Holding

The High Court was correct in rejecting the additional evidence under Order 41 Rule 27, and no substantial question of law arose, so the appeal is dismissed.

Summary

The appellant, Haryana State Industrial Development Corporation, resumed an industrial plot allotted to the respondent, Cork Manufacturing Co., alleging breach of a contractual construction deadline. The respondent filed a suit for permanent injunction, claiming the resumption order was illegal, that it remained in possession, and that the suit was not barred by limitation. The trial court and first appellate court decreed in favor of the respondent, finding the resumption order void and the respondent in possession. In the second appeal, the appellant sought to introduce a legal notice under Order 41 Rule 27 CPC to prove the respondent’s knowledge of the resumption order and to raise a limitation defence, but the High Court rejected the application and dismissed the appeal, holding no substantial question of law arose. The Supreme Court affirmed the High Court’s decision, ruling that the additional evidence could have been produced earlier, that lack of legal advice does not constitute a substantial cause, and that the findings of fact of the lower courts were not perverse. Consequently, the appeal was dismissed and the lower courts' decrees were upheld.

Issues considered

The admissibility of additional evidence under Order 41 Rule 27 CPC in a second appeal
Whether the High Court erred in rejecting the application for additional evidence
Whether the resumption order of the plot was illegal and void
Whether the suit was barred by limitation
Whether the respondent was in possession of the plot at the time of filing the suit

Legislation cited

Code of Civil Procedure, 1908s. Order 41 Rule 27, s. Section 100
Constitution of Indias. Article 136

Subjects

Order 41 Rule 27additional evidencesecond appeallimitationresumption orderpossessionCivil Procedurefindings of factSection 100 CPCArticle 136

Judgment

A HARYANA STAIB INDUSTRIAL DEVELOPMENT CORPORATION
v.
MIS CORK MANUFACTURING CO.

AUGUST 27, 2007

B (TARUN CHATTERJEE AND P.K. BALASUBRAMANYAN,JJ.)

Code of Civil Procedure, 1908:

s. JOO and Order 41, Rule 27-Applicationfor production of additional
C evidence in second appeal before High Court-Legal notice issued by couf!Sel
for plaintiff to defendant sought to be produced as admissible evidence at
second appellate stage by latter which was lying with it during pendency of
suit and first appeal-Jn appeal before Supreme Court, difference of opinion
between the two Judges comprising the Bench with regard to decision of
D High Court rejecting application under Or.41 r.27 as also dismissing the
second appeal-Matter referred to larger Bench.

The plaintiff-respondent was allotted an industrial plot by the defel!dant-
appellant Corporation as per allotment letter dated 24.11.1987. An agreement
was entered into between the parties on 12.2.1988, Clause 8 whereof provided
E that the allottee would start construction on the plot within a period of one
and half years from the date of issuance of the allotment letter and would
complete the erection and installation of machinery and commence production
within a period of two years from the date of allotment of the plot, failing which
the plot would be liable to be resumed and the security amount forfeited. The
F appellant, finding that Clause 8 of the agreement was not complied with by
the respondent, issued a show cause notice to it as to why the plot be not
resumed and possession taken. According to the appellant, it issued the
resumption order on 13.9.1991, and on 20.9.1991 took possession of the suit
plot. On 5.10.1995 the respondent filed a civil suit in the Court of Addi. Civil
Judge praying for a decree of permanent injunction restraining the appellan~
G from interfering with the possession of the suit plot and further reallotting it
to any other person. It was submitted that Clause 8 of the agreement could
not be complied with because of the high tension wires running over the suit
plot and unless the same were removed the plaintiff was not in a position to
raise any construction. The appellant filed a written statement stating that

H 508
STATEINDUSTRIALDEVE. CORPN.1•. CORKMANUFACTURINGCO. 509

the suit was time barred since the plot had been resumed on 13.9.1991. It A
was also submitted that the plaintiff suppressed the facts regarding knowledge
of the resumption order and taking over possession of the suit plot. The trial
court, however, decreed the suit; and the first appellate court affirmed the
decree. In the second appeal, the defendant-appellant filed an application under
Order 41, Rule 27, C.P.C. for acceptance of additional evidence, i.e. the legal B
notice issued on behalf of the plaintiff to the defendant showing
acknowledgement of receipt of the resumption order dated 13.9.1991 by the
plaintiff-respondent The High Court rejected the application and dismissed
.> the second appeal holding that no substantial question of law arose therein.

In the instant appeal filed by the defendant-Corporation, it was contended C
for the appellant that the High Court erred in rejecting the application under
Order 41, Rule 27 CPC since the additional evidence wa'> sought to be adduced
in order to prove that the plaintiff had clear knowledge of the resumption order
passed on 13.9.1991, and the suit having been filed on 5.10.1975 was barred
by limitation.
D
Referring the matter to the larger Bench, the Court

HELD: (By the Court):

In view of the difference of opinion, let this matter be placed before
Hon'ble the Chief Justice oflndia for referring it to an appropriate larger E
Bench.

Per Chatterjee, J.

1.1. The High Court was right in holding that the additional evidence,
i.e. the legal notice issued by the counsel for the respondent to the appellant, F
ought not to have been admitted at the stage of the second appeal. Keeping in
view the principles enunciated by this Court, and applying the same to the
facts and circumstances of the instant case, it cannot be assumed that the
said additional evidence sought to be adduced under Order 41 Rule 27 CPC,
could not be produced in evidence before the trial court or before the first
appellate court due to inadvertence and lack of proper legal advice. Admittedly, G
the said legal notice was lying with the appellant during the pendency of the
suit and also during the pendency of the first appeal. The appellant in its
written statement had categorically taken the plea of limitation which was
also one of the main issues in the suit. (Para 17) [521-E; 520-D-F)
H
510 SUPREME COURT REPORTS [2007] 9 S.C.R

A Municipal Corporation For Greater Bombay v. Lal Pancham of Bombay
and Ors., (1965] 1 SCR 542; and State of Gujarat and Anr. v. Mahendra
Kumar Parshottambhai Desai [Dead] by Lrs., [2006) 9 SCC 772, relied on.

Smt. Pramod Kumari Bhatia v. Om Prakash Bhatia and Ors., (1980) 1
SCC 412; Karnataka Board of Wakfv~ Government ofIndia and Ors., [2004)
B 10 SCC 779; and Sunder Lal & Sonv. Bharat Handicrafts Pr. Ltd, AI~ (1968)
SC 406, referred to.

