Delhi High Court
Sh Jaipal Sharma Trust & Ors. vs Srm Educaitonal And Financial ... on 17 February, 2025
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Reserved on: 2nd December 2024
Pronounced on: 17th February 2025
+ CM(M) 3951/2024 & CM APPL. 70109/2024 & CM APPL.
70110/2024
SH JAIPAL SHARMA TRUST & ORS. .....Petitioners
Through: Mr Karunesh Tandon, Mr
Abhishek Singh and Mr
Rahul Chauhan, Advs.
versus
SRM EDUCAITONAL AND FINANCIAL CONSULTANT
PVT LTD .....Respondent
Through: Mr Anil K. Mishra, Mr
Nakul Grover and Mr
Satyam Shivaach, Advs.
CORAM:
HON'BLE MR. JUSTICE RAVINDER DUDEJA
JUDGMENT
RAVINDER DUDEJA, J.
1. This petition under Article 227 of the Constitution of India has
been filed by the petitioners, seeking to set aside the impugned orders
dated 07.11.2024 and 14.11.2024 passed by the learned District Judge
in Suit bearing No. CSDJ 1332/2018, titled "M/s. SRM Educational
and Financial Consultant Pvt. Ltd. Vs. Jaipal Singh Sharma Trust".
Petitioners has raised concerns regarding procedural irregularities and
substantive legal errors in the Trial Court's findings.
FACTUAL BACKGROUND
2. Respondent filed a Suit for Recovery against the petitioners.
Originally, it was filed as an ordinary Civil Recovery Suit. Upon an
application filed by the respondent, the suit was transferred to the
Commercial Court, considering it as a commercial dispute.
3. Both parties were directed to file affidavits of admission/denial
of documents under Order XI Rule 4 CPC.
4. The Trial Court noted that the affidavits of admission/denial of
both the parties were not as per the provisions of the Commercial
Courts Act, 2015 and therefore they were directed to file fresh
affidavits within three weeks. On the next date i.e., 07.11.2024,
counsel for the petitioners did not appear before the Trial Court. The
Trial Court took note of the filing of affidavit by the respondent. Since
no affidavit was filed by the petitioners, right of petitioners to file the
affidavit of admission/denial was closed.
5. Later in the day, counsel for the petitioners appeared before the
Trial Court and undertook to e-file the affidavit of admission/denial
during the course of the day.
6. On the next date i.e. 14.11.2024, the Trial Court's order records
that petitioners had filed two sets of affidavits of admission/denial of
documents, one in respect of documents filed with the plaint and the
other with regard to the additional documents that were taken on
record on 12.04.2022. The Trial Court was of the view that the
affidavit of admission/denial filed by the petitioners was not in a
proper format and also noted that the column of mode of execution
was left blank in respect of few documents. Further, these columns do
not provide the information in terms of provision of Order XI Rule 4
CPC.
7. Petitioners had also filed separate applications under Order VII
Rule 14 CPC for filing additional documents on record and under
Order XIV Rule 5 CPC for framing of additional issues. Both these
applications came to be dismissed by the trial court vide order dated
14.11.2024.
SUBMISSIONS OF THE PETITIONERS
8. Learned counsel for the petitioners has made following
submissions:
i) The rejection of affidavit of admission/denial was totally
unwarranted. Petitioners submit that even if the affidavit did not
strictly comply with the requirements of Order XI Rule 4 CPC, the
defects were curable and should not have led to outright rejection. The
Courts have consistently held that procedural lapses should not
impede substantial justice.
ii) The affidavit was electronically filed on 07.11.2024 and the
hard copy was submitted on 14.11.2024. The Trial Court's
observation that it was not in the required format, does not justify its
exclusion as the deficiencies could have been rectified.
iii) Trial Court's reliance on strict procedural compliance
disregards the principle that procedural law is intended to facilitate
justice rather than act as a hurdle.
iv) The rejection of the application under Order VII Rule 14 CPC
was erroneous. Petitioners states that the documents sought to be
placed on record were already referenced in the written statement but
were inadvertently omitted. Order VIII Rule 1-A (3) CPC confers
discretion upon courts to permit filing of additional documents at any
stage if necessary for adjudication of the case.
v) The Trial Court erred in dismissing the application under Order
XIV Rule 5 CPC for framing an additional issue concerning the
plaintiff's compliance with its contractual obligations under the MOU
dated 11.03.2014. Petitioners argue that the issue is distinct from the
issue already framed regarding the entitlement of recovery.
vi) Petitioners contend that failure to frame the additional issue
would prejudice its defence as the performance of contractual
obligations is crucial to determine the liability and recovery.
