SUPREME COURT HOLDS THAT APPELLATE COURT CANNOT REMAND SUIT FOR DE NOVO TRIAL WITHOUT RECORDING ANY EXPLANATION

Recently, a two-Judge Bench of the Supreme Court comprising Justice Dinesh Maheshwari and Justice Sudhanshu Dhulia passed a Judgment dated 27.03.2023 in SIRAJUDHEEN vs ZEENATH & ORS. in Special Leave Petition (Civil) No. 22557 OF 2019, and held that High Courts should not remand a matter for trial de novo without recording any explanation thereof.

FACTS

The Respondent No. 1, Zeenath, filed the subject Civil Suit against the present Appellant as Defendant No. 1, Sirajudheen, and other Respondents, her sisters, as Defendant Nos. 2 to 5, for setting aside a Sale Deed, registered in the Office of Sub Registrar, Karunagapally. The suit Property was owned by Zeenath’s father and after his demise a Partition Deed was executed and the Property was in joint possession and enjoyment of the Zeenath and the other sisters. A Partnership Deed was executed amongst the Respondents to run a cinema theatre on the premises. Zeenath was forced, by the husbands of three of her sisters, to reach the office of Sub Registrar for execution of a security bond in favour of a film distributor. As the Respondent No. 1 had utmost faith and belief in them, she reached the Sub Registrar’s Office, and put her signatures on the document as required by them. When Respondent No. 1 enquired about the accounts of cinema theatre from Respondent No. 5, it was informed that her share in the said Property had already been sold. On hearing the same, the Respondent No. 1 rushed to the Office of the Sub Registrar for getting a copy of the document executed on 15.03.2006 and, on going through the same, she realized that she was made to sign on a Sale Deed and not on a security document as told to her earlier. Further, no consideration was received by her and hence, the said Sale Deed was void and non-est.

Apart from the above Civil Suit, the Plaintiff-Respondent No. 1 filed another Civil Suit for prohibitory injunction. Both these Civil Suits were decided together by the Trial Court in its common Judgment dated 28.01.2014. The Trial Court found that no steps were taken by the Plaintiff-Respondent No. 1 to examine the Sub Registrar who had registered the Sale Deed whereupon she had put her signatures on being allegedly made to believe it to be a security document; and she failed to discharge the burden of proof in terms of Section 103 of the Indian Evidence Act, 1872. the Trial Court proceeded to dismiss both the Civil Suits. There were two other suits where Zeenath’s sisters sought partition of the cinema theatre and the shopping complex on the suit Property. These two suits were decreed in favour of the sisters. Zeenath challenged the four decisions of the Trial Court in appeal in Kerala High Court. The Kerala High Court was of the opinion that sufficient evidence was not on record for the Trial Court to reach a conclusion and the High Court considered it appropriate to give an opportunity to adduce further evidence for fresh consideration. The High Court expressed that the evidence necessary for proper determination of the suit had not been brought on record; and that the evidence on record was insufficient to arrive at a proper finding in favour of or against the Sale Deed. For these observations, the High Court vide order dated 28.06.2019 considered it appropriate that the parties be given an opportunity to adduce further evidence and the matter be considered afresh.

ISSUES

Whether the Kerala High Court has been justified in remanding the matter for trial de novo?

REASONING AND ANALYSIS

Aggrieved by the aforementioned Order dated 28.06.2019 of the Kerala High Court, the Appellant moved the Supreme Court under Article 136 of the Constitution of India (Special leave to Appeal by the Supreme Court).

The Apex Court noted that the High Court has not specified as to why it opined that the findings of the Trial Court were unjustified. Referring to the provisions empowering an Appellate Court to pass an order of remand, particularly Rule 23 of Order XLI CPC, it noted that the scope of the same was narrow and cannot be applied to the present case as the suit has not been disposed of on a preliminary point. The Court observed –

“Obviously, the reversal has to be based on cogent reasons and for that matter, adverting to and dealing with the reasons that had prevailed with the Trial Court remains a sine qua non. Thus, remand in the present case cannot be held justified even in terms of Rule 23-A of Order XLI CPC.”

After hearing both Parties the Court observed that we are constrained to apply the observations of this Court in Municipal Corporation, Hyderabad v. Sunder Singh: (2008) 8 SCC 485, to say that the present order of remand has been passed only on ipse dixit of High Court sans any reason or justification.

The Supreme Court further observed that if courts find evidence in possession of a party that has not been produced it can assume that production of the same would be unfavourable to the person who withholds it.

“If the Court finds any particular evidence directly within the control and possession of a party having not been produced, the necessary consequences like those specified in illustration (g) to Section 114 of the Evidence Act may follow but, merely because particular evidence which ought to have been adduced but had not been adduced, the Appellate Court cannot adopt the soft course of remanding the matter.”

Conclusion

Thus, based on the aforesaid observations, the Apex Court allowed the Appeal and set aside the Order dated 28.06.2019 of the Kerala High Court and the said appeal was restored for reconsideration by the High Court in accordance with law. The Apex Court held that the Trial Court had indeed returned its findings on the basis of evidence on record. Whether those findings are sustainable or not is a matter entirely different and the High Court may examine the same but merely because the High Court could not reach a conclusion on preponderance of probabilities, the evidence on record could not have been treated as insufficient so as to not pronounce the Judgment in terms of Rule 24 of Order XLI CPC.

Devashish Kakkar

Legal Associate

The Indian Lawyer