1.2. Lack of proper legal advice or inadvertence to produce the legal
notice in evidence is not a ground to hold that there was substantial cause for.
C acceptance of the additional evidence under Order 41, Rule 27(l)(b} of the
Code. It canilot be said that the legal notice was required by the appellate court
to pronounce a proper judgment in the appeal. It was open for the High Court
to decide the second appeal on merits with the documents and evidence already
on record. The appellant had failed to satisfy the High Court as.to why the
legal notice which was admittedly lying with them could not be produced during.
D all these years i.e. from 5th October 1995 till 31st January 2005;
(Para 17) [521-B, D, Fl

2.1. The High Court held that no question of law much.less any
substantial question of law arose in the.second appeal. A perusal of the
judgment of the High Court also does not show that any substantiaiquestion
E of law, as enumerated in Section 100 of the CPC was in fact raised before the
High Court. [Para 18] [521-H; 522-A]

2.2. So far as the trial court is concerned,.it came.to a finding of fact
that the respondent was found to be in possession ofthe suit plot in spite of
resumption notice having been issued by the appellant. The trial court also
F came to a finding of fact that it was due to inaction on the part of appellant to
remove the electric wires and poles from the~suit plot, and the explanation
given by the respondent for not being able to take any step to raise construction
in compliance with Clause 8 of the agreement must be accepted and, therefore,
a decree for permanent injunction should be.granted in· favour-of the
G respondent These findings offact were.echoed oy the first appellate court as
well. [Para 18) [522-=A-C)

2.3.Jt is well settled that in a second appeal, High Court is not permitted
to set aside the findings of fact arrived at.by.the.two courts below until and
unless it is shown that such findings of fact'are either perverse.or arbitrary
H in nature. The High Court in second appeal found that the appellant had failed
STATEINDUSTRIALDEVE. CORPN. 1•. CORK MANUFACTURING CO. 511

to satisfy it that the findings recorded by the courts below suffered from any A
infirmity or that they were contrary to the record. The High Court also
concluded that there was no question of law much less any substantial question
of law which arose in the second appeal. [Para 181 (522-C, DJ

Per Balasubramanyan, J
B
1. The High Court was clearly in error in refusing to admit in evidence,
the notice sent on behalf of the plaintiff by its advocate to the defendant. It
must be noticed that not even an objection was filed on behalf of the plaintiff
> to the application under Order 41 Rule 27 of the Code denying the issuance
of such a notice. After all, the purpose for which the notice was sought to be C
produced was only to show that the plaintiff was aware of the resumption made
in the year 1991 and the specific acknowledgement of receipt of the relevant
letters in that behalf. Even otherwise, the letters produced at the trial do
indicate that the plaintiff was aware of the resumption of the plot. Therefore,
this was a case where the document produced under Order 41Rule27 of the
Code was required to enable the High Court to pronounce a judgment more D
satisfactorily to its conscience constituting other sufficient cause within the
meaning of Order 41 Rule 27 of the Code for production of additional evidence.
The authenticity of the notice had not been questioned by filing an objection
and the High Court was therefore in error in thinking that it was not a
document which could be straightaway aceepted. (Para 161
E
2. The plaintiff came forward with a dubious case regarding the order
ofresumption of the plot in question. There was clearly a default on the part
of the plaintiff in complying with the requirement of putting up an industry
in the plot and starting commercial production within two years of the
allotment. The excuse put forward by the plaintiff was the existence of an F
electric pole and overhead electric wires, which stood in the way of the
construction, and that it was for the defendant-Corporation to have got them
removed. In the written instrument of allotment, there was no such stipulation.
Having accepted the allotment on its basis and taken possession of the plot, it
is not open to the plaintiff to raise a contention based on some other subsequent
understanding between the plaintiff and some officers of the defendant or G
outside the agreement. (Para 131 (529-B-E)

3.1. The plaintifrs plea that it was not aware of the order of resumption
is belied by the letters marked on its side through PW4 and the admission of
PW6. These letters clearly show that the plaintiff was given notice of the
resumption and was informed that ifhe did not comply with the requirement H
512 SUPREME COURT REPORTS [2007] 9 S.C.R.

A and sent satisfactory reply, the land would be resumed without any further .
notice within the time stipulated therein. Thus, obviously, adequate notice and
adequate opportunity was given to the plaintiff before the order of resumption
was passed. (Para 14) (529-F)

3.2. Non-examination of the original allottee was fatal to the case of the
B plaintiff under the circumstances. P.W.6, who is examined on behalf of the
plaintiff came into picture only in the year 1996 and was not a competent
witness to speak about anything that transpired in the year 1991. It was a
clear case for drawing an adverse inference against the plaintiff for non-
examination of the allottee. These vital aspects have been ignored by the trial
C court and by the first appellate court. The courts below acted perversely in
entering a finding that the order of resumption was illegal and was not binding
on the plaintiff. (Para 14) (529-G; 530-A)

3.3. A finding ignoring legal evidence available in the case and ignoring
the inferences to be drawn from the circumstances established, is a finding
D that can only be described as perverse and such a finding is not binding on
the second appellate court under Section 100 of the Code. In fact, it compels
interference by the second appellate court. The High Court has unfortunately
not adverted to anything relevant, and was incorrect in thinking that the
findings of fact are not liable to be interfered with in the case on hand. At
least, it should have seen that parole evidence to alter the terms of a written
E instrument was not permissible and the fact that the courts below hatf relied
on such evidence justified interference by the High Court in second appeal.
(Para 14) (530-B-CJ

3.4. Similarly, the finding on possession is also found to be based on no
F legal evidence and consequently infirm and liable to be interfered with by this
Court as it should have been interfered with by the Second Appellate Court.
There is no evidence to show that the plaintiff-allottee continued in possession
until the power of attorney was executed in favour of P.W. 6. The suggestion
to P.W. 6 that he was aware of the resumption and re-allotment to another
entity when he filed the suit, is a justifiable suggestion on the facts of this
G case. (Para 15( (530-F, E)

4. Thus, on the whole, the plaintiff has not made out any case for relief
in the present suit. The judgments of the courts below, therefore, call for
interference. The appeal deserves to be allowed. If the decree passed is not
set aside, the Court would be failing in its duty exercising jurisdiction under
H
STATEINDUSTRIALDEVE. CORPN. v. CORKMANUFACTIJRINGCO. [TARUNCHATTERJEE,J.] 513

Article 136 of the Constitution of India. After all, the jurisdiction of this Court A
is a corrective jurisdiction and not a restricted one. (Para 17) (531-DJ

5. During the course of the hearing, the defendant-appellant offered that
the plot could be allotted afresh to the plaintiff, ifthe latter was willing to pay
the price at the rate of Rs.13,000/- per sq,uare meter which is the current
rate. The pl?intiff was not willing to pay that price. Taking note of the B
circumstances, it would be proper to give the plaintiff an opportunity to have
the land allotted to it afresh, on its paying .a price for the plot at the rate of
Rs.10,000/- per square meter. (Para 1911531-F-Gl

6. The appellant would initiate action against those officers who were
dealing with the cancellation of the allotment and taking possession of the C
property, and more particularly those who were in charge of the litigation
and who failed to produce vital documents including the notice issued on behalf
of the plaintiff that was sought to be produced in second appeal It is absolutely
necessary to take such action in the interests of the appellant, the citizens
and the State since it should not be forgotten that the appellant is a trustee of D
public property and is expected to deal with it as a trustee with all care and
caution. (Para 20( (532-C)

7. Time has come to exhort the trial courts, the first appellate courts
and the second appellate courts in the State to show better application of mind
while deciding a lis keeping in mind that what they are performing is a divine E
function that is onerous and at the same time challenging. These observations
regarding the courts in the State are made noticing with regret the lack of
application of mind in many a case that had come before this Court.
(Para 20) (532-D-E)

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3940 of2007. F

From the final Judgment and Order dated 20.01.2006 of the High Court
of Punjab and Haryana at Chandigarh in Regular Second Appeal No. 2320 of
2005.

