suit for declaration and injunction as agreement was stood cancelled - application by respondent that arbitration proceedings are pending - merely because agreement has come to an end by its termination by mutual consent, the arbitration clause does not get perished nor is rendered inoperative. -it is clear that in an agreement between the parties before the civil court, if there is a clause for arbitration, it is mandatory for the civil court to refer the dispute to an arbitrator.- the prerequisites for an application under Section 8 are fulfilled, viz., there is an arbitration agreement; the party to the agreement brings an action in the court against the other party; the subject matter of the action is the same as the subject-matter of the arbitration agreement; and the other party moves the court for referring the parties to arbitration before it submits his first statement on the substance of the dispute. We have come to the conclusion that the civil court had no jurisdiction to entertain a suit after an application under Section 8 of the Act is made for arbitration. In such a situation, refusal to refer the dispute to arbitration would amount to failure of justice as also causing irreparable injury to the defendant As we have already held that the oral agreement as evidenced by the transcript of conversation between the appellant No. 2 and the respondent on 06/07.04.2011 substituting the alleged written agreement dated 06.06.2009 and which contained a clause for arbitration, the same clause for arbitration would also be applicable to the oral agreement. we refer the disputes raised by the appellants in CS(OS) 1532 of 2012 to the sole arbitrator already appointed, viz., Hon’ble Mr. Justice V.K. Gupta (Retd.) and request the arbitrator to decide the disputes expeditiously in accordance with law.

                                     REPORTABLE
                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION

                    CIVIL APPEAL NO. 8837 OF 2016



Mrs. Hema Khattar & Anr.                      .... Appellant(s)

            Versus

Shiv Khera                                               .... Respondent(s)






                               J U D G M E N T


R.K. Agrawal, J.

1)    Challenge in this appeal is to the legality of the judgment and  order
dated 28.09.2012 rendered by a Division Bench of the High Court of Delhi  at
New Delhi in FAO (OS) No. 470 of 2012 whereby the High Court  dismissed  the
appeal filed by the appellants herein.
2)    Factual position in a nutshell is as follows:-
   a) An agreement to reconstruct  a  building  situated  at  C-6/4,  Vasant
      Vihar, New Delhi was executed between Hema Khattar-the appellant No. 1
      herein, wife of Ashwani Khattar – the appellant No. 2 herein, carrying
      on business in construction under the name and style of  M/s  Dessignz
      and Shiv Khera-the respondent herein on 06.06.2009.
   b) Pursuant to the said agreement, the building site was handed  over  to
      the appellant No. 1 herein on 09.11.2010 and thereafter the  execution
      of the work had started.  In March 2011,  as  per  Clause  16  of  the
      Agreement  dated  06.06.2009,  a  spot  inspection  was  conducted  by
      renowned structural engineers which  pointed  out  several  structural
      lacunae.  On coming to know about the  same,  the  respondent  further
      arranged inspection by various specialized  agencies  which  confirmed
      the same in their reports.
   c) Being aggrieved by the quality of construction, the respondent  served
      a legal notice  dated  19.09.2011  to  the  appellant  No.  1  seeking
      damages.  The respondent,  vide  Clause  33  of  the  said  agreement,
      appointed a sole arbitrator claiming that the appellant No. 1 has  not
      complied with the terms of the agreement whereby  disputes,  requiring
      adjudication, have  arisen  between  the  parties.   In  statement  of
      claims, the respondent, besides other claims, also sought for a sum of
      Rs. 39.85 lakhs paid to the appellant No. 1 along with a  sum  of  Rs.
      35,000/- for the TDS deposited to her credit.
   d) The appellants filed a suit for declarations, permanent injunction and
      recovery before the High Court being CS(OS) No. 1532 of 2012 seeking a
      decree that the agreement dated 06.06.2009 entered  into  between  the
      appellant  No.  1  and  the  respondent  was  vitiated  and  had  been
      terminated by mutual consent by both the parties  and  any  proceeding
      initiated pursuant to the agreement is null, non-est and void and also
      for recovery of an amount of Rs. 45,50,000/-.
   e) It is also pertinent to mention here that it was alleged in the plaint
      that a formal meeting was held between the parties  in  which  it  was
      decided that appellant No.1 will no longer be the contractor  and  the
      agreement dated 06.06.2009 would stand terminated  by  mutual  consent
      and the construction would be carried out by the sub-contractors to be
      appointed as per the advice of appellant No. 2 who would supervise the
      same without remuneration/profit.
   f) The respondent filed I.A. No. 12124 of 2012 in CS(OS) No. 1532 of 2012
      under Section 8 of the Arbitration  and  Conciliation  Act,  1996  (in
      short ‘the Act’) claiming that the subject-matter of  dispute  in  the
      present suit is  already  pending  adjudication  before  the  Arbitral
      Tribunal, hence, the suit cannot be proceeded with which was denied by
      the appellants in their reply to the above said application.
   g) Vide order dated 17.09.2012, learned single Judge of the  High  Court,
      found that the suit is bad for misjoinder of parties as  well  as  for
      causes of action and gave an option to the appellants therein to elect
      whether they want the suit to be treated as a  suit  for  recovery  of
      money by appellant No. 2 herein against the respondent or a  suit  for
      declarations and injunction by appellant No. 1.
   h) Being aggrieved by the order dated 17.09.2012, the appellants went  in
      appeal and filed FAO (OS) being No. 470 of 2012 before the High Court.
       A division bench of the High  Court,  vide  order  dated  28.09.2012,
      dismissed the appeal.
   i) Aggrieved by the order dated 28.09.2012,  the  appellants  have  filed
      this appeal by way of special leave before this Court.
3)    Heard Mr. Jayant Bhushan, learned senior counsel  for  the  appellants
and Mr. Sakal Bhushan, learned counsel for the respondent  and  perused  the
records.
Point for consideration:-
4)    The only point for consideration before this Court is whether  in  the
present facts and circumstances of the case the suit is bad  for  misjoinder
of parties as well as for causes of action?
Rival submissions:-
5)    Learned senior counsel for the appellants contended before this  Court
that the agreement dated 06.06.2009 was executed  with  dishonest  intention
containing the arbitration clause  and  in  any  event  the  same  has  been
superseded by a subsequent oral agreement between  appellant  No.  2  herein
and the respondent.
6)    Learned senior counsel further contended that the High Court erred  in
upholding that the cause of action with respect to relief  of  money  is  an
independent cause of action from that of  the  relief  of  declarations  and
injunction.  The High Court failed to appreciate that common trial of  joint
causes of   action is necessary, if at all, as they raise  common  questions
of law and facts and the course adopted by the  High  Court  would  lead  to
multiplicity of proceedings causing delay.  Learned senior  counsel  finally
contended that in view of the patent illegality in the orders passed by  the
High Court, the same are liable to be set aside.
7)    Without prejudice to the aforesaid, learned  senior  counsel  for  the
appellants, in the alternative submitted that the entire matter be  referred
to another  sole  arbitrator  which  may  be  appointed  by  this  Court  as
according  to  him,  in  the  written  contract,  there  was  a  clause  for
arbitration and, subsequently, in the oral contract also, the terms  of  the
earlier contract continued to remain in operation except  those  which  were
modified in the oral contract.
8)    In support of the above submission, learned  senior  counsel  for  the
appellants placed reliance upon a judgment  of  this  Court  in  P.R.  Shah,
Shares and Stock Brokers  Private  Limited  vs.  B.H.H.  Securities  Private
Limited and Others (2012) 1 SCC 594.  He has referred  to  paragraph  19  of
the judgment which reads as under:-

        “19. If A had a claim against B and C, and there was an arbitration
      agreement between A and B  but  there  was  no  arbitration  agreement
      between A and C, it might not be possible to have a joint  arbitration
      against B and C. A cannot make a claim against  C  in  an  arbitration
      against B, on the ground that the claim was being made jointly against
      B and C, as C was not a party to the arbitration agreement. But  if  A
      had a claim against B and C and if A had an arbitration agreement with
      B and A also had a separate arbitration agreement with C, there is  no
      reason why A  cannot  have  a  joint  arbitration  against  B  and  C.
      Obviously,  having  an  arbitration  between  A  and  B  and   another
      arbitration between A and C in regard to the same claim would lead  to
      conflicting decisions. In such a case, to deny the benefit of a single
      arbitration against B  and  C  on  the  ground  that  the  arbitration
      agreements against B and C are different, would lead  to  multiplicity
      of proceedings, conflicting decisions and cause injustice. It would be
      proper and just to say that when A has a claim jointly against  B  and
      C, and when there are provisions for arbitration in respect of both  B
      and C, there can be a single arbitration.”


