Allowing Filing Of Additional Documents Without Reasonable Cause In Trial Defeats Speedy Disposal Of Commercial Suits: Telangana High Court

The Telangana High Court has reiterated that permitting a party to bring on record additional documents at the trial stage without a reasonable cause would defeat purpose of Commercial Courts Act 2015 which aims at speedy disposal of commercial suits. It further said that a court cannot permit documents to belatedly brought on the court's record on the sole ground that the documents have already been referred to in the written statement. A division bench of Justice Moushumi Bhattacharya and Justice Gadi Praveen Kumar held: "The Commercial Court erred in granting leave to the respondents/defendants for filing the listed documents by accepting their ground viz., the documents having been referred to in the Written Statements and the relevance of the documents not having been denied by the petitioner/plaintiff. The Supreme Court in Sudhir Kumar Vs. Vinay Kumar G.B.1 reiterated the rigour of establishing 'reasonable cause' for non-disclosure of documents along with the plaint, under the transformed regime of the CPC as effectuated by the 2015 Act. Several Courts, including a Single Bench of the Delhi High Court in Entertainment Network (India) Ltd. Vs. HT Media Limited2 found that the reasons given by the defendant therein for bringing additional documents on record at a belated stage, were unsatisfactory. It was further observed that permitting additional documents being filed without reasonable cause at the trial stage would defeat the purpose of instituting proceedings under the 2015 Act which aims for expeditious disposal of Commercial Suits". The court further observed that the obligation on the part of the defendant in Order XI Rule 1(9) of the CPC to declare on oath that all such documents have been disclosed and copies thereof been annexed to the Written Statement, fortifies the stricture of Order XI Rule 1 to ensure that the "speed of a Commercial Suit is not retarded by an indolent defendant (or a plaintiff) who seeks shelter under flimsy explanations for belated filings". It further said that mere reference to or reliance on a document by a defendant in the written statement cannot absolve the defendant of its duty of filing the said document along with the written statement under Order XI Rule 1(7) of the CPC. The bench said that Court cannot permit the documents to be subsequently brought on record only on the ground that the documents have already been referred to in the Written Statement. To repeat, the rigour of Order XI Rule 1(7) of the CPC can only be relaxed where the defendant establishes 'reasonable cause' for non-disclosure of the document/s along with the written statement (Order XI Rule 1(10)).The court was hearing two petitions challenging the Commercial Court's orders permitting the respondents(Defendants) to bring on record additional documents. The respondents had argued that the documents were misplaced and could only be traced now. It was submitted that the documents were in the public domain and relevant for the proper adjudication of the suit. The Commercial Court had held that the respondent should be permitted to bring the documents on record, since these documents were mentioned in the written statement and the petitioner (plaintiff) had not denied their relevance.After going through the facts of the case, the bench noted, that the respondents had sought to bring the documents on record after more than 3 years.Referring to the CPC the court said that window given to a defendant to bring additional documents on record subsequent to filing of a written statement or counterclaim is contained in Order XI Rule 1(10), adding that the language used by the Legislature is mandatory in the 'negative sense'. It also said that Order XI Rule 1(7)(c)(iii) carves out an exception to the requirement of disclosure of all documents along with the written statement and this exception covers documents handed over to a witness merely to refresh his/her memory. “In essence, Order XI Rule 1(7) - (10) of the CPC, as amended by the 2015 Act, would clarify that a defendant can be permitted to file documents after the filing of the written statement only when the Court is satisfied that the defendant has established 'reasonable cause' for non-disclosure of the documents at the time of filing of the written statement,” it said. The bench iterated that Order XI Rule 1(9) mandates that all documents be annexed with the written statement containing a declaration on oath, which it held showed the 'tightness of the obligation.'"In the present case, the primary reason given by the Commercial Court is that the defendants' IAs ought to be allowed since the documents were referenced in the Written Statements. The said finding is required to be placed in the context of Order XI Rule 1(7)(a) of the CPC which clarifies the procedural mandate on the defendant by providing that the defendant shall file a list of all documents and photocopies of all documents, in its power, possession, control or...

Allowing Filing Of Additional Documents Without Reasonable Cause In Trial Defeats Speedy Disposal Of Commercial Suits: Telangana High Court

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