Karnataka High Court
S R Udaya Shankar vs S R Ravi Shankar on 21 April, 2023
Bench: G.Narendar, Shivashankar Amarannavar
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 21ST DAY OF APRIL, 2023
PRESENT
THE HON'BLE Mr. JUSTICE G. NARENDAR
AND
THE HON'BLE Mr. JUSTICE SHIVASHANKAR AMARANNAVAR
COMAP No.191/2021
BETWEEN :
S.R.UDAYA SHANKAR
S/O S N RAMACHANDRA
AGED ABOUT 52 YEARS
R/AT No.80, GROUND FLOOR
1ST MAIN ROAD, CHAMARAJPET
BENGALURU - 560 018.
...APPELLANT
(BY SRI DHYAN CHINNAPPA, SENIOR COUNSEL
FOR SRI RAJASHEKAR S, ADVOCATE)
AND :
S R RAVI SHANKAR
S/O S N RAMACHANDRA
AGED ABOUT 61 YEARS
R/AT No.80, FIRST FLOOR
1ST MAIN ROAD, CHAMARAJPET
BENGALURU - 560 018.
... RESPONDENT
(BY SMT. ROHINI K M, ADVOCATE)
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THIS COMAP IS FILED UNDER SECTION 13(1) OF THE
COMMERCIAL COURT ACT, PRAYING TO CALL FOR THE
RECORDS IN COM.O.S.No.67/2019 ON THE FILE OF LXXXII
ADDITIONAL CITY CIVIL AND SESSIONS JUDGE (CCH-83),
BENGALURU AND ETC.
THIS COMAP HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT THIS DAY, SHIVASHANKAR AMARANNAVAR J,
DELIVERED THE FOLLOWING;
JUDGMENT
The respondent - plaintiff filed a commercial suit in Com. O.S. 67/2019 on the file LXXXII Additional City Civil and Sessions Judge (CCH-83), Bengaluru, (for short `the Commercial Court') seeking recovery of money on a transaction claiming to be civil contract works and claimed that he is entitled for a sum of Rs.4,20,79,484/- and future interest at the rate of 18% p.a.
2. The appellant - defendant appeared in the said suit but did not choose to file written statement. The respondent
- plaintiff commenced his evidence on 20.12.2019 and he tendered his affidavit in lieu of examination in chief and he 3 has been examined as P.W.1 and got marked one document as Ex.P.1. Thereafter, the matter was posted for further examination in chief. On subsequent dates, the respondent
- plaintiff (P.W.1) did not appear before the Court. Thereafter, the matter was not taken up for several months owing to Coivd-19 and it simply came to be adjourned from 15.06.2020 to 14.07.2020. Thereafter, the matter was taken up on 25.01.2021 and on that day, P.W.1 was not present. The Commercial Court simply posted the matter for steps to be taken under the provisions of the Commercial Courts Act, 2015. On 20.03.2021 plaintiff's counsel filed written statement and the matter was posted for judgment. The Commercial Court passed judgment under Order VIII Rule 10 CPC and decreed the suit of the plaintiff by judgment dated 31.03.2021. During the course of the judgment, the Commercial Court has marked Ex.P.2 to Ex.P.6. Said judgment dated 31.03.2021 passed in Com. O.S. No. 67/2019 has been challenged in this appeal. 4
3. Heard learned counsel for appellant and learned counsel for respondent and perused the written submission filed by them.
