Mohan Meakin Limited vs The Devicolam Distilleries Ltd on 20 November, 2024

[Cites 5, Cited by 0]

Himachal Pradesh High Court

Mohan Meakin Limited vs The Devicolam Distilleries Ltd on 20 November, 2024

By way of this application filed under Order XI, Rule 1 (10) of the Code of Civil Procedure, as applicable to suits before a Commercial Division of a High Court or a Commercial Court, a prayer has been made for placing on record additional documents on behalf of the defendant/applicant.

2. Learned counsel for the applicant has submitted that the applicant is preferring the application seeking leave of the Court to place on record certain additional documents, which could not be filed by it at the time of filing the written statement, despite reasonable and due care. He submitted 1 Whether reporters of the local papers may be allowed to see the judgment? 2

( 2024:HHC:11877 ) that the suit was listed on 5th March, 2024, on which date, the authorized signatory of the applicant appeared before the Additional Registrar (Judicial) for admission denial of the documents filed by the plaintiff/non-applicant. In the course of inspection of the documents as well as the written statement filed by the defendant/applicant, it was realized that certain documents, which were necessary to be filed, were inadvertently not filed. By placing reliance on the averments made in the application, he submitted that the documents which were inadvertently left out, are just and proper for the adjudication of the suit. The applicant intends to place on record the following documents:-

"(i) the images of the bottle of the defendant which is the subject matter of the present suit.

(ii) the images of the similar shapes of bottles, i.e. Grand Old Parr, Bells Royal Reserve & Golden Horse.

(iii) the images of similar shapes of bottles of rum i.e., Commander in Chief and Old Chief."

Learned counsel further submitted that as far as the documents mentioned at Sr. No. (i) and (ii) are concerned, they have already been referred to in the written statement, but could not be placed on record on account of mis- communication between the defendant and its counsel.

3. With regard to the documents referred to at Sr. No. (iii), which are the images of bottles, which as per the applicant have similar shapes as the bottles of the plaintiff, as per the applicant, these images came to the knowledge of the defendant only after filing of the written statement. 3

( 2024:HHC:11877 )

4. Learned counsel submitted that the authorized representative of the defendant came to know about the brands of the rum mentioned against Sr. No. (iii) after he made extensive research of the product on the internet and as the images mentioned at Sr. No. (iii) were not within the power, control and knowledge of the defendant at the time of filing of the written statement, therefore, the applicant is praying for indulgence of the Court to allow the applicantion and permit it to place on record the documents mentioned in the application.

5. Non-applicant/plaintiff has filed response to the application. Learned counsel appearing for the non-applicant/plaintiff has submitted that the non-applicant/plaintiff has no objection as far as the documents referred at Sr. No. (i) and (ii) are concerned, if they are allowed to be placed on record, because they were in fact referred to in the written statement, however, as far as the documents referred to at Sr. No. (iii) are concerned, the same cannot be allowed to be placed on record.

6. By referring to the provisions of Order XI, Rule 1(10) of the Code of Civil Procedure, as applicable to a Commercial Suit, learned counsel submitted that in terms of these provisions, 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 alongwith the written statement or counter-claim, save and except by leave of Court and such leave shall be granted only upon the defendant establishing reasonable cause for non-disclosure alongwith the written statement or 4 ( 2024:HHC:11877 ) counter-claim. Learned counsel submitted that qua documents referred to at Sr. No. (iii), the applicant itself admits inadvertence and once inadvertence stands admitted, the applicant cannot espouse "reasonable cause" for non- disclosure alongwith the written statement. Learned counsel further submitted that otherwise also, the averments made in the application are completely vague with regard to the documents referred to at Sr. No. (iii). He submitted that it is averred in the application that the authorized signatory came to know about the said documents after he made extensive research of the product on the internet. However, there is nothing on record to demonstrate that the averments have any element of correctness attached with them. He submitted that the brands of rum which are now being intended to be placed on record in the shape of the documents mentioned at Sr. No. (iii) were available on the internet even at the time when the defendant filed the written statement and, therefore, it cannot be said that the defendant could not have had placed them on record, had due diligence been exercised. Learned counsel further submitted that had reasonable care been taken by the defendant at the time of filing the written statement, it could have had produced on record the documents, which now it intends to produce and, thus, fill up the lacunae. Learned counsel further submitted that from which internet site the information was gathered by the applicant and from which internet site the images were downloaded is neither evident from the documents nor mentioned in the application and, therefore also, the application deserves rejection.

