Bombay High Court
Iridium India Telecom Ltd. vs Motorola Inc. And Ors. on 12 December, 2003
Equivalent citations: 2004(1)BOMCR479, 2004 A I H C 816, (2004) 1 BOM CR 479
Author: H.L. Gokhale
Bench: H.L. Gokhale, R.S. Mohite
JUDGMENT H.L. Gokhale, J.
1. Appeal Nos. 702 and 703 of 2003 seek to challenge the order of a Single Judge dated 8th August, 2003 rejecting two Notices of Motion bearing Nos. 2557 of 2002 and 2793 of 2002, which were taken out by the appellants herein in Suit No. 3092 of 2002, which the appellants have filed against the respondents. The two motions sought orders in the nature of attachment before judgment and injunction for obtaining security for a decree that might be passed in the appellants pending suit. Amongst others, the suit claims are (1) US $ 12,04,90,000 with further interest at the rate of 5% per annum on US $ 9,03,30,000 and (2) a sum of Rs. 3,77,21,54,857 with interest at the rate of 12% per annum on the principal amount of Rs. 48,11,00,000.
2. This motion taken out by respondent No. 1 herein seeks through prayer (a) to produce and rely upon the documents listed in the schedule annexed to the motion. Prayer (b) seeks that Mr. Ravi Parthasarthy, Managing Director of ILFS, who has verified the plaint and who has filed an affidavit on 4th August, 2003, be ordered to attend cross-examination. Mr. Kapadia and Mr. Dhond appearing for the appellants object to both these prayers being granted.
3. Now as can be seen from paragraph 33 of the order passed by the learned Single Judge, it was at the last moment at the close of the arguments before him that the respondents herein produced two letters before the learned Single Judge, which were enclosed as Exhibits 1 and 2 to an affidavit dated 25th July, 2003, and the learned Judge allowed them in the interest of justice. As seen from paragraph 33 of the impugned order, the two letters have gone in a great way to decide the matter in favour of the respondents.
4. When the present appeals were filed, the appellants took out two motions therein bearing Nos. 2591 of 2003 and 2592 of 2003. In the affidavit in support of these motions affirmed on 3rd September, 2003, the appellants enclosed a letter of IDBI dated 5th December, 1995, to which the Minutes of the Joint Meeting of Indian Institutional Investors held on 14th November 1995 were enclosed as Exhibit "A". At Exhibit "B" to this affidavit, were the Minutes of the 25th Meeting of the Board of Directors of Iridium India Telecom Limited held on 7th April 1999. According to the appellants, these two documents were necessary to be looked into partly as an answer to the documents which the respondents had produced before the learned Single Judge at the close of the arguments as recorded by the learned Single Judge.
5. Thereafter when these appeals reached for hearing before this Bench, the matter was argued on some 8 days and again it was at the fag end of the arguments that Mr. Desai, learned Senior Counsel appearing for the respondents, on the instructions of his clients, while tendering the written submissions for the convenience of the Court, tendered along therewith still some more documents which were not part of the record before the learned Single Judge. Mr. Kapadia, learned Senior Counsel appearing for the appellants, therefore, objected to the documents being taken on record. He also pointed out that no motion was taken out nor any affidavit filed to justify placing of these documents on record. Mr. Desai, therefore, made an oral application to take out a motion to seek permission to produce the concerned documents. That motion has been taken out on 25th November, 2003.
6. Since the matter was heard by this Bench for quite some time, at the request of the parties, this Bench was especially convened on 3rd and 4th December 2003 (though the assignments of both of us were otherwise different). When the motion was taken out for consideration, what we find is that still some more documents are sought to be placed on record through this motion and for which there is prayer (a) in the motion. An affidavit in reply has been filed objecting to these documents being taken on record and Mr. Kapadia has submitted that opportunity is being misused to produce more and more documents. As against this submission, Mr. Desai has submitted that some of them are the documents of the appellants themselves which have bearing on the subject-matter of the appeals. Some of the documents had to be obtained from the Bankruptcy proceedings in U.S. Mr. Kapadia, on the other hand, submitted that practically all of them are listed in the list of documents filed with the written statement and the belated production is not justified. That apart, prayer (b) of the motion is to seek cross-examination of Mr. Ravi Parthasarthy, Managing Director of Infrastructure Leasing and Financial Services, which is a shareholder of the appellant company. Mr. Kapadia has stoutly opposed this request being considered.
