When a ‘second appeal’ is maintainable before the High Court?

Q. When a ‘second appeal’ is maintainable before the High Court?

Sections 100 to 103, 107, 108 and Order XXXII of the Code of Civil Procedure, 1908 deal with second appeals. According to section 100 of the Code of Civil Procedure, 1908:

(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.

Section 100 of the Code of Civil Procedure as amended by the Amendment Act, 1976, has drastically changed and considerably curtailed the scope of second appeal. Under the old section a second appeal was maintainable on any of the three grounds set out in clauses (a), (b) or (c) which were liberally interpreted but as of now, the scope and ambit of the jurisdiction of High Court in cases of second appeal is very much narrowed down. From section 100 the following consequences ensue:

(i) The High Court must be satisfied that the case involved a Substantial question of Law [Section 100(1)].

(ii) The Memorandum of appeal must precisely state such question [Section 100(3)].

(iii) The High Court at the time of admiring the appeal should formulate such question [Section 100(4)].

(iv) The appeal shall be heard only on that question [Section 100(5)].

(v) At the hearing of appeal, the respondent can agree that the case does not involve such question [Section 100(5)].

(vi) The High Court is, however, empowered to hear the second appeal on any other substantial question of law, not formulated by it, if it is satisfied that the appeal involves such question. The High Court however, has to record reasons for doing so. [Proviso to section 100(5)].

Under section 100 of the Code of Civil Procedure, 1908 after 1976 Amendment, it is essential for the High Court to formulate a substantial question of law and it is not permissible to reverse the judgment of the first Appellate Court without doing so; Ishwar Dass Jain v. Sohan Lai, MANU/SC/0747/1999 : (2000) 1 SCC 434: AIR 2000 SC 426: 2000 (1) CTC 359: JT 1999 (9) SC 305: (2000) 125 PLR 56: RLW 2000 (1) SC 80: (1999) 7 SCALE 277: (1999) Supp 5 SCR 24: 2000 (1) UJ 666 (SC).

Yet again in Roop Singh v. Ram Singh, MANU/SC/0204/2000 : (2000) 3 SCC 708: 2001 (1) BLJR 488: JT 2000 (3) SC 474: 2000 (3) MPHT 18: (2000) 2 SCALE 577: (2000) 2 SCR 605: 2000 (2) UJ 825 (SC), this court has expressed that the jurisdiction of a High Court is confined to appeals involving substantial question of law. Para 7 of the said judgment reads:

“7. It is to be reiterated that under section 100 of the Code of Civil Procedure, 1908 jurisdiction of the High Court to entertain a second appeal is confined only to such appeals which involve a substantial question of law and it does not confer any jurisdiction on the High Court to interfere with pure questions of fact while exercising its jurisdiction under section 100 of the Code of Civil Procedure, 1908. That apart, at the time of disposing of the matter the High Court did not even notice the question of law formulated by it at the time of admission of the second appeal as there is no reference of it in the impugned judgment. Further, the fact findings courts after appreciating the evidence held that the defendant entered into the possession of the premises as a batai, that is to say, as a tenant and his possession was permissive and there was no pleading or proof as to when it became adverse and hostile. These findings recorded by the two courts below were based on proper appreciation of evidence and the material on record and there was no perversity, illegality or irregularity in those findings. If the defendant got the possession of suit land as a lessee or under a batai agreement then from the permissive possession it is for him to establish by cogent and convincing evidence to show hostile animus and possession adverse to the knowledge of the real owner. Mere possession for a long time does not result in converting permissive possession into adverse possession; Thakur Kishan Singh v. Arvind Kumar, MANU/SC/0015/1995 : (1994) 6 SCC 591. The position has been reiterated in Kanahaiyalal v. Anupkumar, JT (2002) 10 SC 98; Premabai v. Jnaneshwar Ramakrishna Patange, 2003 AIR SCW 2922; Chadat Singh v. Bahadur Rama, JT (2004) 6 SCC 296; Mathakala Krishnaiah v. V. Rajagopal, JT (2004) 9 SCC 205 and Madan Lal v. Bal Krishan, MANU/SC/2520/2005 : AIR 2006 SC 645. In Madan Lal v. Bal Krishan, MANU/SC/2520/2005 : AIR 2006 SC 645: 2006 (1) ALT 51 (SC): 2006 (1) AWC 662 (SC): (SC Supp) 2006 (1) CHN 174: 2006 (1) CTC 675: 2006 (2) JCR 1 (SC): JT 2005 (10) SC 494: (2006) 2 MLJ 287 (SC): (2005) 13 SCC 555, it was observed that:

