Full Judgment Text
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 22.03.2024
Judgment pronounced on: 05.07.2024
+ CM(M) 2205/2024, CM APPL. 18005/2024—stay
CASA 2 STAYS PVT. LTD. ..... Petitioner
Through: Mr. Ankur Mahindro, Mr. Harish
Malik & Mr. Kushal Bhattacharjee,
Advs.
versus
VLCC PERSONAL CARE LTD. ..... Respondent
Through: Mr. Manik Ahluwalia, Adv.
CORAM:
HON’BLE MS. JUSTICE SHALINDER KAUR
J U D G M E N T
1. The controversy arising from the present petition revolves around the
application of the respondent under Order XI Rule 1(5) of the Code of Civil
Procedure, 1908 (hereinafter referred to as “CPC”) seeking to bring
additional documents on record being allowed by the learned District Judge
(Commercial Court - 08), South East District, Saket Courts, New Delhi
(hereinafter referred to as „Commercial Court‟) in C.S. (COMM) No.
24/2022 titled as “VLCC Personal Care Ltd. vs Casa 2 Stays Pvt. Ltd”. The
petitioner herein is the defendant and the respondent herein is the plaintiff
before the learned Commercial court in the captioned suit which is pending
adjudication.
2. The petitioner is a private limited company incorporated under the
Companies Act, 2013, engaged in hospitality business and owns a chain of
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hotels operating under its brand name „Fab Hotels‟. Mr. Tushar Chawla, is
the Authorized Representative of the petitioner company, approved vide
board resolution dated 08.10.2021.
3. The respondent is also a registered company, which is engaged in the
business of sale and supply of personal care products for retail as well as for
distribution to the chain of Hotels on contract.
4. The factual background in crux is that on 12.06.2017, the respondent
entered into an agreement with the petitioner for supply of toiletries to the
petitioner on a monthly basis for distribution and utilization of the same in
its chain of hotels. However, various disputes arose between the parties,
consequently, the respondent filed a commercial suit for recovery of Rs.
53,83,366/- along with future and pendente lite interest @ 24% per annum,
against the petitioner. It is stated that the statement of truth as per Order VI
Rule 15A and Order X Rule 1 of CPC was also filed with the plaint.
5. Thereafter, as a matter of procedure and defence, the petitioner filed
its written statement on 21.11.2022. Subsequent thereto, the respondent on
01.03.2023 moved an application under Order XI Rule 1(5) of CPC to place
certain additional documents on record.
6. The petitioner filed its reply to the aforesaid application on
27.04.2023, whereby, it opposed the additional documents to be taken on
record.
7. The learned trial court vide the impugned order dated 31.01.2024
allowed the application of the respondent seeking to place on record the
additional documents. Aggrieved by the same, the petitioner has preferred
the present petition before this court.
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SUBMISSIONS OF THE PETITIONER
8. Mr. Ankur Mahindro, learned counsel for the petitioner submitted that
it was only after 14 months from the date of institution of the suit, when the
matter was listed for framing of issues and case management hearing, the
respondent moved an application under Order XI Rule 1(5) of the CPC to
place the additional documents on record and learned Trial Court has
erroneously allowed the application on the grounds, which are not tenable
under Commercial Courts Act, 2015.
9. Learned counsel submitted that the respondent made a false
submission before the learned trial court by stating that the documents were
not in possession of the respondent at the time of filing of the suit, whereas
in the application before the learned trial court, respondent has averred that
the said documents were in its „regional offices‟ and being old records, it
took time for the respondent to obtain the same. Meaning thereby, that the
said documents were in fact in power, possession and custody of the
respondent all this while.
10. Learned counsel further submitted that impugned order stands
contrary to the procedure under Order XI Rule 1 of CPC and further
antithetical to the law laid down by the Apex Court in Sudhir Kumar v
Vinay Kumar G.B. (2021) 13 SCC 71. More so, the learned Trial Court has
passed the order in a casual and a perfunctory manner without application of
law and following the procedure.