7. Mr. Desai, learned Counsel for the respondents, submitted that some of the documents, which were now being produced, were documents which ought to have been produced by the appellants themselves since they are documents concerning their record. Documents at Sr. Nos. 4, 7, 9 and 11 to 14 are such documents. Rest of the documents are from the record of Iridium LLC which is in liquidation and there was much difficulty in obtaining them. Mr. Desai has no objection to the two letters produced by the appellants being considered. He however submits that in the interest of justice, these documents be also taken on appeal record. Mr. Desai referred to the observations of the Apex Court in paragraph 6 in the case of K.J. Somayya v. State of Bombay, , where the Court observed :
"While it is the duty of a private party to a litigation to place all the relevant matters before the Court, a higher responsibility rests upon the Government not to withhold such documents from the Court."
Mr. Desai submitted that the appellants are a public company whose shareholders are State owned banks and financial institutions. In his submission, this dicta will apply to the appellants in full force.
8. With respect to the objection concerning delay in producing these documents, Mr. Desai submitted that some of the documents were not available since they were with the bankruptcy Court in U.S. He submitted quoting the Apex Court in Madan Gopal Kanodia v. Mamraj Maniram, that the object of Order 13, Rule 2 of Civil Procedure Code is merely to prevent belated production of documents, so that it may not work injustice to the defendant. However, the same provision clearly clothes the Court with discretion to allow production if it is satisfied that good cause is shown. Same has been the approach in a subsequent judgment in the interest of justice in the case of Billa Jagan Mohan Reddy v. Billa Sanjeeva Reddy, .
9. With respect to the power of the Court, Mr. Desai submitted that though provisions of Civil Procedure Code may not strictly apply to letters patent appeal, those provisions will have to be construed as guiding principles. He relied upon the provisions of Order 41, Rule 27(1)(b) of Civil Procedure Code and quoted the following observations of the Constitution Bench from paragraph 16 in the case of K. Venkataramiah v. Seetharama Reddy, to the following effect :
"There may well be cases where even though the Court finds that it is able to pronounce judgment on the State of the record as it is, and so, it cannot strictly say that it requires additional evidence to enable it to pronounce judgment," it still considers that in the interest of justice something which remains obscure should be filled up so that it can pronounce its judgment in a more satisfactory manner. Such a case will be one for allowing additional evidence "for any other substantial cause" under Rule 27(1)(b) of the Code."
This approach has been reiterated once again referring to this judgment in State of Rajasthan v. N. Sahani, , A.P. State Wakf Board v. All India Shia Conference, and R.R. Naidu v. State of M.P., .
10. Mr. Dhond with Mr. Kapadia submitted that no case is made out under sub-clauses (a) or (aa) of Rule 27(1) of Order 41 of Civil Procedure Code and the power under sub-clause (b) should not be invoked for the benefit of any party which may attempt to improve upon its case. Mr. Dhond, learned Counsel for the appellants, relied upon a good number of judgments to oppose the motion of the respondent No. 1. To begin with, he referred to and relied upon the judgment of Privy Council in the case of Kessowli Issur v. Great Indian Peninsule Railway Company, reported in I.L.R. 31 Bom. 381, for the observations therein on the phrase. "If the Appellate Court requires" occurring in section 568 of the then prevalent Civil Procedure Code of 1882, which phrase is similar to the phrase occurring in Rule 27(1)(b) of the Civil Procedure Code of 1908, namely that the Appellate Court requires any document to be produced. The Privy Council observed in that behalf on page 390 of the report as follows:
"On this phraseology, "in appeal", it must be observed that the further evidence was ordered not after the appeal on the merits had been heard, and the evidence as it stood had been examined by the Judges, but on special and preliminary application. This is important, because the legitimate occasion for section 568 is when, on examining the evidence as it stands, some inherent lacuna or defect becomes apparent, not where a discovery is made, outside the Court, of fresh evidence and the application is made to import it."
