Andhra HC (Pre-Telangana)
Cable Corporation Of India Limited vs Sanghi Industries Limited on 10 January, 2003
Equivalent citations: AIR2003AP282, 2003(2)ALD558, [2004]122COMPCAS615(AP), (2003)3COMPLJ216(AP), [2003]44SCL15(AP), AIR 2003 ANDHRA PRADESH 282, (2003) 3 CIVLJ 43, (2003) 2 ANDHLD 558, (2004) 122 COMCAS 615, (2003) 5 INDLD 255, (2003) 3 COMLJ 216, (2003) 3 ICC 283
Author: N.V. Ramana
Bench: N.V. Ramana
ORDER N.V. Ramana, J.
1. M/s. Cable Corporation of India Limited, represented by its Regional Manager, Sri. Ashok Gupta, has filed these two Company Applications.
2. By C.A. No. 556 of 2002, filed under Order XIII, Rule 2 read with Section 151 of the Code of Civil Procedure, 1908, as amended by Act 22 of 2002 (for short 'the Code'), and Rules 6 and 9 of the Companies (Court) Rules, 1959 (for short 'the Rules'), the applicant seeks permission of the Court to produce the list of documents, appended to the application, by condoning the delay, if any, in producing the same. While, by C.A. No. 557 of 2002, filed under the provisions of the Indian Evidence Act, 1872 read with Section 151 of the Code and Rules 6 and 9 of the Rules, the applicant seeks permission of the Court to produce xerox copies of the Letter of Intent dated 27-1-1995 and the Purchase Order dated 10-7-1995, placed by the respondent.
3. One Sri. K.G. Narasimhan, who claims to be Retainer of the applicant-company, filed an affidavit in support of the applications, stating as follows:
4. The applicant-company filed Company Petition under Section 433(e) read with Sections 434(1)(a) and 439(1)(b) of the Companies Act, 1956, for winding up of the respondent-company, namely M/s. Sanghi Industries Limited, for recovery of its dues to the tune of Rs. 50,66,457/-, along with interest thereon. The Company Petition having been admitted, is coming up for the evidence of the applicant-company.
5. It is the case of the applicant-company that when the Company Petition came up for trial, the respondent-company mooted a compromise, and it was felt that the necessity of producing the documents would not arise, if the matter ended in a compromise, but unfortunately, the compromise failed. As the entire transaction with respect to supply of material to the respondent-company took place from their different offices at Chennai, Hyderabad and Mumbai, they could not assemble certain documents, namely (i) Letter of Intent, (ii) Purchase Order placed by the respondent-company, (iii) Invoices raised by the applicant-company, (iv) Consignment Notes in proof of delivery of the materials, and (v) The correspondence exchanged by the applicant and the respondent, and therefore, they could not file them along with the Company Petition. Inasmuch as the above documents have now been grouped up, the applicant-company, seeks permission to file them as exhibits along with the affidavit in lieu of examination-in-chief. Further, as the original Letter of Intent dated 27-1-1995 and Purchase Order dated 10-7-1995 were retained by the excise authorities when they were sent to the factory for determining the excise duty payable on the materials, the learned Counsel submits that the applicant-company is left with the xerox copies thereof, and therefore, the applicant-company be permitted to file the said xerox copies. He would further submit that non-filing of the aforementioned documents along with the Company Petition, was neither intentional nor wanton, but for the reasons stated above, and therefore, in the interest of justice, the applicant-company be permitted to produce the above-mentioned documents, by condoning the delay, if any.
6. On behalf of the respondent-company, one Sri. P. Bala Krishna, Legal Manager, filed counter-affidavit stating that the applications filed by K.G. Narasimhan are not maintainable, either in law or on facts, for the reason that a Retainer has no locus standi to depose the affidavit, and more particularly when he has not filed any resolution passed by the Board of Directors of the applicant-company giving him the General Power of Attorney to file the affidavit, and that apart, he has also not obtained any permission from the Court to represent the case.
7. It is further stated that the applicant-company cannot be permitted to file documents after a gap of more than three years from the date of filing the Company Petition, and that too when it is coming up for trial. No petition to condone the delay in filing the said documents has been filed. The applications filed invoking the provisions of Rule 6 of the Rules cannot be entertained for the reason that as per the amended provisions of Sub-rule (1) of Rule 1 of Order XIII of the Code, as amended by Act 22 of 2002, which came into effect from 1-7-2002, the plaintiff should not be permitted to file the documents subsequent to the filing of the plaint or written statement. Therefore, the documents now sought to be produced by the applicant-company, along with the affidavit in lieu of examination-in-chief, cannot be entertained. He, thus sought, dismissal of the applications.
