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Thursday, March 31, 2011

A C.D. - RECORDING CONVERSATION OF PARTIES - IS ADMISSIBLE EVIDENCE


                                                                              Reportable

                     IN THE SUPREME COURT OF INDIA


                      CIVIL APPELLATE JURISDICTION


                   CIVIL APPEAL NOS.2795-2796  OF 2011

               [Arising out of SLP [C] Nos.18211-18212 of 2010]





K.K.Velusamy                                                         ... Appellant


vs.


N.Palanisamy                                                         ... Respondent




                                  J U D G M E N T




R.V.RAVEENDRAN,J.




       Leave granted.


2.     The  respondent  herein   has  filed  a  suit for  specific  performance   (OS


No.48/2007) alleging  that the appellant-defendant  entered  into a registered


agreement   of   sale   dated   20.12.2006   agreeing   to   sell   the   suit   schedule


property   to   him,   for   a   consideration   of   Rs.240,000/-;   that   he   had   paid


Rs.160,000/- as advance on the date of agreement; that the appellant agreed


to execute a sale deed by receiving the balance of Rs.80,000/- within three


months from the date of sale; that he was ready and willing to get the sale


completed and issued a notice dated 16.3.2007 calling upon the appellant to


                                               2


execute the sale deed on 20.3.2007; and that he went to the Sub-Registrar's


office on 20.3.2007 and waited, but the appellant did not turn up to execute


the   sale   deed.   On   the   said   averments,   the   respondent   sought   specific


performance of the agreement of sale or alternatively refund of the advance


of Rs.160,000/- with interest at 12% per annum from 20.12.2006.




3.     The   appellant   resisted   the   suit.   He   alleged   that   he   was   in   need   of


Rs.150,000 and approached the respondent who was a money lender, with a


request to advance him the said amount as a loan; that the respondent agreed


to   advance   the   loan   but   insisted   that   the   appellant   should   execute   and


register a sale agreement in his favour and also execute some blank papers


and blank stamp-papers, as security for the repayment of the amount to be


advanced; and that trusting the respondent, the appellant  executed the said


documents   with   the   understanding   that   the   said   documents   will   be   the


security for the repayment of the loan with interest. The appellant therefore


contended   that   the   respondent   -   plaintiff   was   not   entitled   to   specific


performance.




4.     The suit was filed on 26.3.2007. The written statement  was filed on


12.9.2007. Thereafter issues were framed and both parties led evidence. On


11.11.2008   when   the   arguments   were   in   progress,   the   appellant   filed   two


                                               3


applications (numbered as IA No.216/2009 and IA No.217/2009). The first


application   was   filed   under   section   151   of   the   Code   of   Civil   Procedure


(`Code' for short) with a prayer to reopen the evidence for the purpose of


further   cross-examination   of   Plaintiff   (PW1)   and   the   attesting   witness


Eswaramoorthy (PW2). IA No.217/2009 was filed under Order 18 Rule 17


of   the   Code   for   recalling   PWs.1   and   2   for   further   cross   examination.   The


appellant   wanted   to   cross-examine   the   witnesses   with   reference   to   the


admissions made during some conversations, recorded on a compact disc (an


electronic record). In the affidavits filed in support of the said applications,


the   appellant   alleged   that   during   conversations   among   the   appellant,


respondent and three others (Ponnuswamy alias Krishnamoorthy, Shiva and


Saravana   Kumar),   the   respondent-plaintiff   admitted   that   Eswaramoorthy


(PW2) had lent the amount (shown as advance in the agreement of sale) to


the appellant through the respondent; and that during another conversation


among   the   appellant,   Eswaramoorthy   and   Shiva,   the   said   Eswaramoorthy


(PW2)   also   admitted   that   he   had   lent   the   amount   (mentioned   in   the


agreement of sale advance) through the respondent; that both conversations


were   recorded   by   a   digital   voice   recorder;   that   conversation   with   plaintiff


was   recorded   on   27.10.2008   between   8   a.m.   to   9.45   a.m.   and   the


conversation with Eswaramoorthy was recorded on 31.10.2008 between 7 to


                                                4


9.50   p.m.;   and   that   it   was  therefore   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.




