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INDIA: Delhi High Court dismisses application for filing additional documents at a belated stage

May 10, 2019

By Tulip De and Ashish Sharma

The High Court of Delhi in Nitin Gupta vs. Texmaco Infrastructure & Holding Limited[1] has held that the commercial courts are not required to entertain belated filings on the ground that the Applicant failed to satisfy the Court as to why the document was not in his knowledge and if it was in his knowledge then why was the document not disclosed at the appropriate time.

Brief Facts:

The Plaintiff had instituted suit for recovery of Rs.2,36,95,461/-. It was inter alia the case of the Plaintiff :

  • that the Defendant had agreed to sell an immovable property to the Plaintiff and one Ashwini Kumar Somany;
  • that the Plaintiff and the said Ashwini Kumar Somany paid a sum of Rs.1,75,00,000/- in pursuance to the said Agreement to Sell;
  • that the said amount of Rs.1,75,00,000/- along with interest has already been returned by the Defendant to the Plaintiff and the said Ashwini Kumar Somany upon the Agreement of Sale of immovable property not fructifying; and,
  • the Plaintiff however, besides the said sum of Rs.1,75,00,000/- paid to him along with Ashwini Kumar Somany had also paid a sum of Rs.1,25,00,000/- in cash to the Defendant. This suit has been instituted for recovery of the said amount of Rs.1,25,00,000/- with interest.

Thereafter, the issues were framed in November, 2018. The Application came up for hearing in April, 2019 when the Defendants pointed out that the Plaintiff had neither filed list of witnesses nor affidavits by way of examination-in-chief of his witnesses inspite of expiry of the time granted therefor.

The Plaintiff, while filing the application, sought leave of the Hon’ble Court to file a letter dated September 02, 2013 of the Defendant to the Plaintiff, whereas, the suit was filed in 2016.

Plaintiff’s Contentions:

Counsel for the Plaintiff made the submissions, amongst other submissions document now sought to be filed remained to be filed owing to the error of the earlier Advocate for the Plaintiff. The Counsel for the Plaintiff also made the following submissions:

  • that the “Defendant” had changed its counsel in the month of November, 2018 and engaged another advocate who asked the Plaintiff to bring all the papers related to the above-noted case so that the proposed issues be drafted for the convenience of the Court;
  • the newly engaged Counsel, while going through the documents brought by the Plaintiff, “lay his hands on the” document now sought to be filed and “during the conference/discussion of the case the Plaintiff explained to his new Counsel that he had found this Letter signed by one Mr. L.K. Jain, in the pocket of his old clothes when he was distributing his old warm clothes to poor indigent persons in the last week of August, 2018 and could not find the above-said letter at the time of filing of the above-noted Suit”;
  • said letter was also handed over to the Plaintiff by the Executive Director of the Defendant.
  • That non-filing of the document was not deliberate but due to an inadvertent bona fide mistake.

Defendant’s Contentions:

Per contra, the Counsel for the Defendant, while opposing the application of the Plaintiff, made the following submissions:

  • That the Plaintiff had instituted a commercial suit.
  • That under Order XI Rule 1(5) of the Code of Civil Procedure, 1908 (CPC) as applicable to commercial suits provides that the Plaintiff shall not be allowed to rely on documents which were in the Plaintiff’s power, possession, control or custody and not disclosed along with plaint or within the extended period if any granted, save and except by leave of Court and which leave is to be granted only on the Plaintiff establishing reasonable cause for non-disclosure along with the plaint;
  • That Order XI Rule 1(6) requires the Plaintiff in a commercial suit to set out in detail the documents and Order XI Rule 1(2) & (3) requires declaration of documents to be made on oath;
  • That the Plaintiff, while filing this suit nowhere disclosed that there was any such document addressed by the Defendant to the Plaintiff, as is sought to be filed now, and which was immediately not available to him;
  • That the Plaintiff, at the time of filing the suit, declared that there was no document other than those filed. Even otherwise, the document sought to be filed does not inspire confidence;
  • That the Plaintiff is filing a photocopy and that the document which was sought to be filed was, in light of the facts, clearly forged and fabricated and only an afterthought.

Court’s Observation and Decision:

  • In light of the facts and circumstances of the case, observed a document filed could be permitted to be filed beyond the stage prescribed for filing thereof, only in proof and aid of the case which is pleaded. No document which runs contrary to or inconsistent with the pleaded case and on which the issues have to be framed, can be permitted to be filed. It was further observed that the document sought to be filed was inconsistent with the pleadings and on the basis whereof, issues were framed in the suit.
  • The Hon’ble Court noted that there was merit in the contention of the Counsel for the Defendant that under Order XI of the CPC as applicable to Commercial Suits, being entitled to belatedly file a document only if “establishes reasonable cause for non-disclosure (of the document now sought to be filed) along with the plaint”. However, there was not a whisper in the declaration in terms of Order XI Rule 1(3) of CPC as applicable to Commercial Suits, of there being in existence the letter sought to be placed on record. Also, there was no explanation as to non-disclosure along with the plaint.
  • That for the Plaintiff to be entitled to leave of the Court under Order XI Rule 1(5) of the CPC for belatedly filing a document, it is essential for the Plaintiff to not only plead but “establish” “reasonable cause for non-disclosure along with the plaint”. In the present case, let alone “establishing”, the plaintiff has not even pleaded reasonable cause for non-disclosure along with the plaint.
  • That unless, the Commercial Divisions, while dealing with the commercial suits, so start enforcing Rules legislated for commercial suits, and refuse to entertain applications for late filing of documents, especially with respect to documents of suspicious character and continue to show leniency in the name of “interest of justice” and “a litigant ought not to suffer for default of advocate”, the commercial suits will start suffering from the same malady with which the ordinary suits have come to suffer and owing whereto the need for the Commercial Courts Act, 2015 was felt.
  • The Hon’ble Court also observed that a litigant who fails to satisfy the Court, while seeking to belatedly file the document, as to why no disclosure of such document was made, cannot be permitted to so file documents.
  • Post amendment with effect from July 01, 2002 of CPC, vide Order VII Rule 14 (1) & (3) and Order VIII Rule 1A (1) & (3) a Plaintiff was required to file documents along with plaint and a Defendant required to file documents along with written statement and documents were not permitted to be received thereafter without leave of the Court. Prior to 2002, the parties, if had not filed the document prior to settlement of issues, were required to satisfy the Court as to why the document was not filed till the stage of settlement of issues and were not required by language of Order XIII Rule (2) to satisfy whether the document was within their knowledge or not.
  • That though with effect from July 02, 2002, for late filing of documents only leave of the Court was required to be taken but the test continued to be applied by the Courts for granting such leave continued to be as prior to 2002 i.e. of reasons for “non-production” of documents at the stage provided therefor. Order XI Rule (1) of the CPC as applicable to commercial suits brought about a radical change. The late filing of documents thereunder is permitted applying the test of reasonable cause of “non-disclosure” of the document at the stage provided for filing thereof. An applicant now is required to satisfy the Court as to why the document was not in his knowledge and if in his knowledge why was the document not disclosed at the appropriate time. Thereunder, documents, even if not immediately available, are required to be disclosed.

Court’s Decision:

In view of the above observation, the Hon’ble Court dismissed the application of the Plaintiff and observed that there is no merit in the said application. It further held that Commercial Division is thus not required to entertain or allow applications for late filing of documents, without any good cause being established for non-disclosure thereof along with pleadings.

 

[1] CS (COMM) No. 1215/ 2016

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