4. Learned counsel for appellant would contend that even though the appellant - defendant has not filed any written statement, he has got right to cross-examine the plaintiff witness, i.e., P.W.1 and without providing him an opportunity for the same, the Commercial Court has passed the impugned judgment under Order VIII Rule 10 CPC. On that point he placed reliance on the decision of this Court rendered in the case of Sri. Nijamuddin and another Vs. Aktharbegam reported in ILR 2021 Kar. 3297, decision of the Hon'ble Apex Court in the case of Modula India Vs. Kamakshya Singh Deo reported in AIR 1989 SC 162 and in the case of Basalingappa Chinnappa Goudar and others Vs. Shantavva and others reported in ILR 2002 Kar. 260 wherein it is held that the valuable right of cross- examination cannot be lost simply because a statement of 5 defence was not filed. He contends that the Commercial Court allowed the evidence to be led and also permitted documents to be marked through P.W.1 and also marked documents suo motu while passing the judgment and it deprives a party a right to cross-examine such witness violates the salutary principle of audi alteram partem. The Commercial Court while passing the judgment has placed reliance on the evidence of P.W.1 as proof of the statements made in the plaint and the same is evident from paragraph No. 13 of the judgment. Said reliance on the evidence without cross-examination cannot be sustained. He further contends that the Commercial Act requires mandatory statement of truth under Order VI Rule 15-A of CPC and it should be in the prescribed form contained in Appendix 1 of the CPC. The plaint is not supported by the said statement of truth as required under Order VI Rule 15- A of CPC. The failure to file such an affidavit as prescribed has rendered not merely the plaint defective but also 6 rendered the judgment which is passed relying on such pleading also defective. Therefore, the Commercial Court cannot rely on the pleadings to pronounce the judgment under Order VIII Rule 10 of CPC. He contends, that non- filing of the statement of truth is not a curable defect as held by the Delhi High Court in the case of Indira Gandhi National Open University Vs. M/s. Sharat Das Associates Pvt. Ltd., reported in MANU/DE /1280/2020.
5. Learned counsel for respondent would contend that the appellant - defendant did not file written statement within 120 days of service of summons to the defendant as required under Order VIII Rule 1 CPC. He contends that non filing of the statement of truth as required under Order VI Rule 15-A CPC is a curable defect and on that point he has placed reliance on the following decisions. 7 i. Haier Telecom (India) Private Limited Vs. Drive India Enterprises Solutions Limited, 2018 SCC Online Bom. 2829 ii. Harji Engineering Works Private Limited Vs. Hindustan Steelworks Construction Limited, (C.S. No.212/2018 dated 14.09.2021), 2021 SCC Online Cal. 2457 iii. Saptharshi Construction vs. Manjusree Singh and others, C.O. No. 179/2021 dated 02.02.2021
6. He contends that proviso to Order VIII Rule 10 CPC clearly states that the time limit to file written statement cannot be extended and therefore, the Commercial Court invoking its power under Order VIII Rule 10 CPC has passed the judgment. He contends that it is neither necessary nor appropriate to direct the plaintiff to adduce evidence in support of facts pleaded by him in an indiscriminate matter. He contends that no purpose would be served in such cases by directing the plaintiff to lead ex-parte evidence. The plaint is supported by affidavit of the plaintiff. He contends 8 that Order VIII Rule 10 of CPC has been inserted by the legislature to expedite the process of justice. The Courts can invoke its power to curb dilatory tactic often resorted to by defendant by not filing the written statement by pronouncing the judgment against it. On that point he placed reliance on the decision of the Delhi High Court in the case of Nirog Pharma Private Limited Vs. Umesh Gupta and another reported in 2016 SCC Online Del. 5961 and in another decision of the Delhi High Court in the case of The Christian Broadcasting Network, INC Vs. CBN News Private Limited reported in 2018 SCC Online Del. 11666 and anther decision of the Delhi High Court in the case of Kleenoil Filtration India Private Limited Vs. Udit Khatri and others reported in 2023 SCC Online Del. 18. He contends that as per the provisions contained in Section 58 of the Indian Evidence Act facts admitted need not be proved. Since the defendant has not filed his written statement the averments made in the plaint are not 9 controverted and they amount to admitted facts under the amended provisions of CPC which has to be read along with Section 58 of the Indian Evidence Act. The defendant has not filed the statement of admissions and denials as required under Order XI Rule 13 of CPC and therefore, the documents of the plaintiff are also deemed to be admitted and therefore the evidence of the plaintiff is not required. The conduct of the appellant - defendant before the Commercial Court and before this Court does not entitle him to any relief. The appellant - defendant has neither deposited Rs.50.00 lakhs before the trial Court nor he has furnished bank guarantee for Rs.1.00 crore in compliance of the order passed by this Court.
7. Considering the contentions raised by both the parties and on perusal of the record the following point arises for our consideration:
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Whether the Commercial Court has erred in pronouncing the judgment under Order VIII Rule 10 of CPC after it directed the plaintiff to lead evidence, further examination of plaintiff as P.W.1 and marking of one document as Ex.P.1 and without giving an opportunity to the defendant to cross-examine P.W.1?