R.Mohan, ASG., Ravindra Bana for the Appellant. G
Gaurav Bhatia and Abhishek Chaudhary for the Respondent.

The Judgment and Order of the Court was delivered by

T ARUN CHATTERJEE, J. I. Leave granted. H
514 SUPREME COURT REPORTS [2007] 9 S.C.R

A 2. This appeal is directed against the judgment and order dated 20th
January, 2006 of the Punjab and Haryana High Court at Chandigarh whereby
the High Court affirmed the concurrent judgments of the courts below
decreeing the suit of the plaintiff/respondent (for short the respondent') and
declaring the resumption of plot allotted to the respondent by the defendant/
B appellant (for·short 'the appellant') as illegal.

3. The appellant allotted an industrial plot bearing PlotNo.259, Udyog
Vihar; Phase IV, Gurgaon to the respondent vide its allotment letter dated 24th
November, 1987. Pursuant to the allotment letter dated aforesaid, the appellant
entered into an agreement on 12th February, 1988 with the respondent Clause
C 8 of which provides that the respondent shall start construction on the plot
for setting up of an industry within a period of three months and complete
the construction thereof within one and a half years from the date of issuance
of the allotment letter and further, the respondent shall complete the erection
and installation of machinery and commence production within a period of
two years from the date of allotment of plot failing which the plot shall be
D liable to be resumed and the security amount equivalent to ten per cent of
the cost of the plot deposited by the respondent at the time of allotment shall
stand forfeited. Clause 28 of the agreement provides that in case of breach
of any of the terms and conditions of the agreement including Clause 8, the
appellant reserves the right to exercise its right of resumption of the plot. The
E appellant, when found that the respondent had violated Clause 8 of the
agreement, issued a show cause notice to it as to why the suit plot should
not be resumed and the possession not be taken back. On 13th September,
1991, the appellant issued a resumption order for non compliance of Clause
8 of the agreement by the respondent stating that the respondent had
contravened the terms and conditions of the allotment order. According to the
F appellant, possession of the suit plot was taken back from the respondent on
20th September, 1991.

4. The respondent filed a Civil Suit before the Addi. Civil Judge (Senior
Division), Gurgaon in 1995 more precisely on 5th October, 1995 praying for
a decree of permanent injunction restraining the appellant from interfering
G and/or disturbing in any manner the possession of the suit plot and further
restraining the appellant from re-allotting the plot to any other person on the
basis of resumption order, if any. In the plaint, it was alleged that it was not
possible for the respondent to comply with Clause 8 of the agreement because
of high tension wires existing over the suit plot and until and unless the said
H high tension wires were removed from the suit plot, the respondent was not
STATEINDUSTRIALDEVE. CORPN. v. CORK MANUFACTURING CO. [TARUNCHATTERJEE,J.) 515

in a position to raise construction on the same within the time specified in A
Clause 8 of the agreement. For the reasons aforesaid, the appellant had no
right to disturb possession of the suit plot or initiate any proceeding against
them. Inspite of several letters written by the respondent to the appellant for
removing high tension electric wires and electric pole, the appellant did not
remove the same till in the year 1995, when suit was already pending, but
instead the appellant sought to resume the suit plot for non compliance of B
Clause 8 of the agreement. Accordingly, a decree for permanent injunction
restraining the appellant from interfering and/or disturbing the possession of
the respondent in respect of the suit plot and other reliefs as noted herein
above was prayed for.

5. After appearance in the suit, the appellant filed a written statement
c
in which the appellant alleged that a resumption order was passed by it on
13th September, 1991 and possession of the suit plot was resumed on 20th
September, 1991 for alleged violation of Clause 8 of the agreement. The plea
of limitation was also raised saying that since the suit plot was resumed on
13th September, 1991 by the appellant and the suit was filed on 5th October, D
1995, the suit must be held to be barred by limitation. In the written statement,
it was also alleged by the appellant that the respondent had suppressed the
fact regarding knowledge of the resumption order and also regarding taking
over of the possession of the suit plot. Accordingly, the appellant had prayed
for dismissal of the suit.
E
6. The following issues were framed by the trial court :

I.Whether the order dated 13.9.91, if any, is illegal, null and void and
not binding upon the plaintiff ?

2. Whether the plaintiff is in possession over the plot in question ? F
3. Whether the plaintiff has got no locus-standi to file the present
suit?

4. Whether the suit is barred by limitation ?

5. Whether the plaintiff is estopped from filing the present suit by his G
own act and conduct ?

6. Whether the suit is bad for non-joinder of the necessary parties ?

7. Relief.
H
516 SUPREME COURT REPORTS [2007] 9 S.C.R.

A 7. The trial court, after the parties had adduced evidence, both oral and
documentary, in support of their respective claims, decreed the suit of the
resp~mdent inter a/ia on the following findings of fact :- ' '

(I) As the high tension line and an electric pole which existed, was
removed on 30th November, 1995 when the suit was already
B pending, the Construction in compliance with Clause ~ of the
agreement could not be raised on the suit plot.
(II) Other allottees in the same area were granted extension of time
to raise construction on identical facts and accordingly it was the 4..
duty of the appellant to extend the time for the respondent also
c after removing the electric wire and pole which existed on the suit
plot.
(Ill)' Even ifthe appellant had resumed the suit plot on 13th September,
1991, the same was so done without giving any opportunity of
hearing to the respondent.
D (IV) No show cause notice was served by the appellant on the
respondent and no procedure was followed to resume the suit
plot.

On the above findings of fact arrived at by the trial court on appreciation of
E the evidence, oral and documentary on record, the following conclusions
were drawn :-

I. The order of resumption passed by the appellant dated 13th
September, 199 l whereby the suit plot was allegedly resumed,
was illegal and against the principles of natural justice and
therefore liable to be set aside.
F
2 The suit was not barred by limitation as the respondent was in
possession of the suit plot and·resumption order of the appellant
was not served upon the respondent.
3. The respondent had by cogent evidence proved his possession
G over the suit plot and accordingly the respondent was entitled
to a decree of permanent injunction as prayed for.

8. Feeling aggrieved, the appellant preferred an appeal by which the
decree of the trial court was affirmed. The appellate court also echoed the
finding of the trial court and held that the appellant instead of removing the
H high tension wire and electric pole from the suit plot resumed the plot in
STATEINDUSTRIALDEVE. CORPN. 1•. CORKMANUFACTURINGCO.[TARUNCHATTERJEE,J.) 517

question on 13th September, 1991 without affording the respondent any A
._,.
opportunity of being heard and, therefore, held that the resumption order was·
ineffective and not binding on the respondent. The appellate court also held.
that the suit was not barred by limitation because no cogent evidence was
produced by the appellant to show that the respondent was served with the
copy of the resumption order at all or that the respondent had any prior
knowledge of the resumption order. B

9. A second appeal was, thereafter, filed by the appellant before the
High Court and in the second appeal, the appellant filed an application under
Order 41 Rule 27 read with Section 151 of the CPC for acceptance of an
additional evidence which was nothing but a legal notice dated 8th October,
199 J sent by the counsel for the respondent wherein the respondent had
c
acknowledged the receipt of resumption order of the appellant dated 13th
September, 1991. The appeal as well as the application for acceptance of
additional evidence under Order 4 I Rule 27 of the CPC was taken up for final
hearing and by the impugned judgment, the High Court rejected the said
application filed under Order 41 Rule 27 of the CPC and also the appeal of D
the appellant. Before the High Court in second appeal, the main thrust of the
..... argument of the learned counsel for the appellant was that the legal notice
allegedly served by the respondent on the appellant should be permitted to
be produced on record as additional evidence in the exercise of its power
under Order 4 J Rule 27 of the CPC to show that the suit filed in 1995 was
barred by limitation. On the merits of the second appeal, the High Court
E
recorded the following :-

"Nothing has been shown that the findings recorded by both the
courts below suffer from any infirmity or are contrary to the record.
No question of law, much less any substantial question of law arises
'1r F
in the present appeal."

