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CASE NO.: Appeal (civil)  4588 of 2007

PETITIONER: K.R.Mohan Reddy

RESPONDENT: M/s Net Work Inc Rep.Tr.M.D.

DATE OF JUDGMENT: 26/09/2007

BENCH: S.B. SINHA & H.S. BEDI

JUDGMENT: JUDGMENT

CIVIL APPEAL NO. 4588 /2007 (Arising out of SLP(C) No.3540/2007)

       S.B.SINHA.J

       Leave granted. (1)     This appeal is directed against the judgment and order dated 20/9/2006  passed by a Division Bench of the Andhra Pradesh High Court in  C.C.C.A.No.253/2004 and the application for adduction of additional  evidence marked as City Civil Court Appeal Misc. Petition No. 239 of 2006,  whereby and whereunder the application filed by the respondent herein,  purported to be under Order 41 Rule 27 of the Code of Civil Procedure  was allowed.  (2)     The parties entered into a partnership. The said partnership was  reconstituted on 1.7.1994. Plaintiff -respondent contended that pursuant to  the reconstituted partnership deed, the appellant had handed over certain  works  to the respondent-firm for its execution. It is also not in dispute that  the appellant herein retired as a partner from the said Firm. However, it  has been  contended that despite  his retirement, the appellant had  requested the respondent to continue the work allotted in  his name so as to  protect his turnover and continuation of his registration as a special class  contractor. Further, the case of the respondent was that the appellant was  to hand over the payment which he is supposed to receive in lieu of the  Khammam Project. According to it upon settlement of accounts of  Khammam Project, an amount of Rs. 34,82,000/- was found due and  payable by the appellant to the respondent Firm. (3)     The contention of the respondent, on the other hand, is  that in respect  of construction of Minister’s quarter at Hyderabad, the appellant had  paid. Rs. 8,00,000/- and Rs. 5,25,316/-. It claimed that a sum of Rs.  8,03,350/- was owing to it by the appellant in respect of the Vijayawada  work.  (4)     According to the respondent, the appellant issued a cheque of Rs.  34,82,000/- in favour of the Firm in respect of Khammam Project along  with a covering letter wherein the appellant assured the respondent that he  would settle the accounts pertaining to the other two projects after  finalizing the accounts with the department. The said cheque was  dishonoured. (5)     On the aforementioned premise, on or about 21.1.2002 a suit for  recovery of Rs. 50,74,109/- along with the interest @ 24% per annum was  filed by the respondent herein. (6)     Appellant in his written statement, while denying and disputing the  aforementioned contentions of the plaintiff-respondent, inter-alia, asserted  that the cheque had been obtained by it by fraud,forgery and with the  connivance of one  Shri K. Ramesh Reddy and Mr. Y.S.Subramaniam,  Managing Partner of the  Respondent. It was also asserted by the appellant  that he had retired from the partnership on 12.1.2000 and all the accounts  between the parties were comprehensively settled which was also  recorded

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in the deed of retirement. (7)     The trial Court framed a general issue as to whether the plaintiffs are  entitled to any relief and did not frame a specific issue with regard to the  case of the appellant herein that the said cheque was an outcome of fraud  and forgery. The learned trial Judge, however, dismissed the suit holding  as under: "i) Defendant admits assignment of Khammam & Vijayawada Projects to    the petitioner. ii)     Clause 8 of the retirement deed does not mention about pending work  with the respondent and future dues payable .

iii)    Plaintiff did not file its accounts to prove that the plaintiff has executed  the entire work at Khammam Hospital.

iv)     Pending disposal of the suit filed by the defendant against the plaintiff  for recovery of the amounts paid to the plaintiff after  retirement (7.6.2000 & 13.7.2000) on the ground that the  same was by way of loan, it is difficult to take a view that the  defendant has paid any money after his retirement  towards  the dues payable under the aforesaid transaction. v)      There is a possibility that the cheque was dishonestly obtained."