9)    Per contra, learned counsel for  the  respondent  submitted  that  the
suit has been filed by the two appellants jointly with respect  to  the  two
separate alleged causes of action. He further  submitted  that  the  alleged
cause of action of the appellant No. 1 is based  upon  the  agreement  dated
06.06.2009  between  the  appellant  No.  1  and  the  respondent  in  which
appellant No. 2 cannot be said to have any joint interest  and  the  alleged
cause of action of appellant No. 2  is  based  upon  an  oral  understanding
arrived at between appellant No.2 and the respondent in which appellant  No.
1 cannot be said to have  any  joint  interest.   Learned  counsel  for  the
respondent further submitted that in such circumstances,  the  instant  suit
in the present form is not maintainable in terms of Order II Rule 3  of  the
Code of Civil Procedure, 1908 (in short ‘the Code’)  and  the  suit  of  the
appellant No. 1 is required to be separated under Order II  Rule  6  of  the
Code.
10)   Learned counsel further submitted that in view  of  the  existence  of
the arbitration clause in the agreement dated  06.06.2009  and  the  subject
matter of dispute between  the  parties  in  the  present  suit  is  already
pending adjudication before the Arbitral Tribunal, the  instant  suit  filed
by the appellant No. 1 cannot be proceeded with and the matter  is  required
to be referred to arbitration.  Learned counsel finally submitted  that  the
judgment rendered by the division bench of  the  High  Court  upholding  the
decision of the learned single Judge  is  correct  and  no  interference  is
called for in the appeal.
11)   Learned counsel further submitted  that  the  oral  contract  did  not
contain any clause for arbitration and the dispute raised by  the  appellant
No. 2 cannot be referred to arbitration.   In  support  whereof,  he  relied
upon a decision of this Court in  Kvaerner  Cementation  India  Limited  vs.
Bajranglal Agarwal and Another (2012) 5 SCC 214 wherein this Court has  held
that there cannot be any dispute that in the absence of  arbitration  clause
in the agreement, no  dispute  could  be  referred  for  arbitration  to  an
Arbitral Tribunal.
12)   Learned counsel, however, submitted that if this Court  comes  to  the
conclusion that the matter should be resolved by  way  of  arbitration,  the
entire matter be referred to the sole arbitrator already  appointed  by  the
respondent.
Discussion:
13)   From the materials on record, it is evident that  an  agreement  dated
06.06.2009 was executed between the parties wherein appellant No. 1 was  the
contractor and the respondent as a client.  The agreement  impugned  clearly
states that there is an arbitration clause therein.  Owing  to  the  dispute
among parties, the respondent, in exercise  of  his  right  under  the  said
clause, appointed a sole arbitrator.  Subsequently, notices were  issued  to
the appellant No. 1 and  the  matter  remained  pending  despite  appearance
before the Arbitral Tribunal.   In  the  meantime,  the  appellants  jointly
filed a suit before the High Court for  declarations,  permanent  injunction
and recovery claiming a formal meeting  was  held  between  the  parties  in
which it was decided that appellant No.1 will no longer  be  the  contractor
and the agreement dated 06.06.2009 would stand terminated by mutual  consent
and the construction would be carried  out  by  the  sub-contractors  to  be
appointed as per the advice of appellant No. 2 who would supervise the  same
without remuneration/profit.  The respondent filed I.A. No.  12124  of  2012
in CS(OS) No. 1532 of 2012 under Section 8 of  the  Act  claiming  that  the
subject-matter  of  dispute  in  the  present  suit   is   already   pending
adjudication before  the  Arbitral  Tribunal,  hence,  the  suit  cannot  be
proceeded with.  Vide order dated 17.09.2012, learned single  Judge  of  the
High Court, found that the suit is bad for mis-joinder of  parties  as  well
as for causes of action and gave  an  option  to  the  appellants  to  elect
whether they want the suit to be treated as a suit for recovery of money  by
appellant No. 2 herein against the respondent or  a  suit  for  declarations
and injunction by appellant No. 1.  The appellants  went  in  appeal  before
the division bench of the High Court.   Vide  order  dated  28.09.2012,  the
division bench also dismissed the same.
14)   From the facts of this case,  we  find  that  a  suit  was  filed  for
declarations, permanent injunction and recovery of money by  the  appellants
stating that a meeting was held in between  the  parties  in  which  it  was
decided that appellant No. 1 would no  longer  be  the  contractor  and  the
agreement dated 06.06.2009 would stand terminated by mutual consent and  the
construction would be carried out by the sub-contractors to be appointed  as
per the suggestions of appellant No.2, who  would  supervise  the  same  but
without any profit/remuneration as per the oral agreement.   The  respondent
agreed to make all payments towards purchase of material, construction,  fee
of architect etc.  Appellant No. 2 incurred an amount of Rs.  45  lakhs  for
and on behalf of the respondent which is sought to be recovered  under  this
suit.  The appellants also claimed a declaration  to  the  effect  that  the
agreement dated 06.06.2009 between appellant No. 1 and  the  respondent  was
obtained by fraud and  mis-representation,  hence,  it  is  null  and  void.
Another declaration sought for in the suit  was  that  the  agreement  dated
06.06.2009 stood terminated by mutual consent.  A decree for  injunction  is
also sought for restraining the respondent from initiating and  carrying  on
any  proceeding  arising  out  of  and  on  the  basis  of  agreement  dated
06.06.2009 between appellant No. 1 and the respondent.  On the  other  hand,
the respondent took the preliminary objection  that  the  suit  is  bad  for
misjoinder of parties and causes of action and further that the  arbitration
proceedings initiated  by  the  respondent,  in  terms  of  the  arbitration
clause, is pending adjudication before the Arbitral Tribunal.
15)   Admittedly, the cause of action for recovery of Rs. 45  lakhs  claimed
in the present suit is the expenditure alleged  to  have  been  incurred  by
appellant No. 2 pursuant to the oral agreement he claims  he  had  with  the
respondent sometime in April, 2011.  On the other hand, the cause of  action
with respect to reliefs of declarations  and  injunction  is  the  agreement
dated 06.06.2009.   The alleged agreement dated 06.06.2009 was,  admittedly,
between the appellant No. 1 and the respondent to which appellant No. 2  was
only a witness, which as per the terms of the plaint terminated later on  by
mutual agreement between the appellant No. 1 and the  respondent.   At  this
stage, it was agreed orally that appellant No. 2,  who  is  the  husband  of
appellant No. 1, would  take  over  the  execution  of  the  pending  works.
Admittedly, Appellant No. 1 is not a party to  the  alleged  oral  agreement
between  Appellant  No.  2  and  the  respondent  for  supervision  of   the
construction by him.
16)   From the materials available on record, particularly,  the  transcript
of conversation between the appellant No. 2 and the respondent  on  6th  and
7th April, 2011, we find that the oral agreement was  substituted  in  place
of the alleged written agreement dated  06.06.2009.   There  is  a  complete
accord and discharge of the responsibilities and  liabilities  of  appellant
No. 1 vis-à-vis the defendant and vice-versa.  The plaint  also  avers  that
after  the  accord  between  appellant  No.  1  and   the   respondent   and
simultaneous discharge of the obligations, a  distinct  oral  agreement  was
entered into between appellant No. 2 and the respondent. It is  quite  clear
from what has been stated above that the cause of action: the right  to  get
declarations with regard to the said contract as null and void  or  a  right
to seek an injunction restraining the respondent from taking any  action  on
the basis of the said contract, if any, with regard  to  the  prior  written
agreement arises in favour of appellant No. 1 against respondent and not  in
favour of appellant No. 2 as he was not  a  party  to  the  agreement  dated
06.06.2009.  On the similar lines, the right to seek  money  decree,  as  is
claimed by the appellants, would be a distinct cause of  action  founded  on
subsequent oral agreement between the appellant No. 2 and the respondent.
17)   Learned single Judge of the High Court, vide order  dated  17.09.2012,
directed the parties to elect as  to  whether  they  want  the  suit  to  be
treated as a suit for recovery of money  by  appellant  No.  2  against  the
respondent or a suit for declarations and  injunction  by  appellant  No.  1
against the respondent and to amend the plaint accordingly.  Learned  single
Judge, after taking a considered view that the suit is  bad  for  misjoinder
of parties and/or misjoinder of causes of action, held that the  application
filed by the defendant under Section 8 of the Act would be disposed of  only
after the  appellants  make  an  election  in  terms  of  this  order.   The
appellants herein, instead of amending the plaint,  went  in  appeal  before
the division bench, which got dismissed vide order dated 28.09.2012.
18)   Since the suit was dismissed for misjoinder of parties  and/or  causes
of action, it is pertinent to mention here the law on the point which is  as
under:-
Order II Rule 3
      “Joinder of causes of action –  (1)  Save  as  otherwise  provided,  a
      plaintiff may unite in the same suit several causes of action  against
      the same defendant, or the same defendants jointly; and any plaintiffs
      having causes of action in which they are jointly  interested  against
      the same defendant or the  same  defendants  jointly  may  unite  such
      causes of action in the same suit.


      (2)   Where causes of action are united, the jurisdiction of the Court
      as regards the suit shall  depend  on  the  amount  or  value  of  the
      aggregate subject matters at the date of instituting the suit.”


Order II Rule 6

      “Power of Court to order separate trials – Where  it  appears  to  the
      court that the joinder of causes of action in one suit  may  embarrass
      or delay the trial or is otherwise inconvenient, the Court  may  order
      separate trials or make such other order as may be  expedient  in  the
      interests of justice.”

