Judgment deciding second appeal without formulation of substantial question law not valid: SC

Supreme Court: The bench of Navin Sinha and Indira Banerjee, JJ has held that 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. 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 CPC.

It said that for entertaining and deciding a second appeal, 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.

“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.”

Explaining the scope of Section 100 CPC, the Court said that 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.

The Court, further, explained:

  • 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, a second appeal cannot be entertained.”

Conclusion

  1. 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.
  2. 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.
  3. 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.
  4. 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
    • the courts below have ignored material evidence or acted on no evidence;
    • the courts have drawn wrong inferences from proved facts by applying the law erroneously; or
    • 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.”

[Nazir Mohamed v. J. Kamala, 2020 SCC OnLine SC 676, decided on 27.08.2020]

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