Important Point
The conditions mentioned in the Section must be strictly fulfilled before a second appeal can be maintained and no court has the power to add to or enlarge those grounds. The second appeal cannot be decided on merely equitable grounds.

Headnote:Code of Civil Procedure, 1908 -Section 100-Second appeal-Conditions mentioned in Section must be strictly fulfilled before second appeal can be maintained-Memorandum of appeal must precisely state substantial question of law-Of High Court obliged to satisfy itself existence of substantial question of law-High Court can hear appeal on substantial question of law though not formulated by it -Practice of deciding second appeal generally without framing substantial question of law deprecated-Second appeal cannot be decided on merely equitable grounds -Concurrent findings of facts howsoever erroneous cannot be disturbed by High Court.
       Held : After the amendment a second appeal can be filed only if a substantial question of lawis 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. If satisfied, the High Court has to formulate the substantial question of law involved in the case. The appeal is required to be heard on the question so formulated. However, the respondent at the time of the hearing of the appeal has a right to argue that the case in the court did not involve any substantial question of law. The proviso to the Section acknowledges the powers of the High Court to hear the appeal on a 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. (Para 2)
       It has been noticed time and again that without insisting for the statement of such substantial question of law in the memorandum of appeal and formulating the same at the time of admission, the High Courts have been issuing notices and generally deciding the second appeals without adhering to the procedure prescribed under Section 100, Code of Civil Procedure. It has further been found in a number of cases that no efforts are made to distinguish between a question of law and asubstantial question of law. In exercise of the powers under this Section the findings of fact of the 1st appellate court are found to have been disturbed. It has to be kept in mind that the right of appeal is neither a natural nor an inherent right attached to the litigation. Being a substantive statutory right, it has to be regulated in accordance with law in force at the relevant time. The conditions mentioned in the Section must be strictly fulfilled before a second appeal can be maintained and no court has the power to add to or enlarge those grounds. The second appeal cannot be decided on merely equitable grounds. The concurrent findings of facts howsoever erroneous cannot be disturbed by the High Court in exercise of the powers under this Section. The substantial question of law has to be distinguished from a substantial question of fact. (Para 3)
       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 firs appellate court. It is true that the lower appellate court should not ordinarily 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 given satisfactory reasons for doing so. In a case where from a given set of circumstances two inferences are possible, one drawn by the lower appellate court is binding on the High Court in second appeal. Adopting any other approach is not permissible. The High Court cannot substitute its opinion for the opinion of the first appellate court unless it is found that the conclusions drawn by the lower appellate court were erroneous being contrary to the mandatory provisions of law applicable or its settled position on the basis of pronouncements made by the apex Court, or was based upon inadmissible evidence or arrived at without evidence. (Para 4)
       If the question of law termed as 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 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 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. But where it is found that the first appellate court has assumed jurisdiction which did not vest in it, the same can be adjudicated in the second appeal, treating it as 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. (Para 5)

Judgement Key Points

Certainly. Based on the provided legal document, here are the key points summarized:

