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Commercial Courts not required to allow belated filing of documents in absence of a good cause, Delhi HC

Commercial Courts not required to allow belated filing of documents in absence of a good cause, Delhi HC

Aditi Singh

The Delhi High Court has held that Commercial Courts are not required to entertain or allow applications for late filing of documents, unless a party is able to establish a good cause for non-disclosure at the time of the pleadings.

“Unless the Commercial Divisions start enforcing Rules legislated for commercial suits and refuse to entertain applications for late filing of documents, especially with respect to documents of suspicious character, and continue to show leniency in the name of ‘interest of justice’ and ‘a litigant ought not to suffer for default of advocate’, commercial suits will start suffering from the same malady with which the ordinary suits have come to suffer”, the Court has cautioned.

The order was passed by a Single Judge Bench of Justice Rajiv Sahai Endlaw in an application by the plaintiff in a commercial suit, seeking to file an additional document post framing of issues.

The suit was instituted by the plaintiff for the recovery of Rs.1,25,00,000 with interest from the defendant pursuant to an unsuccessful agreement of sale of immovable property belonging to the defendant.

The additional document was a letter dated September 2, 2013, written by the defendant to the plaintiff and one Ashwini Kumar Somany, which was meant to give proof of the money transaction between the plaintiff and the defendant.

While the issues were framed in the suit on November 13, 2018, the application came up for hearing on April 11, 2019.

The plaintiff pleaded that the document sought to be filed was not filed earlier “owing to the error of the earlier Advocate for the plaintiff” and that the non-filing of the document was not deliberate but due to an inadvertent, bona fide mistake.

The Court was then informed by the counsel for the defendant that the plaintiff till then had neither filed the list of witnesses nor affidavits by way of examination-in-chief of his witnesses in spite of expiry of the time granted for the same.

After hearing the parties, the Court noted that the document sought to be filed showed the total sale consideration agreed between the parties to be of Rs.10.25 crores, instead of Rs.11.50 crores, which was in contradiction of the case of the plaintiff. Similarly, inconsistency in the balance consideration amount was also pointed out by the Court.

It is thus clear that the document now sought to be filed is also inconsistent with the pleadings and on the basis whereof issues have already been framed in the suit.”

Recording that the plaintiff was not even seeking to amend his pleadings after the letter, the Court stated,

A document is filed and can be permitted to be filed beyond the stage prescribed for filing thereof, only in proof and aid of the pleaded case. No document which runs contrary to or is inconsistent with the pleaded case and on which issues have to be framed, can be permitted to be filed.

The Court further held that for a plaintiff to be allowed to belatedly file a document under Order XI, Rule 1(5) of the CPC, he must not only plead but also “establish reasonable cause for non-disclosure along with the plaint”.

It observed,

The plaintiff having himself transacted qua the said letter, at the time of institution of the suit, must have been aware of the same and even if was immediately unable to find the document now sought to be filed, should have pleaded, in terms of the document now sought to be filed and should have in the affidavit of documents disclosed another letter dated 2nd September, 2013 and further stated that the same was immediately not available or untraceable.

The plaintiff did nothing of the sort and on the contrary, pleaded a case contrary to what emerges now and from the document now sought to be filed. Not a whisper was made in the declaration on oath in terms of Order XI Rule 1(3) of the CPC as applicable to Commercial Suits, of there being in existence…there is no explanation or even a whisper as to non-disclosure along with the plaint.

Further rejecting the plaintiff’s explanation on the belated filing, the Court observed,

…even if what the counsel for the plaintiff is arguing is correct, it shows an attempt to deal in unaccounted money in the matter of sale/purchase of property and in which respect again, as long as the Courts continue to lend their shoulder to tax evaders, tax evasion would continue. Time has thus come for the Courts to not come to the rescue of tax evaders, on the argument that the Civil Court is not concerned with the evasion even if any of tax, indulged in by the plaintiff.

Thus, holding that Commercial Courts are not required to entertain or allow applications for late filing of documents without any good cause being established for non-disclosure, the Court stated that the plaintiff “utterly failed in this regard”.

It recorded that the form prescribed for filing an affidavit of documents requires a litigant in a commercial suit to disclose all relevant documents, even if it is not immediately in its possession.

A litigant who fails to do so and also does not satisfy the Court while seeking to belatedly file the document, why no disclosure of such document was made, cannot be permitted to so file documents.”

The application for belated filing was therefore dismissed by the Court.

The plaintiff was represented by Advocates Ajay Kumar Gupta and Surbhi Gupta.

The defendants were represented by Advocate Gunjan Sinha Jain.

Read the order: