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P.V. Subba Raja Vs. S.S. Narayana Raja and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial;Civil
CourtChennai High Court
Decided On
Case NumberSecond Appeal No. 867 of 1953 and C.M.P. No. 3055 of 1954
Judge
Reported inAIR1954Mad1074
ActsContract Act, 1872 - Sections 23; Evidence Act, 1872 - Sections 101 to 103; Code of Civil Procedure (CPC) , 1908 - Sections 100 and 103 - Order 41, Rule 27 - Order 42, Rule 1
AppellantP.V. Subba Raja
RespondentS.S. Narayana Raja and ors.
Appellant AdvocateT.M. Krishnaswami Iyer and ;R. Desikan, Advs.
Respondent AdvocateR. Kesawa Iyengar and ;K. Thirumalai, Advs.
DispositionAppeal dismissed
Cases ReferredVaithinatha Pillai v. Kuppu Thevar
Excerpt:
civil - dissolution - section 23 of contract act, 1872, sections 101 to 103 of evidence act, 1872, sections 100 and 103 and order 41 rule 27 and order 42 rule 1 of civil procedure code, 1908 - suit for dissolution of partnership - dissolution opposed on ground of illegal partnership - illegal partnership could not be proved in absence of licence - original licence adduced in second appeal as evidence - additional evidence cannot be admitted in second appeal - suit for dissolution allowed. - .....a finding cannot in any view be urged to be a finding on a point of law but is purely a finding of fact, the fact of the terms of the licence, and if it is not competent to a second appellate court to decide on an issue of fact or give a finding except on the evidence on record, it goes without saying that the second appellate court cannot admit evidence and give its own decision on a question of fact. apart from the decisions cited, the provisions of section 103 are sufficiently clear to exclude the operation of order 41, rule 27 and their applicability to appeals filed under order 42, c. p. c. it is not every provision in order 41 that could be said to automatically apply to a proceeding in second appeal by virtue of order 42, rule 1 but only such provisions as may reasonably be.....
Judgment:

Krishnaswami Nayudu, J.

1. This appeal arises out of a suit for dissolution of partnership and for taking accounts of the partnership.

The partnership was run under the style of P. V. Suppa Raja and Co. at Srivilliputtur for the purpose of procurement of foodgrains as Government's whole-sale agents in Malli, Nathampatti and Watrap firkas of Srivilliputtur talut and for importing foodgrains into Srivilliputtur taluk and for importing foodgrains toto Srivilliputtur as Government's recognised quota holders and for running relief shop. The partners of the business were the plaintiffs and the first defendant and the partnership agreement is dated 7-5-1947. The suit was resisted by the first defendant mainly on the ground that the partnership in question is prohibited under law and being opposed to public policy and hence the suit for dissolution of partnership and for taking of accounts was not maintainable. This contention of the first defendant was not accepted by both the lower Courts and a decree for dissolution was passed by the learned District Munsif of Srivilliputtur and was confirmed in appeal by the Subordinate Judge of Ramanathapuram.

The defence being that the partnership was prohibited by the Madras Foodgrains Control Order and was hit by Section 23 of the Indian Contract Act, both the lower Courts were of opinion that prima facie the contention of the defendant was entitled to consideration; but as the licence which was issued admittedly to the first defendant was not produced, and in the absence of the licence the Court could not properly adjudicate on the question of the illegality of the partnership and thus (sic.) rejected the plea of illegality.

2. In the second appeal, where the first defendant is the appellant, he filed an application C. M. P. No. 3055 Of 1954, purporting to be under Order 41, Rule 27, Civil P. C., for leave to receive the original licence as and by way of additional evidence in second appeal. In the affidavit in support of that petition, the first defendant states that since it was admitted that the licence stood in his name only, the first defendant did not take any steps' to' produce the licence in the trial Court, that in the appellate Court a licence from the rationing authorities was filed but the same was not received hi evidence, that he has been able to search for the original licence and secure the same, that the delay or the failure to produce the licence at an early stage was not due to any want of bona fides, and being a public document its genuineness cannot be impeached and that as the document is absolutely essential for the determination of the second appeal, it was necessary that the same should be received as and by way of additional evidence here.

This application is opposed by the respondents the other partners, their main contention being that there is no jurisdiction to admit additional evidence in second appeal and that therefore the petition is incompetent. In the lower appellate Court an authorisation issued under the Madras Rationing Order was sought to be adduced as additional evidence, but the lower Court refused to admit the document both on the ground that it is not a licence under the Madras Foodgrains Control Order but a different document, and on the more important ground, namely, that no substantial cause was shown why the document was not produced at the trial and the appellate Court did not consider that the document was necessary to enable the Court to pronounce its judgment. The lower appellate Court was therefore left without any material as the trial Court to consider the correctness of the contention raised on behalf of the defence as to the illegality of the partnership, and following the decision in --'Vazhmuni Mudali v. Nathamuni Mudall' : AIR1930Mad361 , a judgment of Ananthakrishna Aiyar J., upheld the trial Court's decision and confirmed the decree for dissolution and for accounts.