Conditions for maintaining a second appeal must be strictly fulfilled, and courts are not permitted to add or enlarge the grounds for appeal. The appeal cannot be decided solely on equitable grounds. (!) (!)
After the relevant amendments, a second appeal can only be filed if a substantial question of law is involved. The memorandum of appeal must clearly state this question, and the High Court is obliged to verify its existence before proceeding. The court can hear the appeal on a substantial question of law even if it was not explicitly formulated at the time of admission, to prevent injustice. (!) (!)
The practice of deciding second appeals without properly formulating the substantial question of law and adhering to the prescribed procedure is discouraged. The findings of fact by the first appellate court, even if erroneous, generally should not be disturbed unless there is a legal or procedural error. (!) (!)
The High Court is not authorized to re-examine the grounds on which the first appellate court arrived at its conclusions, especially concerning credibility assessments of witnesses, unless there is a clear legal or procedural violation. The appellate court's findings, based on satisfactory reasons, are binding. (!)
If a substantial question of law has already been settled by a higher court or constitutional bench, an incorrect application of law on facts does not constitute a substantial question of law. Raising new questions without factual basis or that are not pleaded is not permissible. The exercise of jurisdiction by the appellate court must be within its legal bounds, and errors in exercising discretion are not necessarily substantial questions of law. (!) (!)
The right of appeal is a statutory right, not inherent, and must be exercised within the legal framework. The conditions for second appeal are strictly applied to prevent unnecessary litigation and to ensure that only genuine substantial questions of law are considered. (!) (!)
In cases where the first appellate court's jurisdiction was improperly exercised, or its findings are based on inadmissible evidence or incorrect application of law, such issues can be considered substantial questions of law. However, mere errors in factual appreciation or application of settled law do not qualify. (!) (!)
When the findings of fact are based on evidence and the appellate court has provided satisfactory reasons, these should generally be upheld on appeal. Interference is only justified if there is a clear legal or procedural violation or if the findings are perverse or unsupported by evidence. (!) (!)
The decision to interfere with findings of fact must consider whether the question involves a matter of general importance or affects rights substantially. Questions of law that are already settled or involve applying well-established principles are not considered substantial. (!)
The procedural requirements for second appeals, including the precise framing of questions and adherence to legal standards, are vital to ensure justice and prevent abuse of the process. (!) (!)
In the specific case discussed, the High Court's interference was found to be unwarranted because it did not adhere to proper legal procedures, and the findings of the first appellate court were based on credible evidence and proper appreciation of facts. The appellate court's jurisdiction was exercised within its bounds, and the appeal was allowed to restore the original judgment. (!) (!) (!) (!) (!)

These points collectively highlight the importance of strict procedural adherence, the distinction between questions of law and fact, and the limited scope of appellate review concerning factual findings.

Judgment

Sethi, J.-Leave granted.

Despite amendment by the Amending Act No. 104 of 1976, Section 100 of the Code of Civil Procedure appears to have been liberally construed and generously applied by some Judges of various High Courts with the result that the drastic changes made in the law and the object behind that appears to have been frustrated. The Amending Act was introduced on the basis of various Law Commission Reports recommending for making appropriate provisions in the Code of Civil Procedure which were intended to minimise the litigation, to give the litigant fair trial in accordance with the accepted principles of natural justice, to expedite the disposal of civil suits and proceedings so that justice is not delayed, to avoid complicated procedure, to ensure fair deal to the poor sections of the community and restrict the second appeals only on such questions which are certified by the Courts to be substantial question of law.

2. After the amendment a second appeal can be filed only if a substantial question of lawis 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. If satisfied, the High Court has to formulate the substantial question of law involved in the case. The appeal is required to be heard on the question so formulated. However, the respondent at the time of the hearing of the appeal has a right to argue that the case in the court did not involve any substantial question of law. The proviso to the Section acknowledges the powers of the High Court to hear the appeal on a 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.

3. It has been noticed time and again that without insisting for the statement of such substantial question of law in the memorandum of appeal and formulating the same at the time of admission, the High Courts have been issuing notices and generally deciding the second appeals without adhering to the procedure prescribed under Section 100, Code of Civil Procedure. It has further been found in a number of cases that no efforts are made to distinguish between a question of law and asubstantial question of law. In exercise of the powers under this Section the findings of fact of the 1st appellate court are found to have been disturbed. It has to be kept in mind that the right of appeal is neither a natural nor an inherent right attached to the litigation. Being a substantive statutory right, it has to be regulated in accordance with law in force at the relevant time. The conditions mentioned in the Section must be strictly fulfilled before a second appeal can be maintained and no court has the power to add to or enlarge those grounds. The second appeal cannot be decided on merely equitable grounds. The concurrent findings of facts howsoever erroneous cannot be disturbed by the High Court in exercise of the powers under this Section. The substantial question of law has to be distinguished from a substantial question of fact. This Court in Sir Chunilal V. Mehta & Sons Ltd. v. Century Spinning & Manufacturing Co. Ltd.1 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

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1999 Supreme(SC) 515

Important PointThe conditions mentioned in the Section must be strictly fulfilled before a second appeal can be maintained and no court has the power to add to or enlarge those grounds. The second appeal cannot be decided on merely equitable grounds.

Cases Referred (2)

Important Point
The conditions mentioned in the Section must be strictly fulfilled before a second appeal can be maintained and no court has the power to add to or enlarge those grounds. The second appeal cannot be decided on merely equitable grounds.