8. Heard the learned Counsel for the applicant-company as well as the respondent-company.
9. The learned Counsel appearing on behalf of the applicant-company submits that when the matter came up for trial, the respondent-company mooted a compromise, and it was felt that the necessity of producing them would not arise if the compromise ended on a positive note, but unfortunately the compromise did not materialize and failed, and therefore, the necessity of producing the present documents in support of the case of the applicant-company has arisen. Moreover, the documents now sought to be produced were lying at the different offices of the applicant-company, namely, Chennai, Hyderabad and Mumbai, and therefore, they could not be filed along with the Company Petition, and inasmuch as the same have now been grouped up, the applicant-company should be permitted to produce the same in support of its case in the interest of justice. Even the original Letter of Intent dated 27-1-1995 and the Purchase Order dated 10-7-1995 could not be filed along with the Company Petition because they were retained by the excise authorities when they were sent to the factory in the year 1995 for the purpose of determining the excise duty payable on the materials supplied to the respondent-company, and since they are now left with the xerox copies thereof, the applicant-company should be permitted to produce them.
10. On the contrary, the learned Counsel appearing on behalf of the respondent-company contends that Mr. K.G. Narasimhan, who claims to be Retainer of the applicant-company has not filed any General Power of Attorney given by the Board of Directors nor has he taken permission from the Court to represent the case, and therefore, he has no locus standi to file affidavit in support of the applications on behalf of the respondent-company. The present applications, which seek to file the above documents at the stage when the Company Petition is coming up for trial, are not maintainable for there is a gap of more than three years from the date of filing of the Company Petition, and as per the amended provisions of Sub-rule (1) of Rule 1 of Order XIII of the Code, as amended by Act 22 of 2002, which came into effect from 1-7-2002, no party should be permitted to file documents subsequent to the filing of the plaint or written statement. At any rate, since the applications filed by the applicant-company are not supported by any applications seeking to condone the delay of more than three years in producing the documents, and without the delay being condoned, the present applications are not maintainable, and as such, are liable to be dismissed.
11. The contention of the respondent-company that Sri. K.G. Narasimhan, has no locus standi to file affidavit in support of the applications cannot be accepted for the reason that in pursuance of the resolution passed by the Board of Directors of the applicant-company, a Power of Attorney has been executed on 4-7-2002, nominating, appointing and constituting Sri. Ashok Gupta and Sri. K.G. Narasimhan, as lawful Attorneys to do, execute and perform severally all or any of the acts, deeds, matters and things, stated therein.
12. The contention of the respondent-company that the applications filed by the applicant-company for producing the documents at the stage when the Company Petition is coming up for trial, are not maintainable in view of the amended provisions of Sub-rule (1) of Rule 1 of Order XIII of the Code, and more particularly when no application to condone the delay of three years in filing the said applications has been filed, cannot be accepted for the reasons to be stated infra.
13. To answer the above question, it would be necessary to refer to some of the relevant: provisions of the Code. Be it noted that by reason of Amendment Acts 46 of 1999 and 22 of 2002, which came into operation from 1-7-2002, Order VII, Rule 14, Order VIII, Rule 1, Order XIII, Rules 1 and 2 and Order XVIII, Rule 17-A of the Code, were amended. Prior to the amendments, under Order VII, Rule 14 and Rules 15 to 18, the plaintiff was expected to file the documents along with the plaint, and under Order VIII, Rule 1-A, the defendant was expected to file the documents along with the written statement. While under Order XIII, Rule 1, the parties or their pleaders were to produce at or before the settlement of issues, all the documentary evidence of every description in their possession or power, on which they intend to rely, and which has not already been filed in Court, and all documents which the Court has ordered to be produced, and under Rule 2, at any subsequent stage, after the settlement of issues, on good cause being shown to the satisfaction of the Court, the Court might receive the documentary evidence, which is in possession or power of any party.
14. Apart from the above provisions, which cover various stages of the suit or proceedings, under Order XVIII, Rule 17-A, either of the parties to the suit might produce evidence, which is previously not known to him or which he could not produce despite due diligence. After the disposal of the suit and during the pendency of the appeal under Order XLI, Rule 27, the parties can produce additional evidence, which evidence has either been refused to be received by the Trial Court or is required by the Court itself to enable it to pronounce the judgement or for any substantial cause.