11. It was also submitted that apart from not having filed the documents
in the power and possession of the respondent at relevant stage, the attempt
made by it to file the same subsequently after 14 months vide its application
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under Order XI Rule 1 CPC are irrelevant documents and will in no manner
support or enhance the case of the respondent. Further, the letter dated
24.08.2019 purported to be brought on record by the respondent does not
find mention in the pleadings or in the list of documents filed by the
respondent. More so, the said letter was available within the possession of
the management of the respondent but was not filed along with the plaint for
the reasons best known to it.
12. It was further submitted that the consolidated summary statements of
State wise ledger account are also irrelevant documents as it contradicts the
stand of the respondent in its plaint, wherein it has claimed an amount of Rs.
53,83,366/- against the petitioner whereas as per the statement of accounts,
an amount of Rs. 53,45,722/- is due on part of the petitioner. The
documents being contradictory to the case of the respondent cannot be relied
upon.
13. It was submitted that similarly summary statement of the total
invoices raised, payment received, credit note and outstanding amount are
again not filed at the relevant stage, therefore, cannot be permitted to be
placed on record by moving an application under Order XI Rule 1 CPC.
Further, same is the fate of unpaid invoices with proof of deliveries and list
of unpaid invoices. More so, these documents are not stamped and signed as
required under the agreement executed between the parties.
14. Learned counsel submitted that along with the plaint, the respondent
had annexed sample unpaid invoices, however, no application seeking leave
of the Court was filed for subsequently placing the additional documents on
record. On the other hand, in the statement of truth, the respondent
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categorically declared on oath that all the documents in power, possession,
control and custody pertaining to the facts of the case have been disclosed
and furthermore, the respondent do not have any other document in its
power, possession, control and custody.
SUBMISSIONS OF THE RESPONDENT
15. Mr. Manik Ahluwalia, learned counsel for the respondent refuted the
aforesaid submissions and contented that respondent company had been
supplying the personal care products to the chain of hotels owned by the
petitioner on PAN India basis, thus, the purchase orders and invoices were
available at various offices of the respondent in different parts of the
country. At the time of filing of the suit only a few invoices were available
with the respondent, which were filed as sample invoices with an
undertaking to provide the entire set of invoices at the relevant stage with
the leave of the Court. Since the deliveries were done PAN India in multiple,
small or large variable quantities and the invoices towards the said
transactions being voluminous, the respondent took liberty to attach sample
invoices along with the plaint and sought for leave of the Court to allow it to
produce the detailed record at the time of evidence or the same to be verified
from the software record of the respondent company at the stage of
evidence. Hence, the relevant documents were not in power and possession
of the respondent, which came to their knowledge and possession at a
subsequent stage.
16. The learned counsel further submitted that the documents are
necessary for adjudication of the lis between the parties, which have been
clearly mentioned in the plaint, thus, no prejudice shall be caused to the
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petitioner, if the aforesaid documents form part of the record as the said fact
and circumstance is within the knowledge of the petitioner. To the contrary,
the respondent shall suffer irreparable loss in case the respondent is not
permitted to bring on record the relevant invoices along with proof of
deliveries for the purpose of supporting its averments in the plaint.
17. Learned counsel for the respondent in support of his contentions has
relied upon the judgment of Hon‟ble Supreme Court in the case of Sugandhi
(dead) By Legal Representatives And Another vs. P. Raj Kumar
Represented By His Power Agent Imam Oli: (2020) 10 SCC 706.
18. I have heard the arguments at length on behalf of the parties and
perused the record as well as the impugned order.
19. Before adverting to the facts of this case, it is relevant to note that this
Court while exercising jurisdiction under Article 227 of the Constitution of
India is not expected to examine the decision of the Court below as acting as
a Court of first appeal. The supervisory jurisdiction is not to correct an error
of fact or a legal flaw thereby substituting its own decision on the facts and
conclusion as arrived by the Court below. The importance of Article 227
has been examined by the Hon‟ble Supreme Court in Celina Coelho Pereira
vs. Ulhas Mahabaleshwar Kholkar (2010) 1 SCC 217, which held as under:
“The jurisdiction exercised is in the nature of correctional jurisdiction
to set right grave dereliction of duty or flagrant abuse, violation of
fundamental principles of law or justice. The power under Article 227
is exercised sparingly in appropriate cases, like when there is no
evidence at all to justify, or the finding is so perverse that no
reasonable person can possibly come to such a conclusion that the
court or tribunal has come to. It is axiomatic that such discretionary
relief must be exercised to ensure there is no miscarriage of justice.”