“In view of section 100 of the Code of Civil Procedure, 1908 the memorandum of appeal shall precisely state substantial question or questions of law involved in the appeal as required under sub-section (3) of section 100. Where the High Court is satisfied that in any case any substantial question of law is involved it shall formulate that question under sub-section (4) and the second appeal has to be heard on the question so formulated as stated in sub-section (5) of section 100.”

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 in second appeal. The mere appreciation of the facts the documentary evidence or the meaning of entries on the contents of the documents cannot be held to be raising 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; Mst. Sugani v. Rameshwar Das, MANU/SC/8106/2006 : AIR 2006 SC 2172: 2006 (4) ALD 41 (SC): 2006 (3) AWC 2392 (SC): (SC Suppl) 2006 (4) CHN 26: 2006 (3) CTC 108: 2007 (1) JCR 218 (SC): (2006) 3 MLJ 131 (SC): (2006) 4 SCALE 491.

When Second Appeal does not Lie?

Following are the conditions wherein second appeal specifically does not lie after the amendments of 1976 and 2002 of the Code of Civil Procedure:

(i) No second appeal shall lie except on the ground mentioned in section 100 [Section 101].

(ii) No second appeal shall lie from any decree when the subject-matter of the original suit is for recovery of money not exceeding twenty-five thousand rupees.

(iii) It is note worthy that no second appeal lies from an order; it is lies only from a decree. Further, the decree against which the second appeal has to be filed should itself be an appellate decree and such decree against which the second appeal is to be filed must have been passed by a court inferior to the High Court before which the second appeal is to be filed.

No Interference with Finding of Facts

Q. Whether High Court can interfere with the findings of facts in a second appeal?

In Kashibai v. Parwatibai, MANU/SC/0799/1995 : (1995) 6 SCC 213: 1995 (3) ALT 57 (SC): (1995) 97 Bom LR 80: 1995 (2) CTC 476: II (1996) DMC 266 SC: JT 1995 (7) SC 48: (1996) 1 MLJ 45 (SC): 1996 MPLJ 1: (1995) 5 SCALE 615: (1995) Supp 4 SCR 63, it was observed by the Supreme Court that there is no jurisdiction to entertain a second appeal on the ground of erroneous finding of facts based on appreciation of relevant evidence. Thus in second appeal, reappreciation of evidence is not permitted unless the judgment is perverse or the judgment is based upon evidence admittedly illegal or the finding is without evidence (a defect in legal procedure) or there has been a wrong construction of documents or misreading of evidence.

Points of law can be allowed to be urgent and put forward in second appeal, even though such points were available on facts before the Court below, but were not urged or put forward. Thus, new pleas can be taken in second appeal (Subodh Kumar Neogi v. Panchu Gopal Neogi, AIR 1985 (NOC) 120 Cal).

Substantial Question of Law

Q. What do you mean by expression ‘substantial question of law’?

A second appeal lies only on a substantial question of law. After the amendment of 1976, second appeal is barred on the ground of error of law or procedure. The Supreme Court has defined the meaning and scope of “substantial question of law” in Chunnilal Mehta v. Century Spinning & Mfg. Co., MANU/SC/0056/1962 : AIR 1962 SC 1314: (1963) 65 Bom LR 267: (1962) Supp 3 SCR 549, wherein the facts of the case were Chunnilal Mehta & Sons (Appellants) were managing agents of Century Spinning Co. (Respondents) for a term of 21 years by an agreement at 15th June, 1933. However in April, 1951, the Board of Directors of Respondent Co. terminated the agreement of June, 1933 and passed a resolution removing the Appellants as Managing agents. The Appellant relying on relevant clauses of contract between them filed original suit in Bombay High Court claiming 50 lakh as damages for wrongful termination of agreement. The Respondent Co. admitted the termination of appellant employment wrongful but asked the learned Single Judge to assess the quantum of damages appellant was entitled. Clause 14 of mutual contract provided for compensation to be paid in case the agency of managing agents terminated before the expiry of contract. It read:

“For the loss of such employment a sum equal to aggregate amount of monthly salary of not less than Rs. 600 which Managing agents would have been entitled to receive from the company, for and during whole of the then unexpired portion of said period of 21 years.”