I 0. Feeling aggrieved by the judgment of the High Court, the instant.
special leave petition has been filed in respect of which leave has already
been granted.
G
11. On behalf of the appellant, Mr. R. Mohan, Additional Solicitor
General submitted at the first instance that the High Court was not justified
... in rejecting the application for acceptance of additional evidence filed under
Order 41, Rule 27 of the CPC. By the application under Order 41, Rule 27 of
the CPC, a legal notice alleged to have been served by the counsel for the
respondent on the appellant was in fact sought to be admitted in evidence H
518 SUPREME COURT REPORTS [2007] 9 S.C.R.

A to prove that the respondent had clear knowledge of the resumption order
passed on 13th September, 1991 and if such fact was accepted, the s·uit filed
in.the year 1995 was clearly barred by limitation. The High Court, however,
while rejecting the application for acceptance of additional evidence, held that
the legal notice which was alleged to have been served on the appellant was
B per·se not admissible in evidence nor was it proved that the legal notice was
issued by the respondent. The High Court also held that even if the same was
issued, such a legal notice did not advance the case of the appellant.
. -
12. Before we deal with the aforesaid submission of Mr.Mohan, we may
remind ourselves of the provisions of0rder41 Rule 27 of the CPC which are
C as follows:

"27. Production of additional evidence in Appellate Court - [l]The
parties to an appeal shall not be entitled to produce additional evidence,
whether oral or documentary, in Appellate Court. But if-

[a] the court from whose decree the appeal is preferred has
D 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 of
E due diligence, be produced by him at the time when the decree
appealed against was passed, 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 cause,
F
the Appellate Court may allow such evidence or document to be
produced, or witness to be examined.
[2] Whenever additional evidence is allowed to be produced by
an Appellate Court, the Court shall record the reason for its
admission."
G
13. We have carefully examined the provisions:made.under Order 41
Rule.27 of the CPC. The.parties to an appeal shall not be entitled to produce
additional evidence, oral or documentary, beforethe aP.pellate court except on
the.grounds enumerated in Clause (a), (aa) and (b) of0rder41Rule27(1) of
H the CPC. The court may permit additionaLev.idence to be produced only when
STA1E INDUSTRIALDEVE. CORPN. v. CORK MANUFACTURING CO. [fARUNCHATIEIUEE,J.) 519

it is satisfied with the three grounds namely, (i) ifthe Court from whose decree A
the appeal is preferred has refused to admit evidence which ought to have
been admitted; (ii) a 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 of due diligence, be
produced by him at the time when the decree appealed against was passed;
and (iii) when the appellate court requires any document to be produced or B
any witness to be examined to enable it to pronounce judgment; or for any
other substantial cause .

• 14. In Municipal Corporation For Greater Bombay v. Lal Pancham of
Bombay and Ors., [1965] I SCR 542, this Court held that power under Order C
41 Rule 27 of the CPC could not be used for removing a lacuna in the evidence
and did not entitle the appellate court to let in fresh evidence at the appellate
stage when even without such evidence it could pronounce judgment in the
case. Following the aforesaid Clecision in Municipal Corporation For Greater
Bombay v. Lal Pancham of Bombay and Ors., [1965] I SCR 542, this Court
again in State of Gujarat and Anr. v. Mahendra Kumar Parshottambhai D
Desai [Dead) by LRs, [2006] 9 SCC 772, in para IO page 775 observed as
follows:

·~ ... Though the appellate court has the power to allow a document
to be produced or a witness to be examined under Order 41Rule27,
the requirement of the said Court must be limited to those cases E
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 appellant 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 the F
purposes of pronouncement of judgment in a particular way. The
High Court referred to the earlier proceedings before various
authorities and came to the conclusion that though the appellants
had sufficient opportunity to bring the evidence on record, for reasons
best known to it, the State did not produce the entire evidence before
the trial court and it was only 8 years after the dismissal of the suit G
that the applications were filed for adducing additional evidence in
the appeal. "

(Emphasis supplied)

15. In Smt. Pramnd Kumari Bhatia v. Om Prakash Bhatia and Ors., H
520 SUPREME COURT REPORTS [2007] 9 S.C.R.

A [1980] l sec 412, it has been held that the High Court was not unjustified
in refusing to admit the additional evidence under Order 41 Ru le 27 of the CPC
when such additional evidence purported to defeat the claim of one of the
parties and such additional evidence was sought to be laid many years after
filing of the suit. In that circumstance, this Court has held in the aforesaid
B decision that the discretion used by the appellate court in refusing to receive
additional evidence at the late stage cannot be interfered with.