8. Since the suit has been decreed by the Commercial Court under Order VIII Rule 10 CPC we will examine the provisions contained in various Rules of Order VIII of CPC to find out whether the jurisdiction was properly exercised by the Commercial Court in decreeing the suit under Order VIII Rule 10 of CPC.
9. Order VIII Rule 1 provides that the defendant shall file the written statement of his defence. It is inter alia provided under Rule 5 of Order VIII that every allegation of fact in the plaint, if not denied specifically or by necessary implication, or stated to be not admitted in the pleading of 11 the defendant, shall be taken to be admitted. This Rule provides as under:
"5. Specific denial.- (1) Every allegation of fact in the plaint, if not denied specifically or by necessary implication, or stated to be not admitted in the pleading of the defendant, shall be taken to be admitted except as against a person under disability:
Provided that the Court may in its discretion require any fact so admitted to be proved otherwise than by such admission.
(2) Where the defendant has not filed a pleading, it shall be lawful for the court to pronounce judgment on the basis of the facts contained in the plaint, except as against a person under a disability, but the court may, in its discretion, require any such fact to be proved.
(3) In exercising its discretion under the proviso to sub-rule (1) or under sub-rule (2), the court shall have due regard to the fact whether the defendant could have, or has, engaged a pleader.12
(4) Whenever a judgment is pronounced under this rule, a decree shall be drawn un in accordance with such judgment and such decree shall bear the date on which the judgment was pronounced."
10. The scheme of this rule is largely dependent upon the filing or non-filing of the pleading by the defendant. Sub-rule (1) of Rule 5 provides that any fact stated in the plaint, if not denied specifically or by necessary implication or stated to be not admitted in the pleading of the defendant, shall be treated as admitted. Under Rule 3 of Order VIII, it is provided that the denial by the defendant in his written statement must be specific with reference to each allegation of fact made in the plaint. A general denial or an evasive denial is not treated as sufficient denial and, therefore, the denial, if it is not definite, positive and unambiguous, the allegations of facts made in the plaint shall be treated as admitted under this rule. 13
11. The proviso appended to this Rule is important in the sense that though a fact stated in the plaint may be treated as admitted, the Court may, in its discretion, still require such "admitted fact" to be proved otherwise than by such admission. This is an exception to the general rule of evidence that a fact which is admitted need not be proved.
12. Sub-rule (2) provides that if the defendant has not filed his written statement, it would be lawful for the Court to pronounce judgment on the basis of the facts contained in the plaint. The Rule further proceeds to say that notwithstanding that the facts stated in the plaint are treated as admitted, the Court, though it can lawfully pass the judgment, may before passing the judgment require such fact to be proved. The Rule is thus in consonance with the proviso which also requires the fact, even though treated as admitted, to be proved. Thus, the proviso and sub-rule (2) read together indicate that where: 14
(i) an allegation of fact made in the plaint is not denied specifically, or
(ii) by necessary implication, or
(iii) stated to be "not admitted" in the pleading of the defendant, or
(iv) the defendant has not filed the written statement, such allegations of facts shall be treated as admitted. The court in this situation can either proceed to pronounce judgment on such admitted facts or may require the plaintiff, in spite of such admission, to prove such facts.
13. Sub-rule (2) quoted above is thus an enabling provision which enables the Court to pronounce judgment on the basis of the facts contained in the plaint, if the defendant has not filed a written statement. What is important to note is that even though a written statement is not filed by the defendant, the Court may still require a fact pleaded in the plaint to be proved.
14. We may now consider the provisions of Order 8 Rule 9 as also the provisions contained in the other Rule, 15 namely Rule 10, under which the instant suit has been decreed by the Commercial Court. These rules are quoted below:
"9. Subsequent pleadings. - No pleading subsequent to the written statement of a defendant other than by way of defence to a set-off or counter- claim shall be presented except by the leave of the Court and upon such terms as the Court thinks fit; but the Court may at any time require a written statement or additional written statement from any of the parties and fix a time of not more than thirty days for presenting the same.