15. By reason of Amendment Act 46 of 1999, Rule 2 of Order XIII was completely deleted, and in place of Rules 1 and 2, Rule 1 dealing with the original documents to be produced at or before the settlement of issues, was incorporated. The said Rule reads as follows:
(1) The parties or their pleader shall produce on or before the settlement of issues, all the documentary evidence in original where the copies thereof have been filed along with plaint or written statement.
(2) The Court shall receive the documents so produced:
Provided that they are accompanied by an accurate list thereof prepared in such form as the High Court directs.
16. From a reading of the provisions of Rule 1 of Order XIII of the Code, it become manifestly clear that the Court shall receive the documents produced by the parties on or before the settlement of issues if the copies thereof have been filed along with the plaint or written statement. However, the proviso appended to Rule 2 of Order XIII of the Code makes it clear that the Court shall receive the documents so produced if they are accompanied by an accurate list thereof prepared in such form as the High Court directs.
17. Though by deletion of Rule 2 of Order XIII of the Code, it appears that no documentary evidence can be produced after the settlement of issues, but on a critical examination of the various provisions of the Code, the position seems to be otherwise. In this context, the amended provisions of Rule 14 of Order VII of the Code may be read in juxtaposition with that of the unamended provisions of Rule 14 of Order VII:
Unamended provisions of Order VII, Rule 14 of the Code
14. Production of document on which plaintiff sues :--(1) Where a plaintiff sues upon a document in his possession or power, he shall produce it in Court when the plaint is presented, and shall at the same time deliver the document or a copy thereof to be filed with the plaint.
(2) List of other documents:--Where he relies on any other documents (whether in his possession or power or not) as evidence in support of his claim, he shall enter such documents in a list to be added or annexed to the plaint.
Amended provisions of Order VII Rule 14 CPC of the Code
14. Production of document on which plaintiff sues or relies:--(1) Where a plaintiff sues upon a document on relies upon a document in his possession or power in support of his claim, he shall enter such documents in a list, and shall produce it in Court when the plaint is presented by him and shall, at the same time deliver the document and a copy thereof, to be filed with the plaint (2) Where any such document is not in the possession or power of the plaintiff, he shall, wherever possible, state in whose possession or power it is.
(3) A document which ought to be produced in Court by the plaintiff when the plaint is presented, or to be entered in the list to be added or annexed to the plaint but is not produced or entered accordingly, shall not without the leave of the Court, be received in evidence on his behalf at the hearing of the suit.
(4) Nothing in this rule shall apply to document produced for the cross-examination of the plaintiff's witness, or, handed over to a witness merely to refresh his memory.
18. Under Sub-rule (1) of Rule 14 of Order VII of the unamended Code, the plaintiff shall produce the document on which he sues, and which is in his possession or power, in the Court at the time of presentation of plaint, and under Sub-rule (2) thereof, the plaintiff shall give a list of the documents on which he relies, irrespective of whether they are in his possession or power or not, as evidence in support of his claim, which shall be annexed to the plaint. However, the amended provision of Sub-rule (1) of Rule 14 of Order VII of the Code provides that the plaintiff shall produce the document on which he sues or relies, which is in his possession or power, in support of his claim, by entering such documents in a list, which shall be presented along with the plaint, and he shall at the same time, deliver the document and a copy thereof, to be filed with the plaint. Sub-rule (2) thereof provides that if the document on which the plaintiff is placing reliance is not in his possession or power, then he shall, wherever possible, state in whose possession or power it is. Sub-rule (3) thereof, mandates that the document which ought to have been filed at the time of the presentation of the plaint or entered in the list or added or annexed to the plaint, but was not done so, shall not without the leave of the Court, be received in evidence on his behalf at the hearing of the suit. In other words, notwithstanding the mandatory provision of Sub-rule (1) of Rule 14 of Order VII of the amended Code, Sub-rule (3) thereof, which was introduced by Amendment Act 22 of 2002, provides that if the document which ought to have been produced by the plaintiff at the time of presentation of plaint or entered in the list or added or annexed to the plaint, shall be received in evidence on his behalf at the hearing of the suit, only with the leave of the Court. It is pertinent to note that Sub-rule (3) of Rule 14 of Order VII of the amended Code did not find place in the Amendment Act 46 of 1999. Perhaps, realizing the difficulty, the Parliament has incorporated Sub-rule (3) to Rule 14 of Order VII of the Code. Similar such