Calcutta High Court

Glen Industries Private Limited vs United India Insurance Company Limited on 4 April, 2024

                  IN THE HIGH COURT AT CALCUTTA
                  (Ordinary Original Civil Jurisdiction)
                           COMMERCIAL DIVISION


Present:s

The Hon'ble Justice Krishna Rao



                          IA No. G.A. (COM) 2 of 2023

                                         In

                             CS-COM 497 of 2024

                            (Old No. CS 80 of 2023)



                     Glen Industries Private Limited

                                    Versus

                United India Insurance Company Limited




            Mr. Subhashis Sengupta
            Mr. Biswajib Ghosh
            Mr. Avirup Chatterjee
            Mr. Rishov Das
                                                 ... For the plaintiff.
            Mr. Soumendranath Ganguly
            Mr. Jit Ray
            Mr. Souvik Ghosh
                                                ... For the defendant.


Hearing Concluded On : 13.03.2024

Judgment on               : 04.04.2024
                                        2


Krishna Rao, J.:

1. The plaintiff has filed the present application seeking leave to disclose

some documents which were not disclosed with the plaint at the time of

filing of the plaint. On receipt of writ of summons, the defendant

entered appearance and had filed written statement. After filing of

written statement, the plaintiff had sent an e-mail to the defendant for

inspection of documents and in reply, the defendant had informed the

plaintiff that the defendant will inspect the documents on reopening of

the Court after Puja Vacation. By an e-mail dated 21st November, 2023,

the defendant had informed the plaintiff that the defendant will inspect

documents on 24th November, 2023 and in reply to the said e-mail, the

plaintiff informed the defendant that the plaintiff will file an application

for seeking leave to disclose further documents and after disposal of the

application, the plaintiff will offer documents for inspection.

2. Mr. Subhashis Sengupta, Learned Advocate representing the plaintiff

submits that at the time of preparation of list of documents which was

to be offered to the defendant for inspection, the plaintiff has noticed

that several documents were not filed along with plaint. He submits

that few of the e-mails were annexed with the plaint but the documents

mentioned in the said e-mails were not annexed with the plaint.

3. Mr. Sengupta submitted that the plaint was affirmed on 20th April,

2023 and the same was filed before this Court on 2nd May, 2023 and on

the same day due to some urgent work, one of the Director had to leave

for Germany and had returned to Kolkata on 12th May, 2023 due to

which the documents could not be annexed with the plaint. He submits

that the documents were referred in the pleadings but the same were

not annexed with the plaint.

4. Mr. Sengupta submitted that the plaintiff has handed over the

documents to its staff for transmitting to the Learned Advocate for the

plaintiff but due to inadvertence, the same was not handed over to the

Learned Advocate due to which the same could not be incorporated. He

submits that, the documents which the plaintiff is intending to

disclose, the said documents are necessary for proper adjudication of

the suit.

5. Per contra, Mr. Soumendra Nath Ganguly, Learned Counsel for the

defendant submitted that the plaintiff has filed the plaint supported by

verification and "Statement of Truth" as applicable to the commercial

suits and declared on oath that all documents in the power,

possession, control or custody of the plaintiff pertaining to the facts

and circumstances of the suit have been disclosed and copies thereof

are annexed with the plaint and the plaintiff does not have any other

documents in its power, possession, control or custody and thus at this

stage, the plaintiff shall not be allowed to disclose additional

documents.

6. Mr. Ganguly submitted that it is the admitted case of the plaintiff that

the documents which the plaintiff is intending to disclose at this stage

of the suit, were in possession of the plaintiff at the time of filing of the

suit. He submits that the documents which the plaintiff intends to

disclose are about 700 pages and thus it is impossible to believe that

the plaintiff has handed over the documents to one of his employee to

transmit the same and due to inadvertence, the same could not be

transmitted to the Learned Advocate.