SUBMISSIONS OF RESPONDENT
9. Per contra, learned counsel for the respondent has opposed the
petition on the following grounds:-
i) The Trial Court was correct in rejecting the affidavit of
admission/denial as it failed to meet the requirements under Order XI
Rule 4 CPC. The affidavit lacks details regarding the execution,
custody and correctness of documents.
ii) Application under Order VII Rule 14 CPC was rightly
dismissed as the petitioners had ample opportunities to place
documents on record at an earlier stage. The Commercial Courts Act,
2015 prescribes strict timelines to prevent delays in adjudication.
iii) The proposed additional issue under Order XIV Rule 5 CPC
was unnecessary as the core issue of entitlement of recovery already
encompasses the alleged non-performance of the contractual
obligations. According to the respondent, the additional issue would
only serve to prolong the litigation without adding substantive value to
the dispute adjudication.
ANALYSIS & CONCLUSION: REG: AFFIDAVIT OF
ADMISSION/DENIAL
10. The Trial Court's order to accept the affidavit of
admission/denial is unsustainable. Procedural defects, particularly
those that are curable, should not result in rejection. As per the
principles laid down in ONGC Vs. Joint Venture of Sai Rama
Engineering Enterprises and M/s. Megha Engineering &
Infrastructure Ltd., FAO (OS) (COMM) 324/2019 dated 09.01.2023,
minor procedural lapses must not be used to deny adjudication on
merits. The Trial Court's approach is contrary to the established
jurisprudence, which holds that substantive compliance should suffice
unless there is gross non-adherence to legal mandates. Petitioners is
therefore granted one opportunity to submit a revised affidavit
addressing the deficiencies, and the same shall then be taken on
record.
APPLICATION UNDER ORDER VII RULE 14, CPC FOR
FILING ADDITIONAL DOCUMENTS:
11. At the outset, it is required to be noted that the application for
leave to produce additional documents on record was preferred by the
petitioners under Order VII Rule 14 CPC. However, considering
Order XI Rule 1 as applicable to the Commercial Suits by which the
CPC has been amended with respect to the suits before the
Commercial Court and in view of Section 16 of the Commercial
Court's Act, 2015, Order VII Rule 14 CPC shall have no application
at all. After Order XI Rule 1 has been amended with respect to the
suits before the Commercial Courts and a specific provision/procedure
has been prescribed with respect to the suits before the Commercial
Division and before the Commercial Court, the provision of the CPC
as has been amended by the Commercial Courts Act, 2015 and shall
have to be followed. Therefore, in view of Order XI Rule 1 CPC as
amended by the amendment in the Commercial Courts Act, 2015 with
respect to the suits before the Commercial Courts, the provision of
Order VII Rule 14 shall not be applicable at all. Therefore, as such,
the petitioners applied the wrong provision seeking leave of the court
to place on record the additional documents. However, considering the
fact that the learned Commercial Court treated and considered and
even applied Order XI Rule 1 CPC as applicable to the suits filed
before the Commercial Court, the Court shall proceed to consider the
application submitted by the petitioners herein as if the same was
submitted under Order XI Rule 1(4) CPC.
12. In the case of Anita Chhabra & Ors. Vs. Surender Kumar,
decided on 26.09.2022, CM(M) 548/2022 and CM 26752/2022, this
Court speaking through C. Hari Shankar J. has been pleased to
observe as under:-
"8. Before proceeding to the rival contentions advanced at the Bar,
one may refer to the statutory scheme contained in sub rules (1), (4)
and (5) of Order XI Rule 1 of the CPC, which deal with filing of
documents. Order XI Rule 1(1) requires a plaintiff to "file, along
with the plaint, a list of all documents in its power, possession,
control or custody and photocopies thereof. The documents,
therefore, are required to accompany the plaint.
