Supreme Court emphasises on Appellate Courts’ limited scope in remanding back the matter for a de novo trial

Supreme Court: Exercising their appellate jurisdiction, the division bench of Dinesh Maheshwari* and Sudhanshu Dhulia J.J., set aside the order passed by the High Court and restored the appeal for consideration by stating that the High Court had passed an ipse dixit order and had erred in remanding the matter for trial de novo without recording any finding.

Factual Matrix

In the matter at hand, the appeal was granted against the common judgement passed by the Kerela High Court whereby the appeal filed by the respondent 1 against dismissal of her suit for cancellation of a sale deed and for prohibitory injunction was disposed of with directions to the Trial Court to decide the suit afresh after de novo trial, essentially with the observations that the evidence necessary for proper determination of the suit had not been brought on record.

It was contended that the subject property was held in joint possession between the respondents and their mother whereby a partnership deed was executed for running the cinema theatre. When respondent 2 enquired about the accounts of cinema theatre from respondent 5, she was informed that her share in the said property was already sold. Upon inspecting the documents existing the Sub-Registrar’s office, she realised that she was made to sign on a sale deed instead on a security document as mentioned to her earlier. Further, no consideration was received by her and hence, submitted that the said sale deed was void and non-est.

Respondent 1 had filed another civil suit for prohibitory injunction wherein the Trial Court vide its common judgment rejected the petition with the findings inter alia, that the circumstances placed on record did not probabilise the case that by defrauding her, the husbands of her sisters executed the sale document while making her believe that it was a security document for getting new films.

The Trial Court had dismissed both the civil suits by stating that respondent 1 had not taken steps to examine the Sub-Registrar who had registered the sale deed whereupon she had put her signatures on being allegedly made to believe it to be a security document. She had also failed to discharge the burden of proof in terms of Section 103 of the Indian Evidence Act, 1872 (‘Evidence Act’).

Further, the other two civil suits filed by respondent 2-5 (sisters of respondent 1), seeking partition of the cinema theatre and the subject land on one hand and shopping complex on the other were decreed by the Trial Court.

The four decisions of the Trial Court were challenged before the High Court wherein it was observed that merely because separate properties of the partners were used for the business of the partnership, it would not entail a presumption that the properties were brought in as partnership assets. While agreeing with the Trial Court it held that the properties obtained by the sisters under the partition deed continued to be held as co-ownership properties even after execution of the partnership deed.

The High Court affirmed the decree of the Trial Court wherein respondent 1 had claimed prohibitory injunction in the capacity of a partner of the firm against other partners, on the ground that it was an unregistered partnership, therefore, the suit was barred under Section 69(1) of the Indian Partnership Act, 1932.

The High Court had stated that the necessary evidence for proper determination of the suit had not been brought on record and that the evidence already on record were insufficient to arrive at a proper finding in favour of or against the sale deed.

For these observations, the High Court had considered it appropriate that the parties be given an opportunity to adduce further evidence and the matter be considered afresh.

Court Analysis

The Supreme Court stated that the High Court did not advert to the findings of the Trial Court and did not specify as to how the findings recorded by the Trial Court were unsustainable or unjustified.

The Bench noticed that the High Court had narrated a few circumstances leaning in favour of respondent 1 and then a few other circumstances which favour the genuineness of the sale in question and thereafter, observed that the evidence necessary for a proper determination of the suit had not been brought on record and that the evidence on record were insufficient to arrive at a proper finding in favour or against the sale deed in question. Even the material witnesses were not examined, and no evidence was brought in with regard to passing of consideration.

The Bench observed that the High Court was unable to arrive at a conclusion on the basis of the material on record. However, fact of the matter remained that on the basis of the same material on record, the Trial Court had indeed arrived at a definite conclusion that respondent 1 had failed to establish her case and hence, the suit was liable to be dismissed.

The Bench stated that the impugned judgement had a significant omission of the provision empowering the Appellate Court to make an order of remand, thus, it was difficult to find any justification for remand ordered by the High Court. Further the scope of remand in terms of Rule 23 of Order XLI Code of Civil Procedure, 1908 (‘CPC’) was extremely limited and that provision was inapplicable because the suit in question had not been disposed of on a preliminary point. The remand in the present case could only be correlated with Rule 23-A of Order XLI CPC and for its applicability, the necessary requirements were that “the decree is reversed in appeal and a re-trial is considered necessary”, thus, the remand in the present case was not justified.

The Court, therefore, relied upon Municipal Corporation, Hyderabad v. Sunder Singh, (2008) 8 SCC 485 to say that the present order of remand had been passed only on ipse dixit of High Court sans any reason or justification.

The Court stated that the Trial Court had indeed returned its findings on the basis of evidence on record. Whether those findings were sustainable was not the subject matter of the present appeal but merely because the High Court could not reach to a conclusion on preponderance of probabilities, the evidence on record could not have been treated as insufficient so as to not pronounce the judgment in terms of Rule 24 of Order XLI CPC.

Without commenting on the merits of the case, the Court stated that in regard to the want of any particular evidence, if the Court found any particular evidence directly within the control and possession of a party having not been produced, the necessary consequences like those specified in illustration (g) to Section 114 of the Evidence Act may follow but, merely because a particular evidence which ought to have been adduced but had not been adduced, the Appellate Court cannot adopt the soft course of remanding the matter.

The above observations of the Court were only to indicate that the remand of the suit for trial de novo could not be justified in the present case from any standpoint.

With this the bench stated that the High Court had erred in remanding the matter for trial de novo without recording any finding that respondent 1 was prevented from examining herself or from adducing any other evidence as also without explaining as to on what ground the decree was being reversed. Accordingly, stated that the appeal had succeeded in the present matter and the impugned order of the High Court was set aside, restoring the appeal for reconsideration by the High Court, in accordance with law.

[Sirajudheen v Zeenath, 2023 SCC OnLine SC 196, decided on 27-02-2023]

Judgment authored by Justice Dinesh Maheshwari.

Know Thy Judge | Justice Dinesh Maheshwari

Advocates who appeared in this case:

For the appellant- SRM Law Associates;

For the respondent- Advocate James P. Thomas and Advocate Abid Ali Beeran.

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