In Black's Law Dictionary it has been stated that the expression  ‘cause  of
action’ is the fact or facts  which  give  a  person  a  right  to  judicial
relief.  A cause of action, thus, means every fact, which, if traversed,  it
would be necessary for the plaintiff to prove in order to support his  right
to a judgment of the court. In other words, it is a bundle  of  facts  which
taken with the law applicable to them gives the plaintiff a right to  relief
against the defendant. It must include some act done by the defendant  since
in the absence of such an act no cause of action can possibly accrue. It  is
not limited to the actual infringement of the right  sued  on  but  includes
all the material facts on which it is founded.
19)   Order II, Rule 3, provides  for  the  joinder  of  several  causes  of
action and states that a plaintiff  may  unite  in  the  same  suit  several
causes of action against the same defendant, or the same defendants  jointly
or several plaintiffs having causes of action  in  which  they  are  jointly
interested against the same defendant or defendants jointly may  unite  them
in one suit.  The remedy for any possible inconvenience with regard to  said
rule is supplied by the provisions of Order II,  Rule  6,  which  authorizes
the Court to order separate trials of causes of action which  though  joined
in one suit cannot be conveniently tried or disposed of together.
20)   Similarly, Order I Rule 1 of the Code permits  joinder  of  more  than
one persons any right to relief in respect of, or arising out of,  the  same
act or transaction or series of acts or transactions is alleged to exist  in
such persons, whether jointly, severally or in the alternative; and if  such
persons brought separate suits, any common question of  law  or  fact  would
arise.  Order I Rule 2 provides that where it appears to the court that  any
joinder of plaintiffs may embarrass or delay the  trial  of  the  suit,  the
court may put the plaintiffs to their election or order separate  trials  or
make such other order as may be expedient.
21)   In this connection, it is pertinent to refer to  a  judgment  of  this
Court in Ramesh Hirachand Kundanmal vs.  Municipal  Corporation  of  Greater
Bombay and Others 1992 (2) SCC 524 wherein it was held as under:-
      “14. It cannot be said that the main object of the rule is to  prevent
      multiplicity of actions though it may incidentally have  that  effect.
      But that appears to be a desirable consequence of the rule rather than
      its main objectives. The  person  to  be  joined  must  be  one  whose
      presence is necessary as a party. What  makes  a  person  a  necessary
      party is not merely that he has relevant evidence to give on  some  of
      the questions involved; that would only make him a necessary witness .
      It is not merely that he has an interest in the  correct  solution  of
      some questions involved and  has  thought  or  relevant  arguments  to
      advance. The only reason which makes it necessary to make a  person  a
      party to an action is that he should be bound by  the  result  of  the
      action and the question to be settled, therefore, must be  a  question
      in the action which  cannot  be  effectually  and  completely  settled
      unless he is a party.”

22)   In view of the foregoing discussion, we are of the  opinion  that  the
appellants  even  though  had  different  causes  of  action   against   the
respondent but it was a continuity of the  agreement  dated  06.06.2009  and
oral agreement is evidenced by the transcript of  conversation  between  the
appellant No. 2 and the respondent  on  6/07.04.2011,  therefore,  both  the
appellants could have joined as plaintiffs in a suit and  the  suit  is  not
bad for misjoinder of parties or causes of action.   Hence,  learned  single
Judge as also the division bench, was not right in giving an option  to  the
appellants to pursue reliefs qua appellant No. 1  or  qua  appellant  No.  2
only.
23)   In the present facts  and  circumstances  of  the  case,  it  is  also
imperative to find out whether the High Court was justified in deciding  the
maintainability of the suit when an application under Section 8 of  the  Act
is pending adjudication before the  Arbitral  Tribunal.   Before  proceeding
further, it is appropriate to quote here Section 8 of the  Act  which  reads
as under:-
      “8.   Power  to  refer  parties  to  arbitration  where  there  is  an
      arbitration agreement. – [(1) A judicial authority,  before  which  an
      action is brought in a matter which is the subject of  an  arbitration
      agreement shall, if a party to the arbitration agreement or any person
      claiming through or under him, so applies not later than the  date  of
      submitting his first statement on the substance of the dispute,  then,
      notwithstanding any judgment, decree or order of the Supreme Court  or
      any Court, refer the parties to arbitration unless it finds that prima
      facie no valid arbitration agreement exists.]
      (2)  The application referred to  in  sub-section  (1)  shall  not  be
      entertained unless it  is  accompanied  by  the  original  arbitration
      agreement or a duly certified copy thereof:
           [Provided that where the original  arbitration  agreement  or  a
           certified copy thereof is not available with the party  applying
           for reference to arbitration under sub-section (1), and the said
           agreement or certified copy is retained by the  other  party  to
           that agreement, then, the party  so  applying  shall  file  such
           application along with a copy of the arbitration agreement and a
           petition praying the Court to  call  upon  the  other  party  to
           produce the original arbitration agreement or its duly certified
           copy before the Court.]
      (3)   Notwithstanding that an application has  been  made  under  sub-
      section (1)  and  that  the  issue  is  pending  before  the  judicial
      authority, an  arbitration  may  be  commenced  or  continued  and  an
      arbitral award made.”


24)   It is also worthwhile to note Clause   33(d) of  the  agreement  dated
06.06.2009 which refers the parties to Arbitration:-
         “Governing Law & Dispute  Resolution:  All  or  any  disputes  and
      differences  whatsoever  between  the  parties  arising  out  of  this
      Agreement or relating to or touching the mutual rights and obligations
      of  the  parties  shall  be  subject  to  the  jurisdiction   of   the
      Courts/Forums in Delhi only and shall be referred for adjudication  to
      the sole arbitrator, to be appointed solely  and  exclusively  by  the
      FIRST PARTY, whose decision  shall  be  final  and  binding  upon  the
      parties.  The arbitration proceedings shall  be  held  at  New  Delhi,
      India and only the  Courts  at  New  Delhi,  India  alone  shall  have
      jurisdiction over the subject matter of this AGREEMENT.”

25)   In Sundaram Finance Limited and Another vs. T. Thankam (2015)  14  SCC
444, this Court has held as under:-

        “8. Once there is an agreement between the  parties  to  refer  the
      disputes or differences arising out of the agreement  to  arbitration,
      and in case  either  party,  ignoring  the  terms  of  the  agreement,
      approaches the civil court and the other party, in terms of Section  8
      of the Arbitration Act, moves the court for referring the  parties  to
      arbitration before the first statement on the substance of the dispute
      is filed, in view of the peremptory  language  of  Section  8  of  the
      Arbitration Act, it is obligatory for the court to refer  the  parties
      to arbitration in terms of the agreement, as held by this Court in  P.
      Anand Gajapathi Raju v. P.V.G. Raju.”



26)   In P. Anand Gajapathi Raju & Others vs. P.V.G. Raju (Dead) and  Others
(2000) 4 SCC 539, it was held as under:-

      “5. The conditions which are  required  to  be  satisfied  under  sub-
   sections (1) and (2) of Section 8  before  the  court  can  exercise  its
   powers are:
        (1) there is an arbitration agreement;
        (2) a party to the agreement brings an action in the court  against
      the other party;
        (3) subject-matter of the action is the same as the  subject-matter
      of the arbitration agreement;
        (4) the other party moves the court for referring  the  parties  to
      arbitration before it submits his first statement on the substance  of
      the dispute.”




In view of the above, where an agreement  is  terminated  by  one  party  on
account of the breach committed by the other, particularly, in a case  where
the clause is framed in wide and general  terms,  merely  because  agreement
has come to an end by its termination by  mutual  consent,  the  arbitration
clause does not get perished nor is rendered inoperative.   This  Court,  in
the case of P. Anand Gajapathi Raju (supra), has held that the  language  of
Section 8 is peremptory in nature.  Therefore, in cases where  there  is  an
arbitration clause in the agreement, it  is  obligatory  for  the  court  to
refer the parties to arbitration in terms  of  their  arbitration  agreement
and nothing remains to be decided in  the  original  action  after  such  an
application  is  made  except  to  refer  the  dispute  to  an   arbitrator.
Therefore, it is clear that in an agreement between the parties  before  the
civil court, if there is a clause for arbitration, it is mandatory  for  the
civil court to refer the dispute to an arbitrator.
27)   In view of the above, we are of the considered  opinion  that  in  the
present case, the prerequisites for  an  application  under  Section  8  are
fulfilled, viz., there  is  an  arbitration  agreement;  the  party  to  the
agreement brings an action  in  the  court  against  the  other  party;  the
subject matter of the action is  the  same  as  the  subject-matter  of  the
arbitration agreement; and the other party moves  the  court  for  referring
the parties to arbitration before it submits  his  first  statement  on  the
substance of the dispute.  We have come to the  conclusion  that  the  civil
court had no jurisdiction to entertain a suit  after  an  application  under
Section 8 of the Act is made for arbitration. In such a  situation,  refusal
to refer the dispute to arbitration would amount to failure  of  justice  as
also causing irreparable injury to the defendant.
28)   As we have already held that the oral agreement as  evidenced  by  the
transcript of conversation between the appellant No. 2  and  the  respondent
on  06/07.04.2011  substituting  the   alleged   written   agreement   dated
06.06.2009 and which contained a clause for  arbitration,  the  same  clause
for arbitration would  also  be  applicable  to  the  oral  agreement.   The
Division Bench has also erred in  law  in  affirming  the  order  passed  by
learned single Judge.  Both the orders, therefore, cannot be  sustained  and
are set aside and, therefore, in view of the decision in P.R. Shah  (supra),
there  can  only  be  one  arbitrator  and  there  can  only  be  a   single
arbitration.
29)   In view of the  foregoing  discussion,  the  appeal  succeeds  and  is
allowed.  However, instead of remitting  the  matter  back  to  the  learned
single Judge for deciding the suit itself on merits, we refer  the  disputes
raised by the appellants in CS(OS) 1532  of  2012  to  the  sole  arbitrator
already appointed, viz., Hon’ble Mr. Justice V.K. Gupta (Retd.) and  request
the arbitrator to decide the disputes expeditiously in accordance with law.