Q. Discuss the conditions when second appeal does not lie?

The learned trial Judge on interpretation of clause 14 awarded a sum of Rs. 234 lakh (for unexpired term along with interest). Appellant aggrieved “filed the first appeal in the same High Court. The judgment of the High Court in appeal was in affirmance of the judgment of the learned single Judge dismissing appellant’s suit for damages and, therefore it was necessary for the appellant to establish that “a substantial question of law” was involved to go in for second appeal. For second appeal the appellant applied under article 133 (i.e., an appeal shall lie to Supreme Court if the High Court certifies that the appeal involves the substantial question of law). However, the learned Judges missed the application without hearing. Thus this appeal is by special leave petition under article 136 of the Constitution.

The specific contention raised by appellant was that view taken by High Court in disposing his appeal application under article 133 (i.e., as to substantial question of law) runs contrary to Privy Council judgment in Raghunath Prasad Singh v. Deputy Commissioner Pratapgarh, MANU/PR/0012/1927 : AIR 1927 PC 110.

The Supreme Court observing that view of Bombay High Court was narrow while that of Nagpur High Court a little too wide, but that of Madras

High Court was balanced and laid down the following principles to determine whether a question of law is “substantial question of law”:

(1) If the question is of general public importance, or its directly and substantially affects the rights of the parties. A substantial question of law is a substantial question of law as between the parties in the case involved, and does not mean a question of general importance.

(2) Whether it is either open question in the sense that it is not finally settled by this court or by Privy Council or by Federal Court of is not free from difficulty (a doubt about principle of law is involved) or calls for discussion of alternative views: then it is a substantial question of law.

(3) If the question is settled by the highest court or the general principles to be applied 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 substantial question of law.

The assessment of damages by High Court being well within the clauses of mutual agreement were upheld by Supreme Court. Affirming the decree of the High Court, the appeal with cost was dismissed but with an observation:

“The construction of agreement is not only one of law but also it is neither simple nor free from doubt. Moreover, a claim of several lakh was involved …. depending upon the success or failure of conception of the parties Thus, it is a Substantial question of law”.

Recently three judges bench of Supreme Court in Santosh Hazari v. Purshottarn Tiwari, AIR 2001 SC 965: (2001) 251 ITR 84 (SC): JT 2001 (2) SC 407: (2001) 2 MLJ 69 (SC): 2001 (3) MPHT 71: (2001) 1 SCALE 712: MANU/SC/0091/2001 : (2001) 3 SCC 179: (2001) 1 SCR 948 observed that:

“Section 100 of the Code of Civil Procedure, 1908 as amended in 1976 restricts the jurisdiction of High Court to hear the second appeal only on “substantial question of law involved in the case”. An obligation is cast upon the appellant to precisely state in Memorandum of Appeal the substantial question of law involved in appeal for which appellant process to urge before High Court. High Court must be satisfied that a substantial question of law is involved in the case and such question has to be formulated by High Court. At the hearing of the appeal, the scope of hearing is circumscribed by the question so formulated by High Court. Respondent is at the liberty to show that question formulated by High Court is not involved in the case. However, High Court’s power to hear the appeal on any other substantial question of law not earlier formulated by it, is not taken away subject to twin conditions being satisfied:

(a) the High Court feels that the case involves such question, and

(b) High Court records reasons for such satisfaction.”

Power of High Court to Determine Issues of Fact

According to section 103 of the Code of Civil Procedure, 1908,

In any second appeal, the High Court may, if the evidence on the record is sufficient, determine any issue necessary for the disposal of the appeal,–

(a) which has not been determined by the lower Appellate Court or both by the Court of first instance and the lower Appellate Court, or

(b) which has been wrongly determined by such court or courts by reason of a decision on such question of law as is referred to in section 100.