( 2024:HHC:11877 )

7. I have heard learned counsel for the parties and have also carefully gone through the contents of the application and the documents appended therewith as well as the reply filed hereto and the rejoinder.

8. Before proceeding further, it is relevant to refer to the provisions of Order XI, Rule 1(10) of the Code of Civil Procedure, as it is applicable to the Commercial Suits. The same is quoted hereinbelow for ready reference:-

"Order XI, Rule 1(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 counter claim."

A perusal thereof demonstrates that except for sub-rule 7(c) (iii), which, inter alia, provides that nothing in sub-rule-7 shall apply to documents produced by the defendants and relevant for the cross-examination of the plaintiff's witnesses, in answer to any case set up by the plaintiff subsequent to the filing of the plaint, or handed over to a witness merely to refresh his memory, the defendant shall not be allowed to rely on documents, which were in defendant's power, possession, control or custody and not disclosed alongwith the written statement or counter-claim, save and except by leave of Court and such leave shall be granted only upon the defendant establishing 6 ( 2024:HHC:11877 ) reasonable cause for non-disclosure alongwith the written statement or counter-claim.

9. Therefore, in case the defendant intends to file additional documents by invoking the provisions of Order 11, Rule 1(10), then it has to substantiate that the documents which it intends to place on record could not be placed alongwith the written statement by establishing a reasonable cause for non-disclosure thereof alongwith the written statement. In the present case, the documents which the applicant intends to place on record have already been referred to hereinabove. As far as the documents referred to at Sr. No. (i) and (iii) are concerned, because the non-applicant has no objection qua taking the said documents on record, therefore, said documents are permitted to be taken on record.

10. Now coming to the documents, which are referred to at Sr. No. (iii), the following reasons have been spelled out in the application as to why the same could not be filed alongwith the written statement:-

"......The documents mentioned at Serial No. (iii) are the images of the bottles having similar shape as of the plaintiff's bottle but these images came to be known to the defendant only after the filing of the written statement before this Hon'ble Court. It is submitted that the authorized representative of the defendant came to know about the brands of rum mentioned in the Serial No. (iii) after he made extensive research of the product on the internet. It is submitted that the images mentioned at Serial No. (iiii) were not in the power, control and 7 ( 2024:HHC:11877 ) knowledge of the defendant at the time of filing of the written statement.

5. That the list of cocument was prepared by he defendant which was sent to the counsels for filing, however, the defendant after signing and sending the documents through registered posts further sent the additional images to the counsel through registered post which were also to be placed on record, however, by that time the earlier list of documents was filed by the counsel.

6. That certain images of similar bottles having similar shape were found by the defendant during the extensive research which were not in the possession of the defendant at the time of filing of the documents along with the written statement, however, thereafter the defendant came to know there were certain brands of liquor who are selling liquor, especially rum in the similar shape of bottles which would be relevant for the just and proper adjudication of the suit. It is submitted that the defendant thus craves the leave of this Hon'ble Court for filing of the documents sought to be produced through the present application.

7. That the list of documents alongwith the documents which are sought to be produced with the leave of this Hon'ble Court are annexed herewith as Annexure A-I. It is submitted that all reasonable care was taken at the time of filing of the written statement and the defendant has the reasonable cause for not producing the additional documents at the time of filing of the written statement."

11. A perusal of the averments made in the application demonstrate that the reasoning given therein as to why the documents could 8 ( 2024:HHC:11877 ) not be placed on record alongwith the written statement is that the authorized representative of the defendant came to know about the brands of rum mentioned at Sr. No. (iii) after he made extensive research of the product on the internet. Now, it is not the case of the applicant that the images, purportedly downloaded from the internet, were not available on the internet at the time when the written statement was filed. Therefore, if the authorized representative on the hindsight gained knowledge of the documents/images, as the applicant wants the Court to believe, then there is nothing mentioned in the application as to why earlier this knowledge could not be gained by the applicant. In fact, no material has been placed on record from which it can be inferred that on which internet site the documents were available and from which internet link and when they were downloaded. Therefore, the averments that have been mentioned in the application demonstrating that the documents could not be placed on record despite best endeavor of the applicant, cannot be accepted. In fact, in para-3 of the application, it has been mentioned by the applicant that it was on account of inadvertence that the documents which are necessary to be filed, could not be filed.

