Shri Yashwant @ Hudesterkumar Tolani vs Ajay Agrawal (HUF)

The appellant-original defendant, being aggrieved by the judgment and decree dated 19.09.2024 passed by the learned Ad-hoc District Judge-1, Nagpur, in Regular Civil Appeal No.36 of 2022, whereby the appeal came to be decided against the appellant, as well as the judgment and decree dated 27.11.2021 passed in Special Civil Suit No.536 of 2017 came to be set aside has filed this appeal raising the substantive question of law as under:-

The respondent-original plaintiff filed a suit for specific performance of contract and permanent injunction in respect of the ground-floor portion of the property bearing N.M.C. House No.221, Nagpur. According to the plaintiff, the defendant executed a registered Agreement of Sale dated 03.12.2015 for a portion admeasuring 60.38 Sq. Mtrs. for consideration of ₹25,00,000/-. The entire consideration was paid by way of two cheques of ₹5,00,000/-and ₹20,00,000/-, which were encashed. The plaintiff alleged that despite repeated demands, the defendant failed to execute the sale deed. The defendant contended that the Agreement of Sale was executed only as security for the loan and not as a genuine agreement of sale. He further alleged that the loan had been repaid. He also claimed that the property was mortgaged with Kotak Mahindra Bank and referred to a complaint filed by his wife before the JMFC, Nagpur.

The Trial Court held that the plaintiff had proved the registered Agreement of Sale and made payment of ₹25,00,000/-, but declined specific performance and directed a refund of ₹32,98,400/- with 6% interest per annum on ₹25,00,000/- from the date of the suit till realisation. In an appeal, the learned First Appellate Court set aside the Trial Court’s judgment and granted specific performance, directing execution of the registered sale deed, delivery of possession of the ground-floor portion admeasuring 60.38 Sq. Mtrs., and restraint against creation of third-party interests.

The learned Counsel for the appellant submitted that, after filing the second appeal, the appellant obtained certified copies of Miscellaneous Criminal Application No.3391 of 2017 filed by the respondent. According to the appellant, the said proceedings contained statements regarding possession, dispossession and a possession letter, which are not mentioned in the plaint. It was submitted that these statements disclose contradictions in the respondent’s case and are relevant to the dispute.

The learned Counsel further submitted that the appellant had obtained a registered Power of Attorney dated 03.12.2015 executed in favour of the respondent. According to the appellant, this document, read with the Agreement of Sale executed on the same day, supports his contention that the transaction was a loan transaction and that the Agreement of Sale was given as security.

He also relied upon a reply dated 10.07.2026 received from Kotak Mahindra Bank and submitted that it supports the contention that the suit property was mortgaged with the Bank. On these grounds, the appellant sought permission to produce the documents and lead further evidence.

Per contra, the learned Counsel for the respondent opposed the application. He submitted that the appellant had sufficient opportunity before the Courts below to produce the relevant documents and lead evidence. The contention that the Agreement of Sale was merely security for a loan had already been raised and rejected. He further submitted that the appellant could not be permitted to introduce new factual material at the stage of the second appeal merely because the First Appellate Court had decided against him.

Heard the learned Counsel for the parties and perused the record.

The question for consideration is whether the appellant has made out sufficient grounds for permitting him to adduce additional evidence under Order XLI Rule 27 of the Code of Civil Procedure.

According to Order XLI Rule 27 CPC, additional evidence cannot be permitted merely to fill gaps in a party’s case or to enable the party to improve its case at the appellate stage. Under Rule 27(1) (a), (aa) and (b), additional evidence may be permitted only when the conditions stated in the provision are satisfied. The appellant must show that the evidence was wrongly refused by the Court below, or that despite due diligence it could not have been produced earlier, or that the Appellate Court requires the evidence to pronounce judgment or for any other substantial cause.

In K. Venkataramiah v. A. Seetharama Reddy, AIR 1963 SC 1526, the Hon’ble Supreme Court held that the power to receive additional evidence is a judicial discretion and must be exercised within the limits of Order XLI Rule 27 CPC.

