Supreme Court of India
Narayan Sitaram Badwaik (Dead) … vs Bisaram And Ors. on 17 February, 2021Author: N.V. Ramana

Bench: N.V. Ramana, Surya Kant, Aniruddha Bose








1. When the matter came up last time, on 03.02.2021, this Court
passed the following order:

“In spite of service, no one has appeared on
behalf of the respondents.

Heard learned counsel for the appellants.

Taking into consideration the non­appearance of
the counsel for the respondents and to know the
exact position of the disputed property as well as
whether any compromise has taken place between
the parties, we grant two weeks to the counsel for
the appellants to do the needful.

List the matter immediately after two weeks.”
Signature Not Verified

Digitally signed by
Vishal Anand
Even today, when the matter was called out, nobody appeared
Date: 2021.03.17
16:19:53 IST

for the respondents in spite of service of notice.

3. Heard the learned counsel appearing for the appellants.

4. In response to our earlier query, it is represented by the
learned counsel for the appellants that no settlement has taken
place between the parties, and according to her the parties intend
to continue with the litigation.

5. Taking into account the long pendency of the present appeal
before this Court, and the fact that, despite service of notice, the
respondents have not entered appearance from the very beginning
as per the Office Reports, we are of the opinion that we should
dispose of the matter with the assistance of the counsel for the

6. The facts of the case necessary for the disposal of the present
appeal are as follows: the Narayan Sitaramji Badwaik (since
deceased and now represented through his legal representatives
and who shall hereinafter for the sake of convenience be referred to
as the appellant) had filed a suit for possession of the property in
dispute, on the basis of a sale deed dated 26.09.1978, for Rs.
10,000 from some of the respondents. On the other hand, the
respondents contend that no such sale took place, and in fact, the
document executed was only collateral for a loan extended by the
appellant to respondents. The appellant sought possession of the
property on 05.09.1987, and subsequently instituted the present
suit on 07.03.1989. The Trial Court, after looking into the evidence
placed on record, dismissed the suit of the appellant vide judgment
dated 21.09.1995. On appeal, the District Judge reversed the
findings of the Trial Court and decreed the suit in favour of the

appellant vide judgment dated 05.08.1997. Aggrieved by the
judgment of the First Appellate Court, some of the respondents filed
a second appeal before the High Court wherein the High Court
upheld the findings of the Trial Court and allowed the second
appeal vide the impugned judgment, thereby dismissing the suit of
the appellant.

7. We have carefully perused the impugned judgment by the
High Court with the assistance of the counsel for the appellant.

8. The High Court, vide the impugned judgment, noted that the
First Appellate Court had considered irrelevant material and had
erred in appreciating the legal issue involved. The High Court held
as follows:

“8. I may mention that it is neither party’s case
that the transaction is void or voidable. It is
defendants’ simple case that although they had
executed a sale­deed, it was nominal and was not
to be acted upon as sale­deed was executed as a
collateral security. One does not understand why
the learned joint District Judge considered the
question as to whether the transaction between the
plaintiff and the defendants is void or voidable. The
contract becomes void when it is opposed to public
policy and voidable when it is brought about by
fraud, undue influence, coercion or fraud. As
stated earlier, it is neither party’s case that the
document was brought about by fraud, undue
influence, coercion or misrepresentation. There
was, therefore, no question of considering this
aspect at all. It seems that the learned District
Judge instead of considering the provisions of
Section 91 and 92 of the Evidence Act,
considered a totally irrelevant aspect…”

(emphasis supplied)

9. However, after highlighting the legal infirmities of the
judgment of the First Appellate Court, and answering the
substantial question of law framed in favour of the respondents, it
appears that the High Court did not note that the First Appellate
Court, due to its erroneous approach, had failed to consider the
evidence in the correct light. In such a circumstance, it would have
been appropriate for the High Court to remand the matter to the
First Appellate Court to determine the factual issues in light of the
legal point as decided by it, or should have itself taken a decision
on the facts under Section 103 of the Civil Procedure Code.

10. It is a settled position of law that a second appeal, under
Section 100 of the Code of Civil Procedure, lies only on a
substantial question of law [refer Santosh Hazari v. Purushottam
Tiwari (deceased) by LRs, (2001) 3 SCC 179]. However, this does
not mean that the High Court cannot, in any circumstance, decide
findings of fact or interfere with those arrived at by the Courts
below in a second appeal. In fact, Section 103 of the Code of Civil
Procedure explicitly provides for circumstances under which the
High Court may do so. Section 103 of the Code of Civil Procedure is
as follows:

Section 103. Power of High Court to Determine
Issue of Fact

In any second appeal, the High Court may, if the
evidence on the record is sufficient, determine any
issue necessary for the disposal of the appeal,­

(a) which has not been determined by the lower
Appellate Court or both by the Court of first
instance and the lower Appellate Court, or

(b) which has been wrongly determined by such
Court or Courts by reason of a decision on such
question of law as is referred to in section 100.

