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2002 Supreme(Bom) 267
IN THE HIGH COURT OF BOMBAY
D.K. Deshmukh, J.
Larsen Toubro Limited .... Applicant.
Versus
Prime Displays Pvt. Ltd. others.... Respondents.
Company Application Nos. 41, 42 43 of 2002 in Company Petition Nos. 1121, 1122 1123 of 2001, decided on 15-3-2002.
Advocates appeared :
T.R. Andhyarujina Sr.C. with N.H. Seervai, S.J. Kathawala, Naval Agarwal, Harsh Desai, Rajesh Satpalkar, Kaizad Irani, Ms. Vanditta Malhotra and Ms. Farnawaz Saklatwala i/b. Mulla Mulla Cragie Blunt and Caroe, in Company Application No. 41 of 2002 in Company Petition No. 1121 of 2001, for applicant.
Ram Jethmarani, Sr.C. with T.C. Cooper i/b. Amarchand Mangaldas Suresh A. Shroff Co., in Company Application No. 41 of 2002 in Company Petition No. 1121 of 2001, for respondent.
Vinod Bobde, Sr.C. with Raju Subramaniam, Jummy Avasia, Ms. Akhila Kaushik, V.B. Trivedi, Ms. Rajeshree Bhat, Vinod Kothari and Kunaljit Bhattacharjee i/b. M.K. Ambalal Co., in Company Application No. 42 of 2002 in Company Petition No. 1122 of 2001, for applicant.
G.E. Vahanvati, Sr.C. with E.P. Bharucha, F.E. D’vetre and Ms. Rajani Iyer Zubin Kamdin i/b. Daphtary Ferreira Diwan, in Comp. Appl. No. 42/2002 in Comp. P. No. 1122/2001, for respondent.
Vinod Bobde, Sr.C. with S.J. Kathawala, Naval Agarwal, Harsh Desai, Rajesh Satpalkar, Kaizad Irani, Ms. Vandilta Malhotra Msa. Farnawaz Saklatwala i/b. Mulla Mulla, Cragie Blunt Caroe, in Company Application No. 43 of 2002 in Company Petition No. 1123 of 2001, for applicant.
V.R. Manohar, Sr.C. with R.A. Dada, N.G. Thakkar, D.D. Madon and R.M. Kadam i/b. Prakash Co., in Company Application No. 43 of 2002 in Company Petition No. 1123 of 2001, for respondent.
Headnote:Evidence Act, 1872 - Section 126 - Relevant evidence - Procured unlawfully - Admissibility of - Held - Evidence procured unlawfully admissible in evidence - It is discretion of Court to exclude such evidence. - The question of considering the admissibility of the documents in evidence will come when the documents are tendered in evidence. It was held that these documents cannot be produced by the res-pondents, because privilege attaches to them, in my option, this question does not arise for consideration in this case, in view of the above finding. The question whether a document, which is relevant is not be permitted to be received in evidence by the Court, because the document has been obtained unlawfully would arise, in the case where, there is no bar in the law or constitution for receiving the document in evidence. In such a case though the document is relevant and is also otherwise admissible in evidence, the Court refuse to receive the document in evidence, because the party which seeks to lead evidence has procured the document unlawfully, in exercise of its discretion. The occasion for the Court to exercise such discretion does not arise in case of documents which are privileged, because such documents cannot be tendered in Court.
Evidence Act, 1872 - Sections 126 and 129 - Civil Procedure Code, 1908, Order VI, Rule 4 - Company petition - Production of documents in - Objected by company/respondent - Privilege under Sections 126 and 129 of Act claimed - Documents relating to communications between respondent company and its solicitors legal dept - Secondary evidence of privileged document admissible contended by petitioner - Documents not entitled to privilege - Held - Communication between lawyer and client during employment protected under Sections 126 and 129 of Act - Documents are within meaning of Sections 126 and 129 of Act - No pleading about illegal purpose in preparation of such document - Court cannot consider oral arguments - Documents entitled to privilege of Sections 126 and 129 of Act. - Perusal of the provisions of Section 126 of the Evidence Act shows that it injucts a lawyer from disclosing without his client s express consent any communication made to him in the course and for the purpose of his employment as such lawyer. Obviously the injunction contained in Section 126 of the Evidence Act against a lawyer is for the benefit of a client. Thus, a client is entitled to prohibit his lawyer from disclosing any communication made to such lawyer in the course and for the purpose of his employment as a lawyer. Section 129 has been enacted to protect the client from being forced to disclose this communication.
Sections 126 and 129 of the Evidence Act protect the communications between a lawyer and client made during the employment of the lawyer. These provisions by necessary implication protect the documents prepared by the client in anticipation of litigation either for seeking legal advice or for using them in that litigation.
In my opinion therefore it can be safely said that in terms of the provisions of Section 126 and Section 129 of the Evidence Act, the legal professional privilege incorporated in those provi-sions attaches to a document coming into existence in anticipation of litigation. From the above discussion, it is clear that on the basis of the material that is produced by the parties on record, it can be safely said that all the 21 documents to which these company applications relate came into existence in anticipation of litigation for being used in the litigation for the purpose of litigation or for the purpose of defence that litigation and therefore, they are privileged documents within the meaning of Sections 126 and 129 of the Evidence Act.