10. Procedure when party fails to present written statement called for by Court.- Where any party from whom a written statement is required under Rule 1 or Rule 9 fails to present the same within the time permitted or fixed by the Court, as the case may be, the Court shall pronounce judgment against him or make such order in relation to the suit as it thinks fit and on the pronouncement of such judgment, a decree shall be drawn up."16
15. Rule 10 thus governs both the situations, wherein written statement is required under Rule 1 of Order VIII as also it has been demanded under Rule 9. In both situations, if the written statement has not been filed by the defendant, it will be open to the Court to pronounce judgment against him or make such order in relation to the suit as it thinks fit. It is to be noticed that if the written statement is not filed, the Court is required to pronounce the judgment against the defendant. The words "against him" are to be found in Rule 10 of Order VIII which means that the judgment will be pronounced against the defendant. This Rule also gives a discretion either to pronounce the judgment against the defendant or "make such order in relation the suit as it thinks fit." The words are of immense significance inasmuch as they give a discretion to the Court not to pronounce a judgment against the defendant and instead pass such orders as it may think fit in relation to the suit.
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16. There are thus two separate and distinctive provisions in which the Court may pronounce the judgment on the failure of the defendant to file written statement. The failure may be either under Order VIII Rule 5(2) under which the Court may either pronounce judgment on the basis of the facts set out in the plaint or require the plaintiff to prove any such fact; or the failure may be under Order VIII Rule 10 of CPC under which the Court is required to pronounce judgment against the defendant or to pass such order in relation to the suit as it thinks fit.
17. There is yet another provision under which it is possible for the Court to pronounce judgment on admission. This is contained in Rule 6 of Order XII which provides as under:
"6. Judgment on admissions.-(1) Where admissions of fact have been made either in the pleading or otherwise, whether orally or in writing, the court may at any stage of the suit, either on the application of 18 any party or of its own motion and without waiting for the determination of any other question between the parties, make such order or give such judgment as it may think fit, having regard to such admissions.
(2) Whenever a judgment is pronounced under sub-
rule (1) a decree shall be drawn up in accordance with the judgment and the decree shall bear the date on which the judgment was pronounced."
18. Under this Rule, the Court can, at an interlocutory stage of the proceedings, pass a judgment on the basis of admissions made by the defendant. But before the Court can act upon the admission, it has to be shown that the admission is unequivocal, clear and positive. This Rule empowers the Court to pass judg ment and decree in respect of admitted claims pending adjudication of the disputed claims in the suit.
19. In Razia Begum vs. Sahebzadi Anwar Begum reported in AIR 1958 SC 886 it was held that Order XII 19 Rule 6 has to be read along with the proviso to Rule 5 of Order VIII. That is to say, notwithstanding the admission made by the defendant in his pleading, the Court may still require the plaintiff to prove the facts pleaded by him in the plaint.
20. Thus, inspite of admission of a fact having been made by a party to the suit, the Court may still require the plaintiff to prove the fact which has been admitted by the defendant. This is also in consonance with the provisions of Section 58 of the Evidence Act which provides as under:
"58. Facts admitted need not be proved.-No fact need be proved in any proceeding which the parties thereto or their agents agree to admit at the hearing, or which, before the hearing, they agree to admit by any writing under their hands, or which by any rule or pleading in force at the time they are deemed to have admitted by their pleadings:20
Provided that the court may, in its discretion, require the facts admitted to be proved otherwise than by such admissions."
21. The proviso to this Section specifically gives a discretion to the Court to require the facts admitted to be proved otherwise than by such admission. The proviso corresponds to the proviso to Rule 5(1) Order VIII CPC.
22. In view of the above, it is clear that the Court, at no stage, can act blindly or mechanically. While enabling the Court to pronounce judgment in a situation where no written statement is filed by the defendant, the Court has also been given the discretion to pass such order as it may think fit as an alternative. This is also the position under Order VIII Rule 10 CPC where the Court can either pronounce judgment against the defendant "or pass such order as it may think fit."
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23. The Hon'ble Apex Court in the case of Kailash Vs. Nanhku and others reported in 2005 (4) SCC 480 has observed as under:
"32. Our attention has also been invited to a few other provisions such as Rules 9 and 10 of order 8. In spite of the time-limit appointed by Rule 1 having expired, the court is not powerless to permit a written statement being filed if the court may require such written statement. Under Rule 10, the court need not necessarily pronounce judgment against the defendant who failed to file written statement as required by Rule 1 or Rule 9. The court may still make such other order in relation to the suit as it thinks fit."