7. Mr. Ganguly submits that in one hand the plaintiff has made out a case

that the documents were referred in the plaint but has not annexed as

the said documents were not transmitted to the Learned Advocate and

on the other hand, the plaintiff had made out a case that few e-mails

were annexed but the documents were not annexed. He submits that

the averments made by the plaintiff are vague.

8. Mr. Ganguly submitted that Order XI, Rule 1 of the Code of Civil

Procedure, 1908 as applicable to the Commercial Suits brought about

radical changes and it mandates the plaintiff to file a list of all

documents, photocopies of all documents, in its possession, power,

control or custody pertaining to the suit, along with the plaint and the

procedure provided under Order XI, Rule 1 is required to be followed by

the plaintiff and the defendant but the plaintiff has not followed the

said procedure by enclosing all the documents with the plaint.

9. Mr. Ganguly in support of his case has relied upon the judgment

reported in (2021) 13 SCC 71 (Sudhir Kumar -vs- Vinay Kumar G.B.)

and submitted that as per Order XI, Rule 1(5) the plaintiff shall not be

allowed to rely on documents, which were in the possession of the

plaintiff but had not disclosed along with the plaint. Mr. Ganguly

further relied upon the judgment reported in 2023 (5) ABR 206

(Khanna Rayon Industries Pvt. Ltd -vs- Swastik Associates and

Others) and submitted that in the said case also the Bombay High

Court has relied upon the judgment of Sudhir Kumar (Supra) and has

not allowed the plaintiff to disclose document subsequently which were

in possession of the plaintiff at the time of filling of the suit.

10. Heard the Learned Counsel for the parties, perused the materials on

record and the judgments relied by the defendant. Order XI of the Code

of Civil Procedure, 1908 as amended in the Commercial Courts Act,

2015 reads as follows:

"ORDER XI

DISCLOSURE, DISCOVERY AND INSPECTION OF DOCUMENTS IN SUITS BEFORE THE COMMERCIAL DIVISION OF A HIGH COURT OR A COMMERCIAL COURT O.11 R.1. Disclosure and discovery of documents.--(1) Plaintiff shall file a list of all documents and photocopies of all documents, in its power, possession, control or custody, pertaining to the suit, along with the plaint, including:--

(a) documents referred to and relied on by the plaintiff in the plaint;

(b) documents relating to any matter in question in the proceedings, in the power, possession,

control or custody of the plaintiff, as on the date of filing the plaint, irrespective of whether the same is in support of or adverse to the plaintiff's case;

(c) nothing in this Rule shall apply to documents produced by plaintiffs and relevant only--

(i) for the cross-examination of the defendant's witnesses, or

(ii) in answer to any case set up by the defendant subsequent to the filing of the plaint, or

(iii) handed over to a witness merely to refresh his memory.

(2) The list of documents filed with the plaint shall specify whether the documents in the power, possession, control or custody of the plaintiff are originals, office copies or photocopies and the list shall also set out in brief, details of parties to each document, mode of execution, issuance or receipt and line of custody of each document.

(3) The plaint shall contain a declaration on oath from the plaintiff that all documents in the power, possession, control or custody of the plaintiff, pertaining to the facts and circumstances of the proceedings initiated by him have been disclosed and copies thereof annexed with the plaint, and that the plaintiff does not have any other documents in its power, possession, control or custody.

Explanation.--A declaration on oath under this sub-rule shall be contained in the Statement of Truth as set out in the Appendix.

(4) In case of urgent filings, the plaintiff may seek leave to rely on additional documents, as part of the above declaration on oath and subject to grant of such leave by Court, the plaintiff shall file such additional documents in Court, within thirty days of filing the suit, along with a declaration on oath that the plaintiff has produced all documents in its power, possession, control or custody, pertaining to the facts and circumstances of the proceedings initiated by the plaintiff and that the

plaintiff does not have any other documents, in its power, possession, control or custody.