9. In the case of "urgent filing", Order XI Rule 1(4) permits
additional documents to be filed by the plaintiff within 30 days of
filing of the suit, subject to grant of leave by the Court.
10. Documents, which have not been brought on record either
under sub rule (1) or sub rule (4) of Order XI Rule 1, i.e.
documents which have not been brought on record till the expiry of
30 days from the filing of the suit, may be brought on record under
Order XI Rule 1(5), subject to leave of the Court. Such leave,
however, can be granted only on the Plaintiff establishing
reasonable cause for non-disclosure of the documents along with
the plaint.
11. It may be noted that, though Order XI Rule 1(4) also envisages
bringing on record of additional documents not filed along with the
plaint, within 30 days of the filing of the plaint, and requires leave
of the Court to be obtained in that regard, it does not specifically
require the plaintiff, seeking such leave, to establish reasonable
cause for non- disclosure of the documents with the plaint. That is a
requirement restricted, in the case of the plaintiff, to Order XI Rule
1(5 ), in respect of the documents which are sought to be brought
on record beyond 30 days from the date of filing of the plaint.
Order dated l0th January 2022 of Supreme Court in Re:
Cognizance for Extension of Limitation Suo Motu Writ
Petition (C) 3/2020 and decision in Centaur Pharmaceuticals
Pvt. Ltd. V. Stanford Laboratories Pvt. Ltd., Babasaheb
Raosaheb Kobame V Pyrotek India Private Limited7 and
Prakash Corporates v. Dee Vee Projects Ltd.
17. As already noted, Order XI Rule 1(5) of the CPC requires the
petitioners to adduce sufficient cause for failure to disclose the
additional documents along with the plaint, in order to be permitted
to place the documents on record beyond a period of 30 days from
the date of filing of the plaint. The application filed by the
petitioners in the present case does not contain any such disclosure,
as to why the two documents that the petitioners desired to bring on
record were not filed with the plaint. It is admitted that the
documents were in the possession, power and custody of the
petitioners even when the plaint was filed. All that is stated in the
application is that the documents were not brought on record owing
to negligence of the learned Counsel who filed the plaint.
Negligence of Counsel, quite obviously, cannot constitute
reasonable cause, within the meaning of Order XI Rule 1(5); else,
the very requirement of adducing reasonable cause for failure to
disclose the documents with the plaint would be reduced to a
formality.
19. If, therefore, Order XI Rule 1(5) were to be applicable, the
petitioners clearly have no case."
13. The relevant paras of the application filed by the petitioners
under Order VII Rule 14 CPC (treated as under Order XI Rule 1 CPC)
are reproduced below for the proper understanding:-
"3. It is submitted that after filing of the suit for recovery by the
plaintiff/non applicant, the Hon'ble Court was pleased to issue
notice to Applicant/Defendant. Consequently the
defendant/applicant entered into appearance and submitted its
written statement along with the relevant documents and raised
certain objections in its preliminary objection with regard to
maintainability of the suit, failure of the plaintiff for completing
and acting upon its contractual obligations also stated a specific
objection regarding the concealment of facts by the plaintiff that
the plaintiff/ non applicant abandoned the work in August-
September 2015 after realising the fact that its survival in providing
the technical and architectural consultancy shall be no longer
possible as most of the drawings submitted by the plaintiff/non
applicant to the defendant/applicant were not only defective in
nature but were not prepared in consonance with the building bye
laws applicable in respective area. It was also stated that due to the
defective architectural drawings and wrong architectural
consultancy, faulty .work was carried out by the
defendant/applicant which ultimately got demolished on account of
the consultancy provided by the newly appointed contractor.