16. In a recent decision of this court in the case of Karnataka Board
of Wakf v. Government of India and Ors., [2004] IO SCC 779, this Court has
again clearly laid down the principles for acceptance or refusal of additional
C evidence at the appellate stage observing that the scope of Order 41 Rule 27
of the CPC is very clear to the effect that the parties to an appeal shall not
be entitled to produce additional evidence, whether oral or documentary,
unless they have shown that in spite of due diligence, they could not produce
such documents and that such documents are required to enable the court
to pronounce a proper judgment.
D
17. Keeping the aforesaid principles in mind and applying the same on
the facts and circumstances of this case, we are unable to accept the contention
of the learned Additional Solicitor General appearing for the appellant t~at the
legal notice dated 8th October, 1991 could not be produced in evidence before
the trial court or before the first appellate court due to inadvertence and lack
E of proper legal advice. For this purpose, we have examined the pleadings
made in the application for acceptance of additional evidence closely and in
detail. Admittedly, the legal notice issued by the counsel for the respondent
to the appellant which was sought to be admitted as additional evidence at
the second appellate stage was lying with the appellant during the pendency
F of the suit and also during the pendency of the first appeal. The appellant
in its written statement had categorically taken the plea of limitation which
was also one of the main issues in the suit. It is therefore difficult for us to
conceive that the said notice issued by the lawyer of the respondent could
not either be produced before the trial court or before the first appellate court
due to lack of proper legal advice. It cannot also be imagined that the
G appellant having taken a specific plea in the written statement regarding
limitation of the suit could not produce the same due to inadvertence. In any
view of the matter, Order 41 Rule 27 of the CPC also does not empower an
appellate court to accept additional evidence on the ground that such evidence
could not be produced or filed either before the trial court or before the first
H appellate court due to inadvertence or lack of proper legal advice. Mr. Mohan,
STAlEINDUSTRIALDEVE.CORPN.•"CORKMANUFAClURJNGCO.[TARUNCHAITERJEE,J.J 521
learned Additional Solicitor General however.sought to argue that the pleadings A
made in the application for acceptance of"additional evidence would come
within the meaning of "substantial cause" under Order 41 Rule 27 (l)(b) of
the CPC which would require the appellate court to accept the legal notice
in order to pronounce its judgment. We are unable to accept this submission
of Mr. Mohan. In our view, lack of proper legal advice or inadvertence to
produce the legal notice in evidence is not a ground to hold that there was B
substantial cause for acceptance of the additional evidence.' Mr. Mohan,
Learned Additional Solicitor General further sought to argue that the importance
o~ the legal notice was not realized and it was due to inadvertence and lack
of proper legal advice that the same could not be produced before the courts
below. In our view, we do not think that non realization of the importance of C '
the documents due to inadvertence or lack of proper legal advice as noted
hereinabove also would bring the case within the expression ;,other substantial
cause" in Order 41 Rule 27 of the CPC. In this connection, reference can be
made to a decision of this court in the case of Sunder Lal & Son v;. Bharat
Handicrafts Pr. Ltd, AIR (1968) SC 406. In any view of the matter, we do not D
find that the legal notice was -required by the appellate court to pronounce
a proper judgment in the appeal. It was open for the Hi~h Court to decide
the second appeal on merits with the documents and evidenc~ already on
record. Therefore, we are in agreement with the High Court that the additional
evidence namely the legal notice issued by the counsel. for the respondent
to the appellant ought not to have been admitted at the stage of the second E
appeal. As noted hereinabove, the suit was filed by the respondent on 5th
October 1995. The Trial Court decreed the suit about nine years thereafter
more precisely on 12th March 2004. An appeal was carried against the aforesaid
judgment of the trial court which was disposed of on 31st January 2005. The
appellant had failed to satisfy the High Court as to why the legal notice which
was admittedly lying with them could not be produced during all these years F
i.e. from 5th October 1995 till 31st January 2005. Such being the position and
in view of the discussions made herein above, we are unable to hold that the
High Court was not justified in rejecting the application for acceptance of
additional evidence at the second appellate stage.

18. Let us now consider whether the three courts below were justified G
in decreeing the suit of the respondent. Before we consider the findings of
the courts below, it may be kept on record that in the second appeal, the High
Court hefd that no question of law much less any substantial question of law
arose in the same. On a perusal of the judgment of the High Court in the
second appeal, we also do not find that any substantial question of law, as H
-1 , ,._
522 SUPREME COURT REPORTS [2007] 9 S.C.R.

A enumerated in Section 100 of the CPC was in fact raised before the High
....
Court. So far as the trial court is concerned, it came to a finding of fact that
the respondent was found to be in possession of the suit plot in spite of
resumption notice having been issued by the appellant. The trial court also
came to a finding of fact that it was due to inaction on the part of appellant
B to remove the electric wires and poles from the suit plot and the explanation
given by the respondent for not being able to take any step to raise
construction in compliance with Clause 8 of the agreement must be accepted
and therefore a decree for permanent injunction should be granted in favour
of the respondent. These findings of fact were echoed by the appellate court
as well. It is well settled that in a second appeal, High Court is not permitted
C to set aside the findings of fact arrived at by the two courts below until and
unless it is shown that such findings of fact are either perverse or arbitrary
in nature. Mr. Mohan learned Additional Solicitor General, however, could not
satisfy us that the findings of the courts below which were also accepted by
the High Court in the second appeal were either perverse or arbitrary. Accepting
this position, the High Court in second appeal found that the appellant had
D failed to satisfy it that the findings recorded by the courts below suffered
from any infirmit)' or that they were contrary to the record. The High Court
also concluded that there was no question of law much less any substantial
question of law which arose in the second appeal. Before we part with this
judgment, we keep on record that Mr. Mohan appearing for the appellant
E substantially argued before us on the issue that the High Court was not
justified in rejecting the application for acceptance of additional evidence. We
have already discussed this aspect of the matter herein before and after such
discussion, we have already held that there was no infirmity in that part of
the judgment by which the High Court had rejected the application for
acceptance of additional evidence.
F
19. For the reasons aforesaid, we do not find any ground for which
interference with the judgment of the courts below can be called for. Accordingly,
the appeal requires to be dismissed and is dismissed as such. There will be
no order as to costs.

G P.K. BALASUBRAMANY AN, J. l. Leave granted.

2. The defendant in Suit No. 8 of 1995 in the court of Senior Sub-Judge,
Gurgaon is the appellant in this appeal. The appellant allotted plot No. 259 ~·
on 12.3 .1986 to the respondent through its sole proprietor Om Prakash Saharan.
H The approximate area of the plot is 1000 square meters and the tentative price
~t
I

STATEINDUSTRIALDEVE. CORPN. v. CORKMANUFACTIJRJNGCO. [BALASUBRAMANY AN,J.) 523

was Rs. 1,20,000/-. On 12.2.1988, a fonnal agreement was entered into between A
...:? the parties. According to the agreement, the allottee had to start construction
of a building for the setting up of an industrial unit within a period of three
months and had to complete the construction within one and half years from
the date of issue of the letter of allotment. The construction had to be
completed and the installation of the machinery had also to be completed and
the coinmercial production was to be started within a period of two years from
B
the date of allotment. The Agreement also provided that failing compliance
with the above condition by the allottee, the plot was liable to be resumed
and l 0% of the cost of the plot deposited by the allottee at the time of
allotment was liable to be forfeited. The letter of allotment was issued on
24.12.1987. The allottee did not fulfil the condition of starting commercial c
production within two years of the letter of allotment. This fact is not in
dispute. The appellant thereupon issued various notices to the allottee. On
19.7.1991, the allottee requested for extension o time. That request was rejected.
On 13.9.1991, according to the appellant, the appellant issued an order of
resumption which specifically referred to the contravention of the terms and
D
conditions of allotment by the allottee. According to the appellant, possession
was taken back on 20.9.1991. The plot was thereafter re-allotted to M/s
Insulation & Electrical Products (P) Ltd., New Delhi on 2.4.1992. Since that
allottee also did not fulfil the conditions, the said allotment was cancelled on
6.1.1994.
E
3. The respondent, the plaintiff, filed an application for referring the
dispute to Arbitration. The same was rejected. Respondent then approached
the Consumer Forum, but that complaint was also dismissed.