(5) 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 set out above, save and except by leave of Court and such leave shall be granted only upon the plaintiff establishing reasonable cause for non-disclosure along with the plaint.

(6) The plaint shall set out details of documents, which the plaintiff believes to be in the power, possession, control or custody of the defendant and which the plaintiff wishes to rely upon and seek leave for production thereof by the said defendant.

(7) The defendant shall file a list of all documents and photocopies of all documents, in its power, possession, control or custody, pertaining to the suit, along with the written statement or with its counterclaim if any, including--

(a) the documents referred to and relied on by the defendant in the written statement; 1. Subs. by Act 28 of 2018, s. 18, for "Provided further that" (w.e.f. 3-5-2018). 15

(b) the documents relating to any matter in question in the proceeding in the power, possession, control or custody of the defendant, irrespective of whether the same is in support of or adverse to the defendant's defence;

(i) for the cross-examination of the plaintiff's witnesses,

(ii) in answer to any case set up by the plaintiff subsequent to the filing of the plaint, or

(iii) handed over to a witness merely to refresh his memory.

(8) The list of documents filed with the written statement or counterclaim shall specify whether the documents, in the power, possession, control or

custody of the defendant, are originals, office copies or photocopies and the list shall also set out in brief, details of parties to each document being produced by the defendant, mode of execution, issuance or receipt and line of custody of each document.

(9) The written statement or counterclaim shall contain a declaration on oath made by the deponent that all documents in the power, possession, control or custody of the defendant, save and except for those set out in sub-rule (7) (c)

(iii) pertaining to the facts and circumstances of the proceedings initiated by the plaintiff or in the counterclaim, have been disclosed and copies thereof annexed with the written statement or counterclaim and that the defendant does not have in its power, possession, control or custody, any other documents.

(10) Save and except for sub-rule (7) (c) (iii), defendant shall not be allowed to rely on documents, which were in the defendant's power, possession, control or custody and not disclosed along with the written statement or counterclaim, save and except by leave of Court and such leave shall be granted only upon the defendant establishing reasonable cause for non-disclosure along with the written statement or counterclaim.

(11) The written statement or counterclaim shall set out details of documents in the power, possession, control or custody of the plaintiff, which the defendant wishes to rely upon and which have not been disclosed with the plaint, and call upon the plaintiff to produce the same.

(12) Duty to disclose documents, which have come to the notice of a party, shall continue till disposal of the suit.

O.XI R.2.-Discovery by interrogatories.--(1) In any suit the plaintiff or defendant by leave of the court may deliver interrogatories in writing for the examination of the opposite parties or any one or more of such parties, and such interrogatories when delivered shall have a note at the foot thereof stating which of such interrogatories each of such persons is required to answer:

Provided that no party shall deliver more than one set of interrogatories to the same party without an order for that purpose:

Provided further that interrogatories which do not relate to any matters in question in the suit shall be deemed irrelevant, notwithstanding that they might be admissible on the oral cross- examination of a witness.

(2) On an application for leave to deliver interrogatories, the particular interrogatories proposed to be delivered shall be submitted to the court, and that court shall decide within seven days from the day of filing of the said application, in deciding upon such application, the court shall take into account any offer, which may be made by the party sought to be interrogated to deliver particulars, or to make admissions, or to produce documents relating to the matters in question, or any of them, and leave shall be given as to such only of the interrogatories submitted as the court shall consider necessary either for disposing fairly of the suit or for saving costs.

(3) In adjusting the costs of the suit inquiry shall at the instance of any party be made into the propriety of exhibiting such interrogatories, and if it is the opinion of the taxing officer or of the court, either with or without an application for inquiry, that such interrogatories have been exhibited unreasonably, vexatiously, or at improper length, the costs occasioned by the said interrogatories and the answers thereto shall be paid in any event by the party in fault.

(4) Interrogatories shall be in the form provided in Form No. 2 in Appendix C to the Code of Civil Procedure, 1908 (5 of 1908), with such variations as circumstances may require.

