SC Summarizes Principles Relating To Substantial Question Of Law & Second Appeal Jurisdiction

High Court cannot also allow a second appeal, without discussing the question of law, observed Supreme Court in. Civil Appeal Nos. 2843-2844 of 2010 titled "Nazir Mohamed Versus J. Kamala & Ors."

The appeals are directed against a common Judgment and Order dated 06.11.2008 dismissing the Second Appeal being S.A. (MD) No.64 of 2000, filed by the Appellant, but allowing the Second Appeal being S.A. (MD) No. 558 of 2000 filed by the Respondent, and setting aside the Judgment and decree dated 17.09.1999 of the First Appellate Court in A.S. No.16/1998, to the extent the First Appellate Court had declined the Respondent’s claim to a decree of recovery of possession of the Suit premises. The High Court held that the Respondent, being the Plaintiff in the Suit was entitled to a declaration of title in respect of half portion of the Suit premises, recovery of possession of the said half portion of the Suit premises and also to recovery of income from the said half of the Suit property owned by the Respondent and/or charges for use, enjoyment and/or occupation thereof.

Section 100 of the Civil Procedure Code, 1908  which provides for a Second Appeal, as amended by the Civil Procedure Code (Amendment) Act, 104 of 1976, with effect from 1.2.1977, provides as follows:

"100. Second Appeal. -

(1) Save as otherwise expressly provided in the body of this Code or by any other law for the time being in force, an appeal shall lie to the High Court from every decree passed in appeal by any Court subordinate to the High Court, if the High Court is satisfied that the case involves a substantial question of law.

(2) An appeal may lie under this section from an appellate decree passed ex parte.

(3) In an appeal under this section, the memorandum of appeal shall precisely state the substantial question of law involved in the appeal.

(4) Where the High Court is satisfied that a substantial question of law is involved in any case, it shall formulate that question.

(5) The appeal shall be heard on the question so formulated and the respondent shall, at the hearing of the appeal, be allowed to argue that the case does not involve such question:

Provided that nothing in this sub-section shall be deemed to take away or abridge the power of the Court to hear, for reasons to be recorded, the appeal on any other substantial question of law, not formulated by it, if it is satisfied that the case involves such question.]”

A second appeal, or for that matter, any appeal is not a matter of right. The right of appeal is conferred by statute. A second appeal only lies on a substantial question of law. If statute confers a limited right of appeal, the Court cannot expand the scope of the appeal. It was not open to the Respondent-Plaintiff to re-agitate facts or to call upon the High Court to reanalyze or re-appreciate evidence in a Second Appeal.

Section 100 of the Code of Civil Procedure, 1908, as amended, restricts the right of second appeal, to only those cases, where a substantial question of law is involved. The existence of a “substantial question of law” is the sine qua non for the exercise of jurisdiction under Section 100 of the Code of Civil Procedure, 1908.

Taking note of the 'substantial questions of law' framed in this case, the Bench comprising Justice Navin Sinha & Indira Banerjee observed:

"With the greatest of respect to the High Court, neither of the two questions framed by the High Court is a question of law, far less a substantial question of law. There was no controversy before the High Court with regard to interpretation or legal effect of any document nor any wrong application of a principle of law, in construing a document, or otherwise, which might have given rise to a question of law. There was no debatable issue before the High Court which was not covered by settled principles of law and/or precedents."

The Court proceeded to observe that, to be "substantial", a question of law must be debatable, not previously settled by the law of the land or any binding precedent, and must have a material bearing on the decision of the case and/or the rights of the parties before it, if answered either way. "To be a question of law "involved 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 Courts 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 added.

The principles for deciding when a question of law becomes a substantial question of law, have been enunciated by a Constitution Bench of this Court in ["Sir Chunilal Mehta & Sons Ltd. Vs Century Spg. & Mfg. Co. Ltd.", AIR 1962 SC 1314], where Supreme Court held:

”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.”

