2011 (3) TMI 1803 - SC - Indian Laws

Applications for reopening/recalling of evidence - Powers of the trial court or the High court for exercise of discretion u/s 151 or Order 18 Rule 17 of the Code - when the arguments were in progress, the appellant filed two applications. The first application was filed u/s 151 of the Code with a prayer to reopen the evidence for the purpose of further cross-examination of Plaintiff (PW1) and the attesting witness (PW2). second application was filed under O18 R17 of the Code for recalling PWs.1 and 2 for further cross examination. it was necessary to reopen the evidence and further cross-examine PW1 and PW2 with reference to the said admissions (electronically recorded evidence) to demonstrate that the agreement of sale was only a security for the loan. It is stated that the Compact Disc containing the recording of the said conversations was produced along with the said applications. The respondent resisted the said applications. The trial court held that as the evidence of both parties was concluded and the arguments had also been heard in part, the applications were intended only to delay the matter. Therefore, dismissed and HC on the same reasons given by trial court dismissed the said application. The said order is challenged in these appeals by special leave. HELD THAT - The appellant - defendant has taken a consistent stand in his reply notice, written statement and evidence that the agreement of sale was executed to secure a loan of ₹ 150,000, as the respondent insisted upon execution and registration of such agreement. If after the completion of recording of evidence, PW1 and PW2 had admitted during conversations that the amount paid was not advance towards sale price, but only a loan and the agreement of sale was obtained to secure the loan, that would be material evidence which came into existence subsequent to the recording of the depositions, having a bearing on the decision and will also clarify the evidence already led on the issues. According to the appellant, the said evidence came into existence only on 27.10.2008 and 31.10.2008, and he prepared the applications and filed them at the earliest, that is on 11.11.2008. As defendant could not have produced this material earlier and if the said evidence, if found valid and admissible, would assist the court to consider the evidence in the correct perspective or to render justice, it was a fit case for exercising the discretion u/s 151 of the Code. In view of the above, these appeals are allowed in part. The orders of the High Court and Trial Court dismissing u/s 151 of the Code are set aside. The orders are affirmed in regard to the dismissal under O18 R17 of the Code.

Summary

Issues Involved:
1. Suit for specific performance of a sale agreement.
2. Allegation of loan disguised as a sale agreement.
3. Applications for reopening evidence and recalling witnesses.
4. Admissibility and relevance of electronically recorded evidence.
5. Application of Section 151 and Order 18 Rule 17 of the Code of Civil Procedure.

Issue-wise Detailed Analysis:

1. Suit for Specific Performance of a Sale Agreement:
The respondent filed a suit for specific performance of a registered sale agreement dated 20.12.2006, claiming that the appellant agreed to sell the suit property for Rs. 240,000/- and that Rs. 160,000/- was paid as an advance. The respondent alleged readiness and willingness to complete the sale but claimed the appellant failed to execute the sale deed on the agreed date.

2. Allegation of Loan Disguised as a Sale Agreement:
The appellant resisted the suit, alleging that the agreement was executed as security for a loan of Rs. 150,000/- advanced by the respondent, who was a money lender. The appellant claimed the documents were signed under the understanding that they were security for the loan repayment, and thus, the respondent was not entitled to specific performance.

3. Applications for Reopening Evidence and Recalling Witnesses:
During the trial, the appellant filed applications (IA No.216/2009 and IA No.217/2009) to reopen evidence and recall witnesses for further cross-examination based on new electronically recorded evidence. The trial court dismissed these applications, viewing them as tactics to delay proceedings, and the High Court upheld this decision.

4. Admissibility and Relevance of Electronically Recorded Evidence:
The Supreme Court noted that electronically recorded conversations are admissible under the amended definition of "evidence" in Section 3 of the Evidence Act, 1872, and Section 2(t) of the Information Technology Act, 2000. The Court referenced the case of R.M Malkani vs. State of Maharashtra, which established that such evidence is admissible if relevant, the voice is identified, and the recording's accuracy is proved.

5. Application of Section 151 and Order 18 Rule 17 of the Code of Civil Procedure:
Order 18 Rule 17 allows the court to recall witnesses for clarification, not for filling omissions in evidence. Section 151 recognizes the court's inherent power to make necessary orders to secure justice and prevent abuse of process. The Supreme Court emphasized that Section 151 should be used sparingly and only when necessary, and not to routinely reopen evidence or recall witnesses.

The Supreme Court found that the trial court and High Court did not consider whether the new evidence could clarify existing evidence or lead to a just adjudication. The appellant's consistent claim that the agreement was a loan security and the new evidence's potential relevance warranted reconsideration under Section 151.

Conclusion:
The Supreme Court set aside the High Court and trial court's orders dismissing IA No.216/2009 under Section 151, directing the trial court to reconsider the application in accordance with the law. The dismissal of IA No.217/2009 under Order 18 Rule 17 was affirmed. The trial court must now assess the necessity and manner of admitting the new evidence.