Delhi High Court
The Great Gatsby Club Of India vs Mahesh Prefab Pvt Ltd on 18 July, 2022
$~4 (Appellate)
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CM(M) 644/2022 & CM APPL. 30080/2022, CM APPL.
30081/2022
THE GREAT GATSBY CLUB OF INDIA ..... Petitioner
Through: Mr. Rahul Malhotra, Mr. Saqib
Ansari and Ms. Himanshi Madan, Advs.
versus
MAHESH PREFAB PVT LTD ..... Respondent
Through: Mr. Rajnish Kr. Gaind and Mr.
Hemant Kaushik, Advs.
CORAM:
HON'BLE MR. JUSTICE C. HARI SHANKAR
% J U D G M E N T (ORAL)
18.07.2022
1. The impugned order dated 7th May, 2022, passed by the learned
District Judge, Commercial Court ("the learned Commercial Court")
in CS(Comm) 185/2021 (Mahesh Prefab Pvt. Ltd. v. The Great
Gatsby Club of India), dismisses the application of the petitioner (the
respondent before the learned Commercial Court) under Order VIII
Rule 1(A) of the Code of Civil Procedure, 1908 (CPC), and also closes
defence evidence.
2. Both these decisions are assailed by the petitioner.
3. Given the nature of the dispute, no detailed reference to the
assertions in the plaint, wherefrom the present proceedings emanate, is
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necessary. A brief overview would suffice.
4. The respondent filed CS(Comm) 185/2021 against the
petitioner, for recovery of an amount of ₹ 27,49,698/-.
5. It was alleged that the petitioner had awarded work order dated
23rd April 2015 and supply order dated 3rd September 2015 to the
respondent for supply and erection of certain panels at the petitioner's
site at Delhi and that, despite the respondent having successfully
completed the assignment, the petitioner was in default of payment
required to be made to the respondent against the work executed by it.
On this basis, as already noted, the suit sought a decree, against the
petitioner and in favour of the respondent, for ₹ 27,49,698/-.
6. The suit was filed as a commercial suit, under the CPC as
amended by the Commercial Courts Act, 2015, where under an
application for permission to place certain additional documents on
record was moved.
7. Paras 3 to 7 of the said application, which set out the
justification for the said prayers, read thus:
"3. The Defendant for just adjudication of the present lis
craves leave of this Hon'ble Court to bring on record the
following documents.
(i) Current Statement of account which reveals that
an amount of Rs. 14,89,068/- (Rupees Fourteen Lakhs
Eighty-Nine Thousand Sixty Eight Only) was paid by
the Defendant to the Plaintiff.
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(ii) Debit note vide which Rs. 14,89,068/- (Rupees
Fourteen Lakhs Eighty-Nine Thousand Sixty Eight
Only) was paid by the Defendant to the Plaintiff.
4. It is submitted that the above stated document could
not be filed along with the Written statement as the
management of the Defendant society was taken up by the
current management in the year 2019 and the documents were
not collated at the time of filling of reply. Thereafter, the
outbreak of Novel Corona virus made situation worst from
worse.
5. It is submitted that the Defendant since day one has
maintained the stand that as per the statement of accounts
maintained by the Defendant it is the Plaintiff Company who
owes a liability to pay an amount of Rs.2,42,481/- (Rupees
Two Lakh Forty-Two Thousand Four Hundred and Eighty-
One Only) to the Defendant as the balance amount in the
execution of the work. The said fact echoes in the written
statement as well as in the examination of Plaintiff's witness.
6. It is submitted that by filling the above stated documents
no additional fact or development is brought up by the
Defendant as such the suit will not move in reverse direction.
It is further submitted the matter is still at the stage of
Defendants Evidence and so the defendant may be permitted
to place on record the above stated documents· to lead the
Defendant's Evidence for proper and just adjudication of the
Suit.
7. It is submitted that if the present Application is allowed, it
is not detrimental to the interest of the Plaintiff, whereas, if
the present Application is not allowed, it is detrimental to the
interest of the Defendant as irreparable injury shall be caused
to the Defendant."
8. Clearly, therefore, the only ground urged, for the default on the
part of the petitioner in filing the documents that it now sought to
place on record, along with its written statement, was that, when the
written statement was filed, "the documents were not collated".
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9. Mr. Malhotra, learned Counsel for the petitioner, has sought
emphatically to urge that the management of the petitioner, which was
dealing with its affairs at the time of filing of the written statement
was unaware of the documents which were sought to be placed on
record under cover of the aforesaid application.