                            ...…………….………………………J.


                                 (MADAN B. LOKUR)


















































                            .…....…………………………………J.


                               (R.K. AGRAWAL)



NEW DELHI;
APRIL 10, 2017.

The High Court while dealing with the plea of false complaints held that there was no reason to hold that the criminal complaint filed by the respondent-wife was false and mala fide. We are unable to agree with this finding of the High Court and the court below. Both the courts below relied upon the statement of the wife that her husband had often visited her house and she fulfilled her marital obligations. These observations are not based on any reliable or cogent evidence on record. 12. Though we have held that the acts of the wife in filing false complaints against the husband amounts to cruelty, we are, however, not oblivious to the requirements of the wife to have a decent house where she can live. Her son and daughter-in-law may not continue to live with her forever. Therefore, some permanent arrangement has to be made for her alimony and residence -13. The appeal is accordingly allowed. The judgment and order dated 01.03.2013, passed by the High Court in D.B. Civil Miscellaneous Appeal No.1432 of 2004 and the judgment and decree dated 05.08.2004, passed by the Family Court, Udaipur in Civil Case No. 56 of 2000 are set aside. The petition for divorce filed by the husband under Section 13 of the Act is decreed and the marriage of the parties solemnized on 13.04.1989 is dissolved by a decree of divorce. The wife shall be entitled to permanent alimony of Rs. 50,00,000/- (Rupees Fifty Lakhs Only) and a residential flat of the value of up to Rs.1,00,00,000/- (Rupees One Crore Only), as directed hereinabove.

                                                                  REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION


                       CIVIL APPEAL NO. 10719 OF 2013

Raj Talreja                                           … Appellant(s)

                                   Versus

Kavita Talreja                                     …Respondent(s)



                               J U D G M E N T


DEEPAK GUPTA, J.


            Parties to the appeal got married in  1989  according  to  Hindu
rites.  Out of this wedlock a son was born in the  year  1990.   It  is  not
disputed that till the year 1999 both husband and wife lived  together  with
the parents of the husband.  In the year 1999, the couple shifted  to  their
own residence.  On 19.03.2000, the husband left the  matrimonial  home  and,
soon thereafter, on 25.03.2000, filed a petition for grant of  a  decree  of
divorce dissolving the marriage.
2.    It is not disputed that the wife filed a suit praying  for  injunction
that the husband should not be permitted to enter the matrimonial home.   On
07.11.2000, certain news items appeared in the newspapers in  which  serious
allegations were made against the husband.   These  newspaper  reports  were
based on the intimation given by the wife.  On 04.12.2000, the wife filed  a
complaint to the State Women Commission making serious  allegations  against
the husband.  Thereafter, on 05.12.2000, she sent a similar  letter  to  the
Chief Justice of the High Court as well as  the  Superintendent  of  Police.
Finally, on 07.12.2000, she made another complaint to  the  Chief  Minister.
On 16.03.2001, these complaints were found to be false.   On  12.04.2001,  a
First Information Report  (for  short  the  ‘FIR’)  was  registered  at  the
instance of the wife against the appellant husband under  Section  452,  323
and 341 of the Indian Penal Code.  The police investigated  the  matter  and
filed a report on 30.04.2001 stating that there is  no  merit  in  the  FIR.
According to the police, the injuries on the person of the  wife  were  self
inflicted and she has filed a  false  FIR.   It  was  recommended  that  the
criminal proceedings be initiated against  her  under  Section  182  of  the
Indian Penal  Code  (for  short  ‘IPC’).   It  is  not  disputed  that  till
16.03.2001, such criminal proceedings were initiated against the wife.
3.    The husband moved an amendment application  in  the  divorce  petition
incorporating all these facts and alleging that due to filing of  the  false
complaints before various authorities he had been subjected  to  cruelty  by
the wife. This is the only issue raised before us. The learned  trial  Judge
dismissed  the  petition.   The  appeal  filed  by  the  husband  was   also
dismissed.  Hence, this appeal.
4.    It would be pertinent to mention that  in  the  year  2012,  11  years
after the police had submitted its report and  after  proceedings  had  been
initiated against the wife, the wife filed a protest  petition  against  the
cancellation of FIR against the husband, in which notice was issued  by  the
court below.  However, on  a  revision  being  filed  by  the  husband,  the
revisional court allowed the revision petition and quashed the order of  the
trial court.  As  a  result,  there  are  no  criminal  proceedings  pending
against the husband.
5.    We have heard Mr. Gaurav Agrawal, learned counsel  for  the  appellant
and Ms. Vibha Datta Makhija, learned senior counsel for the respondent.
6.    Mr. Agrawal, learned counsel has contended that the acts of  the  wife
in levelling defamatory allegations and filing false complaints against  the
husband amounts to cruelty.  On the other hand, Ms. Makhija, learned  senior
counsel has submitted that her client is not at fault and  cruelty  has  not
been proved.  She further submits that her client wants the status of  being
a legally married woman and she prays that the appeal be dismissed.
7.    We may now refer to the evidence relied  upon  by  the  husband.   The
first is a newspaper report dated 07.11.2000, in which it is  reported  that
the wife had alleged that she was beaten  by  her  husband  and  his  family
members many times for not fulfilling  the  demand  of  dowry.   There  were
allegations that she was kept like an orphan and  twice  attempts  had  been
made to set her on fire.  These allegations were made in a  letter  sent  by
the wife to the police.  Thereafter, the wife sent a  similar  complaint  to
various authorities including the State Women  Commission,  Rajasthan.   She
sent a telegram to the Chief Justice  of  the  Rajasthan  High  Court  again
alleging that her husband and in-laws had attempted to burn her and  engaged
goondas to eliminate her.  Complaint was also  made  to  Chief  Minister  of
Rajasthan.  The matter was referred to the police.  On investigation by  the
police, the allegations were found to be  totally  false.   Thereafter,  the
wife filed a complaint against her husband  and  3  other  persons  alleging
house trespass against them and that she had been assaulted  and  threatened
to leave the house.  In this case also, the final report of  the  police  is
that the complaint is  baseless  and  false  and  the  injuries  were  self-
inflicted.
8.    As noted above, these findings of the police  have  attained  finality
and as on date there is no criminal case pending against  the  husband.   It
is more than obvious that the allegations levelled by the  wife  are  false.
It may be true that  these  allegations  were  levelled  after  the  divorce
petition had been filed and the wife may have been in an agitated  state  of
mind.  However, that did not give her a right to make defamatory  statements
against the husband.  The falseness of the allegations  is  borne  out  from
the fact that the police did not even find  it  a  fit  case  to  be  tried.
After the police filed its cancellation report, the  wife  kept  silent  and
after 11 years she filed a protest petition.

9.    This Court in Para 16 of K. Srinivas Rao v. D.A. Deepa[1] has held  as
follows:
“16. Thus, to the instances illustrative of mental cruelty  noted  in  Samar
Ghosh v. Jaya Ghosh, 2007 (4) SCC 511, we  could  add  a  few  more.  Making
unfounded indecent defamatory allegations against the spouse or his  or  her
relatives in the pleadings, filing of complaints or issuing notices or  news
items which may have adverse impact on the business prospect or the  job  of
the spouse and filing repeated false  complaints  and  cases  in  the  court
against the spouse would, in the facts of a case, amount to  causing  mental
cruelty to the other spouse.”

      In Ravi Kumar v. Julmidevi[2],  this  Court  while  dealing  with  the
definition of cruelty held as follows:
“19. It may be true that there is no definition of cruelty  under  the  said
Act.  Actually  such  a  definition  is   not   possible.   In   matrimonial
relationship, cruelty would obviously mean absence  of  mutual  respect  and
understanding between the  spouses  which  embitters  the  relationship  and
often leads to various  outbursts  of  behaviour  which  can  be  termed  as
cruelty. Sometime cruelty in a matrimonial relationship may  take  the  form
of violence, sometime it may take a different form.  At  times,  it  may  be
just an attitude or an approach. Silence in some situations  may  amount  to
cruelty.
20. Therefore, cruelty in matrimonial behaviour defies  any  definition  and
its categories can never be closed. Whether the  husband  is  cruel  to  his
wife or the wife is cruel to her husband has to be  ascertained  and  judged
by taking into account the entire facts and circumstances of the given  case
and not by any predetermined rigid formula.  Cruelty  in  matrimonial  cases
can be of infinite variety—it may be subtle or even brutal  and  may  be  by
gestures and words. That possibly explains why Lord Denning  in  Sheldon  v.
Sheldon, (1966) 2 WLR 993 held that categories  of  cruelty  in  matrimonial
cases are never closed.”