4. On 5.10.1995, the respondent filed the present suit No. 8of1995 for
-,. a permanent injunction restraining the defendant-appellant from interfering, F
disturbing or in any manner tampering with the possession of the plaintiff
over the plot in dispute, and restraining the defendant-appellant from re-
allotting the plot in question to any other person on the basis of the resumption
order, if any, or otherwise. Though there was no prayer regarding any
resumption order, it was asserted that the resumption order, if any passed by
G
the defendant was void, illegal, non-est and not binding upon the plaintiff in
any manner. A decree for mandatory injunction directing the defendant -
appellant to remove an existing high-tension wire going over the plot in
,;.-• question and also to remove an electrical pole existing in the plot and to make
available the plot free from all kinds of hindrances for raising the construction1
was also prayed for. The plaint was signed by one Uma Shankar who was said H
t--
\

524 SUPREME COURT REPORTS [2007] 9 S.C.R.

A to be a power of attorney of the plaintiff - finn. The plaint proceeded on the
footing that there was also an agreement between the parties that. the electric
pole located in the plot would be got removed by the appellant and it was
in view of the failure of the appellant to get it done, that the construction
could not be started by the plaintiff. It was also admitted in the ,plaint that
B there might have been an order of resumption of the plot, but if there was
any such order, it was illegal, void and ineffective and not binding·on the
rights of the plaintiff because of lack .of opportunity of hearing given to the
plaintiff. The plaint proceeded to state that the defendant was threatening to

c
dispossess the plaintiff pursuant to that order of resumption; that the plaintiff
was in possession and that the plaintiff was entitled to relief as claimed.

5. The defendant filed a written statement contending that the plot in
-
question was resumed on 13. 9.1991 in view of the plaintiff contravening the
tenns of the allotment and possession was taken back on 25.9.1991". The plot
had been re-allotted to another concern. The plaintiff had neither any right
over the plot in question nor any possession over the same. Since the plaintiff
D had defaulted, the plot had been rightly resumed. There was no stipulation
or condition in the allotment that the appellant had the obligation to remove
the electric post located in the plot or the overhead electrical line. The plaintiff
was not in posssession. The suit was liable to be dismissed. )-

E 6. On behalf of the plaintiff, one Jai Bhagwan was examined as P.W. 6.
He gave evidence to. the effect that the plot in dispute was allotted to Om
Parkash Saharan. He had been appointed as General Power of Attorney by
the said Om Parkash Saharan on 9.4.1996. Om Parkash Saharan was the sole
proprietor of the business of the plaintiff-company. Obviously, this witness
who entered the picture by virtue of a power of attorney executed on 9.4.1996,
F was not a party to any of the things that had taken place prior to the grant
of power of attorney in his favour and had no knowledge of them. Om Parkash .....
Saharan in whose name the allotment was made did not go to the box. In the
box, P.W. 6 admitted that the company had received the letter warranti~g of
the proposal to resume the plot because of its failure to fulfil the condition
G of allotment. He stated that because of the high-tension wire passing over the
plot in dispute, it was not possible to raise const_ruction thereon. He
a~mitted
that one week prior to the institution of the present suit, the plaintiff came
to know that defendant had resu~ed the plot in dispute and had also prepared
a report that possession had been taken back. He asserted that the.plaintiff
had not surrendered the possession of the suit property and the plaintiff ~as
H in possessio,1 till date. He stated that letters sent intimating the proposal to
STATE INDUSlRIAL DEVE. CORPN. v. CORK MANUFACTIJRING CO. (BALASUBRAMANYAN, J. J 525

resume the plot were illegal and void. No opportunity of hearing was afforded A
~.-
prior to the resumption of plot in dispute. He admitted that the defendant had
issued Exhibit PW4/l l letter to Om Parkash Saharan, but no payment was
made by Saharan in pursuance thereof. He stated that he knew Om Parkash
Saharan since 1983. He admitted that the allottee had to start construction
within two years from the date of allotment. He admitted that within the
prescribed period, no construction was raised but claimed that that was
B
because of the passing of the high-tension wire over the property. He denied
the suggestion that the plot was resumed on 13.9.1991 and possession was
.... taken on 25.9.1991. He pleaded ignorance of the fact that the plot in question
was re-allotted to another Om Parkash, son of Arjan Lal and that possession
had been given to him since 2.9 .1994. He denied the suggestion that he was c
aware at the time of execution of the Power of Attorney in his favour that the
plot in dispute was re-allotted to Om Parkash son of Arjan Lal. He pretended
ignorance of the filing of a complaint in the District Consumer Forum earlier
by the plaintiff and about the dismissal of the same. He also pretended
ignorance of the fact that a petition under the Arbitration Act was filed by
D
the plaintiff and that was also dismissed. But, he admitted that no construction
_, was started by the time the suit was filed. He denied the suggestion that he
had no right to file the present suit. The power of attorney in his favour was
marked as PW6/l.

7. Letter PW-4/5 produced by the plaintiff and proved through P.W. 4 E
exam'ined on behalf of the plaintiff, was a final show cause notice given to
the plaintiff - company on its failure to set up an industrial unit in the plot
in question. In that notice, after informing the plaintiff that no further extension
of time was possible, the plaintiff was called upon to show cause within a
period of 35 days from the date of issue of that letter as to why the plot
allotted to the plaintiff be not resumed on account of the failure of the plaintiff F
to set up the unit within the extended period. The plaintiff was informed that
in case no satisfactory explanation was received within the period specified,
the Corporation would be constrained to resume the plot without making any
further reference to the plaintiff. Exhibit PW4/l 6, the letter dated 1.4.1991 sent
in reply to the above Jetter dated 4.3.1991 after acknowledging the threat of G
resumption stated that the plaintiff was quite eager and sincere in its desire
to set up an industrial unit but since Shri Om Parkash Saharan, who signed
the letter, was under severe stress and strain due to a serious accident which
-<
made him almost incapacitated for a long period, he could not take effective
steps to undertake the work, and that the plaintiff hoped to take up the work
and complete it in four months and praying that some more time may be
H
526 SUPREME COURT REPORTS [2007] 9 S.C.R.

A allowed for that purpose. It is also seen from an earlier letter PW 4/6 dated
27.3 .1991, that the appellant had specifically brought to the notice of the
plaintiff that the plaintiff had contravened the tenns of the agreement by not
taking up the construction and calling upon the plaintiff to show cause within
35 days why the plot of land should not be cancelled. This was followed by
B PW4/9 dated 15.9.1991 conveying the decision of the appellant to resume the
plot for non-compliance with the tenns of allotment. Thus the correspondence
marked on the side of the plaintiff itself clearly indicated that the plaintiff had
been given notice of the resumption for failure of the plaintiff to fulfil the
tenns of the allotment. The correspondence produced by the plaintiff also
indicates that there was no stipulation outside the tenns of the written
C allotment letter about any promise of removal of any electrical pole or electrical
line passing over the plot in question. Otherwise, that would have been
mentioned in Ex. PW4/16 dated 1.4.1991.

8. The case tottered out on behalf of the plaintiff in the trial court was
that the authorities had agreed to have the electrical pole removed from the
D plot and since it was not removed, the work could not be started. This is not
reflected by the written allotment letter. In other words, there is no tenn
therein to that effect. Such a claim is also belied by the letters written by the
plaintiff which have been marked on the side of the plaintiff as exhibits and
reference to one of them has been earlier made. Some correspondence with
E some officers of the appellant regarding the removal of the electric pole was
relied on to say that outside the written agreement, the appellant had agreed
to get the electric pole and overhead line removed. There was also no evidence
to prove the possession claimed by the plaintiff as on the date of suit.

