:1: IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE JURISDICTION WRIT WRIT WRIT PETITION NO.3725 OF 2008 PETITION NO.3725 OF 2008 PETITION NO.3725 OF 2008 Himatlal Devchand Mehta & Ors. ..Petitioners V/s Bank of Maharashtra ..Respondent Mr.Bharat Mehta i/b Prashant Kulkarni for the petitioners Mr. Kunal Bhanage for the respondent CORAM CORAM CORAM : A.A. SAYED, J. : A.A. SAYED, J. : A.A. SAYED, J. DATE DATE DATE : 2ND JULY, 2008 : 2ND JULY, 2008 : 2ND JULY, 2008 P.C. 1. Rule; rule made returnable forthwith and heard finally by consent. 2. The Appellate Bench of Small Causes Court, at Mumbai, by the impugned order dated 13th February, 2008 has rejected the Application of the petitioners seeking permission to adduce additional evidence in Appeal by producing certified copy of the registered lease deed dated 6-02-2004. Hence this petition. 3. The petitioners, who are the owners of the suit premises, had filed the suit against the respondent-bank u/s. 41 of the Presidency Small :2: Causes Court Act, 1982 for recovery of possession of the suit premises and mesne profits. As stated in para 2 of the petitioners’ Application during the pendency of the suit, vacant possession of the suit premises was handed over by the respondent-bank to the petitioners on 1-06-2004 and the only issue for determination which remained in the suit was in respect of mesne profits. The Court ultimately disposed of the suit by a judgment and order dated 30-04-2005 directing the respondent-bank to pay to the petitioners mesne profits @ Rs.36,000/- per month together with interest @ 4 % per annum from 1-04-2001 to 1-06-2004. 4. The petitioners being aggrieved by the order granting mense profits @ Rs. 36,000/- per month along with interest, filed an appeal for enhancement of the amount of mesne profits. During the pendency of this appeal the Application under Order 41 Rule 27 came to be filed by the petitioners to adduce additional evidence by producing the certified copy of registered lease deed dated 6-02-2004 executed between one Bharat Kishorkumar Zaveri as Lessor and the respondent-bank as lessee in respect of another :3: premises in close proximity to the suit premises taken on lease by the respondent-bank. 5. The case of the petitioners is that during the cross-examination of the witness on behalf of the respondent-bank in the Trial Court, it was admitted that the respondent-bank had acquired another premises on lease at a stone’s throw distance from the suit premises. However, the witness on behalf of the the respondent-bank refused to give any information regarding the consideration paid by the respondent-bank for the newly acquired leased premises. Hence, notice dated 14-09-2004 was given to the respondent-bank to produce the lease deed, but the respondent-bank refused to produce the said document on the ground that it was irrelevant. It was however, admitted by the respondent-bank’s witness in the cross-examination that there was such a lease deed in existence and he had signed the same. He also stated in his cross-examination that he was aware of the amount of lease rent which was being paid in respect of the newly acquired premises by the bank but he did not wish to disclose the same. The suit, was ultimately decreed on 3-04-2005 and the :4: respondent-bank was directed to pay the sum of Rs. 36,000/- per month as mesne profits which amount was according to the petitioners, incorrectly arrived at by the Trial Court on the basis of rent method calculated at six times that of the contractual rent taking into account the rate of inflation. It is alleged by the petitioners that the Court has wrongly rejected the valuation report of the valuer of the petitioners which valued the fair market rent at Rs.9 lacs per month. 6. The learned Counsel for the petitioners submitted that at the relevant time when the evidence of the petitioners was in progress, the petitioners were not aware about the existence of the lease deed and that it was only much later that they got knowledge of it. It is submitted that it is only after enquiry with the office of Sub-Registrar, Mumbai and during the pendency of the Appeal, the petitioners ultimately could procure certified copy of the lease deed dated 6th February, 2004 which is now required to be produced in the Appeal. The learned Counsel for the petitioners submitted that in spite of due diligence being exercised, the :5: petitioners could not procure the lease deed at the time of the trial. The learned Counsel further submitted that the comparative letting method was the best method to arrive at the correct letting value to fix the mesne profits and that the said document is vital for the determination of the issue involved in the appeal. It is further pointed out that in the instant case the lease deed in question is not that of a 3rd party, but that of the respondent-bank itself and the suit premises and the newly acquired premises by the respondent-bank are in close proximity and comparable for letting purposes.It was therefore urged that the petitioners should be allowed to produce additional evidence and produce the said certified copy of the lease deed before the Appeal Court and the impugned order be set aside. 7. The learned Counsel for the petitioners has relied upon the case of Mrutunjoy Lenka V. Gangan Mrutunjoy Lenka V. Gangan Mrutunjoy Lenka V. Gangan Kishore Kishore Kishore Swain Swain Swain, reported in AIR 1995 Orisa 71 wherein it was held that rejection of permission to adduce public documents merely on the ground that they were not produced earlier was not proper and prejudice caused to other party can be mitigated by levying :6: costs. 