10.      Cruelty can never be defined  with  exactitude.   What  is  cruelty
will depend upon the facts and circumstances of each case.  In  the  present
case, from the facts narrated above, it  is  apparent  that  the  wife  made
reckless, defamatory and false accusations against her husband,  his  family
members and colleagues, which would definitely have the effect  of  lowering
his reputation in the eyes of his peers.  Mere filing of complaints  is  not
cruelty, if there are justifiable reasons to file  the  complaints.   Merely
because no action is taken on the complaint or after trial  the  accused  is
acquitted may not be a ground to treat  such  accusations  of  the  wife  as
cruelty within the meaning of the Hindu Marriage Act 1955  (for  short  ‘the
Act’).  However, if it is found that the  allegations  are  patently  false,
then there can be no manner of doubt that  the  said  conduct  of  a  spouse
levelling false accusations against the other spouse  would  be  an  act  of
cruelty.  In the present case, all the allegations were found to  be  false.
Later, she filed another complaint alleging  that  her  husband  along  with
some other persons had trespassed into her house  and  assaulted  her.   The
police found, on investigation, that not only was the  complaint  false  but
also the injuries were self inflicted by the wife.  Thereafter,  proceedings
were launched against the wife under Section 182 of IPC.
11.     We have perused the judgment of the  High  Court.   The  High  Court
while dealing with the plea of false  complaints  held  that  there  was  no
reason to hold that the criminal complaint filed by the respondent-wife  was
false and mala fide.  We are unable to agree with this finding of  the  High
Court and the court below.  Both the courts below relied upon the  statement
of the wife that her husband had often visited her house and  she  fulfilled
her marital obligations.  These observations are not based on  any  reliable
or cogent evidence on record.  It is not disputed before us  that  the  wife
continues to live in the house which belongs to the mother  of  the  husband
whereas the husband lives along with his parents in  a  separate  house  and
the son and daughter-in-law of the parties live with the wife.  The  son  is
working with the husband.  We may note that  Ms.  Makhija  has  very  fairly
stated before  us  that  the  husband  had  always  fulfilled  his  paternal
obligations to his son and is continuing to pay maintenance to his  wife  as
fixed by the court.
12.     Though we have held that the  acts  of  the  wife  in  filing  false
complaints against the husband amounts to  cruelty,  we  are,  however,  not
oblivious to the requirements of the wife to have a decent house  where  she
can live.  Her son and daughter-in-law may not continue  to  live  with  her
forever.  Therefore, some permanent arrangement  has  to  be  made  for  her
alimony and residence.  Keeping in  view  the  status  of  the  parties,  we
direct that the husband shall pay  to  the  wife  a  sum  of  Rs.50,00,000/-
(Rupees Fifty Lakhs only) as one time permanent alimony  and  she  will  not
claim any further amount at any later stage.  This  amount  be  paid  within
three months from today.  We further direct that the wife shall continue  to
live in the house which belongs to  the  mother  of  the  husband  till  the
husband provides her a flat of similar size  in  a  similar  locality.   For
this purpose, the husband is directed to ensure that a flat of the value  up
to Rs.1,00,00,000/- (Rupees One Crore Only) be transferred in  the  name  of
his wife and till it is provided, she shall continue to live  in  the  house
in which she is residing at present.
13.     The appeal is accordingly allowed.  The  judgment  and  order  dated
01.03.2013, passed by the High Court  in  D.B.  Civil  Miscellaneous  Appeal
No.1432 of 2004 and the judgment and decree dated 05.08.2004, passed by  the
Family Court, Udaipur in Civil Case No. 56  of  2000  are  set  aside.   The
petition for divorce filed by the husband under Section 13  of  the  Act  is
decreed and  the  marriage  of  the  parties  solemnized  on  13.04.1989  is
dissolved by a decree of divorce.  The wife shall be entitled  to  permanent
alimony of Rs. 50,00,000/- (Rupees Fifty Lakhs Only) and a residential  flat
of the value of up to Rs.1,00,00,000/- (Rupees One Crore Only), as  directed
hereinabove.  Pending application(s), if any, stand(s)      disposed of.


                                                           …………………………………..J.
                                                         (ADARSH KUMAR GOEL)




                                                           …………………………………..J.
                                                              (DEEPAK GUPTA)


New Delhi
April 24, 2017
-----------------------
[1]    2013 (5) SCC 226.
[2]    2010 (4) SCC 476.

It is well settled law that the jurisdiction to decide the appeal on merits can be exercised by the Appellate Court only when the appeal is filed under Section 96 or 100 of the Code against the decree. Such was not the case here.- We are also unable to agree with the High Court when it held that the first Appellate Court instead of remanding the case to the Trial Court should have heard the appeal on merits. This finding, in our view, is bad in law for the reason that firstly, it was not possible for the first Appellate Court to have recorded the evidence at the appellate stage. Secondly, having regard to the nature of factual controversy involved and keeping in view the nature of additional evidence filed which too needed to be proved in evidence, it was not possible to retain the appeal to itself and invite finding only on additional evidence by taking recourse to powers under Rule 25; and lastly, wholesome remand, as directed by the first Appellate Court, would enable the Trial Court to appreciate the entire evidence in its proper perspective while deciding the suit afresh on merits.- We are also unable to agree with the High Court when it reversed the finding of the first Appellate Court, in so far as it pertained to application filed by the plaintiff under Order 41 Rule 27 of the Code. In our opinion, no fault could be found in the finding of the first Appellate Court on this issue for the following reasons: 29) First, the additional evidence sought to be filed at the first appellate stage was held to be material and necessary for proper adjudication of the suit; and second, the reasons as to why it could not be filed during the trial also found acceptance to the first Appellate Court. 30) In order to enable the parties to have fair trial in civil suit and with a view to do substantial justice, the first Appellate Court, in our view, rightly allowed the plaintiff to file the additional documents in appeal which satisfied the requirements of Order 41 Rule 27 of the Code. 31) We cannot, therefore, concur with the reasoning and the conclusion arrived at by the High Court in the light of reasoning mentioned above. 32) In view of foregoing discussion, we allow the appeal, set aside the impugned order of the High Court and restore that of the first Appellate Court with modification as mentioned in para 22. 33) Liberty is granted to the defendants to file in rebuttal any additional evidence before the Trial Court in support of their case.

      REPORTABLE
                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL No. 5540 OF 2017
                 (Arising out of S.L.P.(c) No. 2771 of 2014)


J. Balaji Singh                         ….Appellant(s)

                                   VERSUS

Diwakar Cole & Ors.                    ….Respondent(s)


                               J U D G M E N T
Abhay Manohar Sapre, J.
      1)    Leave granted.
2)    This appeal is filed by the plaintiff against the final  judgment  and
order dated 26.09.2013 passed  by  the  High  Court  of  Judicature,  Andhra
Pradesh at Hyderabad in Civil  Misc.  Appeal  No.645  of  2012  whereby  the
learned Single Judge of the High Court  allowed  the  appeal  filed  by  the
defendants (respondents herein) and set aside the judgment and decree  dated
17.02.2012 passed by the Additional District  Judge,  Kadapa  and  confirmed
the judgment and decree dated 31.12.2009 passed by the Senior  Civil  Judge,
Kadapa in Original Suit No.62 of 2005.
3)    Facts necessary for the disposal of the appeal, which lies  in  narrow
compass, need mention infra to appreciate the controversy  involved  in  the
appeal.
4)    The appellant  is  the  plaintiff  whereas  the  respondents  are  the
defendants in a civil suit out of which this appeal arises.
5)    The appellant filed a civil suit being O.S. No.62 of 2005  before  the
Senior Civil Judge, Kadapa against the respondents for  declaration  of  his
title over the suit property (described in detail in  the  Schedule  to  the
plaint)  and  also  sought  permanent  injunction  against  the  respondents
restraining them from interfering in his possession over the suit  property.

6)    The respondents filed their respective written statements  and  denied
the appellant's claim over the suit property. The Trial Court framed  issues
on law and facts on the basis of the pleadings for adjudicating  the  rights
of the parties arising in  the  case.  The  parties  filed  the  documentary
evidence and adduced oral evidence in support of their respective case.
7)    The Trial Court, vide judgment/decree dated 31.12.2009 in  O.S.  No.62
of 2005 dismissed the appellant's suit. Felt aggrieved, the appellant  filed
first appeal being A.S. No.42 of 2010  before  the  VI  Additional  District
Judge, Kadapa. In appeal, the appellant filed one application (I.A. No.  211
of 2011) under Order 41 Rule 27 read with Section 151 of the Code  of  Civil
Procedure,  1908  (hereinafter  referred  to  as  “the  Code")  and   sought
permission to file additional evidence (documents) in support  of  his  case
which, according to him, was material and necessary for the proper  disposal
of the suit.  It was alleged that  the  additional  evidence  could  not  be
filed in suit at that time due to its non-availability with  the  plaintiff.
The respondents opposed the application.
8)    The  first  Appellate  Court,  by  judgment/decree  dated  17.02.2012,
allowed the application (I.A.No.211 of 2011) filed by  the  appellant  under
Order 41 Rule 27 read with Section 151 of the Code  and  then  proceeded  to
decide the appeal on merits.  By his lengthy  judgment  (pages  97  to  129,
Annexure P-10 to SLP paper book)  the  first  Appellate  Judge  allowed  the
appeal, set  aside the judgment/decree  of the Trial Court and remanded  the
case to the Trial Court for deciding the suit afresh on merits  uninfluenced
by any of the observations made by him in the judgment.   The  parties  were
granted liberty to adduce additional evidence in support of  their  case  in
the Trial Court.
9)     Felt  aggrieved  by   the   aforesaid   judgment,   the   respondents
(defendants) filed C.M.A. No.645 of 2012 before the High Court  under  Order
43 Rule 1 (u) of the Code.
10)   By impugned judgment, the learned Single  Judge  allowed  the  appeal,
set aside the judgment of the first Appellate Court and dismissed  the  suit
by restoring the judgment and decree of the  Trial  Court.  Felt  aggrieved,
the plaintiff has filed this appeal by way  of  special  leave  before  this
Court.
11)   Heard Mr. D. Bharat Kumar, learned counsel for the appellant  and  Mr.
Y. Raja Gopala Rao, learned counsel for the respondents.
12)   Having heard learned Counsel for the parties and  on  perusal  of  the
record of the case, we are constrained to allow the appeal,  set  aside  the
impugned judgment and remand the case to the Trial Court  for  deciding  the
civil suit afresh on merits in accordance with law.
13)   The question, which  arises  for  consideration  in  this  appeal,  is
whether the High Court was justified in allowing the defendants’ appeal  and
thereby justified in restoring the judgment/decree of the Trial Court  which
had dismissed the suit.  In other words, the questions  which  arose  before
the High Court were, whether the first  Appellate  Court  was  justified  in
setting aside the judgment/decree of the Trial Court; and if so, whether  it
was justified in remanding the case to the Trial Court for  fresh  trial  of
the  suit  in  accordance  with  law.  Another  question,  which  fell   for
consideration, was whether  the  first  Appellate  Court  was  justified  in
allowing the application filed by the appellant (plaintiff) under  Order  41
Rule 27 of the Code by which the plaintiff had sought permission  to  adduce
additional evidence in appeal in support of his case.
14)   As is clear from mere perusal of the impugned judgment, we  find  that
the High Court recorded inconsistent finding  insofar  as  it  pertained  to
Order 41 Rule 27 of the Code.   In Para 26, it was held  as under:
"26………….Assuming that the lower appellate Court  felt  that  the  additional
documents filed by the plaintiff in the appeal before it have  some  bearing
on the  case,  nothing  prevented  it  from  considering  the  same,  giving
opportunity to both parties to lead evidence and deciding the appeal……."