In Union of India v. Ibrahim Uddin, (2012) 8 SCC 148, the Hon’ble Supreme Court held that additional evidence cannot ordinarily be permitted merely to raise a new point or to give a party another opportunity to prove a case which it failed to establish before the Court below.

As regards the Miscellaneous Criminal Application No.3391 of 2017, the appellant relies upon statements allegedly made by the respondent concerning possession, dispossession and a possession letter. However, the appellant has not demonstrated how the proposed documents are necessary for deciding the substantial question of law raised in this second appeal. The statements relied upon would also have to be considered in their proper context and, if disputed, may require further factual examination. The application does not establish sufficient grounds for reopening such factual issues at this stage.

At the onset of facts related to the registered Power of Attorney dated 03.12.2015, the appellant contends that it supports his contention that the Agreement of Sale was executed as security for a loan. However, the appellant had already raised the loan transaction issue before the Trial Court, and the Courts below considered and rejected it on the evidence then available. The appellant has not shown that the Power of Attorney was relied upon as a basis of the pleadings or evidence before the Courts below, or explained satisfactorily why it could not have been produced earlier despite the due diligence. The document is now sought to strengthen the defence which the appellant failed to establish. In these circumstances, its production cannot be permitted merely to reopen the factual controversy.

The principles laid down in Union of India v. Ibrahim Uddin (supra) support the view that a party cannot claim additional evidence as a matter of right merely to improve its case at the appellate stage.

However, it is pertinent to note that the reply dated 10.07.2026 issued by Kotak Mahindra Bank, which the appellant submits that it was received subsequently. Even assuming that the reply was obtained after the decisions of the Courts below, its subsequent receipt does not, by itself, establish that additional evidence must be admitted. The appellant must also show that the document is necessary for deciding the appeal and that the requirements of Order XLI Rule 27 CPC are satisfied.

The appellant had alleged before the Trial Court that the suit property was mortgaged with Kotak Mahindra Bank. However, no sufficient documentary evidence establishing the alleged mortgage has been shown as having been produced before the Courts below. The Bank’s reply now sought to be introduced cannot automatically be treated as proof of the alleged mortgage or as a ground for reopening the entire factual inquiry. On the material placed in this application, the appellant has not demonstrated that the Bank’s reply is necessary for deciding the substantial question of law in the Second Appeal. The appellant has also not sufficiently explained why the relevant evidence could not be produced earlier despite due diligence.

In view of the principles laid down in K. Venkataramiah (supra) and Union of India v. Ibrahim Uddin (supra), the subsequent receipt of a document, by itself, is not sufficient to permit its production unless the requirements of Order XLI Rule 27 CPC are satisfied. The question whether the learned First Appellate Court had erred in granting specific performance must be examined on the existing record and the applicable law, without presuming that the alleged mortgage has been established.

The appellant has also relied upon Murgappa Sangappa Wale (D) Thr. Heirs & Ors. v. Tukaram Genu Gavali (D) Thr. Heirs & Ors., 2013 (5) ALL MR 261, in support of his contentions concerning readiness and willingness and the conduct of a party seeking specific performance. In said case, the Court considered the conduct of the plaintiff, the steps taken to perform the agreement and the effect of delay. The said judgment may be relevant while considering the merits of the second appeal. However, it does not dispense with the requirements of Order XLI Rule 27 CPC or establish an independent ground for receiving additional evidence.

The scope of a second appeal is confined to the substantial questions of law. It is not an opportunity to introduce a new factual case or to reopen factual issues merely because a party is dissatisfied with the findings of the Courts below. Additional evidence may be permitted where the statutory requirements are satisfied, but the appellant has not established those requirements in the present case. Neither the alleged contradictions in the criminal proceedings, nor the Power of Attorney, nor the Bank’s reply is necessary for deciding the second appeal on the basis of the substantial question of law framed therein.

In view of the above, I held that the appellant has failed to establish sufficient grounds for permitting additional evidence under Order XLI Rule 27 read with Order XLII Rule 1 CPC. The documents are primarily intended to support the contention already raised or to reopen factual issues considered by the Courts below. In the view of above discussion as no substantive question of law arises in this second appeal, the same deserves to be dismissed along with the application. Hence, I pass the following order:-