The facts in that case in so far as the question of the illegality of the partnership is concerned are similar though they did not arise under the Madras Foodgrains Control Order, but under a similar enactment the Abkari Act. The licence was not produced in the case also. Ananthakrishna Aiyar J. observed:

'It goes without saying that the production of the licence granted to the first defendant is essential to enable the Court to properly adjudicate on the question of illegality of the partnership raised by the first defendant.'

Then the learned Judge observed further:

'A partnership is prima facie legal, unless it is proved that the object of the same was illegal or that the object of the partnership necessarilyinvolved some thing illegal or contrary to public policy (Section 23 of the Indian Contract Act). The defendant who alleged the illegality has not succeeded in establishing the necessary facts which would enable the Court to come to that conclusion. The first defendant not having produced the necessary materials before the Court, I am unable to say that the learned District Judge was wrong in his decision oh this point.'

3. I am in complete agreement with the observations of the learned Judge in : AIR1930Mad361 that the case of the defendant being that the partnership is illegal--otherwise the partnership prima facie being legal--it is for him to establish it by such evidence as he could place before the Court, especially as to the terms of the licence under which the business was carried on to enable the Court to understand the real implications of the licence and decide whether by reason of the terms of the licence the partnership offends Section 23 of the Contract Act. The licence is therefore a very important document and it was necessary, for first defendant to have produced it at the earliest possible time at the trial. This he having failed to do it is now for consideration whether that document could be admitted and received in evidence in second appeal.

4. The provision in the Civil Proceduce Code regarding additional evidence in an appellate Court is Order 41, Rule 27. Order 41 deals with the rules governing the proceedings in appeals from original decrees. Order 42 deals with appeals from appellate decrees, i.e., second appeals to the High Court.Order 42, Rule 1 says,

'The rule of Order 41 and Order 41-A shall apply so far as may be, to appeals to the High Court of Judicature at Madras from appellate decrees with the modifications contained in this Order.'

The other rules in Order 42 relate to the form to be observed in the presentation of second appeals, as to the number of copies of the judgment and decree that have to be filed, & do not concern with the question of any admission of additional evidence in second appeals. By virtue of Order 42, Rule 1 the provisions of Order 41 including Rule 27 may be held to be applicable to the second appeals; but it has to be noted that Order 41 and Order 41-A should only as far as may, be applied to appeals to the High Court from appellate decrees. The main provisions under which second appeals are filed are Sections 100 to 103, C. P. C. Section 100 which gives the scope and extent of jurisdiction of the Court in the matter of second appeals says that

'an appeal shall lie to the High Court, from every decree passed in appeal by any Court subordinate to a High Court, on any of the following grounds:

(a) the decision being contrary to law or to some usage having the force of law;

(b) the decision having failed to determine some material issue of Jaw or usage having the force of law;

(c) a substantial error or defect in the procedure provided by this code or by any other law for the time being in force, which may possibly have produced error or defect in the decision of the case upon the merits....'

5. Section 101 makes it clear that no second appeal shall lie except on the grounds mentioned in Section 100. Ordinarily the jurisdiction to determine an issue of fact is not vested in a Court hearing second appeals. But under Section 103 an exception is made. Under Section 103,

'In any second appeal, the High Court may, if the evidence on the record is sufficient, determine any issue of fact necessary for the disposal of the appeal which has not been determined by the lower appellate Court or which has been wrongly determined by such Court by reason of any illegality, omission, error or defect such as is referred to in Sub-section (1) of Section 100.'

6. The circumstances under which a second appellate Court may determine an issue of fact are therefore limited to the conditions arising under Section 103 which makes the position clear that so far as evidence is concerned, on which an issue of fact may be determined the evidence on record must be sufficient to enable the High Court to decide the question of fact. That necessarily implies that it should not be ordinarily competent to the High Court in second appeal to consider any other evidence excepting the evidence on record.

In so far as our High Court is concerned, theFull Bench in -- 'Secretary of State v. Manjeshwar Krishnaya', 31 Mad 415 (B), lays down thata party cannot, on second appeal, let in evidencewhich was not placed before the lower appellateCourt. The order of the Full Bench is howevershort and is in the following terms:

'Objection has been taken to the admissibilityof fresh evidence in second appeal, and wehave been referred to -- 'Ramchandra v.Krishnaji', 28 Bom 4 (C), and -- 'Raru Kuttiv. Mamad', 18 Mad 480 (D). We must upholdthe objection and dismiss the petition.'

