(a) A Court sitting in second appellate jurisdiction has 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. (b) 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 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
1. The jurisprudence on Section 100, CPC is rich and varied. Time and again Courts in numerous judgments have 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.
2. In Panchugopal Barua v. Umesh Chandra Goswami and Ors. (1997) 4 SCC 713, it was noted that the requirement, most fundamental under section 100 of the CPC, 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.
3. The jurisdiction under section 100 has been described by the Supreme Court in Gurdev Kaur v. Kaki (2007) 1 SCC 546 stating that 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 the legislature never wanted a 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 (2007) 1 SCC 546 was referred to and relied upon in Randhir Kaur v. Prithvi Pal Singh & Ors (2019) 17 SCC 71.
4. In Santosh Hazari v. Purushottam Tiwari (2001) 3 SCC 179, the Supreme Court 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 were followed in Government of Kerala v. Joseph 2023 SCC OnLine SC 961and Chandrabhan v. Saraswati 2022 SCC OnLine SC 1273.
5. Non Formulation of substantial question(s) of law renders proceedings “patently illegal”. This Court’s decisions in Umerkhan v. Bimillabi (2011) 9 SCC 684 and Shiv Cotex v. Tirgun Auto Plast Pvt Ltd. & Ors (2011) 9 SCC 678 indicate this position.
6. Substantial questions of law, as framed by the High Court must be answered in light of the contentions raised therein.
7. If the Court is of the view that a question framed is to be altered, deleted or a new question is to be added, then the Court must hear the parties.
8. For both the above principles, reference may be made to Gajaraba Bhikhubha Vadher v. Sumara Umar Amad (2020) 11 SCC 114 where the following principles were observed:
a) The substantial question of law framed by the High Court must be answered, with reasons. Disposing off the appeal without answering the same cannot be justified.
b) If a need is felt to modify, alter or delete a question, a hearing must be provided to the parties in respect thereof.
9. When the case is admitted, but upon hearing when it is found that no substantial question of law arises for consideration, reasons should be recorded in such dismissal.
10. In Kichha Sugar Co. Ltd. v. Roofrite (P) Ltd (2009) 16 SCC 280 it was observed:
“4. Our attention is drawn by the learned counsel for the respondents to the provisions of Section 100(5) of the Civil Procedure Code where the respondent to a second appeal is permitted “to argue that the case does not involve such question” i.e. the questions formulated earlier. No doubt, but then the order on the second appeal should indicate, howsoever briefly, why the questions formulated at the earlier stage had, at the stage of final hearing, been found to be no questions of law.”
11. Substantial questions should ordinarily, not be framed at a later stage. If done so, then parties must be given an opportunity to meet them. In U.R. Virupakshappa v. Sarvamangala (2009) 2 SCC 177 it was held:
“15. It, furthermore, should not ordinarily frame a substantial question of law at a subsequent stage without assigning any reason therefor and without giving a reasonable opportunity of hearing to the respondents. [See Nune Prasad v. Nune Ramakrishna [(2008) 8 SCC 258 : (2008) 10 Scale 523] ; Panchugopal Barua v. Umesh Chandra Goswami [(1997) 4 SCC 713] (SCC paras 8 and 9); and Kshitish Chandra Purkait v. Santosh Kumar Purkait [(1997) 5 SCC 438] (SCC paras 10 and 12)].
16. The High Court, in this case, however, formulated a substantial question of law while dictating the judgment in open court. Before such a substantial question of law could be formulated, the parties should have been put to notice. They should have been given an opportunity to meet the same. Although the Court has the requisite jurisdiction to formulate a substantial question of law at a subsequent stage which was not formulated at the time of admission of the second appeal but the requirements laid down in the proviso appended to Section 100 of the Code of Civil Procedure were required to be met.”
12. In MehboobUrRehman v. Ahsanul Ghani (2019) 19 SCC 415 it was observed in respect of application of Section 100(5) CPC as under:
a) It is not rule under proviso to subsection (5) to hear any other substantial question of law irrespective of the question(s) formulated, so as to annul other requirements of S. 100, CPC.
b) Proviso to come in operation in exceptional cases where reasons are to be recorded by High Court.
13. It has further been held that the application of this section is only when some questions, substantial in law, already stand framed. (B.C. Shivashankara v. B.R. Nagaraj (2007) 15 SCC 387).
14. Wrong application of law laid down by the Privy Council, Federal Court or the Supreme Court, will not qualify for substantial question of law and neither wrong application of facts.
