the Second Appeal filed by the respondents in terms
of Section 100 of the Code of Civil Procedure, 1908 (in short
the ‘CPC’). Though many points were urged in support of the
appeal, primarily it was contended that the Second Appeal
was allowed without formulating any substantial question of
law which is mandatory in law.
3. Learned counsel for the respondents submitted that
though no question has rightly been formulated, but the basic
factors have been taken into account and after considering the
materials on record the second appeal was allowed.
4. After the amendment a second appeal can be filed only if
a substantial question of law is involved in the case. The
memorandum of appeal must precisely state the substantial
question of law involved and the High Court is obliged to
satisfy itself regarding the existence of such a question. If
satisfied, the High Court has to formulate the substantial
question of law involved in the case. The appeal is required to
be heard on the question so formulated. However, the
respondent at the time of hearing of the appeal has a right to
argue that the case in the court did not involve any
substantial question of law. The proviso to the section
acknowledges the powers of the High Court to hear the appeal
on a substantial point of law, though not formulated by it with
the object of ensuring that no injustice is done to the litigant
where such a question was not formulated at the time of
admission either by mistake or by inadvertence.
5. It has been noted time and again that without insisting
for the statement of such a substantial question of law in the
memorandum of appeal and formulating the same at the time
of admission, the High Courts have been issuing notices and
generally deciding the second appeals without adhering to the
procedure prescribed under Section 100 of the CPC. It has
further been found in a number of cases that no efforts are
made to distinguish between a question of law and a
substantial question of law. In exercise of the powers under
this section in several cases, the findings of fact of the first
appellate court are found to have been disturbed. It has to be
kept in mind that the right of appeal is neither a natural nor
an inherent right attached to the litigation. Being a
substantive statutory right, it has to be regulated in
accordance with law in force at the relevant time. The
conditions mentioned in the section must be strictly fulfilled
before a second appeal can be maintained and no court has
the power to add or to enlarge those grounds. The second
appeal cannot be decided on merely equitable grounds. The
concurrent findings of facts will not be disturbed by the High
Court in exercise of the powers under this section. Further, a
substantial question of law has to be distinguished from a
substantial question of fact. This Court in Sir Chunilal V.
Mehta and Sons Ltd. v. Century Spg. & Mfg. Co. Ltd. (AIR
1962 SC 1314) held that :
“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.”
6. It is not within the domain of the High Court to
investigate the grounds on which the findings were arrived at,
by the last court of fact, being the first appellate court. It is
true that the lower appellate court should not ordinarily reject
witnesses accepted by the trial court in respect of credibility
but even where it has rejected the witnesses accepted by the
trial court, the same is no ground for interference in second
appeal when it is found that the appellate court has given
satisfactory reasons for doing so. In a case where from a given
set of circumstances two inferences of fact are possible, one
drawn by the lower appellate court will not be interfered by the
High Court in second appeal. Adopting any other approach is
not permissible. The High Court will, however, interfere where
it is found that the conclusions drawn by the lower appellate
court were erroneous being contrary to the mandatory
provisions of law applicable or its settled position on the basis
of pronouncements made by the Apex Court, or was based
upon inadmissible evidence or arrived at by ignoring material
evidence.
7. The question of law raised will not be considered as a
substantial question of law, if it stands already decided by a
larger Bench of the High Court concerned or by the Privy
Council or by the Federal Court or by the Supreme Court.
Where the facts required for a point of law have not been
pleaded, a litigant should not be allowed to raise that question
as a substantial question of law in second appeal. Mere
appreciation of facts, the documentary evidence or the
meaning of entries and the contents of the documents cannot
be held to be raising a substantial question of law. But where
it is found that the first appellate court has assumed
jurisdiction which did not vest in it, the same can be
adjudicated in the second appeal, treating it as a substantial
question of law. Where the first appellate court is shown to
have exercised its discretion in a judicial manner, it cannot be
termed to be an error either of law or of procedure requiring
interference in second appeal. This Court in Reserve Bank of
India v. Ramkrishna Govind Morey (1976 (1) SCC 803) held
that whether the trial court should not have exercised its
jurisdiction differently is not a question of law justifying
interference.([See: Kondiba Dogadu Kadam v. Savitribai Sopan
Gujar and Others (1999(3) SCC 722)].