12. Another glaring contradiction in the averments made in the application is to the effect that whereas initially it is mentioned in the application that it was in the course of the admission denial of the documents filed by the plaintiff/non-applicant that the applicant-defendant realized that certain documents had been inadvertently left out to be placed on record, however, thereafter a totally different story has been put forth as to why the 9 ( 2024:HHC:11877 ) documents mentioned at Para No. 4(iii) could not be placed on record. This Court is of the considered view that the endeavour of the applicant to now place on record the documents referred at Para No. 4 (iii) is nothing but to fill up the lacunae, which is not permissible in terms of the statutory provisions or Order XI, Rule 1(10) of the Code of Civil Procedure, as applicable to commercial suits. This Court cannot give premium to the inadvertence on the part of the defendant, which is admitted by the defendant in the application. The statutory provisions are salutary and the Court is duty bound to ensure that the same are abided in letter and spirit. This Court is not oblivious to the fact that the procedure is handmaid of justice, but then fact of matter remains that the procedure cannot be allowed to be abused by a party so as to take advantage of its own inadvertence and/or to fill up lacunae in its case.

13. In view of the above discussion, this application is partly allowed. Documents mentioned in the application at Paragraph No. 4(i) and

(ii) are permitted to be taken on record, however, qua documents mentioned at Para 4(iii), the application is rejected.

(Ajay Mohan Goel) Judge November 20, 2024 (bhupender) 10 ( 2024:HHC:11877 )

11. At this stage, this Court would like to refer to a few judgments. In Great Gatsby Club of India Vs. Mahesh Prefab Pvt. Ltd, 2022 SCC Online Del. 2099, Hon'ble Delhi High Court was pleased to hold as under:-

"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 Kumar:

"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 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, 11 ( 2024:HHC:11877 ) 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 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 12 ( 2024:HHC:11877 ) 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.

In Entertainment Network (India) Ltd. Vs. HT Media Limited, 2022 SCC Online Del. 2626, the Hon'ble Delhi High Court has been pleased to hold as under:-

"19. Order XI sub-rule (7) of Rule 1 CPC, as amended by the Commercial Courts Act, 2015, mandates that the Defendant shall file a list of documents in its power, possession, control or custody, pertaining to the suit, along with the written statement. Sub-rule (10) of Rule 1 of Order XI of the Act clearly stipulates that Defendant shall not be allowed to rely on documents which were in Defendant's power, possession, control or custody and not disclosed along with the written statement, save and except by leave of the Court and that such leave shall be granted only upon the Defendant establishing 'reasonable cause' for non-disclosure along with written statement. The Brand Report is a document which beyond a doubt, existed prior to the filing of the written statement and was in power, possession, control or 13 ( 2024:HHC:11877 ) custody of the Defendant. Therefore, the rigours of Order XI Rule 1(10) of the Act shall apply on all four corners and the document cannot be taken on record, unless the Defendant makes out a 'reasonable cause' for its non- disclosure at the time of filing the written statement. The only ground put-forth, as noted above, by the Defendant for nondisclosure of the document, is 'inadvertence' and the observations of the Court while granting injunction against the Defendant. Unfortunately, under the Commercial Courts Act, these considerations cannot be a ground to permit filing of additional documents. The proscription against permitting such a document to be taken on record, unless a reasonable cause is made out by the Defendant, in my view, is absolute. It also needs to be emphasised at this stage that the Brand Report is dated 22.12.2015 and no attempt was made by the Defendant for nearly 5 years to bring the said document on record as the present application was filed only on 06.02.2020, by which date the issues were framed in the suit and Plaintiff's evidence had concluded. In the entire application, there is no reason spelt out by the Defendant for inaction for these 5 years, while admittedly, the report was in its power and possession in the year 2015 itself and thus, no permission can be granted to take the document on record.

