Sushama vs Manoj Kumar

A. Badharudeen, J

This second appeal has been filed under Section 100 of the Code of Civil Procedure (for short, ‘the C.P.C.’ hereinafter) against the decree and judgment in A.S.No.2/2021, dated 11.11.2022 on the files of the Sub Court, Chavakkad, arose out of the judgment and decree in O.S.No.1773/2013, dated 28.9.2019 on the files of the Munsiff Court, Chavakkad. The appellants herein are defendants 1 to 3 in the above suit. The plaintiff is the sole respondent herein.

Heard the learned counsel for the appellants on admission.

I shall refer the parties in this appeal as ‘plaintiff’ and ‘defendants’ for convenience.

Plaintiff filed the suit for realisation of Rs.6,00,000/-(Rupees Six Lakh only), along with interest on the assertion that, one Ranadev, who is the husband of the 1st defendant and father of the other defendants, issued a cheque, dated 9.10.2013, on 24.1.2013, in repayment of the advance amount he received, at the time of execution of a sale agreement in between Ranadev and the plaintiff on 30.7.2012. According to the plaintiff, though the sale agreement was for sale of the property of Ranadev, for a total consideration of Rs.15 Lakh, Ranadev wanted to go abroad for employment before execution of the sale agreement, the sale agreement was abandoned and accordingly, he had issued a cheque for Rs.6,00,000/- (Rupees Six Lakh only), for return of the advance amount he received. While so, Ranadev died in the month of May, 2013 in an accident occurred in Gulf. Thereafter, the plaintiff filed suit, when the cheque got dishonoured for want of funds, after issuance of demand notice.

Defendants resisted the suit. The main contention raised was that, there was no sale agreement in between Ranadev and the plaintiff, as contended. Ranadev was a social worker and he acted as middle man in between the plaintiff and other persons, since the plaintiff was a money lender. The cheque, produced as suit document, was issued as security by Ranadev.

The court below appreciated the rival contentions, after recording evidence. PW1 was examined and Exts.A1 to A4 were marked on the side of the plaintiff. DW1 was examined on the side of the defendant and no other evidence let in.

On appreciation of evidence, the trial court decreed the suit as under:

“In the result, the suit is decreed as follows:-

The defendants are directed to pay an amount of Rs.6,54,800/- (Rupees Six lakh fifty four thousand and eight hundred) to the plaintiff with interest 6% on an amount of Rs.6,00,000/- from the date of suit till realisation. The defendants are liable to the said amount only to the extent of the property that they derived from deceased Renadev. The property shown in the schedule shall be a charge from the said amount.

Defendants are liable to pay costs of the suit.”

Though appeal filed before the appellate court, the appellate court also dismissed the appeal.

The learned counsel for the appellants/defendants submitted that the execution of the cheque was not properly proved and the cheque lacks consideration.

On perusal of the verdicts of the trial court as well as the appellate court, both courts believed the evidence of PW1, to hold that the transaction led to execution of the cheque was proved. During examination of the 1st defendant as DW1, she also admitted that, Ranadev was the owner in possession of 9.5 cents of property and out of which, 2 cents were sold by him to his sister. The courts below believed the evidence of PW1 and found that the plaintiff succeeded in proving the transaction led to execution of Ext.A1 cheque and accordingly, benefit of presumptions under Sections 118 and 139 of the Negotiable Instruments Act, was given in favour of the plaintiff, since the defendants failed to rebut the presumptions, in any manner.

On perusal of the available materials, the finding of the trial court and the appellate court in this regard is found to be justified. The trial court as well as the appellate court granted decree in favour of the plaintiff, on finding that the plaintiff succeeded in proving the transaction, which led to execution of Ext.A1 cheque, where the defendants miserably failed to rebut the presumptions. Therefore, the said finding does not require any interference.

In this case, the learned counsel for the appellants/defendants failed to raise any substantial question of law warranting admission of the second appeal. Order XLII Rule 2 provides thus:

“2. Power of Court to direct that the appeal be heard on the question formulated by it.-At the time of making an order under rule 11 of Order XLI for the hearing of a second appeal, the Court shall formulate the substantial question of law as required by section 100, and in doing so, the Court may direct that the second appeal be heard on the question so formulated and it shall not be open to the appellant to urge any other ground in the appeal without the leave of the Court, given in accordance with the provision of section 100.”

Section 100 of the C.P.C. provides that, (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. Proviso says 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.

In the decision in Nazir Mohamed v. J. Kamala and Others reported in [2020 KHC 6507 : AIR 2020 SC 4321 : 2020 (10) SCALE 168], the Apex Court held that:

The condition precedent for entertaining and deciding a second appeal being the existence of a substantial question of law, whenever a question is framed by the High Court, the High Court will have to show that the question is one of law and not just a question of facts, it also has to show that the question is a substantial question of law. In Kondiba Dagadu Kadam v. Savitribai Sopan Gujar, [(1999) 3 SCC 722], the Apex Court held that:

"After the amendment 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 a 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 a question was not formulated at the time of admission either by mistake or by inadvertence."

"It has been noticed time and again that without insisting for the statement of such a 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 S.100 of the 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 a substantial question of law. In exercise of the powers under this section the findings of fact of the first 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."

"If  the  question  of  law  termed  as  a  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 the 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 a 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 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."

When no substantial question of law is formulated, but a Second Appeal is decided by the High Court, the judgment of the High Court is vitiated in law, as held by this Court in Biswanath Ghosh v. Gobinda Ghose, AIR 2014 SC 152. Formulation of substantial question of law is mandatory and the mere reference to the ground mentioned in Memorandum of Second Appeal can not satisfy the mandate of S. 100 of the CPC.

In a latest decision of the Apex Court in Government of Kerala v. Joseph, reported in [2023 (5) KHC 264 : 2023 (5) KLT 74 SC], it was held as under:

For an appeal to be maintainable under Section 100, Code of Civil Procedure ('CPC', for brevity) it must fulfill certain well – established requirements. The primary and most important of them all is that the appeal should pose a substantial question of law. The sort of question that qualifies this criterion has been time and again reiterated by this Court. We may only refer to Santosh Hazari v. Purushottam Tiwari, [2001  (3)  SCC  179]  (three  –  Judge  Bench) wherein this Court observed as follows:

The phrase “substantial question of law”, as occurring in the amended S.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 S.109 of the Code or Art.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.

The legal position is no more res-integra on the point that in order to admit and maintain a second appeal under Section 100 of the C.P.C., the Court shall formulate substantial question/s of law, and the said procedure is mandatory. Although the phrase 'substantial question of law' is not defined in the Code, 'substantial 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 S.109 of the Code or Art.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. As such, second appeal cannot be decided on equitable grounds and the conditions mentioned in Section 100 read with Order XLII Rule 2 of the C.P.C. must be complied to admit and maintain a second appeal.

In view of the above fact, no substantial question of law arises in this matter to be decided by admitting this appeal.

In the result, this appeal is found to be meritless and the same is dismissed without being admitted.

All interlocutory applications pending in this second appeal, stand dismissed.

Registry shall inform this matter to the trial court as well as the appellate court, forthwith.