5.      The   respondent   resisted   the   said   applications.   He   denied   any   such


conversations or admissions. He alleged that the recordings were created by


the appellant with the help of mimicry  specialists and Ponnuswamy, Shiva


and Saravana Kumar. He contended that the application was a dilatory tactic


to drag on the proceedings.




6.      The   trial   court,   by   orders   dated   9.9.2009,   dismissed   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. The revision petitions filed by the


appellant challenging the said orders, were dismissed by the High Court by a


common  order dated 7.4.2010, reiterating  the reasons assigned by the trial


court.   The   said   order   is   challenged   in   these   appeals   by   special   leave.   The


                                              5


only   question   that   arises   for   consideration   is   whether   the   applications   for


reopening/recalling ought to have been allowed.




7.     The   amended   definition   of   "evidence"   in   section   3   of   the   Evidence


Act, 1872 read with the definition of "electronic record" in section 2(t) of


the Information Technology Act 2000, includes  a compact disc containing


an electronic record of a conversation. Section 8 of Evidence Act provides


that the conduct of any party, or of any agent to any party, to any suit, in


reference to such suit, or in reference to any fact in issue therein or relevant


thereto, is relevant, if such conduct influences or is influenced by any fact in


issue or relevant fact, and whether it was previous or subsequent thereto.  In


R.M Malkani vs. State of Maharastra - AIR 1973 SC 157, this court made it


clear that electronically recorded conversation is admissible in evidence, if


the conversation is relevant to the matter in issue and the voice is identified


and the accuracy of the recorded conversation is proved by eliminating the


possibility of erasure, addition or manipulation. This Court further held that


a   contemporaneous   electronic   recording   of   a   relevant   conversation   is   a


relevant   fact   comparable   to   a   photograph   of   a   relevant   incident   and   is


admissible   as   evidence   under  Section   8  of  the   Act.     There   is   therefore   no


doubt that such electronic record can be received as evidence.


                                                6


8.      Order 18 Rule 17 of the Code enables the court, at any stage of a suit,


to recall any witness who has been examined (subject to the law of evidence


for the time being in force) and put such questions to him as it thinks fit. The


power to recall any witness under Order 18 Rule 17 can be exercised by the


court either on its own motion or on an application filed by any of the parties


to   the   suit   requesting   the   court   to   exercise   the   said   power.   The   power   is


discretionary and should be used sparingly in appropriate cases to enable the


court to clarify any doubts it may have in regard to the evidence led by the


parties. The said power is not intended to be used to fill up omissions in the


evidence   of   a   witness   who   has   already   been   examined.   [Vide  Vadiraj


Naggappa   Vernekar   v.   Sharadchandra   Prabhakar   Gogate   -  2009   (4)


SCC   410].   Order   18   Rule   17   of   the   Code   is   not   a   provision   intended   to


enable   the   parties   to   recall   any   witnesses   for   their   further   examination-in-


chief or cross-examination or to place additional material or evidence which


could not be produced when the evidence was being recorded. Order 18 Rule


17 is primarily a provision enabling the court to  clarify any issue or doubt,


by recalling any witness either suo moto, or at the request of any party, so


that the court itself can put questions and elicit answers. Once a witness is


recalled   for   purposes   of   such   clarification,   it   may,   of   course,   permit   the


parties to assist it by putting some questions.


