Supreme Court Allows Additional Evidence in Consumer Dispute: Jiten K. Ajmera vs. Tejas Co-operative Housing Society (2019)

Date of the Judgment: May 6, 2019
Citation: 2019 INSC 448
Judges: Uday Umesh Lalit, J., Indu Malhotra, J.
Can new evidence be introduced at the appellate stage in a consumer dispute? The Supreme Court of India addressed this question in a case concerning a housing society’s complaint against a developer for failing to provide amenities and obtain an occupancy certificate. The Court considered whether the State Consumer Disputes Redressal Commission was correct in rejecting the developer’s application to submit additional documents as evidence. The judgment was delivered by a two-judge bench comprising Justice Uday Umesh Lalit and Justice Indu Malhotra, with Justice Indu Malhotra authoring the opinion.

Case Background

The case revolves around a dispute between the appellants, Jiten K. Ajmera and Anr., sons of the late Smt. Mrudula K. Ajmera, and the respondent, M/s Tejas Co-operative Housing Society. Smt. Mrudula K. Ajmera owned a plot of land in Mumbai where she constructed a building named Tejas Apartments. The flats were sold to various purchasers who then formed the respondent housing society. The housing society filed a consumer complaint against the appellants, alleging deficiencies in service, failure to obtain an occupancy certificate, and failure to execute a conveyance deed in favor of the society.

Timeline:

Course of Proceedings

The District Consumer Disputes Redressal Forum partly allowed the housing society’s complaint on 27.02.2013, directing the appellants to obtain the occupancy certificate, execute the conveyance deed, and refund certain amounts. Aggrieved by this order, the appellants filed an appeal before the State Consumer Disputes Redressal Commission, Maharashtra. During the pendency of this appeal, the appellants sought to introduce additional evidence, specifically a letter from their architect to the Municipal Corporation of Greater Mumbai (MCGM) requesting an occupancy certificate (dated 08.08.2013) and a reply from MCGM (dated 26.08.2013) stating that unauthorized structures by occupants were preventing the issuance of the certificate. The State Commission rejected this application, deeming the documents “not necessary.” The National Consumer Disputes Redressal Commission upheld the State Commission’s decision.

Legal Framework

The Supreme Court considered the provisions of Order XLI Rule 27 of the Code of Civil Procedure, 1908 (CPC), which deals with the production of additional evidence in appellate courts. Order XLI Rule 27, CPC states:

“27. Production of additional evidence in 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 adduce 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.”

The Court noted that under Order XLI Rule 27, CPC, additional evidence can be produced at the appellate stage if the party establishes that, despite exercising due diligence, the evidence was not within their knowledge or could not have been produced at the time the decree appealed against was passed.

Arguments

The Appellants argued that the documents they sought to introduce were crucial for demonstrating their inability to obtain the Occupancy Certificate. They contended that these documents came into existence after the filing of the appeal and, therefore, could not have been produced before the District Forum. The Appellants submitted that the documents would show that the delay in obtaining the Occupancy Certificate was not due to their fault, but due to unauthorized structures erected by the occupants of the building.

The Respondent did not make any specific arguments in the judgment regarding the application for additional evidence. However, it can be inferred that the Respondent was against the admission of additional evidence, as they had succeeded before the State Commission and the National Commission in opposing the application.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame specific issues but considered the following:

• Whether the State Commission was correct in rejecting the application for additional evidence under Order XLI Rule 27, CPC.
• Whether the National Commission was correct in affirming the State Commission’s order.

Treatment of the Issue by the Court

Authorities

The Supreme Court relied on the following authority:

The Court also considered Order XLI Rule 27 of the Code of Civil Procedure, 1908 (CPC) to determine the conditions for admitting additional evidence at the appellate stage.

Judgment

The Court also considered the authorities as follows:

• The Supreme Court followed the precedent set in A. Andisamy Chettiar v. A. Subburaj Chettiar, (2015) 17 SCC 713* to interpret the provisions of Order XLI Rule 27, CPC. The Court emphasized that the requirements of the rule must be met before additional evidence can be admitted at the appellate stage.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to ensure a fair hearing and to allow all relevant evidence to be considered. The Court emphasized that the additional documents were crucial for the appellants to substantiate their claim that they were unable to obtain the occupancy certificate due to reasons beyond their control. The Court was also concerned that the State Commission had rejected the application for additional evidence without providing adequate reasons. The Court emphasized that the State Commission should have taken a holistic view of the matter and considered the relevance of the additional documents.

The Court’s reasoning was based on the following points:

• The additional documents were necessary to establish that the Appellants were unable to obtain the Occupancy Certificate due to unauthorized structures by occupants.
• The documents came into existence after the appeal was filed and could not have been produced earlier.
• The State Commission had rejected the application without providing adequate reasoning, merely stating that the documents were “not necessary”.

The Court’s reasoning was based more on the factual aspects of the case, specifically the relevance of the additional documents and the circumstances under which they came into existence. The legal aspect, concerning the interpretation of Order XLI Rule 27, CPC, played a secondary role.

Logical Reasoning

The Supreme Court considered and rejected the State Commission’s view that the documents were “not necessary.” The Court emphasized that the State Commission should have taken a holistic view of the matter and considered the relevance of the additional documents. The Court also rejected the National Commission’s view that the State Commission’s order did not call for any interference.

The Court’s decision was based on the principle of natural justice, which requires that all parties be given a fair opportunity to present their case. The Court also considered the provisions of Order XLI Rule 27, CPC, which allows for the production of additional evidence at the appellate stage in certain circumstances.

The Supreme Court stated:

“These documents are of relevance to establish that the Appellants are not in a position to obtain the Occupancy Certificate from the MCGM until the unauthorized structures, which are in violation of the approved plans, are removed.”

“In the absence of these documents, the Appellants would not be in a position to substantiate their case that they are unable to obtain the Occupancy Certificate, and comply with the directions issued by the District Forum.”

“The State Commission was in error by rejecting the Application filed by the Appellants under Order XLI Rule 27, CPC by merely stating that the documents are “not necessary”. The said Order is an unreasoned one. The State Commission must have taken a holistic view of the matter.”

The Supreme Court allowed the appeal, set aside the orders of the State Commission and the National Commission, and remitted the matter back to the State Commission to consider the additional evidence and decide the appeal on merits.

Key Takeaways

• Additional evidence can be admitted at the appellate stage if it is relevant and could not have been produced earlier despite due diligence.
• Appellate courts must provide reasoned orders when rejecting applications for additional evidence.
• A holistic view of the matter must be taken while considering applications for additional evidence.
• The principle of natural justice requires that all parties be given a fair opportunity to present their case.

Directions

The Supreme Court remitted the matter to the State Commission to take the additional documents on record and decide the appeal on merits in accordance with the law. The State Commission was directed to decide the appeal expeditiously since it was pending since 2013.

Development of Law

The ratio decidendi of this case is that appellate courts must consider applications for additional evidence with due diligence and provide reasoned orders. The Supreme Court reiterated the conditions under which additional evidence can be admitted at the appellate stage as per Order XLI Rule 27, CPC. This judgment clarifies that appellate courts cannot reject applications for additional evidence without proper reasoning.

Conclusion

The Supreme Court’s decision in this case emphasizes the importance of allowing parties to present all relevant evidence, especially when such evidence could not have been produced earlier. The Court’s ruling ensures that the State Commission will now consider the additional evidence which is necessary to decide the case on merits.