15)   Whereas in the other part of the judgment, the  learned  Single  Judge
did not approve the approach  of  the  first  Appellate  Court  in  granting
indulgence to the appellant to fill the  lacuna  by  adducing  evidence.  Be
that as it may, having observed this, the High Court  proceeded  to  examine
the case on  merits  and  eventually  allowed  the  appeal,  set  aside  the
judgment of the first Appellate Court and restored  the  judgment/decree  of
the Trial Court. The effect of the judgment of the High Court  is  that  the
plaintiff's suit stands dismissed.
16)   The main question,  which  fell  for  consideration  before  the  High
Court, was whether the first Appellate Court  was  right  in  remanding  the
case to the Trial Court for fresh trial on merits?
17)   There are three provisions in the Code which deal with  the  power  of
the Appellate Court to remand the case to the Trial Court. These  provisions
are Order 41 Rules 23, 23-A, and 25.
18)   So far as Order 41 Rule 23 is  concerned,  it  enables  the  Appellate
Court to remand the case to the Trial Court when it  finds  that  the  Trial
Court has disposed of the suit  upon  a  preliminary  point.  The  Appellate
Court in such cases is empowered to direct the Trial  Court  to  decide  all
the issues on evidence on record.
19)   So far as Rule 23-A is concerned, it enables the  Appellate  Court  to
remand the case to the Trial Court when  it  finds  that  though  the  Trial
Court has disposed of the suit on all the issues  but  on  reversal  of  the
decree in appeal, a  re-trial  is  considered  necessary  by  the  Appellate
Court.
20)   So far as Rule 25 is concerned, it  enables  the  Appellate  Court  to
frame or try the issue if it  finds  that  it  is  essential  to  the  right
decision of the suit and was not framed by the Trial  Court.  The  Appellate
Court in such case may, accordingly, frame the issues and refer the same  to
the Trial Court to take the evidence and record the findings on such  issues
and return to the Appellate Court for deciding the appeal.  In  such  cases,
the Appellate Court retains the appeal to itself.
21)   Now coming to the facts of the case, we are of the considered  opinion
that once the first Appellate Court allowed the application under  Order  41
Rule 27 of Code and took on record the additional evidence, it  rightly  set
aside the judgment/decree of the Trial Court giving liberty to  the  parties
to lead additional evidence  in  support  of  their  case  which,  in  turn,
enabled the Trial Court to decide the civil suit afresh  on  merits  in  the
light  of  entire  evidence.  The  first  Appellate  Court  was,  therefore,
justified in taking recourse to powers  conferred  on  the  Appellate  Court
under Order 41 Rule 23-A for remanding the case to the Trial Court. We  find
no fault in exercise of such power by the first Appellate Court.
22)   In our considered view, the  only  error  which  the  first  Appellate
Court committed was that it went on to record the  findings  on  merits.  In
our view, it was not necessary to do so while passing the order  of  remand.
The reason is that once the first  Appellate  Court  formed  an  opinion  to
remand the case, it was required to give reasons in support  of  the  remand
order as to why the remand is called for in the case.   Indeed,  the  remand
was made only to enable the Trial  Court  to  decide  the  case  on  merits.
Therefore, there was no  need  to  discuss  much  less  record  findings  on
several issues on merits.  It was totally uncalled for.
23)   So far as the impugned order is concerned,  the  High  Court,  in  our
view, committed jurisdictional error when it also again  examined  the  case
on merits and set aside the  judgment  of  the  first  Appellate  Court  and
restored the judgment of the Trial Court. The High Court,  in  our  opinion,
should not have done this for the simple reason that it was  only  examining
the legality of the remand order in an appeal  filed  under  Order  43  Rule
1(u) of the Code.  Indeed, once the High Court came  to  a  conclusion  that
the remand order was bad in law then it could only remand the  case  to  the
first Appellate Court with  a  direction  to  decide  the  first  appeal  on
merits.
24)   The High Court failed to see  that  when  the  first  Appellate  Court
itself did not decide the appeal on  merits  and  considered  it  proper  to
remand the case to the Trial Court,  a  fortiori,  the  High  Court  had  no
jurisdiction to decide the appeal on merits. Moreover, Order  43  Rule  1(u)
confers limited power on the High Court to examine  only  the  legality  and
correctness of the remand order of the first Appellate Court but not  beyond
that. In other words, the High Court should have seen  that  Order  43  Rule
1(u) gives a limited power to examine the  issue  relating  to  legality  of
remand order, as is clear from Order 43 Rule 1(u) which reads thus:-
“1(u)  an order under rule 23 or rule 23A of Order  XLI  remanding  a  case,
where an appeal would lie from the decree of the Appellate Court”

25)   It is well settled law that the jurisdiction to decide the  appeal  on
merits can be exercised by the Appellate  Court  only  when  the  appeal  is
filed under Section 96 or 100 of the Code against the decree.  Such was  not
the case here.
26)   In the light of abovementioned discussion, we are of the opinion  that
the High Court had no  jurisdiction  to  consider  much  less  deciding  the
entire case of the parties on merits in such appeal.
27)   We are also unable to agree with the High Court when it held that  the
first Appellate Court instead of remanding  the  case  to  the  Trial  Court
should have heard the appeal on merits. This finding, in our  view,  is  bad
in law for the reason that firstly,  it  was  not  possible  for  the  first
Appellate Court to have  recorded  the  evidence  at  the  appellate  stage.
Secondly, having regard to the nature of factual  controversy  involved  and
keeping in view the nature of additional evidence filed which too needed  to
be proved in evidence, it was not possible to retain the  appeal  to  itself
and invite finding only on additional evidence by taking recourse to  powers
under Rule 25; and lastly,  wholesome  remand,  as  directed  by  the  first
Appellate Court, would enable the  Trial  Court  to  appreciate  the  entire
evidence in its  proper  perspective  while  deciding  the  suit  afresh  on
merits.
28)   We are also unable to agree with the High Court when it  reversed  the
finding of the  first  Appellate  Court,  in  so  far  as  it  pertained  to
application filed by the plaintiff under Order 41 Rule 27 of  the  Code.  In
our opinion, no fault could be found in the finding of the  first  Appellate
Court on this issue for the following reasons:
29)   First, the additional  evidence  sought  to  be  filed  at  the  first
appellate  stage  was  held  to  be  material  and  necessary   for   proper
adjudication of the suit; and second, the reasons as to why it could not  be
filed during the trial also found acceptance to the first Appellate Court.
30)   In order to enable the parties to have fair trial in  civil  suit  and
with a view to do substantial justice, the first  Appellate  Court,  in  our
view, rightly allowed the plaintiff to  file  the  additional  documents  in
appeal which satisfied the requirements of Order 41 Rule 27 of the Code.
31)   We cannot, therefore, concur with the  reasoning  and  the  conclusion
arrived at by the High Court in the light of reasoning mentioned above.
32)   In view of foregoing discussion, we allow the appeal,  set  aside  the
impugned order of the High Court and restore that  of  the  first  Appellate
Court with modification as mentioned in para 22.
33)   Liberty  is  granted  to  the  defendants  to  file  in  rebuttal  any
additional evidence before the Trial Court in support  of  their  case.  The
Trial  Court  will  allow  the  parties  to  lead  oral  evidence  to  prove
additional documentary evidence and then decide the suit  afresh  on  merits
strictly on the basis of evidence  in  accordance  with  law  without  being
influenced by any observations made by the first Appellate Court,  the  High
Court  and  this  Court  in  their  respective  orders   passed   in   these
proceedings.
34)   The Trial Court shall  ensure  disposal  of  the  suit,  as  directed,
within six months as an outer limit. Parties  to  appear  before  the  Trial
Court on 01.05.2017 to  enable  the  Trial  Court  to  decide  the  suit  as
directed above.