In '18 Mad 480 (D)', relied upon by the Pull Bench a review of the judgment in second appeal was sought for on the ground that after the judgment was pronounced new and Important documentary evidence from which it would appear that the properties in question were not under attachment at the date of the mortgage was discovered. It was held that the application for review could not be entertained for the reason that the ground relied upon could not be successfully relied upon on a second appeal;

In the course of the judgment learned Judges observed:

'But in this case the second appeal has been heard and decided, and we can no longer permit the appeal to be withdrawn. Nor could we in second appeal admit evidence of fact which was not before the lower appellate Court, whether it would be still open to the petitioner now to move lower appellate Court to admit the new evidence is not a point which it is necessary for us here to decide.'

In the other case '28 Bom 4 (C)', it was held that when on coming to the High Court in second appeal it is discovered that there is evidence which ought to have been placed before the lower Courts, the proper practice to pursue is to allow the second appeal to be withdrawn in order that a review petition may be presented to the lower appellate Court.

The decision of the Madras High Court in '18 Mad 480 (D)', does not appear to have been placed before the learned Judges in '28 Bom 4 (C)', and Jenkins C. J. observed 'at p. 7' as follows:

'Now I am clear that the case does not fall within Section 568, C. P. C., (corresponding to Order 41, Rule 27 of the present Code) even if it can be contended that Clause (b) of that section could apply in second appeal. So we have to see whether there is anything else that we can do. We have been referred to a decision of an appellate Bench of this Court in which evidence no doubt was admitted in second appeal. But the ground on which that course was taken is not sufficiently apparent to allow us to accept that case as a guide to us in this appeal. We think there can be no doubt as to the proper practice to pursue when on coming to this Court on second appeal it is discovered that there is evidence which ought to have been placed before the lower Court. It is indicated as far back as 1872 in the case of -- 'Nanabhai Vallabhadas v. Nathabhai Haribhai', 9 . Bom, H. C. R. 89 (E), where Sir Michael Westrop points out that the practice is to allow the second appeal to be withdrawn in order that a review petition may be presented to the lower appellate Court. I think it has always been recognised that in that practice the Court has strained its power to its utmost limits, and I do not think that we would be justified in going beyond that.'

7. In -- 'Shamsuddin Biswas v. Molannessa Bibi', : AIR1926Cal941 (F), a request to admit additional evidence under Order 41, Rule 27 was negatived by a Bench of the Calcutta High Court and it was held that it cannot be said that it required any document to be produced or any witness to be examined to enable it to pronounce Judgment on a question of fact.

At p. 943 the learned Judge Ghose J. further observed as follows:

'It seems to me very difficult to bring this application within the provisions of Rule 27, Order 41, C. P. C., because in the first Instance it does not come within Clause (a) of Sub-rule 1, nor does it come within Clause (b). As we sitting here cannot be said to require any document to be produced or any witness to be examined to enable us to pronounce judgment on a question of fact or of any other substantial cause to enable us to pronounce judgment on a question of fact, if we are to accept this document we should have to reverse the finding of fact arrived at by the. Court of appeal below and to send back the case for retrial after taking into consideration the evidence which we allow to be produced in this Court. But we can set aside a judgment in second appeal only on the ground set forth in Section 100, C. P. C. The findings of fact which had been arrived at by the lower appellate Court are not tainted by any of the defects mentioned in Section 100 in which case only we can interfere in second appeal. It seems to me that we are therefore not in a position to accept fresh evidence in second appeal with regard to a question of fact under the circumstances mentioned by the appellant.'

But a later decision of a single Judge of the Calcutta High Court before whom the Bench decision in -- ' : AIR1926Cal941 (F)', was not placed appears to take a different view.

Charkravartti J. in -- 'Sashi Kanta v. Jagannath Namadas', AIR 1946 Cal 518 (G), in considering the question as to whether a second appellate Court had jurisdiction to entertain an application under Order 41, R. 27 observed as follows:

'In my view I have such jurisdiction. The ground upon which the lower appellate Court threw out the application for review has already been stated. On the rejection of the application, the decree as passed by that Court remained as it was and when that decree came to be dealt with by this Court in second anneal it is impossible to say that an application for admission of additional evidence would not lie as a matter of law because such an application made in the form of an application for review, had been rejected by the lower appellate Court. The question before me simply is whether the appellant has been able to bring himself within the limits of Order 41, Rule 27, C. P. Code.'