Order from which Appeal Lies

Section 104 of the Code of Civil Procedure, 1908 provides that,

(1) An appeal shall lie from the following orders, and save as otherwise expressly provided in the body of this Code or by any law for the time being in force, from no other orders:

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(ff) an order under section 35A;

(ffa) an order under section 91 or section 92 refusing leave to institute a suit of the nature referred to in section 91 or section 92, as the case may be;

(g) an order under section 95;

(h) an order under any of the provisions of this Code imposing a fine or directing the arrest or detention in the civil prison of any person except where such arrest or detention is in execution of a decree; (i) any order made under rules from which an appeal is expressly allowed by rules:

Provided that no appeal shall lie against any order specified in clause (ff) save on the ground that no order, or an order for the payment of a less amount, ought to have been made.

(2) No appeal shall lie from any order passed in appeal under this section.

Kondiba Dagadu Kandam case

In Kondiba Dagadu Kadam v. Savitri Bai, JT (1999) 3 SC 163: AIR 1999 SC 2213: 1999 (2) CTC 468: (1999) II MLJ 105 (SC): RLW 2000 (1) SC 89: (1999) 2 SCALE 633: MANU/SC/0278/1999 : (1999) 3 SCC 722: (1999) 2 SCR 728: 1999 (2) UJ 820 (SC), the facts of the case were, the appellants filed a suit for specific performance against the respondent with regard to an agreement to sale dated 12th May, 1972 which was dismissed by Trial Court by it’s order dated 25th June, 1985. The lower Appellate Court allowed the appeal and granted the relief of specific performance in favour of plaintiff.

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1. Clauses (a) to (f) omitted by Act 10 of 1940, sec. 49 and Sch. III.

The Appellate Court found that the deceased ‘Sopan’ executed a document Exhibit page 68 in front of plaintiff witness Babu, who confirmed the thumb-impression of deceased on Exhibit page 68 were made in his presence. The findings of Appellate Court are based on appreciation of evidence and being the finding of the last court on facts were binding upon the parties.

The fact that learned single judge of the High Court has only appreciated the evidence is evident from findings “the lower Appellate Court has only relieved upon the evidence of two attesting witnesses viz. Sopan Shankar Nadha and Ramu Laxman Shinde (police patil)”. Ramu Laxman Shinde had stated that he was present at the time of execution of agreement of repurchase dated 12th May, 1972. However, in the plaint there is no reference whatsoever with regard to Ramu Laxman, being present at the time of execution of said repurchase agreement dated 12th May, 1972. In view thereof, the evidence of Ramu Laxman Shinde cannot be accepted. Sopan Shankar Nadhe is also not reliable as he make’s contradictory statement about Sopan’s thumb-impression. The Apex Court held that the order of learned single Judge, impugned in the appeal being against the settled norms and contrary is the mandate to section 100 of the Code of Civil Procedure, 1908, therefore cannot be sustained. The appeal is allowed by setting aside the impugned judgment of the High Court and restoring the judgment of the first appellate court with costs throughout.

Observations and decision of the Supreme Court.–

The Apex Court made following observations with regards to section 100 of the Code of Civil Procedure, 1908.

After the Amendment Act, 1976 to the Code of Civil Procedure, 1908, 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 question. The High Court has to formulate the substantial question of law involved in the case. The respondent at the time of hearing of the appeal has a right to argue that the case in the Court did not involve substantial question of law. The proviso to the section, acknowledges the power of the High Court to hear the appeal on substantial point of law, though not formulated by it with the object of ensuring that no injustice is done to the litigant where such question was not formulated at the time of admission either by mistake or by inadvertence.

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. The lower Appellate Court should not 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 been given satisfactory reasons for doing so. In case where from a given set of circumstances two inferences are possible one drawn by lower Appellate Court is binding on the High Court in second appeal. The High Court cannot substitute its opinion for the opinion of the first Appellate Court unless it is found that conclusion drawn by lower Appellate Court were erroneous being contrary to the mandatory provisions of law applicable or its settled position on the basis of pronouncement made by the Apex Court, or was based upon inadmissible evidence or arrived at without evidence.