(5) Where any party to a suit is a corporation or a body of persons, whether incorporated or not, empowered by law to sue or be sued, whether in its own name or in the name of any officer of other person, any opposite party may apply for an order allowing him to deliver interrogatories to any member or officer of such corporation or body, and an order may be made accordingly.

(6) Any objection to answering any interrogatory on the ground that it is scandalous or irrelevant or not exhibited bona fide for the purpose of the suit, or that the matters inquired into are not sufficiently material at that stage, or on the ground of privilege or any other ground may be taken in the affidavit in answer.

(7) Any interrogatories may be set aside on the ground that they have been exhibited unreasonably or vexatiously, or struck out on the ground that they are prolix, oppressive, unnecessary or scandalous and any application for this purpose may be made within seven days after service of the interrogatories.

(8) Interrogatories shall be answered by affidavit to be filed within ten days, or within such other time as the court may allow.

(9) An affidavit in answer to interrogatories shall be in the form provided in Form No. 3 in Appendix C to the Code of Civil Procedure, 1908 (5 of 1908), with such variations as circumstances may require.

(10) No exceptions shall be taken to any affidavit in answer, but the sufficiency or otherwise of any such affidavit objected to as insufficient shall be determined by the court.

(11) Where any person interrogated omits to answer, or answers insufficiently, the party interrogating may apply to the court for an order requiring him to answer, or to answer further, as the case may be, and an order may be made requiring him to answer, or to answer further, either affidavit or by viva voce examination, as the court may direct.

O.XI R.3. Inspection.--(1) All parties shall complete inspection of all documents disclosed within thirty days of the date of filing of the written statement or written statement to the counterclaim, whichever is later. The Court may extend this time limit upon application at its discretion, but not beyond thirty days in any event.

(2) Any party to the proceedings may seek directions from the Court, at any stage of the proceedings, for inspection or production of

documents by the other party, of which inspection has been refused by such party or documents have not been produced despite issuance of a notice to produce.

(3) Order in such application shall be disposed of within thirty days of filing such application, including filing replies and rejoinders (if permitted by Court) and hearing.

(4) If the above application is allowed, inspection and copies thereof shall be furnished to the party seeking it, within five days of such order.

(5) No party shall be permitted to rely on a document, which it had failed to disclose or of which inspection has not been given, save and except with leave of Court.

(6) The Court may impose exemplary costs against a defaulting party, who wilfully or negligently failed to disclose all documents pertaining to a suit or essential for a decision therein and which are in their power, possession, control or custody or where a Court holds that inspection or copies of any documents had been wrongfully or unreasonably withheld or refused.

O.XI R.4. Admission and denial of documents.--(1) Each party shall submit a statement of admissions or denials of all documents disclosed and of which inspection has been completed, within fifteen days of the completion of inspection or any later date as fixed by the Court.

(2) The statement of admissions and denials shall set out explicitly, whether such party was admitting or denying:--

(a) correctness of contents of a document;

(b) existence of a document; 17

(c) execution of a document;

(d) issuance or receipt of a document;

(e) custody of a document.

Explanation.--A statement of admission or denial of the existence of a document made in

accordance with sub-rule (2) (b) shall include the admission or denial of the contents of a document.

(3) Each party shall set out reasons for denying a document under any of the above grounds and bare and unsupported denials shall not be deemed to be denials of a document and proof of such documents may then be dispensed with at the discretion of the Court.

(4) Any party may however submit bare denials for third party documents of which the party denying does not have any personal knowledge of, and to which the party denying is not a party to in any manner whatsoever.

(5) An Affidavit in support of the statement of admissions and denials shall be filed confirming the correctness of the contents of the statement.

(6) In the event that the Court holds that any party has unduly refused to admit a document under any of the above criteria,-costs (including exemplary costs) for deciding on admissibility of a document may be imposed by the Court on such party.