8. The phrase “substantial question of law”, as occurring in
the amended Section 100 of the CPC is not defined in the
Code. The word substantial, as qualifying “question of law”,
means of having substance, essential, real, of sound worth,
important or considerable. It is to be understood as
something in contradistinction with technical, of no
substance or consequence, or academic merely. However, it is
clear that the legislature has chosen not to qualify the scope of
“substantial question of law” by suffixing the words “of general
importance” as has been done in many other provisions such
as Section 109 of the CPC or Article 133(1)(a) of the
Constitution. The substantial question of law on which a
second appeal shall be heard need not necessarily be a
substantial question of law of general importance. In Guran
Ditta v. T. Ram Ditta (AIR 1928 PC 172) , the phrase
‘substantial question of law’ as it was employed in the last
clause of the then existing Section 100 CPC (since omitted by
the Amendment Act, 1973) came up for consideration and
their Lordships held that it did not mean a substantial
question of general importance but a substantial question of
law which was involved in the case. In Sri Chunilal’s case
(supra), the Constitution Bench expressed agreement with the
following view taken by a full Bench of the Madras High Court
in Rimmalapudi Subba Rao v. Noony Veeraju (AIR 1951 Mad.
969):
“When a question of law is fairly arguable, where
there is room for difference of opinion on it or
where the Court thought it necessary to deal with
that question at some length and discuss
alternative views, then the question would be a
substantial question of law. On the other hand if
the question was practically covered by the
decision of the highest court or if the general
principles to be applied in determining the
question are well settled and the only question
was of applying those principles to be particular
facts of the case it would not be a substantial
question of law.”
9. This Court laid down the following test as proper test, for
determining whether a question of law raised in the case is
substantial:
“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.”
10. In Dy. Commnr. Hardoi v. Rama Krishna Narain (AIR
1953 SC 521) also it was held that a question of law of
importance to the parties was a substantial question of law
entitling the appellant to a certificate under (the then) Section
100 of the CPC.
11. To be “substantial” a question of law must be debatable,
not previously settled by law of the land or a binding
precedent, and must have a material bearing on the decision
of the case, if answered either way, insofar as the rights of the
parties before it are concerned. To be a question of law
“involving in the case” there must be first a foundation for it
laid in the pleadings and the question should emerge from the
sustainable findings of fact arrived at by court of facts and it
must be necessary to decide that question of law for a just and
proper decision of the case. An entirely 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. It will,
therefore, depend on the facts and circumstance of each case
whether a question of law is a substantial one and involved in
the case, or not; the paramount overall consideration being
the need for striking a judicious balance between the
indispensable obligation to do justice at all stages and
impelling necessity of avoiding prolongation in the life of any
lis. (See :Santosh Hazari v. Purushottam Tiwari (deceased) by
Lrs. [(2001) 3 SCC 179].
12. The principles relating to Section 100 CPC, relevant for
this case, may be summerised thus:-
(i) An inference of fact from the recitals or contents of
a document is a question of fact. But the legal effect
of the terms of a document is a question of law.
Construction of a document involving the
application of any principle of law, is also a question
of law. Therefore, when there is misconstruction of a
document or wrong application of a principle of law
in construing a document, it gives rise to a question
of law.
(ii) The High Court should be satisfied that the case
involves a substantial question of law, and not a
mere question of law. A question of law having a
material bearing on the decision of the case (that is,
a question, answer to which affects the rights of
parties to the suit) will be a substantial question of
law, if it is not covered by any specific provisions of
law or settled legal principle emerging from binding
precedents, and, involves a debatable legal issue. A
substantial question of law will also arise in a
contrary situation, where the legal position is clear,
either on account of express provisions of law or
binding precedents, but the court below has decided
the matter, either ignoring or acting contrary to
such legal principle. In the second type of cases, the
substantial question of law arises not because the
law is still debatable, but because the decision
rendered on a material question, violates the settled
position of law.
13. The general rule is that High Court will not interfere with
concurrent findings of the Courts below. But it is not an
absolute rule. Some of the well recognized exceptions are
where (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. When
we refer to ‘decision based on no evidence’, it not only refers to
cases where there is a total dearth of evidence, but also refers
to any case, where the evidence, taken as a whole, is not
reasonably capable of supporting the finding.
14. In spite of several decisions of this Court highlighting the
requirement of formulating the substantial question of law, if
any, before adjudicating the Second Appeal, time and again, it
has come to our notice that the mandatory requirement is not
being followed.
15. The impugned order is set aside and the matter is
remitted to the High Court to formulate substantial question of
law, if any, and thereafter decide the appeal. Needless to say if
there is no substantial question of law involved, the appeal
has to be dismissed. We make it clear that we have expressed
any view as to whether any substantial question of law is
involved.
16. The appeal is allowed. There shall be no order as to
costs.