20. It is further relevant to mention the findings of Hon‟ble Supreme
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Court in Puri Investments vs. Young Friends and Co. ,
MANU/SC/0290/2022, which reads as under:-
“14. In the case before us, occupation of a portion of the subject-
premises by the three doctors stands admitted. What has been argued
by the learned counsel for the appellant is that once the Tribunal had
arrived at a finding on fact based on the principles of law, which have
been enunciated by this Court, and reflected in the aforesaid passages
quoted from the three authorities, the interference by the High Court
under Article 227 of the Constitution of India was unwarranted. To
persuade us to sustain the High Court's order, learned counsel
appearing for the respondents has emphasized that full control over
the premises was never ceded to the medical practitioners and the
entry and exit to the premises in question remained under exclusive
control of the respondent(s)-tenant. This is the main defence of the
tenant. We have considered the submissions of the respective counsel
and also gone through the decisions of the fact-finding fora and also
that of the High Court. At this stage, we cannot revisit the factual
aspects of the dispute. Nor can we re-appreciate evidence to assess
the quality thereof, which has been considered by the two fact-finding
fora. The view of the forum of first instance was reversed by the
Appellate Tribunal. The High Court was conscious of the restrictive
nature of jurisdiction under Article 227 of the Constitution of India. In
the judgment under appeal, it has been recorded that it could not
subject the decision of the appellate forum in a manner which would
project as if it was sitting in appeal. It proceeded, on such observation
being made, to opine that it was the duty of the supervisory Court to
interdict if it was found that findings of the appellate forum were
perverse. Three situations were spelt out in the judgment under appeal
as to when a finding on facts or questions of law would be perverse.
These are:--
(i) Erroneous on account of non-consideration of material evidence,
or
(ii) Being conclusions which are contrary to the evidence, or
(iii) Based on inferences that are impermissible in law.”
21. Hence, the law has been settled that while considering the relief
claimed under Article 227 of the Constitution of India, the High Court has to
bear in mind the limited supervisory jurisdiction to be exercised by it.
22. Needless to say, the Commercial Courts Act, 2015 being a special
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statute must operate with full thoroughness in respect of commercial suits.
The Court cannot be oblivious of the objects and reasons for which the
Commercial Courts Act was enacted. The Statement of Objects and Reasons
of the Commercial Courts Act specifically refers to the need for speedy
disposal of commercial disputes of specific value. In order to achieve the
said object, various provisions of the Civil Procedure Code, 1908 have been
amended and made applicable to the commercial suits.
23. It is equally true that while allowing an application under Order XI
Rule 1(5) CPC, it is pertinent to look for a reasonable cause, if it has been
specifically pleaded and a good cause is made out, then the litigant could be
permitted to place on record documents at a later stage.
24. The Hon‟ble Supreme Court in Sudhir Kumar Alias S. Baliyan
versus Vinay Kumar G.B. (supra) considered the scope under Order XI Rule
1 to 5 CPC, as amended by Commercial Courts Act, 2015 and held as
under:-
“9.3 It is true that Order 11 Rule 1 CPC as applicable to the
commercial suits brought about a radical change and it mandates the
plaintiff to file a list of all documents, photocopies of all documents, in
its power, possession, control or custody, pertaining to the suit, along
with the plaint and a procedure provided under Order 11 Rule 1 is
required to be followed by the plaintiff and the defendant, when the
suit is the commercial suit.
