2008 (3) TMI 707 - SC - Indian Laws

Judgment passed by the High Court in exercise of the powers u/s 100 of the CPC - No Substantial question of law Involved - Test for determining Question of law raised in the case is Substantial or Not - HELD THAT - The phrase substantial question of law as occurring in the amended Section 100 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 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 1928 (4) TMI 2 - PRIVY COUNCIL the phrase substantial question of law as it was employed in the last clause of the then existing Section 100 (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. This Court laid down the following test as proper test for determining whether a question of law raised in the case is substantial as quoted in Sir Chunilal s case 1962 (3) TMI 77 - SUPREME COURT . 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. Thus we set aside the impugned judgment of the High Court and remit the matter to it for fresh consideration. The Second Appeal can be only maintained after formulating substantial question of law if any and not otherwise. We make it clear we have not expressed any opinion on the question as to whether any substantial question of law is involved or not. The appeal is allowed to the aforesaid extent without any order as to costs.

Summary

Issues Involved:
1. Whether the High Court formulated a substantial question of law as required under Section 100 of the Code of Civil Procedure, 1908.
2. The jurisdiction of the High Court in second appeals under Section 100 of the Code of Civil Procedure, 1908.
3. The distinction between a question of law and a substantial question of law.

Issue-Wise Detailed Analysis:

1. Whether the High Court formulated a substantial question of law as required under Section 100 of the Code of Civil Procedure, 1908:

The appellant challenged the judgment of the Punjab and Haryana High Court which allowed the second appeal without formulating any substantial question of law. Section 100 of the Code of Civil Procedure mandates that the memorandum of appeal must precisely state the substantial question or questions of law involved, and the High Court must formulate such questions before hearing the appeal. The Supreme Court noted that the impugned judgment did not show that any substantial question of law was formulated or that the second appeal was heard on such a formulated question. Consequently, the judgment could not be maintained.

2. The jurisdiction of the High Court in second appeals under Section 100 of the Code of Civil Procedure, 1908:

Section 100 restricts the jurisdiction of the High Court to only those appeals involving a substantial question of law. The Supreme Court emphasized that the High Court cannot interfere with pure questions of fact while exercising its jurisdiction under Section 100. The Court referred to precedents such as Ishwar Dass Jain v. Sohan Lal and Roop Singh v. Ram Singh, reiterating that the High Court must formulate a substantial question of law and cannot reverse the judgment of the first appellate court without doing so.

3. The distinction between a question of law and a substantial question of law:

The Supreme Court highlighted that a substantial question of law must be of general public importance or directly and substantially affect the rights of the parties. It should not be a question already settled by the highest court or involve merely applying settled principles to the facts. The Court cited Sir Chunilal V. Mehta and Sons Ltd. v. Century Spg. & Mfg. Co. Ltd., which established the test for determining whether a question of law is substantial. The Court also noted that the High Court should not investigate the grounds on which findings were arrived at by the first appellate court unless those findings were contrary to mandatory provisions of law or based on inadmissible evidence.

Conclusion:

The Supreme Court set aside the High Court's judgment and remitted the matter for fresh consideration, emphasizing that a second appeal can only be maintained after formulating a substantial question of law. The appeal was allowed to the extent of remitting the matter without any order as to costs. The Court made it clear that it had not expressed any opinion on whether any substantial question of law was involved.