provisions have been incorporated in Order VIII where the defendant in case of counterclaim, is obliged to file the document along with the written statement. Rule 1-A of Order VIII is a new provision, which is akin to Rule 14 of Order VII of the Code, the only difference being that the former applies to the defendant and the latter applies to the plaintiff. The provision which enabled the parties to produce evidence with the leave of the Court under Rule 2 of Order XIII has been removed and transplanted virtually in Order VII, Sub-rule (3) of Rule 14 and Order VIII, Sub-rule (3) of Rule 1-A of the Code. These two provisions, now enable the parties to produce the documents at the hearing of the suit, which have not been produced along with the plaint or written statement, as the case may be. Since Sub-rule (3) of Rule 14 of Order VII and Sub-rule (3) of Rule 1-A clearly contemplate the production of evidence with the leave of the Court at the time of hearing of the suit, a stage which is subsequent to the filing of the plaint and written statement, I am of the opinion that the Code has provided for a provision which enables the parties to produce such evidence at the conclusion of the trial and before the pronouncement of judgment, the stage which has been clearly envisaged under Rule 17-A of Order XVIII whereunder, the Court may recall a witness at any stage of the suit for examination. While that be the position, I see no reason as to why the applicant-company should not be permitted to produce the documentary evidence, and more so when the trial has not yet started. Even otherwise, the inherent powers of the Court under Section 151 of the Code have been saved, and nothing prevents the Court from receiving the documents in exercise of its inherent power, in the absence of any express prohibition to that effect in the Code.
19. A reference may also be made to Rule 9 of the Company (Court) Rules, 1959, which deal with the inherent powers of the Court. The said Rule reads thus:
Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the Court to give such directions or pass such orders as may be necessary for the ends of justice or prevent abuse of the process of the Court.
20. From a reading of the above Rule, it becomes abundantly clear, that the Rules, shall in no way affect or limit or abridge the inherent power of the Court to give such directions or pass such orders as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Court.
21. As is well known, procedures are manmade. Procedures should not come in the way of advancement of justice, but should be a facilitator of justice. In this regard, it is apt to refer to some observations made by the Apex Court in Bhagwan Swaroop v. Mool Chand, , which read as under:
But the law of procedure devised for advancing justice and not impeding the same................. a Code of Procedure designed to facilitate justice and further its ends; not a penal enactment for punishment and penalties; not a thing designed to trip people up.
22. This Court exercises original jurisdiction insofar as matters relating to the companies under the Companies Act, 1956 are concerned. In the instant case, the trial has not yet started. The copies of the documents which are now sought to be filed were not filed along with the Company Petition because the transactions with regard to supply of material took place from various offices of the applicant-company, and they were lying at Chennai, Hyderabad and Mumbai. That apart, the original Letter of Intent and Purchase Order were-retained by the excise officials for computing the excise duty, and therefore, the applicant-company is left with the xerox copies thereof. It is further the contention of the applicant-company that they could have filed the documents at an earlier point of time, but because of the compromise mooted by the respondent-company, they could not file the documents. As the compromise failed, it became necessary for the applicant-company to file the documents in support of their case, which are crucial and important. The contention of the applicant-company that the compromise mooted by the respondent-company, failed, has neither been disputed by the respondent-company neither in their counter nor at the time of arguments.
23. Since the trial in the Company Petition is yet to start, and the documents now sought to be filed by the applicant-company, are very crucial to their case, and having regard to the various provisions of the Code and the inherent power of the Court under Section 151 thereof, read with the illimitable power of this Court under Rule 9 of the Company (Court) Rules, 1959, I am of the considered opinion that to meet the ends of justice, the applications as prayed for should be allowed, and more so when no prejudice is likely to be caused to the respondent-company for they would be given the opportunity to rebut the same in the evidence.
24. In the result, both the applications are allowed. The applicant-company is permitted to produce the list of documents, appended to the applications, as also the xerox copies of the Letter of Intent and the Purchase Order placed by the respondent-company, and the delay, if any, shall also stand condoned, for the reasons stated by the applicant-company in the applications as well as for the reasons recorded in the preceding paragraphs. No costs.