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SC: High Courts Must Frame Substantial Questions of Law at Admission Stage of Second Appeal

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Published on: 24 September 2023 at 19:28 IST

The Supreme Court, in a recent ruling dated September 21, 2023, has underscored that High Courts, when exercising their jurisdiction for Second Appeals under Section 100 of the Code of Civil Procedure, 1908, should generally formulate substantial questions of law at the admission stage. However, if these questions are formulated at a later stage, the Court must grant the concerned parties adequate time to address and respond to them before rendering a decision.

A bench comprising Justice BR Gavai and Justice Sanjay Karol addressed an appeal challenging an order passed in a Second Appeal by the Nagpur Bench of the Bombay High Court, After framing substantial questions of law, the High Court proceeded to hear the appeal on the same day and reversed the concurrent factual findings of the lower courts, ultimately dismissing the plaintiff’s suit for specific performance.

The Supreme Court expressed dissatisfaction with the manner in which the appeal was hastily disposed of, without affording the parties sufficient opportunity for a proper hearing:

The speed at which the Court proceeded to resolve the appeal, without granting proper and adequate time for argument, is not commendable.

The governing statute places significant emphasis on allowing the parties to present their arguments on all questions, as reflected in various pronouncements of this Court.

The approach adopted by a Court in disposing of such appeals must align with these principles,” noted the Supreme Court, while remanding the order back to the High Court for a fresh review.

The Court referred to a series of judgments to highlight that the process of second appeal follows a step-by-step progression, involving the formulation of substantial questions at the admission stage, subsequent admission for hearing, and the issuance of a reasoned judgment after hearings. In the present case, the Court observed that these procedural steps were not adhered to correctly.

The Supreme Court stressed that the formulation of substantial questions of law is a crucial aspect of High Courts’ exercise of their jurisdiction for Second Appeals under Section 100 of the CPC.

The Court clarified that if such questions are modified, removed, or new ones are introduced, the parties must be given the opportunity to be heard before the appeal is decided.

“A Court functioning in second appellate jurisdiction should frame substantial questions of law at the time of admission, except in exceptional circumstances. After the framing of these questions, the Court should proceed to hear the parties on these questions, providing them with adequate time to prepare and address them. It is only after such hearings subsequent to framing that a second appeal can be concluded,” emphasized the Supreme Court.

The Supreme Court noted that the parties were not given sufficient time to prepare and argue their case in response to the questions framed by the Court, as mandated by Section 100 of the CPC.

Section 100(5) CPC suggests a gap between the initial framing of questions at admission and the subsequent hearing. The proviso therein allows the Court to formulate additional questions during the hearing, upon which the parties must also present their arguments.

This means that the questions framed at the time of admission are already known to the parties, providing them with an opportunity to prepare arguments. It is during the course of arguments that a new significant issue might arise, leading to the formulation of additional questions, with the parties being granted time to address them.

Furthermore, the Supreme Court highlighted that High Courts in Second Appeals should only interfere with factual findings in exceptional circumstances. In such cases, the Court should review the Trial Court’s records thoroughly:

“Ordinarily, in the exercise of their jurisdiction, High Courts do not interfere with factual findings. However, if there are compelling legal reasons to do so, the Court may, but only after reviewing the Trial Court’s records. In other words, when overturning factual findings, the Court must examine the records of the Trial Court, on the basis of which it seeks to challenge the conclusions reached by the lower Court.”

In the specific case at hand, the High Court in a Second Appeal reversed the concurrent factual findings without identifying any exceptional circumstances or errors in the lower courts’ findings, as noted by the Supreme Court.

The Court emphasized that factual findings should not be overturned without a proper assessment of the evidence on record, and a mere allegation of perversity, without a thorough evaluation of the evidence, would be unfair to the Trial Court.

Consequently, the Supreme Court set aside the High Court’s judgment in the Second Appeal and remanded the case to the High Court for a fresh review.

Case Title: Suresh Lataruji Ramteke V. Sau. Sumanbai Pandurang Petkar, Civil Appeal No. 6070 Of 2023