24. In the light of the above provisions we have to examine the facts of this case.
25. The appellant - defendant appeared through his counsel after service of summons but did not choose to file written statement within the time allowed, i.e., 120 days 22 from the date of service of summons. The Commercial Court after passing the order that the appellant - defendant has not filed his written statement, has directed the respondent - plaintiff to lead evidence. As the Commercial Court directed the plaintiff to lead evidence, it exercised its power under Order VIII Rule 5(2) and Order VIII Rule 10 of CPC. It appears, that the Commercial Court did not exercise its power to pronounce the judgment under Order VIII Rule 10 CPC since the pleadings and statement of truth of the respondent - plaintiff and the documents produced were not sufficient to pronounce the judgment. It is also clear from the subsequent act of the respondent - plaintiff of filing an interim application seeking production of clear and complete copies of document Nos.2 and 3 under I.A. No. 1/2020 which came to be allowed by the Commercial Court by order dated 12.03.2020. Said documents produced under I.A. No. 1/2020 were not available on the date on which the written statement of the defendant was taken up 23 on file and the case was posted for plaintiff's evidence, i.e., 05.08.2019. In pursuance of the said order directing the plaintiff to lead evidence, the plaintiff filed his affidavit in lieu of examination-in-chief and he has been examined as P.W.1 and got marked one document as Ex.P.1. The said document, Ex.P.1, is also marked subject to objections raised by the defendant as it was a copy. Thereafter, the case was posted for recording further chief-examination of P.W.1. At that stage the counsel for the plaintiff filed written arguments and the Commercial Court posted the case for verification and judgment and thereafter pronounced the judgment under Order VIII Rule 10 of CPC on 31.03.2021. The order sheet maintained by the Commercial Court does not reveal that the case was posted for passing judgment under Order VIII Rule 10 of CPC.
26. The Commercial Court after directing the plaintiff to lead evidence, allowing the plaintiff to lead evidence, examining one witness as P.W.1 and posting the case for 24 recording further examination in chief of P.W.1 cannot go back to the stage of passing judgment under Order VIII Rule 10 of CPC.
27. The Commercial Court has marked Ex.P.2 to Ex.P.6 during the course of judgment and placed reliance on them and also on the evidence of P.W.1 while passing the judgment. Said documents, Ex.P.2 to Ex.P.6 are not admitted in evidence. Therefore, the Commercial Court has erred in marking Ex.P.2 to Ex.P.6 during the course of the judgment. In view of the law laid down by this Court in the case of Sri.Nijamuddin and Another Vs. Smt.Akhtarbegam and Others reported in ILR 2021 Kar. 3297, decision of the Hon'ble Apex Court in the case of Modula India Vs. Kamakshya Singh Deo reported in AIR 1989 SC 162 and decision of this Court in the case of Basalingappa Chinnappa Goudar and others Vs. Shantavva and others reported in ILR 2002 Kar. 260, 25 the defendant has got right to cross-examine the witnesses of the plaintiff even though statement of defence was not filed. The Commercial Court did not post the case for recording further examination in chief of P.W.1 and without allowing the defendant to cross-examine P.W.1, placing reliance on the evidence of P.W.1 has passed the judgment under Order VIII Rule 10 CPC. The Commercial Court ought to have posted the suit for recording of further examination in chief of P.W.1 and thereafter allowed the defendant to cross-examine P.W.1 and his witnesses and thereafter passed the judgment. Therefore, the Commercial Court has erred in passing the judgment under Order VIII Rule 10 of CPC after it directed the plaintiff to lead evidence, examining one witness as P.W.1 and marking of one document as Ex.P.1. The point is answered accordingly. Therefore, the matter requires to be remanded to the Commercial Court.
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28. The contentions of the learned counsel for appellant and learned counsel for respondent regarding the statement of truth not being filed along with the plaint as required under Order VI Rule 15-A of CPC in accordance with Appendix 1 and its effect is kept open since we are remanding the matter.
29. In view of the above, we proceed to pass the following;
ORDER
i. Appeal is partly allowed.
ii. The judgment passed by the Commercial Court in Com. O.S. 67/2019 by the LXXXII Additional City Civil and Sessions Judge (CCH-83), Bengaluru, under Order VIII Rule 10 of CPC is set aside.
iii. The matter is remitted to the Commercial Court to proceed in accordance with law from the stage of further chief examination of P.W.1.
27iv. The Commercial Court has to give an opportunity to defendant to cross-examine the witnesses of the plaintiff.
Refund full Court fee paid on the memorandum of appeal to the appellant.
Sd/-
JUDGE Sd/-
JUDGE LRS.