These documents were made in furtherance of an illegal purpose, in terms of the provisions of the proviso to Section 126 of the Evidence Act, the documents are not entitled to privilege. It is pertinent to note here that in the affidavit filed on behalf of the respondents in this company applications, there is no averments to the found that these documents have come into existence in furtherance of any illegal purpose. Rule 4 of Order VI of the Civil Procedure Code lays down that in all cases in which a party relies on any misrepresentation, fraud, breach of trust, wilful default of undue unfluence particulars of such misrepresentation, fraud, breach of trust, wilful default etc. shall be stated in the pleadings. It is clear that whenever a party wants to contend that any document is prepared in furtherance of any illegal purpose or preparation of a document is a fraud, then not only such a case is required to be pleaded, but details of such illegal purpose or fraud will have to be stated in the pleadings. Perusal of the provisions of Rule 6 of the Company Court Rules shows that the provisions of the Civil Procedure Code are applicable to the petition filed under the Companies Act, if there is no contrary indication in the Company Act or the Rules framed thereunder. In the absence of pleadings, such an allegation cannot be made at the time of oral argument and the Court cannot consider such argument. In this view of the matter, therefore in my opinion the submission that these documents were prepared in furtherance of any illegal purpose has no substance and has to be rejected.
The debate is on production of these documents. The documents which are covered by or which are privileged in view of the provisions of Sections 126 and 129 of the Evidences Act, though relevant can not be produced. In a sense, the provi-sions of Sections 126 and 129 operate as an exception to the provisions of Section 5 of the Evidence Act. In other words, evidence of a relevant document under Section 5 of the Evidence Act cannot be given if that document is privileged because of the provisions of Sections 126 and 129 of the Evidence Act.
Evidence is admissible and should be received by the Court to which it is tendered unless there is a legal reason for its rejection. Admissibility presupposes relevancy. Admissibility also denotes the absence of any applicable rule of exclusion. Facts should not be received in evidence unless they are both relevant and admissible. The principal rules of exclusion under which evidence becomes inadmissible are two fold. First, evidence of relevant facts is inadmissible when its reception offends against public policy or a particular rule of law. Some matters are privileged from disclosure. A party is sometimes estoppel from proving facts and these facts are therefore inadmissible. It is thus, absolutely clear that a document to which privilege attaches because of the provisions of Sections 126 and 129, though relevant cannot be received in evidence.
D.K. DESHMUKH, J.:---The parties are agreed that the facts and law involved in these three company applications are identical and hence all these applications can be conveniently disposed of by a common order.
2. The facts that are material and relevant for the purpose of deciding these applications are as under:---
Prime Displays Pvt. Ltd., Everest Media Ltd., and Abiz Business Pvt. Ltd., have filed company petitions against Larsen Toubro Ltd. for winding up of the Larsen Toubro Ltd., which is a company incorporated under the Companies Act, on the ground that it is unable to pay its debts. Larsen Toubro Ltd. has taken out these company applications.
In this order the Larsen Toubro Ltd. is referred to as the applicant and the companies which have filed these company petitions are referred to as the respondents.
3. The applicant has entered into contracts with the respondents, which are called “Hoarding Contracts”. Pursuant to the terms of these contracts, the respondents in the month of June, 2001 raised bills on the applicant. The amounts under the bills were payable by the applicant on or before 31-7-2001. The applicant did not make the payment. Demand notices dated 31-8-2001 were served on the applicant by the respondents under section 434 of the Companies Act. The applicant repudiated the hoarding contracts by letters issued in September, 2001. The applicant took the stand that it is not liable to pay the amount, as the contract because of which the amounts were payable themselves have been repudiated. As the statutory notice was not complied with, the respondents filed company petitions in this Court in the month of November, 2001. Along with the petitions, the respondents had filed copies of some documents. The applicant in its affidavit in reply objected to the production of these copies on the ground that the documents are privileged as also on the ground that the respondents had not disclosed how they have secured these copies of the documents. It was also claimed that the documents of which the copies were filed are confidential. The respondents on 15-1-2001 submitted a compilation of documents. On 22-1-2001, the applicant took out these company applications seeking an order from the Court for expunging from the record the documents listed in the schedule of these applications. It appears that the company petitions came up for admission before the Court on 21-1-2002. The applicant requested the Court that these applications should be heard first and decided and it is only thereafter that the company petitions should be taken up for consideration. This request was not granted by the Court by order dated 23rd January, 2002 and the Court directed that these applications would be heard along with the company petitions. This order was challenged by the applicant before the appeal Court. The appeals have been decided by the Appeal Court by order dated 14-2-2002. It is paragraph 1-B of the order dated 14-2-2002 of the Appeal Court, which is relevant for the present purpose. It is reads as under:---
“The Company Court will thereafter first decide the Judge's summons including the question of production and/or admissibility of documents objected to therein. If the company Court by its order on the Judge's summons holds any of the objected documents as capable of being produced and/or as being admissible, the company will be at liberty to file its further sur rejoinder to these documents within one week from the date on which the ordinary copy of the said order is made available.”
4. Thus, in terms of the order of the Appeal Court, I have heard these applications, which seek an order for expunging 21 documents. (5 documents annexed to the petitions and 16 documents submitted in the compilation of documents by the respondents). It may be pointed out that in the schedule to the applications, 23 documents have been listed, but the learned Counsel for the applicant at the out set stated that they do not seek any suc