9. In spite of such glaring factors emerging, the trial court proceeded
F to accept the story of the plaintiff that it had not been given notice ~f the
resumption of the land and that it continued to be in possession and that
there was a col}dition for removal of the electric pole and the electrical line
and since the pole and the line were removed only by 30. l l .1995, the plaintiff
had time to take up the project thereafter. I must say that the decision of the
G trial court shows total lack of application of mind and non consideration of
the pleadings and the evidence in the case. The suit was thus decreed
declaring the resumption order dated 13.9.1991 illegal and against the principles
of natural justice and setting it aside, a relief that does not even seen to be
sought in the plaint. The lower appellate court also toed the line of the trial
court and dismissed the appeal, again, without proper advertence to the
H relevant materials available in the case and even without adverting to the fact
STATEINDUSTRIALDEVE.CORPN.v.CORKMANUFACTURINGCO.(BALASUBRAMANYAN,J.J527

that P.W. 6, the power of attorney holder had no knowledge of what had A
transpired earlier even on his Q.Wn showing and that the original grantee Om
IT_.
Parkash Saharan had not even come forward to speak to the case of the
plaintiff. The appeal was dismissed by the Appellate Court. I must say that
as a court of first appeal and as the final court of facts, the Appellate Court
had a duty to reappraise the entire material to decide the points arising and
the appellate court in this case has miserably failed to perform its duty. B

I 0. The defendant filed a Second Appeal. Along with the Second
Appeal, since the plaintiff had pretended ignorance of the order of resumption,
on behalf of the defendant, a legal notice sent by counsel for the plaintiff was
also produced by way of additional evidence by invoking Order 41 Rule 27
of the Code of Civil Procedure. We must say with regret that the Second
c
Appellate Court without any application of mind ---- in fact it pains me to
record out of my experience in this Court for three years, that the particular
High Court is disposing of Second Appeals in such a cavalier manner that
nothing else is needed to bring discredit the system itself --- rejected the
Second Appeal by stating that no substantial questions of law arose in the D
Second Appeal. This was after dismissing the application filed under Order
41 Rule 27 of the Code, I get the impres5ion, even without trying to understand
< what the suit is for, what was the nature of disposal of the suits by the courts
below and what that document implied and what it established. The decree
thus granted is under challenge before us.
E
11. Learned counsel for the appellant submitted that it was not a
condition of the grant or allotment, that the appellant would get removed an
existing electric pole or electric wire passing over the property before handing
over possession to the respondent. It is pointed out that the plaintiff had
unconditionally taken possession pursuant to the allotment. Learned counsel F
pointed out that the written letter of allotment does not contain any such
stipulation, on the other hand it contained a clear stipulation that the allottee
had to complete the entire construction and start the commercial production
within two years from the date of issue of the letter of allotment. Learned
counsel further pointed out that even the letters on the side of the plaintiff
seeking extension of time did not put forward any such claim and what was 0
put forward was only the incapacitation of the proprietor of the plaintiff and
the consequent delay in starting the construction. Learned counsel further
pointed out that P.W. 6 examined as the power of attorney of the plaintiff,
~
came into the picture only in the year 1996 and had no knowledge of things
that transpired in the year 1991 when the allotment was cancelled, the H
528 SUPREME COURT REPORTS [2007) 9 S.C.R.

A resumption order was passed and the land was r~sumed. Om Parkash Saharan
who was the eo nominee allottee, had not even gone to the box to speak
about the letters relating to the failure of the plaintiff to fulfil the conditions
of allotment and speak about the so called absence of knowledge about the
order of resumption. Learned counsel submitted that it was in that context
B that the original notice sent by one P. Bhaskaran, Advocate on behalf of the
plaintiff to the appellant - defendant was sought to be produced in the
Second Appeallate Court so that the conscience of the court may be satisfied
in that regard since the said notice clearly acknowledged the letter conveying
the factum of the resumption of the . plot allotted to the plaintiff by the
appellant. Learned counsel submitted that the High Court was clearly in error
C in rejecting the application under Order 41 Rule 27 even without applying its
mind as to the purpose for which the said document was produced and the
need for that document for .rendering a decision more satisfactory to the
conscience of the Court and without even properly understanding the scope
of Section I 00 of Code of Civil Procedure and the duty a Second Appellate
Court is called upon to perfonn. Learned counsel pointed out that even a
D finding of fact ignoring vital documents or without advertence to the relevant
evidence and without asking itself the relevant questions, was a finding that
was not binding on a Second Appellate Court under Section 100 of the Code..
Learned counsel pointed out that there was no evidence of the possession
being with the plaintiff as on the date of the suit and even the local
E Commissioner's report taken at the instance of the plaintiff showed that the
land was lying vacant. The appellant had allotted the land to another person
though it had to be resumed again because of failure of that person to fulfil
the tenns of the allotment to him. The decree for injunction in favour of the
plaintiff restraining the appellant from interfering with the so called possession
of the plaintiff was clearly a decree not supported by the necessary finding
F required under law and a relief granted, unsupported by the necessary finding
based on evidence in that behalf, clearly amounted to the lower appellate
court making a substantial error of law warranting correction by the High
C_ourt in Second Appeal. Learned counsel submitted that the relief of
declaration granted was alsQ unwarranted in the nature of the reliefs claimed
G in the plaint.

12. On behalf of the respondent-plaintiff, it was contended that the
understanding was that the electric pole and the overhead electric lines will
be got removed by the defendant-Corporation and since that was not done
till the year 1995, there was no default on the part of the plaintiff. The High
H Court was justified in not admitting fresh evidence in Second Appeal since
STATEINDUSTR!ft,.L DEVE. CORPN. "· CORKMANUFACTURINGCO. [BALASUBRAMANYAN,J.J 529

the defendant had the opportunity to produce the same before the trial court. A
r.w' . Learned counsel also submitted that the finding of possession was a finding
of fact and the High Court was justified in not interfering with the same.
Learned counsel submitted that there is no reason to interfere with the decree
passed in the case.

13. The plaintiff had come forward with a dubious case regarding the B
order of resumption of the plot· in question. There was clearly a default on
the part of the plaintiff in complying with the requirement of putting up an
industry in the plot and starting commercial production within two years of
...,... allotment. The excuse put forward by the plaintiff for not doing anything in
the plot was the existence of a electric pole and overhead electric wires, which
stood in the way of the construction. It was the further case of the plaintiff
c
that it was for the defendant - Corporation to have got them removed while
delivering possession of the plot. We find from the written instrument of
allotment, that there was no such stipulation therein. Having accepted the
allotment on its basis and taken possession of the plot, it is not open to the
plaintiff to raise a contention based on some other subsequent understanding D
between the plaintiff and some of the officers of the defendant or outside the
--(
agreement. In fact, in the letter PW4/16, when such a case if true, should have
been put forward, such a case is not put forward. There is also no evidence
of any subsequent agreement in that regard. Merely because the officers of
the appellant were induced to write letters regarding removal of the pole long
after the resumption does not establish any such condition of allotment.
E

14. The plaintiffs plea that it was not aware of the order of resumption
is belied by the letters marked on its side through PW4 and the admission
of PW6. These letters clearly show that the plaintiff was given notice of the
resumption and was informed that if he did not comply with the requirement F
and sent satisfactory reply, the land will be resumed without any further
notice within the time stipulated therein. Thus obviously, adequate notice.and
adequate opportunity was given to the plaintiff before the order ofresumption
was passed. The non-examination of Om Prakash Saharan was fatal to the
case of the plaintiff under the circumstances. The courts below acted perversely
in entering a finding that the order of resumption was illegal and was not G
binding on the plaintiff. I find that the courts below have not adverted to the
relevant materials available. Moreover, it is seen that P.W.6, who is examined
~ on behalf of the plaintiff came into the picture only in the year 1996 and was
not a competent witness to speak about anything that transpired in the year
1991 and that the original allottee Om Parkash Saharan had not even come H
530 SUPREME COURT REPORTS [2007] 9 S.C.R.