(7) The Court may pass orders with respect to admitted documents including for waiver of further proof thereon or rejection of any documents.

O.XI R.5. Production of documents.--(1) Any party to a proceeding may seek or the Court may order, at any time during the pendency of any suit, production by any party or person, of such documents in the possession or power of such party or person, relating to any matter in question in such suit.

(2) Notice to produce such document shall be issued in the Form provided in Form No. 7 in Appendix C to the Code of Civil Procedure, 1908 (5 of 1908).

(3) Any party or person to whom such notice to produce is issued shall be given not less than seven days and not more than fifteen days to produce such document or to answer to their inability to produce such document.

(4) The Court may draw an adverse inference against a party refusing to produce such document

after issuance of a notice to produce and where sufficient reasons for such non-production are not given and order costs.

O.XI R.6. Electronic records.--(1) In case of disclosures and inspection of Electronic Records (as defined in the Information Technology Act, 2000 (21 of 2000)), furnishing of printouts shall be sufficient compliance of the above provisions.

(2) At the discretion of the parties or where required (when parties wish to rely on audio or video content), copies of electronic records may be furnished in electronic form either in addition to or in lieu of printouts.

(3) Where Electronic Records form part of documents disclosed, the declaration on oath to be filed by a party shall specify--

(a) the parties to such Electronic Record;

(b) the manner in which such electronic record was produced and by whom;

(d) the source of such electronic record and date and time when the electronic record was printed;

(e) in case of email ids, details of ownership, custody and access to such email ids;

(f) in case of documents stored on a computer or computer resource (including on external servers or cloud), details of ownership, custody and access to such data on the computer or computer resource;

(g) deponent's knowledge of contents and correctness of contents;

(h) whether the computer or computer resource used for preparing or receiving or storing such document or data was functioning properly or in case of malfunction that such malfunction did not affect the contents of the document stored;

(i) that the printout or copy furnished was taken from the original computer or computer resource.

(4) The parties relying on printouts or copy in electronic form, of any electronic records, shall not be required to give inspection of electronic records, provided a declaration is made by such party that each such copy, which has been produced, has been made from the original electronic record.

(5) The Court may give directions for admissibility of Electronic Records at any stage of the proceedings.

(6) Any party may seek directions from the Court and the Court may of its motion issue directions for submission of further proof of any electronic record including metadata or logs before admission of such electronic record.

O.XI R.7. Certain provisions of the Code of Civil Procedure, 1908 not to apply.--For avoidance of doubt, it is hereby clarified that Order XIII Rule 1, Order VII Rule 14 and Order VIII Rule 1A of the Code of Civil Procedure, 1908 (5 of 1908) shall not apply to suits or applications before the Commercial Divisions of High Court or Commercial Courts.".

11. Order XI, Rule 1(4) provides that in case of urgent filings, the plaintiff

may seek leave to rely on additional documents, as part of the above

declaration on oath and subject to grant of such leave by Court, the

plaintiff shall file such additional documents in Court, within thirty

days of filing of the suit, along with a declaration on oath that the

plaintiff has produced all documents in its power, possession, control

or custody, pertaining to the facts and circumstances of the suit and

the plaintiff does not have any other documents, in its power,

possession, control or custody. Order XI Rule 1(5) further 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 set out above, save and

except by leave of the Court and such leave shall be granted only upon

the plaintiff establishing reasonable cause for non-disclosure along

with plaint.

