Appellate Court Cannot Permit Production Of Additional Evidence Unless & Until Procedure Under Order XLI Rules 27-29 CPC Is Followed: Supreme Court

The Supreme Court observed that unless and until the procedure under Order XLI Rules 27, 28 and 29 are followed, the parties to the appeal cannot be permitted to lead additional evidence and/or the appellate court is not justified to direct the court from whose decree the appeal is preferred or any other subordinate court, to take such evidence and to send it when taken to the Appellate Court.

In this case, the judgment debtor filed objections in the execution petition and contended that the consent decree was obtained by fraud. This objection was overruled and the court proceeded with the execution proceedings and the sale of the mortgaged property came to be confirmed in favour of the auction purchaser. The execution court also later dismissed the application of judgment debtor to set aside the court auction/sale. This was challenged by the Judgment Debtor before the High Court. The consent decree was also challenged before the High Court by filing first appeal.

The High Court, while considering the appeal, called for a finding/report from the Principal City Civil Judge and directed him to hold an enquiry as to whether the consent decree was obtained by fraud. The report stated that the decree had been obtained by fraud. Taking note of this, the High Court allowed the appeal.

In appeal, the Apex Court bench comprising Justices Ashok Bhushan, R. Subhash Reddy and MR Shah, observed that as per the provisions of Order XLI, the appellate court may permit additional evidence to be produced whether oral or documentary, if the conditions mentioned in Order XLI Rule 27 are satisfied after the additional evidence is permitted to be produced in exercise of powers under Order XLI Rule 27.

"Thereafter, the procedure under Order XLI Rules 28 and 29 is required to be followed. Therefore, unless and until the procedure under Order XLI Rules 27, 28 and 29 are followed, the parties to the appeal cannot be permitted to lead additional evidence and/or the appellate court is not justified to direct the court from whose decree the appeal is preferred or any other subordinate court, to take such evidence and to send it when taken to the Appellate Court. From the material produced on record, it appears that the said procedure has not been followed by the High Court while calling for the report from the learned Principal City Civil Judge."

[Rule 27 Order XLI of Code of Civil Procedure 1908 "Production of additional evidence in Appellate Court" provides that (1) The parties to an appeal shall not be entitled to produce additional evidence, whether oral or documentary, in the Appellate Court. But if- (a) the Court from whose decree the appeal is preferred has refused to admit evidence which ought to have been admitted, or  (aa) the party seeking to produce additional evidence, establishes that notwithstanding the exercise of due diligence, such evidence was not within his knowledge or could not, after the exercise if due diligence, be produced by him at the time when the decree appealed against was or (b) the Appellate Court requires any document to be produced or any witness to be examined to enable it to pronounce judgment, or for any other substantial case,the Appellate Court may allow such evidence or document to be produced, or witness to be examined. (2) Wherever additional evidence is allowed to be produced by an Appellate Court, the Court shall record the reason for its admission.

Rule 28 Order XLI of Code of Civil Procedure 1908 deals with "Mode of taking additional evidence": Wherever additional evidence is allowed to be produced, the Appellate Court may either take such evidence, or direct the Court from whose decree the appeal is preferred, or any other subordinate Court, to take such evidence and to send it when taken to the Appellate Court. Rule 29 Order XLI of Code of Civil Procedure 1908 is about "Points to be defined and recorded": Where additional evidence is directed or allowed to be taken, the Appellate Court shall specify the points to which the evidence is to be confined and record on its proceedings the points so specified.]

The court added that when the fraud is alleged the same is required to be pleaded and established by leading evidence and mere allegation that there was a fraud is not sufficient.  

The court further noted that at the time when the Principal City Civil Judge permitted the parties to lead the evidence and submitted the report/finding that the decree was obtained by fraud, there was already an order passed by the Executing Court-Co-ordinate Court overruling the objections made by the judgment debtors that the decree was obtained by fraud. Therefore, unless and until the order dated 03.03.1998 was set aside, neither the High Court was justified in calling for the report from the learned Principal City Civil Judge nor even the learned Principal City Civil Judge was justified in permitting the judgment debtors to lead the evidence on the allegation that the decree was obtained by fraud, mis-representation, when the judgment debtors failed to lead any evidence earlier before the Executing Court when such objections were raised, the court said while allowing the appeal.

Case: H.S. Goutham vs. Rama Murthy [CIVIL APPEAL NO. 1844 OF 2010]
Coram: Justices Ashok Bhushan, R. Subhash Reddy and MR Shah
Counsel: Adv Ashish Choudhary, AOR Rohit Amit Sthalekar , Adv Rahul Arya, Adv P.R. Ramasesh,
Citation: LL 2021 SC 84

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