                                               7


9.      There is no specific provision in the Code enabling the parties to re-


open the evidence for the purpose of further examination-in-chief or cross-


examination.   Section   151   of   the   Code   provides   that   nothing   in   the   Code


shall be deemed to limit or otherwise affect the inherent powers of the Code


to make such orders as may be necessary for the ends of justice or to prevent


the   abuse   of   the   process   of   the   court.   In   the   absence   of   any   provision


providing   for   re-opening   of   evidence   or   recall   of   any   witness   for   further


examination   or   cross-examination,   for   purposes   other   than   securing


clarification required by the court, the inherent power under section 151 of


the Code, subject to its limitations, can be invoked in appropriate cases to re-


open   the   evidence   and/or   recall   witnesses   for   further   examination.   This


inherent power of the court is not affected by the express power conferred


upon the court under Order 18 Rule 17 of the Code to recall any witness to


enable the court to put such question to elicit any clarifications.




10.     The   respondent   contended   that   section   151   cannot   be   used   for   re-


opening evidence or for recalling  witnesses. We are not able to accept the


said submission as an absolute proposition. We however agree that section


151   of   the   Code   cannot   be   routinely   invoked   for   reopening   evidence   or


recalling   witnesses.   The   scope   of   section   151   has   been   explained   by   this


Court in several decisions (See  :  Padam Sen vs. State of UP-AIR 1961 SC


                                                 8


218; Manoharlal Chopra vs. Seth Hiralal - AIR 1962 SC 527; Arjun Singh


vs. Mohindra Kumar - AIR 1964 SC 993; Ram Chand and Sons Sugar Mills


(P) Ltd. vs. Kanhay Lal - AIR 1966 SC 1899; Nain Singh vs. Koonwarjee -


1970 (1) SCC 732;  The Newabganj Sugar Mills Co.Ltd. vs. Union of India -


AIR   1976   SC   1152;            Jaipur   Mineral   Development   Syndicate   vs.


Commissioner  of Income Tax, New  Delhi - AIR 1977 SC 1348;   National


Institute of Mental Health & Neuro   Sciences vs. C Parameshwara  - 2005


(2) SCC 256; and  Vinod Seth vs. Devinder Bajaj  - 2010 (8) SCC 1).   We


may summarize them as follows:




(a)     Section   151   is   not   a   substantive   provision   which  creates  or   confers


any power or jurisdiction  on courts. It merely  recognizes the discretionary


power inherent in every court as a necessary corollary for rendering justice


in accordance with law, to do what is `right' and undo what is `wrong', that


is, to do all things necessary to secure the ends of justice and prevent abuse


of its process.



(b)     As   the   provisions   of   the   Code   are   not   exhaustive,   section   151


recognizes   and   confirms   that   if   the   Code   does   not   expressly   or   impliedly


cover   any   particular   procedural   aspect,   the   inherent   power   can   be   used   to


deal   with   such   situation   or   aspect,   if   the   ends   of   justice   warrant   it.   The


breadth of such power is co-extensive with the need to exercise such power


on the facts and circumstances.


                                              9


(c)    A  Court  has   no   power  to   do  that   which  is   prohibited   by   law  or  the


Code,   by   purported   exercise   of   its   inherent   powers.   If   the   Code   contains


provisions   dealing   with   a   particular   topic   or   aspect,   and   such   provisions


either expressly or necessary implication exhaust the scope of the power of


the court or the jurisdiction that may exercised in relation to that matter, the


inherent   power   cannot   be   invoked   in   order   to   cut   across   the   powers


conferred   by   the   Code   or   a   manner   inconsistent   with   such   provisions.   In


other words the court cannot make use of the special provisions of Section


151 of the Code, where the remedy or procedure is provided in the Code.



(d)    The inherent powers of the court being complementary to the powers


specifically   conferred,   a  court   is   free   to   exercise   them   for   the   purposes


mentioned in Section 151 of the Code when the matter is not covered by any


specific provision in the Code and the exercise of those powers would not in


any way be in conflict with what has been expressly provided in the Code or


be against the intention of the Legislature.



(e)    While   exercising   the   inherent   power,   the   court   will   be   doubly


cautious,   as   there   is   no   legislative   guidance   to   deal   with   the   procedural


situation and the exercise of power depends upon the discretion and wisdom


of the court, and the facts and circumstances of the case. The absence of an


express provision in the code and the recognition and saving of the inherent


power of a court, should not however be treated as a carte blanche to grant


any relief.