10. That submission, however, would be contrary to the specific
assertion in para 4 of the application, to the effect that the documents
were not filed as they had not been collated. The very assertion that
the documents were not collated at the time of filing of the written
statement indicates that they were within the knowledge of the
petitioner.
11. The impugned order dated 7th May, 2022, passed by the learned
Commercial Court, rejects the aforesaid application of the petitioner,
reasoning thus:
"CS (COMM) 185/21
MAHESH PREFAB PVT LTD. Vs. THE GREAT GETSBY
CLUB OF INDIA
07.5.2022
Present: Shri Hemant Kaushik- Ld. Counsel for the plaintiff
Shri SM Ansari - Ld. Counsel for the defendant
An application has been filed under Order 8 (1) A CPC
which should have been under Order 11 Rule 10 CPC, as
amended by the Commercial Court Act, by the defendant for
placing on record two additional documents, i.e. current
statement of account and a debit note for a sum of
Rs.14,89,068/- on the premise that the management had
changed and these documents were not handed over to the Ld.
Counsel as they could not be traced earlier. Ld. Counsel for
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the defendant submits that he has put questions regarding
these documents during the cross-examination and they fortify
his defence. However, order 11 Rule 10 CPC clearly provides
that defendant shall not be allowed to rely on documents
which were in defendant's power, possession, control or
custody and not disclosed with the written statement except
with the leave of the Court which shall be granted on
defendant's establishing a reasonable cost for non-disclosure
of these documents with the written statement. The
explanation given by the Ld. Counsel for the defendant shows
that these documents were in the power, possession and
custody of the defendant and the mere fact that the
management changed or they could not be traced earlier is not
a reasonable ground. Even otherwise, issues have already
been framed in this case and evidence of the plaintiff already
stands closed. Hence, the application is dismissed."
12. The initial observation, in the impugned order dated 7th May,
2022, to the effect that the application of the petitioner ought to have
been filed under Order XI Rule 1(10) (wrongly referred to, in the
impugned order, as "Order XI Rule 10") is supported by the judgment
of the Supreme Court in Sudhir Kumar @ S. Baliyan v. Vinay Kumar
G.B. 1, which holds that an application for placing additional
documents on record, in a commercial suit, is relatable not to Order
VIII but to Order XI of the CPC.
13. The reasoning of the learned Commercial Court in the afore-
extracted passages from the impugned order is also supported by the
decision of the Supreme Court in Sudhir Kumar1, as well as by the
express wordings of Order XI Rule 1(10) of the CPC as amended by
the Commercial Courts Act, 2015.
2021 SCC OnLine SC 734
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14. Order XI Rule 1(10) of the CPC, as amended by the
Commercial Courts Act, 2015, reads thus:
"ORDER XI
DISCLOSURE, DISCOVERY AND INSPECTION OF
DOCUMENTS IN SUITS BEFORE THE COMMERCIAL
DIVISION OF A HIGH COURT OR A COMMERCIAL
COURT
1. Disclosure and discovery of 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."
15. Order XI Rule 1(7)(c) (iii) of the CPC, to which Order XI Rule
1(10) refers, reads as under:
"ORDER XI
Disclosure, discovery and inspection of documents in suits
before the Commercial Division of a High Court or a
Commercial Court
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:--
xxx
(7) The defendant shall file a list of all documents
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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--
xxx
(c) nothing in this Rule shall apply to
documents produced by the defendants and
relevant only--
xxx
(iii) handed over to a witness merely to
refresh his memory."
16. Clearly, in proceedings under the Commercial Courts Act,
there is an absolute statutory proscription on a defendant being
allowed to rely on any documents which were in its power, possession
or custody and not disclosed along with the written statement or
counter claim, except by leave of the court. The Court is also
statutorily proscribed, by Order XI Rule 1(10), from granting leave
except where reasonable cause for not filing of the documents along
with the written statement or counter claim has been made out.
17. The Supreme Court has reiterated this position, in the following
passages from its decision in Sudhir Kumar1:
"31. Therefore a further thirty days time is provided to
the plaintiff to place on record or file such additional
documents in court and a declaration on oath is
required to be filed by the plaintiff as was required as
per Order XI Rule 1(3) if for any reasonable cause for
non disclosure along with the plaint, the documents,
which were in the plaintiff's power, possession, control
or custody and not disclosed along with plaint.
