Boodireddy
Chandraiah and Ors V. Arigela Laxmi and Anr [2007] Insc 933 (17 September 2007)
Dr.
Arijit Pasayat & D.K. Jain
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.
Back