11. Mr. Dhond then relied upon another judgment of the Privy Council on Order 41, Rule 27 of Civil Procedure Code of 1908 in the case of Parsotim Thakur v. Lal Mohar Thakur, , to the effect that these provisions are clearly not intended to allow a litigant who has been unsuccessful in the lower Court to patch up the weak parts of his case and fill up omissions in the Court of Appeal. Then he referred to the judgment in the case of Mohammad Akbar Khan v. Mt. Motal, , wherein in paragraph 12, the Privy Council observed that the power of the Appeal Court to admit further evidence under Order 41, Rule 27(1)(b) is confined to cases in which the Court requires any document to be produced or any witness to be examined to enable it to pronounce judgment or for any other substantial cause. Mr. Dhond submitted that the document will be sought by the Court only for two reasons : (1) to enable it to pronounce the judgment or (2) for any other substantial purpose and none other. Then he referred to paragraph 7 from the judgment in the case of Arjan Singh v. Kartar Singh, to submit that the discretion of the Court to receive and admit additional evidence under this Rule is not an arbitrary one, but is a judicial one circumscribed by the limitations specified therein. The Court observed therein:
"The true test, therefore, is whether the Appellate Court is able to pronounce judgment on the materials before it without taking into consideration the additional evidence sought to be adduced."
12. Mr. Dhond pressed into service the propositions emerging in the judgment of the Constitution Bench in the case of Municipal Corporation of Greater Bombay v. Lala Pancham, . A Division Bench of this High Court had permitted a party in appeal to produce the additional evidence since, according to them, it was not possible to dispose of the case on the material on record. The Apex Court held in paragraph 9 of the judgment that this provision does not entitle the High Court to let in fresh evidence at the appellate stage where even without such evidence it can pronounce judgment. It is only for removing the lacuna in evidence that the appellant is empowered to produce additional evidence. In that matter, the High Court did not say that there was any such lacuna. On the other hand, it said that certain documentary evidence on record supported in a large measure the plaintiffs contentions about fraud and mala fides, and then the Apex Court observed "we must point out that the power under Clause (b) of sub-rule (1) of Rule 27 cannot be exercised for adding to the evidence already on record except upon one of the ground specified in the provision". Mr. Dhond emphasised the fact that this was also a Constitution Bench judgment and this was subsequent to the one in the case of K. Venkataramiah v. Seetharama Reddy relied upon by Mr. Desai. It is however material to note that this judgment in the case of Municipal Corporation of Greater Bombay does not refer to the earlier judgment in the case of Venkataramiah (supra). The judgment in Venkataramiah's case was one on the phrase "or any substantial cause" which was not under consideration before the Court in the case of Municipal Corporation of Greater Bombay (supra). In BMC's case, the Court was concerned with a situation wherein the High Court had allowed one party in appeal to produce additional evidence since, in the view of the High Court, it was not possible to decide the matter in a particular manner. The High Court had not held that there was any lacuna in the case. The Apex Court did not approve such an approach.