Therefore plaintiff has to satisfy and establish a
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reasonable cause for non disclosure along with plaint.
However, at the same time, the requirement of
establishing the reasonable cause for non disclosure of
the documents along with the plaint shall not be
applicable if it is averred and it is the case of the
plaintiff that those documents have been found
subsequently and in fact were not in the plaintiff's
power, possession, control or custody at the time when
the plaint was filed. Therefore Order XI Rule 1(4) and
Order XI Rule 1(5) applicable to the commercial suit
shall be applicable only with respect to the documents
which were in plaintiff's power, possession, control or
custody and not disclosed along with plaint. Therefore,
the rigour of establishing the reasonable cause in non
disclosure along with plaint may not arise in the case
where the additional documents sought to be
produced/relied upon are discovered subsequent to the
filing of the plaint."
(Emphasis Supplied)
18. The only ground urged, in the application filed by the petitioner
to place additional documents on record, was that, at the time of filing
written statement, the petitioner's affairs were being managed by an
earlier management which had not collated the documents. This itself
indicates that the documents were within the power, possession and
control of the petitioner at that time. Obviously, therefore, in view of
the proscription contained in Order XI Rule 1(10) of the CPC, the
learned Commercial Court could not have allowed the documents to
be brought on record and no exception can, therefore, be taken to the
refusal, by the impugned order, to do so.
19. Mr. Malhotra has emphasised the importance of the documents
for a proper adjudication of the controversy between the parties. He
has also submitted that bringing the documents on record would not
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cause any prejudice to the respondent.
20. Unfortunately, these considerations cannot be of any relevance
where the suit has been filed as a commercial suit, under the
Commercial Courts Act. The proscription against bringing additional
documents on record, save and except where sufficient cause were not
filing of the documents along with the plaint or with the written
statement, in the case of the plaint and the defendant, as contained in
clauses (5) and (10) of Order XI Rule 1 of the CPC as amended by the
Commercial Courts Act, are absolute.
21. The court cannot dilute the rigour of the said provisions on any
sympathetic or other considerations. It is presumed that these
considerations were in the mind of the legislature when they enacted
the Commercial Courts Act. There can be no charity beyond the law.
22. As such, the challenge, in this petition, to the order dated 7th
May, 2022, insofar as it rejects the petitioner's application for placing
the additional documents on record, must necessary fail.
23. The second challenge, in the present petition, is to the decision
of the learned District Judge to close the petitioner's DE. The
observation of the learned Commercial Court in this regard is brief,
and read thus:
"Another application has been filed by the defendant for
amending the list of witnesses and a new affidavit of the
Engineer of the defendant namely of Shri Sunil Kumar has
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been filed on the ground that the previous AR Shri Akash Jain
is unwell and is unable to depose before the Court. Same is
allowed and amended list of witnesses and the affidavit of
Shri Sunil Kumar is taken on record.
DW1 examined and discharged. No other witness is present or
cited. Hence, DE is closed despite protest by Ld. Counsel for
the defendant.
Put up for final arguments on 11.7.2022."
24. On this issue, the petitioner clearly has a case. The afore-
extracted passages from the impugned order dated 7th May, 2022 are
contrary in terms. The learned Commercial Court has, in the same
breath, allowed an amended list of witnesses to be filed by the
defendant and taken it on record, and has closed the defence evidence
on the ground that, apart from DW-1, no other witness was present or
cited.
25. These two decisions cannot go hand in hand.
26. As such, on this aspect, the impugned order cannot sustain. The
learned Commercial Court having allowed the additional list of
witnesses to be taken on record, the petitioner, as the defendant before
the learned Commercial Court, would, of needs, have to be allowed to
lead their evidence.
27. As such, the present petition is disposed of in the following
terms:
(i) The challenge to the impugned order dated 7th May, 2022,
insofar as it dismisses the petitioner's application for bringing
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additional documents on record, is rejected.
(ii) The impugned order dated 7th May, 2022, insofar as it
closes the defence evidence, is, however, quashed and set aside.
The petitioner would be at liberty to lead the evidence of the
remaining witnesses as per the amended list of witnesses that
the learned Commercial Court as permitted to be taken on
record by the impugned order dated 7th May, 2022.
28. The petition stands partly allowed in the aforesaid terms, with
no order as to costs.
29. All pending applications also disposed of.
C. HARI SHANKAR, J.
JULY 18, 2022
dsn
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