8. The learned Counsel for the respondent-bank on the other hand, pointing out Order 41 Rule 27 of CPC, submitted that the lease deed, copy of which is sought to be produced by the petitioners was within their knowledge and the petitioners could have procured the same, had they exercised due diligence in the matter and they ought to have produced the same in the Trial Court. It is contended that having failed to do so, the Appeal Court has rightly refused to exercise its discretion and rejected the Application of the petitioners to adduce additional evidence. The contentions on behalf of the Petitioners are denied and it is submitted that the document is not relevant and no useful purpose will be served in allowing the petitioners to produce additional evidence. In support of his contentions the learned Counsel for the respondent-bank relied upon the decisions in the case of (1) Jaipur Jaipur Jaipur Development Development Development Authority V. Kailashwati Devi, Authority V. Kailashwati Devi, Authority V. Kailashwati Devi, reported 1997 DGLS 1115, (2) N. Kamalam V. Ayyasamy, N. Kamalam V. Ayyasamy, N. Kamalam V. Ayyasamy, reported in 2001 DGLS 944, (3) Adil Jamshed Frenchman Adil Jamshed Frenchman Adil Jamshed Frenchman V. V. V. Sardar Dastur Schools Trust Sardar Dastur Schools Trust Sardar Dastur Schools Trust, reported in 2005 :7: DGLS 130 and (4) K.R.Mohan Reddy V. Net Work K.R.Mohan Reddy V. Net Work K.R.Mohan Reddy V. Net Work Incorporation, Incorporation, Incorporation, reported in 2007 DGLS 1112. reported in 2007 DGLS 1112. reported in 2007 DGLS 1112. 9. I have heard the ld. Counsel for the parties and perused the material on record. 10. At the outset it would be necessary to refer to the provisions of Section 107 and Order 41 Rule 27 of CPC which deal with production of additional evidence in the Appellate Court. Section 107 of the Code interalia enables an Appellate Court to take additional evidence or to require such other evidence to be taken and reads as under:- "Sec "Sec "Sec 107-Powers of appellate Court - 107-Powers of appellate Court - 107-Powers of appellate Court - (1) Subject to such conditions and limitations as may be prescribed, an appellate Court shall have power- (a) to determine a case finally; (b) to remand a case; (c) to frame issues and refer them for trial; (d) to take additional evidence or to require such evidence to be taken. (2) Subject as aforesaid, the appellate Court shall have the same powers and shall perform as nearly as may be the same duties as are conferred and imposed by this Code on Court of original jurisdiction in respect of suits instituted therein." :8: 11. The conditions and limitations stated in sub-section (1) above, are prescribed in Order 41 Rule 27, which provides as under: "O 41 R 27 - Production of additional evidence 41 R 27 - Production of additional evidence 41 R 27 - Production of additional evidence in in in Appellate Court- Appellate Court- Appellate Court- (1) The parties to an appeal shall not be entitled to produce additional evidence, whether oral or documentary, in the Appellate Court. But if- (a) the Court from whose decree the appeal is preferred has 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 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, 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." 12. It is to be borne in mind that in the present case what the petitioners are seeking, is production in the Appellate Court, of a certified copy of a lease deed entered into between the respondent-bank :9: and a 3rd party in respect of a premises which is in close proximity to the suit premises and which according to the petitioners would help in arriving at the true letting value and fixing the correct quantum of mesne profits in relation to the suit premises. 13. In light of what is stated in Order 41 Rule 27 (aa) which is applicable in the instant case, let us consider whether the said lease deed could have been produced by the petitioners at the time of the trial and whether the petitioners have exercised due diligence to produce the said document in the Trial Court and whether the Appeal Court was right in rejecting the Application of the petitioners for the production of additional evidence in the appeal. 14. Undisputedly the lease deed dated 6-02-04, is between the respondent-bank and 3rd party and the same is a private document and is in custody of the respondent-bank. At the time of cross-examination in the Trial Court, despite a notice for production of the lease deed, the witness on behalf of the respondent-bank refused to produce the same. The :10: witness has in fact admitted in the cross-examination that he is aware as to the quantum of monthly lease amount being paid by the respondent-bank in respect of the newly acquired premises and that he has himself executed that said lease deed. He, however refused to disclose the quantum. It was therefore obvious that the respondent-bank was interested in seeing that the document does not come before the Court and the same was being withheld. The suit was thereafter decreed on 30-04-05. It is in these circumstances, the lease deed which may prove to be a vital document and which would throw light on the valuation for the purposes of arriving at the figure of mesne profits has not come before the Trial Court, in spite of an opportunity being given and calling upon the respondent-bank to produce the document. For the respondent-bank to now say that the petitioner did not exercise due diligence is rather curious. The conduct of the respondent-bank, was rather wanting and they being a Bank performing public function were expected to act fairly in the matter. 