Holding

The appellate court must admit the agreement as additional evidence under Order 41 Rule 27 and consider its effect before deciding the appeal.

Summary

The suit concerned possession of 17 cents of land sold by T. Sekharan, who later died; the appellants (his heirs) claimed the sale was a collateral security for a loan and that an agreement dated 4 January 1983, executed in the presence of a police sub‑inspector, evidenced receipt of Rs 35,000 and the condition that the property be returned if the loan was not repaid. The trial court treated the deed as a simple sale and ordered surrender of possession. On appeal, the appellants sought to introduce the 1983 agreement as additional evidence under Order 41 Rule 27 of the CPC, but the appellate court refused to admit it. The Supreme Court held that the appellate court was obliged to admit the agreement as additional evidence and to record its effect, either by taking evidence or by making a finding, to ensure fair justice. Consequently, the appeal was allowed and the matter remitted to the appellate court for proper consideration, emphasizing the mandatory nature of Order 41 Rule 27 in admitting post‑pleading documents.

Issues considered

Whether a document executed after the commencement of suit can be admitted as additional evidence under Order 41 Rule 27 of the CPC.
Whether the appellate court erred in refusing to admit the 1983 agreement as additional evidence.
Whether the agreement demonstrates that the sale deed was a collateral security, affecting the parties' rights.

Legislation cited

Code of Civil Procedure, 1908s. Order 41 Rule 27

Subjects

additional evidenceOrder 41 Rule 27collateral securitysale deedpossession suitappellate procedurecivil appealevidence admissibilityfair justice

Judgment

A SMT. SARADA AND ORS.
v.
MANIKKOTH KOMBRA RAJENDRAN

APRIL 22, 1996

B [K. RAMASWAMY AND G.B. PATTANAIK, JJ.]

Code of Civil Procedure, 1908 :

Order 41, Rule 27-Additional evidence-Filing of-Property sold as a
C collateral security-Subsequent agreement mentioning receipt of considera-
tion-Appellate court refusing to take the document as additional
evidence-Held : Appellate court ought to have received the additional
evidence and considered the effect thereof by either recording the evidence of
the paities or calling a finding on it fi'om the trial cowt-Without that it would
not be possible to render fair justice between the parties-Appeal remitted
D back to the appellate court to follow the procedure and dispose of the appeal
in accordance with law.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 7739 of
1996.
E From the Judgment and Order dated 4.8.95 of the Kerala High Court
in S.A. No. 886 of 1990-E.

B.Y. Deepak and G. Prakash for the Appellants.

The following Order of the Court was delivered :
F
Though the respondent has been served, he is not appearing either
in person of through counsel.

Leave granted.
G The admitted position is that one T. Sekharan was the owner of the
property. He sold 17 cents of land under Ex. A-2, dated 14.7.1982. He was
impleaded as the first defendant in the suit laid for recovery of the
possession on the ground that after the sale there was an contemporaneous
agreement to permit the respondent to remain in possession for a period
H of four months and on expiry thereof, he was to surr~nder his possession.
624
SARADA v. MANIKKOTH KOMBRA RAJENDRAN 625

Since he had not surrendered the possession, notice Ex. A/4, was issued A
on December 10, 1982 and on his failure to vacate the same, suit was laid
for recovery of possession. Since the first defendant died, the appellants
were brought on record as party defendants to the suit. It is their case that
the respondent is a money-lender and the property sold was to obtain a
loan and he had obtained the sale deed as a collateral security for repay-
B
ment of the loan of a sum of Rs. 20,000. After the dispute had arisen, there
was an agreement entered by the first defendant and the respondent in the
of
presence of the Sub-Inspector Police which formed part of the agree-
ment, which reads as under :

"Agreement executed BETWEEN 'A' PARTY, Rajendran, 42 C
years, son of Manikooth Kombra Chalil Damudaran. Kacheri
Amson, AND 'B' Party, Sekharan, aged 60 years, son of Thaikandy
Gopalaln, Amarasseri Amson Desom.

Whereas A party had given a complaint before the Kakkur
Police Station upon the B Party not acting in accordance with the D
agreement whereby the Parammel property owned by B party had
bee_n sold to A party, and whereas both parties spoke under the
· mediation of the station Sub-Inspector; and

. Whereas the parties have jointly agreed to the terms stated E
· bel.ow and have accordingly executed this agreement in the
. presence of the witnesses who have signed below this the 4th day
'ofJan:uary, 1983 and retained one copy each of this agreement.

: It is agreed - ·
F
. .. That B party shall-pay A party Rs. 35,000 (Rupees Thirty Five
Thousand
I
only) on
.
or before and that the Parammal property in
the possession of .A party shall then he given to B party at his
expense .. if the B party acts contrary thereto, he should vacate and
·hand ~ver the ab 0ve said Pararnmel property to A party. Further, G
·A Party will have the right against B party to take steps in
accordance .with ·law."

The trial Court decr~ed the suit accepting that Ex. A-2 is a sale and
the appellants are liable to surrender possession as sub-lessees. In the
ap_peal, the appellants raised the i_ssue regarding the agreement referred to H
626 Sl IPRF~tl' CUURT REPORTS [ J9%J SUPP. l S.L.R.

A hcrcinbefl1r~ and ~ought to pl:.tce this document as an additional evidence
under Order ~l, Ruic 27 CPC etc. The appellate Court rejected the same.
In the s~cun<l appeal, the 1-Egh Court has dbn1i.'-.sed the appeal conrinning
the decree fur possession. Thu\ this appeal by special leave.
.-
Since it is the case of the appellants that T. Sckharan h;id sold the
B property as a collateral security and \Vhcn the agrl'e111ent subsequently
entered intn clearly mentioned receipt of Rs. 3.'1))00 as consideration of the
property, it Wlllll<l indicate that the parties had the sale Ex. A-l is only a>
''collateral security. Under these circun1stanccs, 1 hc appellate l'ourt ought
to have received the agrccn1cnt datl'.d Januur; .+. 1983 as additional
C t:vi<le-ncc a11d \.·1lnsidcrcd the effect thereof by either recording the cvi<lencl'
,1f the part iv, :f calling_ ;1 finding: in this bt.:half fro1n the trial l~ourt. Without
th u...:ipt nl th.· cl<iclJ:TILfll and the ~\.i<lcncc in cun.'>i<ll,_'.ration Lhcrcof, it \\.'OU Id

n,il he pt~\:-iihk· !d render fair ju:.tice hct\.vcen the partit:s.

~fl _ :1ppcal i:. aCl\)rdingly allo\\'L'!.l ·rT~c judgmenl and decree of the
D appellate t·ourt <.t\ \Vcll as the ~·Iigh ('nun,;... \lJ aside and the <1ppcal i~
fL'll]i!.tcd tn the appcllatt: ('ourt LtJ fn!lu\\' tht: prl1ccdure indic~ltl'.d
h1 ·,·cir~Jbn\'~ and <li.<..pusc nf the <tPf'l';tl dCcording lo hnv. No custs.

'.J. '· Appeal allllwcu.