9.4. However, the additional documents can be permitted to be bought
on record with the leave of the court as provided in Order 11 Rule
1(4). Order 11 Rule 1(4) provides that in case of urgent filings, the
plaintiff may seek leave to rely on additional documents as part of the
above declaration on oath [as provided under Order 11 Rule 1(3)]
and subject to grant of such leave by court, the plaintiff shall file such
additional documents in court, within thirty days of filing the suit,
along with a declaration on oath that the plaintiff has produced all
documents in its power, possession, control or custody, pertaining to
the facts and circumstances of the proceedings initiated by the
plaintiff and that the plaintiff does not have any other documents, in
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its power, possession, control or custody.
9.5. Order 11 Rule 1(5) further provides that the plaintiff shall not be
allowed to rely on documents, which were in the plaintiff's power,
possession, control or custody and not disclosed along with plaint or
within the extended period set out above, save and except by leave of
court and such leave shall be granted only upon the plaintiff
establishing reasonable cause for non-disclosure along with the
plaint. Therefore on combined reading of Order 11 Rule 1(4) read
with Order 11 Rule 1(5), it emerges that (i) in case of urgent filings
the plaintiff may seek leave to rely on additional documents; (ii)
within thirty days of filing of the suit; (iii) making out a reasonable
cause for non- disclosure along with plaint.”
25. It was further held as under:
“9.5 that Order 11 Rule 1(5) further provides that the plaintiff shall
not be allowed to rely on documents, which were in the plaintiff's
power, possession, control or custody and not disclosed along with
plaint or within the extended period set out above, save and except by
leave of court and such leave shall be granted only upon the plaintiff
establishing reasonable cause for non-disclosure along with the
plaint. Therefore on combined reading of Order 11 Rule 1(4) read
with Order 11 Rule 1(5), it emerges that (i) in case of urgent filings
the plaintiff may seek leave to rely on additional documents; (ii)
within thirty days of filing of the suit; (iii) making out a reasonable
cause for non-disclosure along with plaint.
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 11 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 the 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, possession, control or custody at the time when the
plaint was filed. Therefore Order 11 Rule 1(4) and Order 11 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
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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.”
26. In light of the above principle of law, the findings of learned Trial
Court are taken up for consideration. The learned Trial Court while
permitting the respondent to place the additional documents on record under
Order XI Rule 1(5) and Rule 1(1)(c)(ii) CPC observed that the documents
sought to be placed on record by the respondent are material and relevant to
decide the matter in controversy between the parties. It allowed the
documents to form part of record as the issues in the case were yet to be
framed and thus, no prejudice would have been caused to the rights of the
petitioner as it would have an opportunity to controvert the same during the
course of trial. The learned Trial Court also found justification given by the
respondent in the application for not filing the documents at the time of
filing of the plaint.
27. Now, coming back to the facts of the present case, it emerges from the
application under Order XI Rule 1(5) & Rule 1(1)(c)(ii) CPC of the
respondent that it seeks to bring on record the unpaid invoices along with the
proof of deliveries for purpose of supporting the claim of Rs.53,83,366/- and
copy of a letter dated 24.08.2019 issued by petitioner to the respondent as an
acknowledgment of the outstanding amount of Rs. 50,94,344.64 payable to
the respondent as on 31.03.2019.
28. The application of the respondent is silent about the documents i.e.
consolidated summary statement of state wise ledger account, summary
statement of the total invoices raised, payment received, credit note and
outstanding amount to be brought on record but mentions only about three
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categories of documents i.e. unpaid invoices, proof of deliveries and a letter
dated 24.08.2019. Thus, the application under Order XI Rule 1(5) CPC is
vague as it does not specify all the additional documents that respondent
wishes to place on record. Needless to say, the petitioner has mentioned
about aforesaid additional documents in its reply.
29. The respondent has further relied upon paragraph 9 of the plaint to
place emphasis on the argument that it had sought for the leave of the Court
in the plaint by mentioning as under:
“9. That the Plaintiff duly supplied agreed quantities of goods to the
various chains of hotels namely "Fab Hotels" in different cities
against the purchase orders and regular invoices were raised by the
Plaintiff towards delivery of each batch of toiletries. That since the
deliveries. were done PAN India in multiple small or large variable
quantities and the invoices towards the said transactions volume up to
thousands of documents, the plaintiff is taking the liberty to attach
sample invoices along with the plaint and craves the leave of this
Hon'ble Court to allow the plaintiff to produce the detailed record at
the time of evidence or as the same to be verified from the software
records of the plaintiff company at the stage of evidence. A copy of the
sample unpaid invoices raised by the plaintiff against the goods
delivered to the defendant PAN India is annexed herewith and marked
as Annexure P/4.”