12. On combined reading of Order XI Rule 1(4) read with Order XI Rule 1(5)

it reveals that in case of urgent filing, (i) the plaintiff may seek leave to

rely on additional documents, (ii) within thirty days of filing the suit,

(iii) making out a reasonable cause for nondisclosure along with the

plaint. Thirty days time is provided to the plaintiff to place on record or

to file such additional documents in Court and a declaration on oath is

required to be filed by the plaintiff in terms of Order XI Rule 1(3). The

plaintiff has to satisfy and establish a reasonable cause for non-

disclosure along with plaint. However, for the requirement of

establishing the reasonable cause for non-disclosure of documents

along with plaint shall not be applicable if it is averred and it is the

case of the plaintiff that those documents have been found

subsequently to the filing of the suit and those documents were not in

possession, power, control and custody of the plaintiff at the time of

filing of the suit. Therefore, Order XI Rule 1(4) and Order XI Rule 1(5)

are applicable to the commercial suit only with respect to the

documents which were in possession of the plaintiff and not disclosed

along with the plaint.

13. In the case of Khanna Rayon Industries Pvt. Ltd (Supra), the

Bombay High Court relied upon the judgment of Sudhir Kumar

(Supra) held that:

"31. The Supreme Court in the case of Sudhir Kumar alias S. Baliayn v. Vinay Kumar G.B. (supra) has referred to the strict requirement of Order XI Rule 1(5) of the CPC in the context of commercial suits and after referring to such strict requirement, the Supreme Court held in the said case that the Plaintiff therein could not be permitted to contend that it had reasonable cause for non- disclosure/filing of the documents along with the plaint, on the ground that the documents were voluminous. In a series of judgments i.e. Rishi Raj vs. Saregama India Ltd. (supra), Anita Chhabra & Ors. vs. Surender Kumar (supra), Saregama India Limited v. Zee Entertainment Enterprises Limited (supra) and Nitin Gupta vs. Texmaco Infrastructure & Holding Limited (supra), the Delhi High Court has applied the rigor of Order XI Rule 1(5) of the CPC in commercial suits in various circumstances to examine as to whether the Plaintiffs therein had made out reasonable cause for non-disclosure of documents with the plaint. It was found that when the Plaintiff failed to place on record proper reasons and reasonable cause, permitting additional documents to be placed on record at any stage, although they were in the power, possession, control or custody of the Plaintiff, would make a complete mockery of Order XI of the CPC, as made applicable to commercial suits. It was found that reasonable cause would have to be specifically pleaded and only when good cause was made out that the Plaintiff could be permitted to place on record such documents at a later stage. It was held in the said judgments that leniency in such matters would run counter to the very object and purpose for which such amendments in the CPC were introduced by the Commercial Courts Act.

32. This Court agrees with the views expressed by the Delhi High Court in the aforementioned judgments, particularly for the reason that they are in tune with the aforesaid

judgment of the Supreme Court in Sudhir Kumar alias S. Baliayn vs. Vinay Kumar G.B. (supra). Applying the said position of law to the application filed on behalf of the Plaintiff in the present case, it is found that the only reasons stated in the application for failure to place on record the documents, proposed to be placed on record by way of amendment, were "oversight" and "inadvertence". The application is devoid of any pleadings showing reasonable cause for non- disclosure of the said documents with the plaint as is mandatorily required under Order XI Rule 1(1) of the CPC, as applicable to commercial suits. Such casual reasons cannot be accepted. There is no dispute about the fact that the documents proposed to be placed on record on behalf of the Applicant were very much within the power, possession, control and custody of the Applicant when the suit was filed."

14. In the present case, it is the admitted case of the plaintiff that the

documents were in possession of the plaintiff at the time of filing of the

suit and were not annexed/ disclosed. The plaint was affirmed on 20th

April, 2023 and the same was filed before this Court on 2nd May, 2023

and on the same day one of the Director of the plaintiff had to leave for

Germany for some urgent business commitment and returned to

Kolkata on 12th May, 2023. It is also the case of the plaintiff that the

plaintiff has handed over the documents to one of its employee for

transmitting the documents to the Learned Advocate but due to

inadvertence the same was not handed over to the Learned Advocate.

15. The plaintiff initially issued an e-mail to the defendant for inspection of

documents. At the time of preparing list of documents for inspection,