15. It is to be noted that the issues in the suit :11: were framed on 6-02-2003 and evidence of the petitioner-plaintiff commenced on 18-02-2003 and the cross-examination of the petitioner started on 20-03-2003 and was concluded on the same day. The Architect on behalf of the petitioners was examined and he had filed affidavit of evidence on 24-03-2003 and his cross-examination began on 16-07-2003 and ultimately concluded on 27-01-2004. Thereafter the suit was adjourned to 17-02-2004 for evidence of respondent-bank. The respondent-bank thereafter vacated the suit premises on 1-06-2004. The respondent-bank’s affidavit of evidence was filed on 7-07-2004, wherein the fact of handing over the possession of the suit premises is also stated and therefore, the only issue which remained before the Trial Court was in respect of mesne profits. 16. The evidence on behalf of the petitioners, as stated, above concluded on 27-01-2004. Significantly it was only thereafter i.e. on 06-02-04 that the lease deed in question was executed. Therefore, the lease deed in question could not in any event have been within the knowledge of the petitioners in the evidence adduced on their behalf, which concluded :12: prior to the lease deed being executed. When the petitioners got knowledge about the existence of the lease deed after their evidence was over, an attempt was made by them to have the lease deed produced by the respondent-bank during their cross-examination, after giving notice to produce the same. The respondent-bank however, as stated above, refused to produce the same. Thereafter as it transpires, it was only during the pendency of the Appeal that a certified copy of the lease deed was acquired by the petitioners on making necessary inquiry and application before the Sub-Registrar of Assurances. It was in these circumstances, that the Application for production of additional evidence was made in the Appeal Court. Pertinently, no reply to the Application of the petitioners controverting the facts stated therein has been filed by the respondent-bank and the attempt to file reply at a belated stage was rejected by the Appeal Court. Considering the above, in my view, the respondent-bank cannot be heard to say that the petitioners are not entitled to produce the document in the appeal Court since they have failed to exercise due diligence in production of the said :13: document in the Trial Court. The Appeal Court, as it appears, has overlooked the above facts whilst passing the impugned order. 17. It is pertinent to note that the valuation of the monthly lease rent of the suit premises by the petitioners at Rs. 9,00,000/- p.m. was rejected by the Trial Court and the Trial Court has arrived at a valuation of Rs. 36,000/- per month towards the mesne profits on the basis of rent method, calculated at six times the rent which was being paid earlier. The Appeal, which is pending, is filed for enhancement of the quantum of lease rent and challenges the valuation at Rs. 36,000/- per month the Trial Court. In my prima facie view, it is desirable that comparable letting method, which is a better and more reliable method is adopted rather than rent method, keeping in mind the peculiar facts and circumstances of this case, where the respondent- bank has lost protection of the Rent Act. Merely because there has been some delay in filing the Application during the pendency of the Appeal ought not to have resulted in the Application of the petitioners being thrown out, particularly when the :14: Appeal is yet to be decided. Ultimately the Courts are required to do substantial justice and in the facts of this case, the additional evidence was prima-facie for the production of a vital document and would only enable the Appeal Court in pronouncing better judgment and effectually adjudicate the dispute. Undoubtedly, the respondent-bank would always have the opportunity to rebut the evidence. 18. Prima-facie, I find that the document in question is relevant and the document could not be produced in trial Court by the petitioners for good reasons. However it would ultimately be for the concerned Court to decide the relevancy and admissibility of the document in question in accordance with law after adducing evidence in the matter and all contentions in that regard are kept open. I am satisfied that conditions stated in clause (aa) of Order 41 Rule 27 for production of additional evidence are met with. It is to be noted that the document in question was a private document of the respondent-bank and was not in the custody of the petitioners. I find that the document in question would have a bearing on the fixation of :15: mesne profits which is the subject matter of challenge in the Appeal Court and the document would help in arriving at a just and meaningful decision in the matter. 19. The Petitioners’ reliance on the decision of the single Judge of the Orissa High Court in the case of Mrutunjoy Mrutunjoy Mrutunjoy Lenka Lenka Lenka (supra) is in my opinion misplaced, inasmuch as in that case the documents sought to be produced were public documents and there was no dispute about their relevancy and admissibility. 20. Coming to the cases relied upon by the respondents, it is to be noted that in the case of Jaipur Jaipur Jaipur Development Authority Development Authority Development Authority (supra), the Apex Court was dealing with the interpretation of the word - additional- in clause (aa) of Order 41 Rule 27 of CPC as the suit was decreed ex-parte and the question there was whether it was permissible to restrict clause (aa) for the benefit of only those who had adduced some evidence in the Trial Court. It was held by the Apex Court that it was not necessary that the party seeking to introduce additional evidence must have also been one who has led some evidence in :16: the trial Court. I do not see how that decision is of any help to the respondent-bank, as in the present case we are not dealing with a suit which is decreed ex-parte and both the parties had infact adduced evidence in the Trial Court. 