30. The respondent submitted that therefore, the respondent was candid in
its approach by bringing forth the reason in the plaint itself that due to
voluminous record, it preferred to produce the detailed record at the time of
recording of the evidence or the same could be verified from software
records of the respondent at the time of evidence and it only filed sample
invoices and craved for leave of the Court to produce the entire record
subsequently. In contrariety, in its application, the respondent has submitted
that the entire record could not be produced as the supply and distribution of
the products by the respondent company is decentralised, which is fulfilled
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by Carrying and Forwarding Agents (hereinafter referred as “CFA”) in the
respective States. Thus, the invoices had to be obtained from various CFA
warehouses of the respondent situated in different States in India as the
deliveries were made through different offices and warehouses of
respondent located PAN India. With respect to the letter dated 24.08.2019,
the respondent has raised the plea that it was not within the knowledge of
the employees of the respondent company that such a letter with respect to
confirmation of petitioner‟s account existed, which could not be traced by
the current management despite practising due diligence, therefore, it could
not be placed on record with the plaint.
31. It is worth to mention, the respondent has not pressed for leave of the
Court at the time of the suit was filed before the learned Trial Court. Had
that been the case, the learned Trial Court may have granted at the most, a
further period of thirty days to the respondent to place on record the
additional documents, thereafter, the respondent would have been required
to file a declaration on oath in accordance with Order XI Rule 1(3) CPC.
32. It is noted from the record, that the respondent in its statement of truth
appended with the plaint, has categorically deposed “I do not have any other
document in my power, possession, control or custody”.
33. Further, in view of paragraph 9 of the plaint, no application has been
filed to seek extension of time to place the additional documents. Also, the
respondent has not pleaded in its application that the additional documents
were not in its power, possession, control or custody earlier and thus were
not produced along with the suit. To the contrary, the respondent has
claimed vide its application to place additional documents on record that
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invoices had to be obtained from CFAs in their respective states, hence were
not in possession of the respondent.
34. Noticeably, the submission of the respondent does not appear to be
convincing since while preparing the plaint, the respondent would have
checked its records as averred in the plaint that petitioner had made a
payment of Rs. 2,81,76,502/- and the outstanding amount that remained to
be paid by the petitioner amounted to Rs.53,83,366/- meaning thereby, the
respondent would have relied upon its statement of account to ascertain the
amount which remained unpaid and was required to be recovered from the
petitioner. Thus, the statement of the account would have contained all the
details of the paid / unpaid invoices and respondent could have easily
collected the invoices and other documents before filing the suit. It is also
not the case of the respondent that there was an urgency in filing the suit,
which prevented it from procuring the relevant documents from CFAs to be
filed alongwith the suit. As noticed above, in respect of the two statements
of accounts purported to be filed as additional documents are not addressed
in the application at all. Hence, there is merit in the submission of learned
counsel for the petitioner that there is error in exercising its jurisdiction by
the learned Trial Court, warranting supervisory correction by this Court
under Article 227 of the Constitution of India.
35. Viewed thus, the impugned order is entirely against the compliance of
provision under Order XI Rule 5 CPC and spirit of Commercial Courts Act,
2015, which is accordingly set aside and the documents brought on record
vide application of the respondent under Order XI Rule 1(5) CPC are
directed to be taken off the record.
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36. Insofar as the letter dated 24.08.2019 is concerned, though the
respondent has not pleaded the same in the plaint, it will not preclude it from
putting the letter to the petitioner‟s witness during evidence.
37. Accordingly, the petition, along with pending application, is disposed
of with the observations made hereinabove.
SHALINDER KAUR, J.
JULY 05, 2024 /ss
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