Time To Bury Pernicious Practice Of Submitting Information In 'Sealed Cover': Bombay High Court

Taking a firm stance against practice of parties submitting information in sealed cover to the court, the Bombay High Court recently refused to accept Income Tax returns and financial statements of a developer in a sealed cover and directed it to file an affidavit for the same.A division bench of Justice GS Patel and Justice Kamal Khata observed that no court shout permit a litigant to disadvantage the opposing party by submitting material in a sealed cover.“No litigant can disadvantage the opponent by squirrelling some information into the court record ‘in sealed cover’. No party is entitled can rely on such ‘sealed cover material’ to the prejudice of the other side, and no court should permit it. To do so flies in the face of every concept of fair justice and openness and transparency in the decision-making process. It is time to bury this thoroughly pernicious practice”, the court held.The court further said that filing information in sealed cover when the court has ordered the party to file an affidavit for the information will invite contempt proceedings.“Where there are private disputes between two parties and a Court has ordered a party to make a disclosure on Affidavit of some material, there is simply no question of that party putting in anything ‘in sealed cover’. As a matter of law, that is non-compliance with a judicial order. In a given case, it will invite action in contempt. If immunity from disclosure is sought, that is an application that must be made to a court and must receive a judicial order.”The court emphasized that such a practice fundamentally undermines the legitimacy of the adversarial legal process. Any material presented before the court should be accessible to the opposing party, and exceptions to this rule must be narrowly defined adhering to relevant laws such as the Evidence Act, the court observed.The court noted that in other jurisdictions such as UK, limited disclosure or non-disclosure of certain information is permitted, but this is typically governed by statutory regulations and subjected to judicial oversight. It is never for a party to decide what to disclose or withhold, especially when the court has issued a specific order compelling disclosure, the court stated.The court made these observations in a writ petition filed in 2022 by one Sonali Ashok Tandle, a 67-year-old woman, against developer Ranka Lifestyle Ventures.Tandle is a former tenant of a building slated for redevelopment. She claimed that she is entitled to a flat of larger area in the redeveloped building. She alleged that she was being given a lesser area than other tenants.Earlier this year, another division bench of Justice GS Kulkarni and Justic RN Laddha had noted that the developer failed to appear before the court through its lawyers and persistently violated court orders. Thus, the bench issued show cause notices to the developer and Maharashtra Housing and Area Development Authority (MHADA) requiring them to provide explanations as to why contempt proceedings should not be initiated against them. The bench had directed the developer to submit a disclosure affidavit containing details of unsold flats in the building and bank details and IT Returns in a sealed envelope.The developer submitted a list of unsold flats as well as financial statements to the previous bench. However, the bench of Justice Patel and Justice Khata refused to accept the sealed cover stating,“we note that the previous Division Bench accepted without comment the tendering of some documents in sealed cover by the 1st Respondent. This Court has previously thoroughly deprecated this practice. So has the Supreme Court…We specifically disapprove of this and do not permit it. It undermines the legitimacy of the adjudication process in any system based on an adversarial proceeding.”The court also criticised the developer for submitting a voluminous affidavit. “This Affidavit is indeed voluminous and a large part of it is probably entirely unnecessary given the narrow controversy. This attempt to inundate the Court with paperwork in the faint hope that this will somehow intimidate a Bench into constantly adjourning the matter will not succeed”, said the court.The court accepted the developer’s proposal of reserving two flats in the redeveloped building. The petitioner can move into one of the flats immediately and shift to the other flat with larger area if the court decides she is entitled to it. Thus, the court directed the court receiver to put the petitioner Tandle in physical possession of one of the flats and take vacant possession of the larger flat until further court orders.The court lifted the ongoing stay on the issuance of an Occupancy Certificate (OC) for the redeveloped building and released the unsold flats. Ranka Lifestyle Ventures was directed to maintain detailed records of all apartment sales, including the names of purchasers, transaction dates, and apartment areas.The case is scheduled for a final hearing on...

Time To Bury Pernicious Practice Of Submitting Information In 'Sealed Cover': Bombay High Court

Amisha Shrivastava

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