………...................................J.
                              [R.K. AGRAWAL]


…...……..................................J.
                                [ABHAY MANOHAR SAPRE]
      New Delhi;
April  24, 2017


-----------------------
16

whether the copy of the case diary or a portion thereof can be provided to the accused under the provisions of the Right to Information Act, we are not deciding the said question in the matter on hand. In the case of Sidharth etc. etc. vs. State of Bihar[3], the entire case diary maintained by the police was made available to the accused by the trial Court. In that context certain observations were made by this Court which read thus:- “….But if the entire case diary is made available to the accused, it may cause serious prejudice to others and even affect the safety and security of those who may have given statements to the police. The confidentiality is always kept in the matter of criminal investigation and it is not desirable to make available the entire case diary to the accused. In the instant case, we have noticed that the entire case diary was given to the accused and the investigating officer was extensively cross-examined on many facts which were not very much relevant for the purpose of the case. The learned Sessions Judge should have been careful in seeing that the trial of the case was conducted in accordance with the provisions of CrPC.”- neither the police officer has refreshed his memory with reference to entries in the police diary nor has the trial court used the entries in the diary for the purposes of contradicting the police officer (PW-15), it is not open for the accused to produce certain pages of police diary obtained by him under the provisions of Right to Information Act for the purpose of contradicting the police officer. In view of the above, the High Court is not justified in permitting the accused to produce certain pages of police diary at the time of cross examination of PW-15/Investigating Officer. Accordingly, the impugned Order is liable to be set aside and the same stands set aside. The appeal is allowed.

                                                                  Reportable



                        IN THE SUPREME COURT OF INDIA

                       CRIMINAL APPELLATE JURISDICTION

                       CRIMINAL APPEAL NO 694 OF 2017
                (Arising out of SLP (Crl.) No. 9314 of 2016)


Balakram                                    ….Appellant

                                   Versus


State of Uttarakhand & Ors.             …Respondents


                               J U D G M E N T


MOHAN M. SHANTANAGOUDAR, J.


      Leave granted.

2.    The judgment in Miscellaneous application No. 1123 of 2016, passed  by
the High Court of Uttarakhand at Nainital  setting  aside  the  order  dated
31.8.2016 in I.A. No. 174 Kha in S.T. No. 1 of 2015 is  called  on  question
in this appeal.
3.    Respondent No.3 herein, along with another accused,  is  facing  trial
in ST No. 01 of 2015 before the Sessions Court, Champawat for  the  offences
punishable under Section 302 and 201  of  IPC.  During  the  course  of  the
trial,  after  the  completion  of  examination  in  chief  of   PW-15,   an
application was filed by the respondent No.3 herein (one  of  the  accused),
the contents of which read thus:-
“In the above  mentioned  case  applicant  wants  to  submit  some  key  and
relevant documents which are necessary  for  the  fair  and  just  trial  of
instant case.
It is therefore, humbly prayed that your Honour may kindly grant  permission
for the same in the interest of justice.”

4.    Along with the application, list of documents to be produced was  also
filed.  The documents are stated to be copies of  certain  pages  of  Police
diary maintained under Section 172 of the Code of Criminal  Procedure,  1973
(for brevity, Cr.P.C.), by the Investigation  Officer  (PW-15),  which  were
obtained by respondent No.3 by making an application  under  the  provisions
of Right to Information  Act,  2005.   The  respondent  No.  3  proposes  to
confront PW 15 with those documents.
5.    Such application was opposed by the  appellant  herein/complainant  on
the ground that the fresh documents cannot be allowed to be produced by  the
accused at the premature stage of trial  and  it  is  always  open  for  the
accused  to  produce  such  documents  during  the  stage  of  recording  of
statements of the  accused  under  Section  313,  Cr.P.C.   It  was  further
contended by the appellant that it is open for the accused to lead  evidence
on their behalf after recording of  the  statements  of  the  accused  under
Section 313, Cr.P.C.
6.    The  application  came  to  be  rejected  by  the  Sessions  Court  on
31.8.2016. Being aggrieved by the same, respondent No.3 herein  filed  Misc.
Application No. 1123 of  2016  before  the  High  Court  of  Uttarakhand  at
Nainital under Section 482 Cr.P.C.  By the impugned  order  the  High  Court
allowed the said miscellaneous application.
7.    Learned counsel for the appellant taking us through the order  of  the
Courts below, argued that entries made in the police diary  referred  to  in
Section 172 of the Cr.P.C. cannot be used for the purpose of Section 145  of
the Indian Evidence Act, 1872 unless the conditions laid down under  Section
172(2) and (3)  of  Cr.P.C  are  satisfied;  that  the  High  Court  is  not
justified in allowing  the  accused/respondent  herein  to  produce  certain
pages of police diary obtained by the respondent  under  the  provisions  of
Right to Information Act. He argued in support of the  order  of  the  Trial
Court.
8.    Per contra, advocate for the  respondent  argued  in  support  of  the
order of the High Court contending that the documents sought to be  produced
were for confronting PW 15-Investigation Officer who is the author of  those
documents;  the  defence  will  lose  an   opportunity   to   confront   the
investigation officer, in case the respondent is not allowed to produce  the
documents in question. According to him, it is always open  to  the  accused
to produce the documents to be relied upon by him at the time  of  recording
his statement under Section 313 of the Cr.P.C. but  the  accused  would  not
get chance to confront the Investigation Officer with such documents.
9.    Before proceeding further it would be relevant to note the  provisions
of Section 172 Cr.P.C. and Section  145  of  the  Indian  Evidence  Act  for
deciding  the issue involved:-
“Section 172 of the Code of Criminal Procedure, 1973

172. Diary of proceedings in investigation.
(1) Every police officer making an investigation under  this  Chapter  shall
day by day enter his proceedings in the investigation in  a  diary,  setting
forth the time at which the information reached him, the time  at  which  he
began and closed his investigation, the place or places visited by him,  and
a statement of the circumstances ascertained through his investigation.

(2) Any Criminal Court may send for the  police  diaries  of  a  case  under
inquiry or trial in such Court, and may use such diaries,  not  as  evidence
in the case, but to aid it in such inquiry or trial.

(3) Neither the accused nor his agents shall be entitled to  call  for  such
diaries, nor shall he or they be entitled to see them  merely  because  they
are referred to by the Court; but, if they are used by  the  police  officer
who made them to refresh his memory, or if  the  Court  uses  them  for  the
purpose of contradicting such police officer, the provisions of section  161
or section 145, as the case may be, of the Indian Evidence Act, 1872  (1  of
1872 ), shall apply,

Section 145 of the Indian Evidence Act, 1872
145. Cross-examination as to previous statements in writing.—A  witness  may
be cross-examined as to previous  statements  made  by  him  in  writing  or
reduced into writing, and relevant to  matters  in  question,  without  such
writing being shown to him, or being proved;  but,  if  it  is  intended  to
contradict him by the writing, his attention must, before  the  writing  can
be proved, be called to those parts of it which  are  to  be  used  for  the
purpose of contradicting him.”