(f)    The   power   under   section   151   will   have   to   be   used   with


circumspection and care, only where it is absolutely necessary, when there is


no provision in the Code governing the matter, when the bona fides of the


                                                10


applicant   cannot   be   doubted,   when   such   exercise   is   to   meet   the   ends   of


justice and to prevent abuse of process of court.





11.     The Code earlier had a specific provision in Order 18 Rule 17A for


production of evidence not previously known or the evidence which could


not be produced despite due diligence. It enabled the court to permit a party


to   produce   any   evidence   even   at   a   late   stage,   after   the   conclusion   of   his


evidence   if   he   satisfied   the   court   that   even   after   the   exercise   of   due


diligence,   the   evidence   was   not   within   his   knowledge   and   could   not   be


produced   by   him   when   he   was   leading   the   evidence.   That   provision   was


deleted  with effect from 1.7.2002. The  deletion  of the  said provision does


not   mean   that   no   evidence   can   be   received  at   all,  after   a   party   closes   his


evidence.   It   only   means   that   the   amended   structure   of   the   Code   found   no


need   for   such   a   provision,   as   the   amended   Code   contemplated   little   or   no


time   gap   between   completion   of   evidence   and   commencement   and


conclusion   of   arguments.   Another   reason   for   its   deletion   was   the   misuse


thereof   by   the   parties   to   prolong   the   proceedings   under   the   pretext   of


discovery of new evidence.




12.     The  amended  provisions  of the Code  contemplate and  expect a trial


court   to   hear   the   arguments   immediately   after   the   completion   of   evidence


                                               11


and   then   proceed   to   judgment.   Therefore,   it   was   unnecessary   to   have   an


express provision for re-opening the evidence to examine a fresh witness or


for recalling any witness for further examination. But if there is a time gap


between   the   completion   of   evidence   and   hearing   of   the   arguments,   for


whatsoever   reason,   and   if   in  that   interregnum,  a  party   comes   across  some


evidence   which   he   could   not   lay   his   hands   earlier,   or   some   evidence   in


regard to the conduct or action of the other party comes into existence, the


court may in exercise of its inherent power under section 151 of the Code,


permit the production of such evidence if it is relevant and necessary in the


interest of justice, subject to such terms as the court may deem fit to impose.




13.     The learned counsel for respondent contended that once arguments are


commenced,   there   could  be   no  re-opening   of  evidence   or   recalling   of  any


witness.   This   contention   is   raised   by   extending   the   convention   that   once


arguments   are   concluded   and   the   case   is   reserved   for   judgment,   the   court


will   not   entertain   any   interlocutory   application   for   any   kind   of  relief.   The


need for the court to act in a manner to achieve the ends of justice (subject to


the need to comply with the law) does  not end when arguments are heard


and judgment is reserved. If there is abuse of the process of the court, or if


interests   of   justice   require   the   court   to   do   something   or   take   note   of


something,   the   discretion   to   do   those   things   does   not   disappear   merely


                                                 12


because the arguments are heard, either fully or partly. The convention that


no application should be entertained once the trial or hearing is concluded


and the case is reserved for judgment is a sound rule, but not a straitjacket


formula.   There   can   always   be   exceptions   in   exceptional   or   extra-ordinary


circumstances, to meet the ends of justice and to prevent abuse of process of


court,   subject   to   the   limitation   recognized   with   reference   to   exercise   of


power   under   section   151   of  the   Code.   Be   that   as   it   may.   In   this   case,   the


applications were made before the conclusion of the arguments.




14.     Neither   the   trial   court   nor   the   High   court   considered   the   question


whether   it   was   a   fit   case   for   exercise   of   discretion   under   section   151   or


Order   18   Rule   17   of   the   Code.   They   have   not   considered   whether   the


evidence sought to be produced would either assist in clarifying the evidence


led on the issues or lead to a just and effective adjudication. Both the courts


have   mechanically   dismissed   the   application   only   on   the   ground   that   the


matter was already at the stage of final arguments and the application would


have the effect of delaying the proceedings.




