What is a Substantial Question of Law and what is its relevance in Second Appeal under Section 100 of CPC?

 

Recently, the Hon’ble Supreme Court discussed that under the Code of Civil Procedure, 1908 (CPC), could a Second Appeal be entertained by the Appellate Court without involvement of a substantial question of law? This is was the basic controversy involved in the case of Nazir Mohamed v. J. Kamala & Ors., (2020) SCC OnLine SC 676. The Hon’ble Supreme Court discussed the mandate of S. 100 of CPC and postulated various interpretations. S. 100 of CPC is reproduced hereinbelow: -

 

“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.”

 

Following are the important remarks of the Hon’ble Supreme Court in relation to S. 100 of CPC: -

 

1. It said that S.100 of the CPC, 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 CPC.’

 

2. The case of Sir Chunilal v. Mehta & Sons Ltd. v. Century Spg. & Mfg. Co. Ltd., AIR 1962 SC 1314, was also discussed wherein it was 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.”

 

3. The Court also discussed various other precedents in this regard and came to the conclusion 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. And 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.

 

4. The Court further held that as was held in the case of Panchagopal Barua v. Vinesh Chandra Goswami, AIR 1997 SC 1047, 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.

 

Apart from discussing the above, the Hon’ble Court also gave its own set of principles in relation to S.100 of CPC that are as under: -

 

“A. 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.

 

B. 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.

 

C. 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.

 

D. 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.”

 

Thus, all in all, the Hon’ble Supreme Court has given a very detailed judgment in relation to S.100 of CPC and how it is be applied. I feel that it is a much-needed judgment and should serve as a beacon of guiding light for all the High Courts. It has been rightly pointed out by the Supreme Court that it has become a routine practice to mark every question as a substantial question of law in Second Appeals. Such a practice should be deprecated and is against the mandate of the statute.