20. This Court in Rishi Raj v. Saregama India Ltd., 2021 SCC OnLine Del 4897, had rejected the application filed by the Plaintiff, post framing of issues refusing to accept 'inadvertence' as a ground for non- disclosure along with the plaint. Similarly, in the case of Zee Entertainment Enterprises Ltd. Saregama India Ltd., 2019 SCC OnLine Del 10215, Plaintiff had filed an application to file additional documents after framing of the issues on the ground of 'inadvertent error' on account of 14 ( 2024:HHC:11877 ) which the said documents were left out from the list of documents filed along with the suit. After analysing the provisions of Order XI Rule 1(5) pertaining to commercial suits, the Court observed as under:-

"17. A reading of paragraphs 3 and 4 of the application which have been reproduced here-inabove and in which alone the attempt, if any, at establishing reasonable cause has been made, are not found to satisfy the test. Not only is there no explanation as to why the inadvertent error now alleged was not detected at the time of institution of the suit when the plaintiff was required to sift through each document for entering its requisite particulars in the list, on oath, but even now, at the stage of applying for leave to file documents, no proper pleadings lest establishing a case have been made out. All that is pleaded is that "in view of the age of such documents, two assignment agreements were left out from the list of documents along with the present plaint in lieu of which other agreement with the same party was placed on record erroneously...". No particulars have been given as to why the signatory of the plaint and of the affidavit in terms of Order XI Rule 1(3) & (6) did not go through the documents as required by law. In fact, no affidavit of Mr. Harsh Tripathi who had signed and verified the plaint and sworn on affidavit of disclosure of document, even has been filed, and the affidavit accompanying the application is of Mr. Mudit Raizada who, save for describing himself as authorised signatory of the plaintiff, has not even stated the position, if any, held by him in the plaintiff. There is again no explanation as to why, when the first affidavit of Mr. Anurag Bedi was drafted, the mistake or inadvertence even if any did not come to light. There is no explanation as to why the mistake, though not noticed at the time of filing the affidavit by way of examination-in-chief of Anurag Bedi, did not still come to light while withdrawing the said affidavit on the ground of errors therein. There is yet no explanation as to why even at the time of drafting the fresh affidavit of Mr. Anurag Bedi or at the time of scheduling of examination-in-chief, the mistake did not come to light."

21. Having so observed, the Court finally held that if the Courts, in spite of the legislative mandate and change, continue to overlook such deficiencies in the name of interest of justice, the litigants and practitioners of the commercial suit will never wake up to the change required to be brought about in the conduct of such suits. 15

( 2024:HHC:11877 ) The facts of the present case, in my view, are squarely covered by these two judgments. In the present case also, there is no explanation why the inadvertent error was not detected earlier and why the Defendant waited until conclusion of the Plaintiff's evidence to file the application to bring the said additional document on record.

22. In this context, I may refer to the judgment in Nitin Gupta (supra) wherein post framing of issues, Plaintiff had sought to file a letter dated 02.09.2013. Defendant had opposed the application inter alia on the ground that while filing the suit, Plaintiff had nowhere disclosed that there was any such document addressed by the Defendant to the Plaintiff and that no reasonable cause as required under Order XI Rule 1(5) of the Act was made out for taking the additional documents on record. The Court found merit in the contention of the Defendant that the Plaintiff is entitled, under Order XI of the Act, as applicable to commercial suits, to file a document belatedly only if it establishes 'reasonable cause' for non- disclosure along with the plaint. Application was disallowed by the Court and one of the factors, which weighed with the Court to come to the said conclusion, was that Plaintiff was unable to show a reasonable cause for non-disclosure of the document along with the plaint. What is significant is the observation of the Court in para 38 of the judgment that unless the Commercial Divisions while dealing with the commercial suits start enforcing Rules legislated for commercial suits and refuse to entertain applications for late filing of documents where they do not disclose reasonable cause and continue to show leniency, Commercial Courts will start suffering from the same malady which the ordinary suits have suffered and the purpose of the Commercial Courts Act would be 16 ( 2024:HHC:11877 ) defeated. I may also quote from the judgment of a Co- ordinate Bench in Great Gatsby Club of India v. Mahesh Prefab Pvt. Ltd., 2022 SCC OnLine Del 2099 as under:-

"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."

Thus, a perusal of the said judgments makes it apparently clear that...................

( 2024:HHC:11877 ) In view of the above discussion, the application is partly allowed. Documents mentioned at Sr. No. 4(i) and (ii) are permitted to be taken on record, however, qua documents mentioned at Sr. No. 4(iii), the application is rejected.

(Ajay Mohan Goel) Judge November 20, 2024 (bhupender)

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Himachal Pradesh High Court