With respect to the learned Judge I find myself unable to subscribe to the view that In the circumstances of that case an application for additional evidence would he as a matter of law. The implications of Section 100 and Section 103, C. P. C., do not appear to have been considered.

The Allahabad High Court in -- 'Ranglal v. Lilawati' : AIR1929All375 , followed the decision in -- ' : AIR1926Cal941 (F).

A Bench of the Lahore High Court in -- 'Walt Muhammad v. Md. Bakhsh', AIR 1924 Lah 444 (I) held that Rule 27 of Order 41, C. P. C., does not authorise an appellate Court to allow the production of additional evidence in second appeal. The view of Sadasiva Aiyar J. in -- 'Raman Menon v. Mammali' AIR 1918 Mad 1159 (J) was that it was not competent to the High Court to admit fresh evidence as to facts in second appeal and the proper course where a party thinks that any fresh evidence which is discovered after the decision of the appellate Court would have been of assistance to him if it had been considered at the original trial or in the appeal, is for him to withdraw the second appeal and apply for review of the judgment in the lower appellate Court. The view taken in -- '28 Bom 4 (C) is endorsed by the learned Judge in that decision.

In -- 'Vaithinatha Pillai v. Kuppu Thevar', AIR 1919 Mad 1166 (K), a Full Bench of the High Court by a majority held that where a lower appellate Court refused to admit a certain material document as additional evidence in the appeal under Order 41, Rule 37, C. P. C., the High Court cannot interfere in second appeal and hold that such additional evidence ought to have been admitted by the lower appellate Court. When the jurisdiction of the Court in second appeal cannot even extend to interference with the exercise of discretion of the lower appellate Court as regards the admission of evidence or otherwise, a 'fortiori' a Court in second appeal cannot be held to be competent to admit additional evidence to decide a question of fact. Though the Full Bench in -- 'AIR 1919 Mad 1166 (K)' is not a decision directly applicable to the question raised in this appeal, it shows the limited extent and scope of the powers of the second appellate Court in regard to decision on matters affecting questions of fact.

8. There can Be no doubt that in this case the purpose for which the appellant seeks to have this document, the licence, admitted, is to enable the Court to give a finding as to what the exact terms of the licence are. Such a finding cannot in any view be urged to be a finding on a point of law but is purely a finding of fact, the fact of the terms of the licence, and if it is not competent to a second appellate Court to decide on an issue of fact or give a finding except on the evidence on record, it goes without saying that the second appellate Court cannot admit evidence and give its own decision on a question of fact. Apart from the decisions cited, the provisions of Section 103 are sufficiently clear to exclude the operation of Order 41, Rule 27 and their applicability to appeals filed under Order 42, C. P. C. It is not every provision in Order 41 that could be said to automatically apply to a proceeding in second appeal by virtue of Order 42, Rule 1 but only such provisions as may reasonably be applied having in view the provisions of Sections 100 and 103, and the limited scope of the jurisdiction of the second appellate Court in matters affecting questions of fact. The proper view to be taken therefore is that It is not competent to admit additional evidence in second appeal. That is the view which has been consistently held by almost all the High Courts in India and that view is in accord with the provisions of the Code governing second appeals.

9. It is however urged by Mr. T. M. Krishna-swami Aiyar, learned counsel for the appellant, that the Pull Bench decision in -- '31 Mad 415 (B)' and -- 'AIR 1919 Mad 1166 (K)' Were decisions prior to the amendment of Rule 27 of Order 41 by the amendment carried out in 1941 by the introduction of Clause (b) and that the amendment confers larger powers in Courts in the exercise of their discretion and also enable the parties to adduce additional evidence under circumstances which were not open prior to the amendment. Clause (b) which is added to Rule 27, Order 41 reads:

'The party seeking to adduce additional evidence satisfies the appellate Court that such evidence notwithstanding the exercise of due diligence was not within his knowledge or could not be produced by him at or before the time when the decree under appeal was passed.'

There can be no doubt that a party has greater chances of approaching the appellate Court for admission of additional evidence by reason of the amendment; but that would not, in my view, change the extent and scope of or enlarge the jurisdiction vested in a second appellate Court under the provisions of Sections 100 to 103 and Order 42 which however are not varied or amended so as to enlarge the powers of the second appellate Court. The amendment of 1941 of Rule 27 does not in any way affect the position of the second appellate Court in regard to admission of additional evidence. The application therefore will stand dismissed.

10. On the merits I am unable to find any ground for differing from the view taken by the lower appellate Court, which I have adverted to already. The appeal fails and is dismissed with costs. No leave.


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