15.     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   Rs.150,000,   as   the   respondent   insisted   upon


                                             13


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   under   section   151   of   the   Code.   The   courts


below have not applied their minds  to the question whether such evidence


will be relevant and whether the ends of justice require permission to let in


such evidence. Therefore the order calls for interference.




16.    We may add a word of caution. The power under section 151 or Order


18 Rule 17 of the Code is not intended to be used routinely, merely for the


asking. If so used, it will defeat the very purpose of various amendments to


the Code to expedite trials.  But where the application is found to be bona


                                              14


fide and where the additional evidence, oral or documentary, will assist the


court to clarify the evidence on the issues and will assist in rendering justice,


and   the   court   is   satisfied   that   non-production   earlier   was   for   valid   and


sufficient   reasons,   the   court   may   exercise   its   discretion   to   recall   the


witnesses or permit the fresh evidence. But if it does so, it should ensure that


the   process   does   not   become   a   protracting   tactic.   The   court   should   firstly


award   appropriate   costs   to   the   other   party   to   compensate   for   the   delay.


Secondly the court should take up and complete the case within a fixed time


schedule so that the delay is avoided. Thirdly if the application is found to


be mischievous, or frivolous, or to cover up negligence or lacunae, it should


be rejected with heavy costs. If the application is allowed and the evidence is


permitted   and   ultimately   the   court   finds   that   evidence   was   not   genuine   or


relevant   and   did   not   warrant   the   reopening   of   the   case   recalling   the


witnesses, it can be made a ground for awarding exemplary costs apart from


ordering prosecution if it involves fabrication of evidence. If the party had


an opportunity to produce such evidence earlier but did not do so or if the


evidence   already   led   is   clear   and   unambiguous,   or   if   it   comes   to   the


conclusion   that   the   object   of   the   application   is   merely   to   protract   the


proceedings, the court should reject the application. If the evidence sought to


be   produced   is   an   electronic   record,   the   court   may   also   listen   to   the


                                                  15


recording before granting or rejecting the application.




17.     Ideally, the recording of evidence should be continuous, followed by


arguments, without any gap. Courts should constantly endeavour to follow


such a time schedule. The amended Code expects them to do so. If that is


done,   applications   for   adjournments,   re-opening,   recalling,   or   interim


measures could be avoided. The more the period of pendency, the more the


number   of   interlocutory   applications   which   in   turn   add   to   the   period   of


pendency.




18.     In   this   case,   we   are   satisfied   that   in   the   interests   of   justice   and   to


prevent   abuse   of   the   process   of   court,   the   trial   court   ought   to   have


considered   whether   it   was  necessary   to   re-open   the   evidence   and   if   so,   in


what   manner   and   to   what   extent   further   evidence   should   be   permitted   in


exercise of its power under section  151 of the Code.     The  court ought to


have also considered whether it should straightway recall PW1 and PW2 and


permit   the   appellant   to   confront   the   said   recorded   evidence   to   the   said


witnesses  or  whether   it  should   first  receive  such  evidence   by   requiring   its


proof   of   its   authenticity   and   only   then   permit   it   to   be   confronted   to   the


witnesses (PW1 and PW2).


                                                     16


19.      In view of the above, these appeals are allowed in part. The orders of


the   High   Court   and   Trial   Court   dismissing   IA   No.   216/2009   under


section 151 of the Code are set aside. The orders are affirmed in regard to


the dismissal of IA No.217/2009 under Order 18 Rule 17 of the Code. The


trial   court   shall   now   consider   IA   No.216/2009   afresh   in   accordance   with


law.





                                                           ..............................J.

                                                           (R. V. Raveendran)





New Delhi;                                                 ............................J.

March 30, 2011.                                            (A. K. Patnaik)