15. If on an issue, the trial court discusses the evidence but does not return a finding thereon, High Court in jurisdiction under Section 100, CPC may do so. Reference be made to Govindbhai Chhotabhai Patel v. Patel Ramanbhai Mathurbhai (2020) 16 SCC 255. The Supreme Court in Kondiba Dagadu Kadam v. Savitribai Sopan Gujar (1999) 3 SCC 722, observed-
“6. 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.”
16. Interference on findings of fact permitted in exceptional cases, i.e., when finding is based on either inadmissible or, no evidence. The Supreme 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.
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. Jurisdiction under second appeal not to be exercised merely because an alternate view is possible.
18. It was observed in Hamida v. Mohd. Khalil (2001) 5 SCC 30 that the High Court, it is well settled, while exercising jurisdiction under Section 100 CPC, cannot reverse the findings of the lower appellate court on facts merely on the ground that on the facts found by the lower appellate court another view was possible. This position was reiterated by Avtar Singh & Ors. v. Bimla Devi & Ors (2021) 13 SCC 816.
19. In aid of such a restricted application, an essential aspect in ensuring that it does not acquire the nature of a “third appeal” is the limited possibility of appreciation of evidence and connectedly, the restriction on upturning concurrent findings of fact. However, there are certain exceptions to the rule as pointed out by this Court in Nazir Mohamed v. J. Kamala (2020) 19 SCC 57, as under:
“33.4. The general rule is, that the 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.
20. The extent of the same may be underscored by the observation that:
“32. 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 V. Ramachandra Ayyar v . Ramalingam Chettiar [V. Ramachandra Ayyar v . Ramalingam Chettiar , 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.”
21. In Suresh Lataruji Ramteke Vs. Sau. Sumanbai Pandurang Petkar & Ors [Civil Appeal No. 6070 of 2023 arising out of SLP (C) No. 20183 of 2022], the Supreme Court held that it was apparent from the above extracted principles and a perusal of the respective judgments that the second appeal is envisioned, much like any other process of the Court to be a step by step process, each step further being a consequence of the previous one. Framing of substantial questions at the stage of admission, the appeal then being admitted for hearing, hearing thereon, and then a reasoned judgment.
22. It was emphasized that hearing the parties, on all questions, framed at the time of admission as also the one framed, added or altered, is absolutely essential.
On facts, it was noted that the parties were not given the requisite time to meet the questions framed by the Court. Section 100(5) CPC suggests that there is a gap between framing of the questions at admission and hearing, as the proviso thereto gives an opportunity to the Court to frame additional questions at the time of hearing, on which the parties would have to be heard as well.
Meaning thereby, that the questions framed at the time of admission, at such point of subsequent framing of questions are already known to the parties and they have had time to prepare to address arguments on the same. It is during the arguments that a further important issue is discovered and a question in that regard is framed, with the parties then being granted time to meet that question as well.
23. The Supreme Court relied on its earlier judgement in Amar Singh v. Dalip Singh (2012) 13 SCC 405 wherein it was held:
a) The purpose of framing a 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 advance 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.
24. It was noted in Suresh Lataruji Ramteke Vs. Sau. Sumanbai Pandurang Petkar (supra) that the High Court had framed the questions of law on the second date of hearing, the parties were heard right then and there, and the second appeal was disposed of with the judgment being dictated and findings of fact reversed. It was held that this was not in consonance with the manner set out for the disposal of a second appeal.
25. It was also noted that the impugned judgment overturns concurrent findings of fact in respect of readiness and willingness on the part of the plaintiff to perform the contract, without pointing out the exceptional circumstance or the perversity in the findings which were returned by the Courts below.
26. It was held that for the Court to have done so, in accordance with law, the actual evidence, which was before the Courts below had to be called for. This is so because, if the findings returned are to be upturned on perversity, the same should unmistakably be reflected from record. If this is not so done, the Court of first appeal being the “final Court of fact”, would be reduced to a mere saying, of no actual effect.
27. It was emphasized that a second appeal is not a “third trial on facts”, and so, for reappreciation of evidence to be justified, and for the same to be required as well as being demonstrably, at a different threshold from merely, a “possible different view”, perversity or the other conditions of “no evidence” or “inadmissible evidence” ought to be urged, and subsequently, with the Court being satisfied on the arguments advanced, of such a possibility, the Court would then, proceed to call for the record. That is to say that accepting the argument of perversity merely on the submissions made and not having appreciated the record, would be unfair to the Court of first appeal.
28. The Supreme Court summed up the law as follows:
(a) A Court sitting in second appellate jurisdiction has 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.
(b) 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 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.