In Hero ["Vinoth Vs Seshammal", (2006) 5 SCC 5452], Supreme Court referred to and relied upon Chunilal Vs Mehta & Sons (supra) and other judgments and summarised the tests to find out whether a given set of questions of law were mere questions of law or substantial questions of law.  The relevant paragraphs of the judgment of this Court in Hero Vinoth (supra) are set out hereinbelow:

"21. The phrase "substantial question of law", as occurring in the amended Section 100 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 withtechnical, 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 Code 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 Vs Ram Ditta [(1927-28) 5I5 IA 235 : 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 Sir Chunilal case [1962 Supp (3) SCR 549 : AIR 1962 SC 1314] 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 : (1951) 2 MLJ 222 (FB)] : (Sir Chunilal case [1962 Supp (3) SCR 549 : AIR 1962 SC 1314] , SCR p. 557) “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 the particular fact of the case it would not be a substantial question of law."

To be “substantial”, a question of law must be debatable, not previously settled by the law of the land or any binding precedent, and must have a material bearing on the decision of the case and/or the rights of the parties before it, if answered either way.

To be a question of law “involved 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 Courts of facts, and it must be necessary to decide that question of law for a just and proper decision of the case.

Where no such question of law, nor even a mixed question of law and fact was urged before the Trial Court or the First Appellate Court, as in this case, a second appeal cannot be entertained, as held by this Court in ["Panchagopal Barua Vs Vinesh Chandra Goswami", AIR 1997 SC 10473].

Whether a question of law is a substantial one and whether such question is involved in the case or not, would depend on the facts and circumstances of each case. The paramount overall consideration is the need for striking a judicious balance between the indispensable obligation to do justice at all stages and the impelling necessity of avoiding prolongation in the life of any lis. This proposition finds support from ["Santosh Hazari Vs Purushottam Tiwari", (2001) 3 SCC 179].

In a Second Appeal, the jurisdiction of the High Court being 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 incorrect as held in ["Ramchandra Vs Ramalingam", AIR 1963 SC 302]. 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.

The Bench therefore summarized the principles relating to Section 100 of the Code of Civil Procedure as follows:

(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.

(iii) 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.

(iv) The general rule is, that High Court will not interfere with the concurrent findings of the Courts below. But it is not an absolute rule. Some of the well-recognised 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. A decision based on no evidence, does not refer only to cases where there is a total dearth of evidence, but also refers to case, where the evidence, taken as a whole, is not reasonably capable of supporting the finding.

The condition precedent for entertaining and deciding a second appeal being the existence of a substantial question of law, whenever a question is framed by the High Court, the High Court will have to show that the question is one of law and not just a question of facts, it also has to show that the question is a substantial question of law.

In ["Kondiba Dagadu Kadam Vs Savitribai Sopan Gujar", (1999) 3 SCC 722], Supreme Court held:

“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 the 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”

“It has been noticed 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 Code of Civil Procedure. 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 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 to or enlarge those grounds. The second appeal cannot be decided on merely equitable grounds. The concurrent findings of facts howsoever erroneous cannot be disturbed by the High Court in exercise of the powers under this section. The substantial question of law has to be distinguished from a substantial question of fact.”

“If the question of law termed as a substantial question 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, its merely wrong application on the facts of the case would not be termed to be a substantial question of law. Where a point of law has not been pleaded or is found to be arising between the parties in the absence of any factual format, a litigant should not be allowed to raise that question as a substantial question of law in second appeal. The mere appreciation of the facts, the documentary evidence or the meaning of entries and the contents of the document 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.”

When no substantial question of law is formulated, but a Second Appeal is decided by the High Court, the Judgment of the High Court is vitiated in law, as held by Supreme Court in ["Biswanath Ghosh Vs Gobinda Ghose", AIR 2014 SC 1527]. Formulation of substantial question of law is mandatory and the mere reference to the ground mentioned in Memorandum of Second Appeal cannot satisfy the mandate of Section 100 of the Code of Civil Procedure, 1908.

The Court observed that the Judgment and Order of the High Court under appeal does not discuss or decide any question of law involved in the case. It also addressed the contentions raised on merits. It observed that the presumption based on the maxim 'possession follows title' that possession must be deemed to follow title, arises only where there is no definite proof of possession by anyone else. Allowing the appeal, the Bench observed:

"61. Just as this Court has time and again deprecated the practice of dismissing a second appeal with a non-speaking order only recording that the case did not involve any substantial question of law, the High Court cannot also allow a second appeal, without discussing the question of law, which the High Court has done."