21. In so far as the case of N.Kamalam N.Kamalam N.Kamalam (supra) is concerned, the Application for production of documents were made in the Appeal after a lapse of ten years and the Apex Court held that the provisions of Order 41 Rule 26 are not engrafted so as to authorise any lacunae or gaps in evidence to be filled up. In the present case I am satisfied that the additional evidence sought to be produced by the petitioners is not for the purposes of filling any gaps or lacunae, and therefore, that decision would also not be of any assistance to the respondent-bank. 22. In the case of Adil Jamshed Frenchman Adil Jamshed Frenchman Adil Jamshed Frenchman (supra), relied upon on behalf of the respondent-bank, the first Appellate Court had allowed the Application of the tenants to produce additional evidence and held that the tenants were not parties to the correspondence between the landlord and 3rd party and :17: they could not have earlier obtained the knowledge of the document in spite of due diligence. The High Court set aside the order of the first appellate court and held that the tenants had failed to establish that notwithstanding the exercise of due diligence, such evidence was not within their knowledge or could not, after exercise of due diligence, be produced by him at the time when the decree appealed against was passed. The Apex Court, while setting aside the order of the High Court and restoring the order of the first Appellate Court, observed that the correspondence entered into by the landlord with the 3rd party could not have been within the knowledge of the tenants and therefore the tenants’ statement that the documents could not have been produced before the trial Court in spite of the exercise of due diligence, was highly probable. The Learned Counsel for the respondent-bank argued that the underlying principle of this decision is that once it is established that the additional evidence was within the "knowledge" of the petitioners at the stage of the trial, the Application before the Appeal Court to produce additional evidence ought to be rejected. This decision in my view, would also not :18: be of assistance to the respondent-bank inasmuch as in the present case, the lease deed was executed by the respondent-bank only after the evidence on behalf of the petitioners was already over and it obviously cannot be said that the document was within the knowledge of the petitioners at the time of their evidence being adduced. Even thereafter, when the petitioners got knowledge of the existence of the document, the same was not in the custody of the petitioners, but was in the custody of the respondent- bank and they were not aware of the particulars of the document. Pertinently the respondent-bank had refused to produce the document in the cross-examination in spite of notice to them to produce the same and their witness had refused to disclose the particulars thereof. In these circumstances, it would not be proper on the part of the respondent-bank to contend that the document was within the knowledge of the petitioners and ought to have been produced in the Trial Court. It is however to be noted that in decision cited above the Application of the tenants for producing additional evidence ultimately came to be allowed by the Apex Court. :19: 23. In the case of K.R. Mohan Reddy K.R. Mohan Reddy K.R. Mohan Reddy (supra), cited on behalf of the respondent-bank it was held by the Apex Court that it would be for the Applicant to show that the conditions precedent for application of clause (aa) of sub-rule (1) of Rule 27 of Order XLI is different from that of clause (b) mentioned therein are satisfied. In the event the former is applied, it would be for the applicant to show that the ingredients or conditions precedent mentioned therein are satisfied. There can be no dispute about the proposition laid down in the said decision; however I do not find that this decision can be of any assistance to the respondent-bank in view of the fact that in the case in hand we are not concerned with clause (b) and considering the findings arrived at by me in the instant case insofar as clause (aa) is concerned. 24. In view of the aforesaid discussion, I find that the discretion exercised by the Appeal Court in the present case is improper and not judicious and would result in grave injustice. The impugned order cannot be sustained and interference under article :20: 227 of the Constitution is therefore, warranted. Consequently, the petition succeeds and the impugned order is set aside and rule is made absolute. The petitioners are permitted to adduce additional evidence by producing certified true copy of the registered lease deed dated 6-02-2004, subject to costs, quantified at Rs. 20,000/- being paid by the petitioners to the High Court Legal Aid Committee. I am not inclined to grant the payment of costs to the respondent-bank considering their conduct in the matter and the fact that this entire exercise could have been avoided, had the respondent-bank produced the document in the Trial Court when called upon to do so. 25. I may hasten to add here that my views in so far as valuation is concerned are only prima facie and the Appeal Court will not be influenced by the observations made in this order at the hearing of the Appeal, which will be decided on its own merits. 26. It is left to the discretion of Appellate Court as to whether it would want to take the additional evidence itself or direct the Trial Court to do so. :21: The Appeal Court would however, in any case, specify and record