(8)     Respondent preferred an appeal thereagainst. Indisputably, an  application under Order XLI Rule 27 of Code of Civil Procedure was filed  on 22.3.2006. (9)     It, however, appears that no notice was issued in relation thereto. The  said application  purported to have come up for consideration along with  the hearing of the appeal.  (10)    With the consent of the parties, the main appeal itself was to be heard. (11)    By reason of the impugned judgment, although, the High Court noticed  the findings of the learned trial Judge and various decisions operating in  the field, inter alia, held that the application for adduction of additional  evidence filed by the respondent herein should be allowed, the same being  a requirement of Court and/or was otherwise for substantial cause. (12)    Mr.Rakesh Dwivedi, learned senior counsel appearing on behalf of the  appellant, inter alia, would submit that the High Court prior to passing of  the said order did not give an opportunity to the appellant to file an  objection in regard  to the maintainability of the said application. (13)    In any event, the learned counsel would contend that the respondent’s  application being based on clause (aa)  of Sub-rule (1) of Rule 27 of order  XLI of C.P.C., the High Court committed a serious error in relying upon  Clause (b) thereof. (14)    Mr.Uday Umesh Lalit, learned senior counsel appearing on behalf of  the respondent, on the other hand, would submit that if the case of the  respondent as set out in his plaint vis-a-vis the findings of learned trial  Judge are to be considered in their entirety, the High Court was correct in  its view. (15)    The High Court, in our opinion, failed to apply the provisions of Order  41 Rule 27 of CPC in its correct perspective. Clauses (a), (aa) and (b) of  Sub-rule (1) of Rule 27 of Order XLI refer to  three different situations.   Power of the appellate court to pass any order thereunder is limited. For  exercising its jurisdiction thereunder, the appellate Court must arrive at a  finding that one or the other conditions enumerated thereunder is satisfied.  A good reason must also be shown as to why the evidence was not  produced in the trial Court. (16)    Respondent in its application categorically stated that the books of  accounts had been misplaced and the same were discovered a few days  prior to the filing of the said application while the office was being shifted. (17)    The High Court, unfortunately did not enter into the said questions at  all . As indicated hereinbefore, the High Court proceeded on the basis as if  clause(b) of Sub-rule (1) of Rule 27 of Order XLI of CPC was applicable. (18)    It is now a trite law that the conditions precedent for application of  clause (aa) of Sub-rule (1) of Rule 27 of Order XLI is different from that of  clause(b). In the event the former is to be applied, it would be for the  applicant to show that the ingredients or conditions precedent mentioned

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therein are satisfied. On the other hand clause(b) to Sub-rule (1) of Rule 27  of Order XLI of CPC is to be taken recourse to, the appellate Court was  bound to consider the entire evidences on record and come to an  independent finding for arriving at a just decision; adduction of additional  evidence as has been prayed by the appellant was necessary. (19)    The fact that the High Court failed to do so, in our opinion, amounts to  misdirection in law. Furthermore, if the High Court is correct in its view  that the plaintiff-respondent had proceeded on the basis that the suit in its  entirely based on a cheque, wherefor, it was not necessary for it to file the  books of accounts before the trial Court, finding contrary thereto could not  have been arrived at that the same was in fact required to be proved so as  to enable the appellate Court to arrive at a just conclusion. (20)    The Supreme Court in State of Gujarat Vs. Mhendrakumar  Parshottambhai Desai(dead) by L.Rs--. (2006) 9 SCC 772 relying upon  Municipal Corporation of  Greater Bombay Vs. Lal Pancham and Ors.,  held as under: " Though the appellate Court has the power to allow a document to be  produced and a witness to be examined under Order XLI Rule 27 CPC,  the requirement of the said Court must be limited to those cases where it  found it necessary to obtain such evidence for enabling it to pronounce  judgment. This provision did not entitle the appellate court to let in fresh  evidence at the appellate stage where even without such evidence it can  pronounce judgment in the case. It does not entitle the appellate court to  let in fresh evidence only for purposes of pronouncement of judgment in a  particular way."

(21)    Appellate Court should not pass an order so as to patch up the  weakness of the evidence of the unsuccessful party before the trial Court,  but it will be different if the Court itself require the evidence to do justice  between the parties. The ability to pronounce judgment is to be understood  as the ability to pronounce judgment satisfactorily to the mind of the  Court. But mere difficulty is not sufficient to issue such direction. While  saying so, however, we do not mean that the Court at an appropriate stage  would be precluded from considering the applicability of clause (b). (22)    We are, therefore, of the opinion that the impugned judgment cannot  be sustained. It is set aside accordingly. The respondent may file additional  affidavit in support of its application under Order XLI  Rule 27 CPC  within two weeks from the date of receipt of copy of this order. The  appellant may file his response both to the Original Application as also the  additional affidavit, if any,  within four weeks thereafter. (23)    We would request the High Court to consider the entire matter in  accordance with law afresh on merits. (24)    The appeal is disposed of with the aforementioned observations.