A forward to give evidence on behalf of the plaintiff. It was a clear case for
drawing an adverse inference against the plaintiff for non examination of Om
'-=::
Parkash Saharan. These vital aspects have been ignored by the trial court and
by the first appellate court when they purported to find that the order of
cancellation was not binding on the plaintiff. I am of the view t~at a finding
ignoring legal evidence available in the case and ignoring the inferences to
B be drawn from the circumstances established, is a finding that can only be
described as perverse and such a finding is not binding on a Second Appellate
Court under Section 100 of the Code. In fac~, it compels interference by the
Second Appellate Court. The High Court has unfortunately not adverted to
anything relevant and was incorrect in thinking that the findings of fact are "":
c not liable to be interfered with in the case on hand. At least, it should have
seen that parole evidence to alter the terms of a written instrument was not
permissible and the fact that the courts below had relied on such evidence
justified interference by the High Court in Second Appeal.
)

15. Same is the position regarding the finding on possession. The
D correspondence with the Electricity Board does not establish that the plaintiff
continued to be in possession notwithstanding its default and the order of
resumption with notice to the plaintiff. The evidence of P. W. 6 is not evidence
at all of possession of the plaintiff as on the date of the suit or of possession >
subsequent to 1991. There is no evidence to show that the plaintiff Om
Parkash Saharan, the allottee continued in possession until the power of
E attorney was executed in favour of P.W. 6. The suggestion to P.W. 6 that he
was aware of the resumption and re-allotment to another entity when he filed
the suit, is a justifiable suggestion on the facts of this case. The finding on
possession is also found to be based on no legal evidence and consequently
infirm and liable to be interfered with by this Court as it should have been
F interfered with by the Second Appellate Court. -"(.

16. I am also of the view that the Second Appellate Court was clearly
in error in refusing to admit in evidence the notice sent on behalf of the
plaintiff by its advocate to the defendant. It must be noticed that not even
an objection was filed on behalf of the plaintiff to the application under Order
G 41 Rule 27 of the Code denying the issue of such a notice. There was no
denial of the status of the counsel who had issued the notice on behalf of
the plaintiff. There is a presumption that when an Advocate sends a notice
on behalf of a client, the notice is sent by him on instructions from his client.
~
The plaintiff had no case before the High Court that it had not instructed the
concerned counsel to send such a notice. After all, the purpose for which the
H
STATEINDUSTRIALDEVE. CORPN. v. CORKMANUFACTURINGCO.[BALASUBRAMANYAN,J.J53;1

notice was produced was only to show that the plaintiff was aware of the A
resumption made in the year I99I and the specific acknowledgement of
receipt of the concerned letters in that behalf. Even otherwise, the letters
produced at the trial do indicate that the plaintiff was aware of the resumption
of the plot. Therefore, this was a case where the document produced under
Order 4I Rule 27 of the Code was required to enable the High Court to
pronounce a judgment more satisfactory to its conscience constituting other B
sufficient cause within the meaning of Order 4 I Rule 27 of the Code for
production of additional evidence. The authenticity of the notice had not

- been questioned by filing an objection and the High Court was therefore jn
error in thinking that it was not a document which could be straight away
accepted. C
I 7. Thus, on the whole, I am satisfied that the plaintiff had not made
out any case for relief in the present suit. The judgments of the courts below
therefore call for interference. I am satisfied that the appeal deserves to be
allowed. If the decree now passed is not set aside, I apprehend that I would
be failing in my duty exercisingjurisdiction under Article 136 of the Constitution D
of'India. After all, the jurisdiction of this Court is a corrective jurisdiction and
not a restricted one.

18. The appeal is therefore allowed. The judgments and decrees of the
courts below are set aside and the suit filed by the plaintiff is dismissed with
costs throughout. E
I9. During the course of the hearing, the defendant -- appellant offered
that the plot could be allotted afresh to the plaintiff, ifthe plaintiff was willing
to pay the price at the rate of Rs.13,000/- per square meter which is the current
rate. The plaintiff was not willing to pay that price. But learned counsel for F
the plaintiff contended that the plaintiff had, obviously subsequent to the
decreeing of the suit, had put up a construction in the property. It is obviQus
that on the date of suit, there was no construction. The Local Commission¢r's
report establishes that and the evidence of P.W. 6 also indicates that. In that
situation, taking note of the circumstances, I think it proper to give the
plaintiff an opportunity to have the land allotted to it afresh, on its paying G
a price for the plot at the rate of Rs. I 0,000/- per square meter. In other words,
if the plaintiff - respondent pays to the defendant - appellant, the price of the
·plot at Rs. I0,000/- per square meter within four months from today, there will
be a fresh allotment of the plot by the defendant to the plaintiff. While
calculating the amount, the plaintiff will be entitled to adjust any sum that H
532 SUPREME COURT REPORTS [2007) 9 S.C.R. ·

A might have been paid towards the allotment of the plot origirially made in the
year 1987 and it need only pay the balance ,amount. In case, the price at the
rate of Rs. I 0,000/- per square meter is not paid by the plaintiff to the defendant
...
within a period of four months as stipulated above, the defendant would
forthwith take physical possession of the land and report that fact to the trial
court by way of the.affidavit and deal with the plot in accordance with law.
B
20. Before leaving this case, I think it necessary to issue a direction and

-
to make an observation. The direction is to the appellant to initiate action
against those officers who were dealing with the cancellation of the allotment
and taking possession of the property, and more particularly those who .were
c in charge of the litigation and _who failed to produce vital documents including
the notice issued on behalf of the plaintiff that was sought to be produced
in Second Appeal. It is absolutely necessary to take such action, in the
interests of the appellant, the citizens and the State since it should not be
forgo.tten that the appellant is a trustee of public·property and is expected to
deal with it as a trustee with all care and caution. The second is to exhort the
D trial courts, the first appellate courts and the second appellate courts in the
State to show better application of mind while deciding a !is keeping in mind
that what they are performing is a divine function that is -onerous and at the JI"
same time challenging. I. am making these observations regarding the courts
in the concerned State since for the last three years I have been. noticing with
regret the lack of application in many a case that had come before this Court.
E
ORDER

In view of the difference of opinion between us, let this matter be ·placed
before Hon'ble the Chief Justice of India for plaeing the matter before an
aRpropriate larger Bench.
F I -'-'{'

RP. Referred the matter to the larger Bene;h.

..J

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