13. Mr. Dhond then relied upon the judgment in the case of Sunder Lal and Son v. Bharat Handicrafts Pvt. Ltd., , wherein the document sought to be produced in appeal was admittedly in possession of the party and could have been produced in the trial Court. In the facts of that case, the Court held that no substantial cause was made out which would justify an order allowing additional evidence. Similar are the observations in the case of Official Liquidator v. Raghawa Desikachar, , where in paragraph 5 the Apex Court held that the true test was whether the Appellate Court was able to pronounce the judgment on the materials before it without taking into consideration the additional evidence sought to be adduced. Similar are the observations in paragraph 19 of N. Kamalam v. Ayyasamy, to the effect that these provisions are not engrafted in the Code so as to patch up the weak points in the case and to fill up the omissions. In Mahavir Singh v. Naresh Chandra, reported in A.I.R. 2001 S.C. 134, the Apex Court observed in paragraph 6 that any such trend, if allowed, would result in that at any stage of the case either in the first appeal or the second appeal, the additional evidence is sought to be adduced on the ground that better scientific evidence can be adduced, the process would become unending.
14. Relying upon all these judgments, Mr. Dhond submitted that it was very much possible for the respondents to produce these documents before the trial Court as can be seen from the list of documents annexed to the written statement. The respondent No. 1 should not be permitted to strengthen their case in this particular fashion. As against this submission of Mr. Dhond, Mr. Desai pointed out that the list of documents had been filed only on 20th July, 2003, i.e. when the matter was already adjourned for orders before the Single Judge. The respondent No. 1 was already under criticism for producing two documents before the Single Judge at the last stage. These documents are being produced to show the knowledge of the appellants with respect to various stages of the transaction in controversy. Mr. Desai showed a willingness that if the appellant felt so prejudiced, the respondent No. 1 was ready to leave it to the Court that the impugned order be set aside and the matter be sent down again to the Single Judge to decide the motion afresh in the light of these documents. However, it is the appellants themselves who did not want any remand to the trial Court on the ground that this will result into further delay in decision on their motion in the suit.
15. We have considered both these requests. The submission of Mr. Kapadia and Mr. Dhond is undoubtedly correct that from time to time the respondents are producing more and more documents. Mr. Desai has however taken us through the documents and having gone through them, we are of the opinion that it would be desirable that the respondents are permitted to produce these documents so that the entire material with respect to the prayers in the motion is before the Court and the Court can pronounce the judgment in a more satisfactory manner and no obscure elements remain. This is a matter where both parties are attributing dishonesty to the other. It is the case of the appellants that they have been cheated and the entire project was a fraud. As against that, the respondents contend that there was no fraud and the appellants had complete knowledge about the scheme. The documents have a bearing on the knowledge of the appellants. It would not be proper that the judgment be pronounced without these documents being considered or else it will leave a lacuna in the evidence on record. Mr. Desai has made a statement on instructions that no further document whatsoever will be place on record. However, he requests that these documents be permitted and be taken into consideration by the Court. As far as the appellants are concerned, Mr. Kapadia has stated that there are no further documents which the appellants would like to produce. In our view, both these set of documents ought to be taken on record and they are necessary to pronounce the judgment in a more satisfactory manner. The proposition laid down by the Apex Court in K. Venkataramiah's case (supra) continues to hold the field and the judgment in Bombay Municipal Corporation's case (supra) does not make any departure therefrom.
16. As far as prayer (b) of this motion is concerned, we cannot but note that the motion was decided, as always by the learned Single Judge, only on affidavits and having considered the facts there is no need for any oral evidence at the motion stage. We are, therefore, not incline to entertain prayer (b) of the motion.
17. Accordingly we direct as follows :
(a) Prayer (a) of Notice of Motion No. 3462 of 2003 is allowed. The respondent No. 1 is permitted to produce these documents in appeal. In view of this order, the appellant will be at liberty to file their response to these documents.
(b) Similarly as far as the appellants are concerned, they are also permitted in appeal to place on record two documents Exhibits A and B enclosed to the affidavit of Shri Nitin Lokhande affirmed on 3rd September. 2003.
(d) Prayer (b) of the motion is rejected.
(e) Respondent No. 1 to pay the costs of the motion quantified at Rs. 50,000/- to be paid by respondent No. 1 to the appellants within 4 weeks from today.
(f) Motion stands disposed of.
(g) Authorised copies be supplied to the parties.