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The Delhi High Court recently observed that courts ought to revaluate the manner by which they require electronic documents to be proved.
While dealing with a case relating to a loan default, the Court held that merely because a printout of statement of account is filed as secondary evidence with necessary certificate, does not make it less valid.
These observations were made while setting aside a judgment of a trial court, which had dismissed the recovery suit of ICICI bank on the ground that it had failed to file the original loan recall notice.
The Single Judge Bench of Justice Pratibha M Singh observed that,
“Despite all the original documents being on record, the Trial Court proceeded on an erroneous assumption that the original loan recall notice dated 11th February, 2014, has not been placed on record and only a photocopy of the same has been placed on record.
It is actually unfathomable as to how the loan recall notice, issued to the Defendants, could be produced in original by the Plaintiff bank. The original of the said notice would obviously be with the Defendants. This can hardly be a ground to dismiss the suit of the Plaintiff bank by adopting a technical approach.”
The Bench stated that courts have a duty to safeguard public money and by applying completely incorrect principles of procedure and evidence, suits filed by these financial institutions cannot be dismissed in this manner.
Justice Singh gave extensive reasoning for holding that the trial court had applied the provisions of the Evidence Act in a completely incorrect manner. The order states,
“In commercial transactions, like the one in the present case i.e., a suit for recovery based on a loan transaction, the journey of procedure has resulted in complete injustice. The final result i.e., dismissal of the suit only on the basis of the original of the loan recall notice not being on record is unsustainable.
It ought to be borne in mind that a loan recall notice results in consequences for the person who has availed the loan. The Plaintiff bank could have maintained the suit for recovery even in the absence of the loan recall notice so long as the disbursement of loan and availing of the same is admitted. In this case, all the loan documents in original are placed on record.”
The Court also delved into the way accounts are maintained nowadays and the resultant classification into primary and secondary evidence.
“Section 34 of the Evidence Act clearly provides that the books of accounts maintained in electronic form are relevant. Under Section 62 of the Evidence Act, original documents constitute primary evidence. In the context of electronic evidence, printouts of electronic documents are considered as secondary.
However, judicial notice needs to be taken of the fact that most accounts today are not maintained in paper form, but electronic form. The primary evidence could be the server on which the statement of accounts is stored. These servers may store the statement of accounts of multiple clients in the hard drive. It would be an impossibility to require the Plaintiff bank to produce the hard drive of the server in every suit for recovery filed by it.
Under such circumstances, the Plaintiff bank has no option but to produce the secondary evidence i.e., a printout of statement of accounts, duly certified by a responsible official of the bank along with a certificate under Section 65B of the Evidence Act.”
The Court further observed that there is some serious re-thinking required on the manner in which electronic documents are to be proved.
“In each case where electronic documents are involved, it would be impractical to expect the parties to produce the primary evidence which would be the medium on which the document is stored, considering that electronic documents could be stored on hard drives, hard disks, CPUs, micro-processors, cameras, telephones, etc.”
The Bench noted that though the Code of Civil Procedure and the Evidence Act have undergone several amendments over the years, in the area of production of documents, they continue to insist on primary evidence. This, the Court held, can result in enormous injustice due to delay in commercial cases.
Finally, the Bench allowed the appeal of the bank and decreed the suit for the sum of Rs.9,11,985.21 with pendente lite interest @ 8% per annum from the date of filing of the suit.