11. A bare perusal of this section clearly indicates that it provides
for the High Court to decide an issue of fact, provided there is
sufficient evidence on record before it, in two circumstances. First,
when an issue necessary for the disposal of the appeal has not been
determined by the lower Appellate Court or by both the Courts
below. And second, when an issue of fact has been wrongly
determined by the Court(s) below by virtue of the decision on the
question of law under Section 100 of the Code of Civil Procedure.
This Court, in the case of Municipal Committee, Hoshiarpur v.
Punjab State Electricity Board, (2010) 13 SCC 216, held as

“26. Thus, it is evident that Section 103 CPC is not
an exception to Section 100 CPC nor is it meant to
supplant it, rather it is to serve the same purpose.
Even while pressing Section 103 CPC in service,
the High Court has to record a finding that it had
to exercise such power, because it found that
finding(s) of fact recorded by the court(s) below
stood vitiated because of perversity. More so, such
power can be exercised only in exceptional
circumstances and with circumspection, where the
core question involved in the case has not been
decided by the court(s) below.

27. There is no prohibition on entertaining a
second appeal even on a question of fact
provided the court is satisfied that the findings
of fact recorded by the courts below stood
vitiated by non­consideration of relevant
evidence or by showing an erroneous approach
to the matter i.e. that the findings of fact are
found to be perverse. But the High Court cannot
interfere with the concurrent findings of fact in a
routine and casual manner by substituting its
subjective satisfaction in place of that of the lower
courts. (Vide Jagdish Singh v. Natthu Singh [(1992)
1 SCC 647]; Karnataka Board of Wakf v. Anjuman­
E­Ismail Madris­Un­Niswan [(1999) 6 SCC 343]
and Dinesh Kumar v. Yusuf Ali [(2010) 12 SCC

28. If a finding of fact is arrived at by ignoring
or excluding relevant material or by taking into
consideration irrelevant material or if the
finding so outrageously defies logic as to suffer
from the vice of irrationality incurring the
blame of being perverse, then the finding is
rendered infirm in the eye of the law. If the
findings of the Court are based on no evidence or
evidence which is thoroughly unreliable or evidence
that suffers from the vice of procedural irregularity
or the findings are such that no reasonable person
would have arrived at those findings, then the
findings may be said to be perverse. Further if the
findings are either ipse dixit of the Court or based
on conjecture and surmises, the judgment suffers
from the additional infirmity of non­application of
mind and thus, stands vitiated. (Vide Bharatha
Matha v. R. Vijaya Renganathan [(2010) 11 SCC
(emphasis supplied)

12. With respect to the present case, it is clear from the
observations passed by the High Court in the impugned judgment
that the First Appellate Court approached the matter incorrectly. As

such, the High Court ought to have either remanded the matter, or
exercised its powers under Section 103, Code of Civil Procedure and
decided the issues of fact. Instead, after negativing the observations
and holding of the First Appellate Court, the High Court
mechanically upheld the decision rendered by the Trial Court in the
following terms:

“11. This decision makes it clear that a party has a
right to show that the document was not intended
to be acted upon and what is written in it is of no
consequence. The Learned judge of the trial court
has rightly held that the defendants had actually
shown that the sale­deeds were nominal and they
were not to be acted upon and therefore, the
plaintiff was not entitled to possession. The
Learned District Judge fell in error in setting aside
the finding of the trial court that the sale­deed in
favour of the plaintiff was a nominal on the ground
that the defendant ought to have got the sale­deeds
set aside. The Learned Civil Judge has rightly
considered the evidence and has held the sale­deed
to be nominal and having been executed by way of
collateral security. The finding of the Learned
District Judge that the suit was not maintainable
unless sale­deed was got set aside by defendants,
therefore, was not proper. The substantial question
of law is answered accordingly. The appeal is,
therefore, allowed and judgment and decree passed
by the first appellate court is set aside and that of
the trial court restored.”

13. A perusal of the above clearly indicates that the High Court
decided the appeal without any assessment of the evidence on
record, in a single paragraph. In the circumstances highlighted, we
are of the opinion that this was not appropriate.

14. In view of the above, we are of the considered view that the
impugned order of the High Court is liable to be set aside, and the
matter be remanded.

15. We, accordingly set aside the order of the High Court and
remand the matter to the said Court for fresh consideration of the
appeal, on facts and law, if necessary. We also leave it open to the
High Court to modify the question of law framed, or frame
additional questions of law after giving an opportunity to the
parties. It is clarified that we have not made any observations as to
the merits of the case, or the correctness of holding of the High
Court on the legal issue.

16. Taking into consideration the long pendency of the litigation,
we request the High Court to dispose of the matter within a period
of six months from the date of communication of this order.

17. The Appeal is disposed of in the afore­stated terms.



FEBRUARY 17, 2021.



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