10.    The  afore-mentioned  provisions  are  to  be  read  conjointly   and
homogenously. It is evident from sub-section (2)  of  Section  172  Cr.P.C.,
that the Trial Court has unfettered  power  to  call  for  and  examine  the
entries in the police diaries maintained by the Investigating Officer.  This
is a very important safeguard. The legislature has  reposed  complete  trust
in the Court which is conducting the inquiry or the trial.  If there is  any
inconsistency or contradiction arising in the evidence, the  Court  can  use
the entries made in the  diaries  for  the  purposes  of  contradicting  the
police officer as provided in sub-section (3) of Section 172 of  Cr.P.C.  It
cannot be denied that  Court  trying  the  case  is  the  best  guardian  of
interest of justice.  Under sub-section (2) the criminal court may send  for
diaries and may use them not as evidence, but to aid it  in  an  inquiry  or
trial.  The information which the Court may get from  the  entries  in  such
diaries usually will be utilized as foundation for questions to  be  put  to
the police witness and the court may, if necessary  in  its  discretion  use
the entries to contradict the  police  officer,  who  made  them.   But  the
entries in the  police  diary  are  neither  substantive  nor  corroborative
evidence, and that they cannot  be  used  against  any  other  witness  than
against the police officer that too for the limited extent indicated above.
11.   Coming to the use of police diary by the accused, sub-section  (3)  of
Section 172 clearly lays down that neither the accused nor his agents  shall
be entitled to call for such diaries nor he or they may be entitled  to  see
them merely because they are referred to by the Court.   But,  in  case  the
police officer uses the entries in the diaries to refresh his memory  or  if
the Court uses them for the purpose of contradicting  such  police  officer,
then the provisions of Sections 145 and 161, as the  case  may  be,  of  the
Evidence Act would apply.  Section 145 of  the  Evidence  Act  provides  for
cross examination of a witness as to the previous statements made by him  in
writing or reduced into writing and if it was intended to contradict him  in
writing, his attention must be called to those  portions  which  are  to  be
used for the purpose of contradiction.  Section 161 deals with  the  adverse
party’s right as to the writing used to refresh memory.  It can,  therefore,
be seen that, the right of the accused to cross-examine the  police  officer
with reference to the entries in the police diary is very  much  limited  in
extent and even that limited scope arises  only  when  the  Court  uses  the
entries to contradict the police officer or when the police officer uses  it
for refreshing his memory.
12.   In other words, in case if the Court does not use  such  entries   for
the purpose of  contradicting the police officer or if  the  police  officer
does not use the same for  refreshing  his  memory,  then  the  question  of
accused getting  any right to use entries even to that limited  extent  does
not arise.  The accused persons cannot force the police officer  to  refresh
his memory during his examination in the Court by referring to  the  entries
in the police diary.
13.   Section 145 of the Indian Evidence Act consists of two limbs.   It  is
provided in the first limb of Section 145  that  a  witness  may  be  cross-
examined as to the previous statements made  by  him  without  such  writing
being shown to him.   But the Second limb provides that, if it  is  intended
to contradict him by the writing, his attention  must before writing can  be
proved, be called  to those parts of  it  which  are  to  be  used  for  the
purpose of contradicting him. Sections 155 (3) and 145  of  Indian  Evidence
Act deal  with  the  different  aspects  of  the  same  matter  and  should,
therefore, be read together.
14.   Be that as it may, as mentioned supra, right of the accused  to  cross
examine the police officer with reference  to  the  entries  in  the  police
diary is very much limited in extent and  even  that  limited  scope  arises
only when the Court uses such entries to contradict the  police  officer  or
when the police officer uses it for refreshing his memory and that again  is
subject to provisions of Sections 145 and 161 of the  Indian  Evidence  Act.
Thus, a witness may be cross-examined as to his previous statements made  by
him as contemplated under Section 145 of the Evidence Act if  such  previous
statements are brought on record, in accordance with law, before  the  Court
and if the contingencies as contemplated under  Section  172(3)  of  Cr.P.C.
are fulfilled.  Section 145 of the  Indian  Evidence  Act  does  not  either
extend or control the provisions of Section 172 of Cr.P.C. We may hasten  to
add  here itself that there is no scope in Section 172  of  the  Cr.P.C.  to
enable the Court, the prosecution  or the accused to use  the  police  diary
for the purpose of contradicting any witness other than the police  officer,
who made it.
15.   In case of Malkiat Singh and  others  vs.  State  of  Punjab[1],  this
Court while considering the scope of Section 172(3) Cr.P.C.  with  reference
to Section 145 of the Indian Evidence Act observed thus:-
“It is manifest from its bare reading without  subjecting  to  detailed  and
critical analysis that the case diary  is  only  a  record  of  day  to  day
investigation of the investigating officer to  ascertain  the  statement  of
circumstances ascertained through the investigation. Under  sub-section  (2)
the court is entitled at the trial or  enquiry  to  use  the  diary  not  as
evidence in the case, but as aid to it in the inquiry or trial. Neither  the
accused, nor his agent, by operation of sub-section (3), shall  be  entitled
to call for the diary, nor shall he  be  entitled  to  use  it  as  evidence
merely because the court referred to it.  Only  right  given  thereunder  is
that if the police officer who made the entries in  the  diary  uses  it  to
refresh his memory or if the court uses it for the purpose of  contradicting
such witness, by operation of Section 161 of the Code  and  Section  145  of
the Evidence Act, it shall be used for  the  purpose  of  contradicting  the
witness, i.e. Investigation Officer or to explain it  in  re-examination  by
the prosecution, with permission of the court. It is, therefore, clear  that
unless the investigating officer or the court uses it either to refresh  the
memory or contradicting the  investigating  officer  as  previous  statement
under Section 161 that  too  after  drawing  his  attention  thereto  as  is
enjoined under Section 145 of the Evidence Act, the entries cannot  be  used
by the accused as evidence.”

16.   The police diary is only a record of day to day investigation made  by
the investigating officer.  Neither the accused nor his  agent  is  entitled
to call for such case diary and also are not entitled  to  see  them  during
the course of inquiry or trial.   The  unfettered  power  conferred  by  the
Statute under Section 172 (2)  of  Cr.P.C.  on  the  court  to  examine  the
entries of the police diary would not allow the  accused  to  claim  similar
unfettered right to inspect the case diary.
17.   This Court in the case of Mukund Lal vs. Union of India  and  Anr[2].,
while considering the question relating to  inspection of the  entries  made
in the case diary by the accused has observed thus:-

“We are of the opinion that the provision embodied  in  sub-section  (3)  of
Section  172  of  the  CrPC  cannot  be  characterised  as  unreasonable  or
arbitrary. Under sub-section (2) of Section 172 CrPC the  court  itself  has
the unfettered power to examine the entries in the diaries. This is  a  very
important safeguard. The legislature  has  reposed  complete  trust  in  the
court which is conducting the inquiry or the trial.  It  has  empowered  the
court  to  call  for  any  such  relevant  case  diary;  if  there  is   any
inconsistency or contradiction arising in the context of the case diary  the
court can use the entries  for  the  purpose  of  contradicting  the  police
officer as  provided  in  sub-section  (3)  of  Section  172  of  the  CrPC.
Ultimately there can be no better custodian or guardian of the  interest  of
justice than the court trying the case. No court will  deny  to  itself  the
power to make use of the entries in  the  diary  to  the  advantage  of  the
accused by contradicting the police officer with reference to  the  contents
of the diaries. In view of this safeguard, the  charge  of  unreasonableness
or arbitrariness cannot stand scrutiny. The petitioners claim an  unfettered
right to make roving inspection of the entries in the case diary  regardless
of whether these entries  are  used  by  the  police  officer  concerned  to
refresh his memory or regardless of the fact  whether  the  court  has  used
these entries for the purpose  of  contradicting  such  police  officer.  It
cannot  be  said  that  unless  such  unfettered  right  is  conferred   and
recognised, the embargo engrafted in sub-section (3) of Section 172  of  the
CrPC would fail to meet the test of  reasonableness.  For  instance  in  the
case diary there might be a note as regards the identity  of  the  informant
who gave some information which resulted in investigation into a  particular
aspect. Public interest demands that such an entry is not made available  to
the accused for it might endanger the safety of the informants and it  might
deter  the  informants  from  giving   any   information   to   assist   the
investigating agency, as observed in Mohinder Singh v. Emperor:

“The accused has no right to insist upon a police witness referring  to  his
diary in order to elicit information which is privileged.  The  contents  of
the diary are not at the disposal of the defence and cannot be  used  except
strictly in accordance with the provisions of Sections 162 and 172.  Section
172 shows that witness may refresh his memory by reference to them but  such
use is at the discretion of the witness and the judge, whose duty it  is  to
ensure  that  the  privilege  attaching  to  them  by  statute  is  strictly
enforced.”

The public interest requirement from the standpoint of the need to ensure  a
fair trial for an accused  is  more  than  sufficiently  met  by  the  power
conferred on the court, which is the ultimate custodian of the  interest  of
justice and can always  be  trusted  to  be  vigilant  to  ensure  that  the
interest of accused persons standing the trial, is fully safeguarded.”

18.   From the afore-mentioned, it is clear that the denial of right to  the
accused to inspect the case diary cannot be  characterized  as  unreasonable
or  arbitrary.  The  confidentiality  is  always  kept  in  the  matter   of
investigation and it is not desirable to make available the police diary  to
the accused on his demand.
19.   Since we are not called upon to decide the question as to whether  the
copy of the case diary or a portion thereof can be provided to  the  accused
under the provisions of the Right to Information Act, we  are  not  deciding
the said question in the matter on hand. In the case of Sidharth  etc.  etc.
vs. State of Bihar[3],   the entire case diary maintained by the police  was
made available to the accused by the trial Court. In  that  context  certain
observations were made by this Court which read thus:-

“….But if the entire case diary is made available to  the  accused,  it  may
cause serious prejudice to others and even affect the  safety  and  security
of those who may have given statements to the  police.  The  confidentiality
is always kept in the  matter  of  criminal  investigation  and  it  is  not
desirable to make available the entire case diary to  the  accused.  In  the
instant case, we have noticed that the entire case diary was  given  to  the
accused and the investigating  officer  was  extensively  cross-examined  on
many facts which were not very much relevant for the purpose  of  the  case.
The learned Sessions Judge should have  been  careful  in  seeing  that  the
trial of the case was conducted in accordance with the provisions of CrPC.”


20.    Since  in  the  matter  on  hand,  neither  the  police  officer  has
refreshed his memory with reference to entries in the police diary  nor  has
the trial  court  used  the  entries  in  the  diary  for  the  purposes  of
contradicting the police officer (PW-15), it is not open for the accused  to
produce certain pages of police diary obtained by him under  the  provisions
of Right to Information Act for the  purpose  of  contradicting  the  police
officer.
21.   In view of the above, the High Court is not  justified  in  permitting
the accused to produce certain pages of police diary at the  time  of  cross
examination of PW-15/Investigating Officer. Accordingly, the impugned  Order
is liable to be set aside and the same stands  set  aside.   The  appeal  is
allowed.

                                                           …….…………………………..J.
                                   (Dipak Misra)


                                                           …….…………………………..J.
                                 (A.M. Khanwilkar)


                                                             …………………………………J.
                                                   (Mohan M. Shantanagoudar)
New Delhi
Dated: April 19, 2017
-----------------------
[1]   . 1991(4) SCC 341

[2]    AIR 1989 SC 144

[3]    AIR 2005 SC 4352