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Can I say,

The old man was grateful and in return he gave John a seed. After a few days, he was surprised. It has grown a golden papaya on that tree.
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Try:

The old man was grateful, and in return, he gave John a seed. After a few days, John was surprised. The tree grew/bore a golden papaya.

Chris
Comments  
Students: Are you brave enough to let our tutors analyse your pronunciation?
Thanks. That means:

It has grown a golden papaya on that tree.

Above sentence is incorrect?
It should be in past tense because "has grown" is a present perfect tense which you use to relate a past to the present, but the previous sentences have no present tenses.

"It has grown a fruit on that tree" means something else refered to by "it" caused the tree to grow a fruit. I think what you meant is it is the tree (not something else that) grew the fruit.

Chris