4. It is stated and' submitted that the non applicant/ plaintiff after
filing their replication to the written statement of the
applicant/defendant again filed additional documents on record. It
is submitted that though the documents were filed by the defendant
with the written statement but, upon scrutiny it transpired that few
documents/drawings which were prepared by the architectural &
consultancy services hired by the applicant/ defendant later on after
the plaintiff/non applicant abandoned the work were necessary to
be placed on record. It is submitted that these "drawings are
essential and necessary to adjudicate upon the issue of failure of the
plaintiff/ non applicant in providing the correct and accurate
architectural drawings and the the correct drawings were not
prepared by the plaintiff/ non applicant but by the other
architectural service provider company appointed by the applicant/
defendant. It is also submitted that these drawings/documents are
an important and basic part of the dispute and are essential to be
taken on record for just and proper of the present suit.
5. It is stated that no prejudice would be caused to the plaintiff/non
applicant if these documents/drawings are taken on record.
Whereas, if these documents/drawings are not taken on record, it
would prejudice the rights and interest of the applicant/ defendant."
14. The statement of truth filed by the petitioners in support of the
written statement, specifically states that all the documents in its
power, possession, control and custody have been disclosed and
copies thereof have been filed with the written statement. The Trial
Court took note that the written statement was filed by the petitioners
on 19.01.2019 and they sought to bring the documents on record
which were already in their custody, power and possession after more
than five years. The Trial Court found no cause, much less sufficient
cause for non-production of documents at the appropriate stage.
15. The Trial Court allowed the respondent's application for
admission-denial of documents vide its order dated 12.04.2022.
Petitioners did not challenge the said order. Merely because the
respondent's application was allowed, petitioners cannot seek parity,
more so for the reason that they have failed to explain any sufficient
cause for not filing the documents at the initial stage. Thus, the
challenge to the impugned order to the extent that dismissed the
application of the petitioners filed under Order VII Rule 14 CPC
therefore cannot be sustained.
APPLICATION UNDER ORDER XIV RULE 5 CPC FOR
FRAMING ADDITIONAL ISSUES
16. By virtue of the application under Order XIV Rule 5 CPC,
petitioners made a prayer for framing the following additional issue:-
"Whether the plaintiff acted and completed all its contractual
obligations required to be performed under turnkey project/MOU
dated 11.03.2014?"
17. The Trial Court was of the view that the issue already framed
i.e. "Whether the plaintiff is entitled to the recovery of the suit
amount?" OPP," would cover the proposed issue and therefore there
was no need for framing a separate issue for the same.
18. As per the factual matrix, petitioners wanted to establish a
medical college and hospital, for which, it had approached the
respondent for providing consultancy services at its Delhi office. The
parties entered into a Memorandum of Understanding dated
11.03.2014. As per the terms of the MOU, respondent was to provide
all technical and professional assistance on turnkey basis.
19. The defence of the petitioners in its written statement is that the
respondent did not complete its contractual obligations and abandoned
the work.
20. In the backdrop of the pleadings of the parties, the entitlement
to recovery hinges on whether the respondent fulfilled its contractual
duties. The Trial Court therefore finds merit in the petitioners'
argument that the additional issue is not subsumed within the existing
issue. The decision on the issue of entitlement of recovery of the suit
amount would certainly depend upon the finding on the proposed
issue. The issue proposed is therefore necessary for just determination
of the case. Application under Order XIV Rule 5 CPC filed by the
petitioners is therefore allowed and the Trial Court is directed to frame
additional issue as proposed.
CONCLUSION
21. In view of the afore-going analysis, the impugned order dated
07.11.2024 is set aside while the order dated 14.11.2024 is partly set
aside. Accordingly, this Court directs as under:-
a) Petitioners be granted one opportunity to file affidavit of
admission/denial.
b) The following issue as proposed in application under Order
XIV Rule 5 CPC filed by the petitioners be framed:-
"Whether the plaintiff performed its contractual obligations
arising out of the MOU dated 11.03.2014?" OPP.
22. The petition stands allowed in the above terms. The Trial Court
is directed to proceed with the matter in accordance with law.
23. No order as to cost.
RAVINDER DUDEJA, J.
February 17, 2025
RM/r/i/n
