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IN THE HIGH COURT OF DELHI AT NEW DELHI
Neena Bansal Krishna, J.
Jindal Drilling And Industries Ltd. - Appellant
Versus
Naresh Kumar Agarwal & Ors. - Respondents
I.A. 11509 of 2021 in CS(OS) 1753 of 2013
Decided On : 10-10-2022
Discovery - Non-compliance with Order - CPC - [CS(OS) 1753/2013] - Order XI Rule 21, Order XI Rule 12, Order XI Rule 14, Order XI Rule 18, Order XI Rule 21 - The court discussed the non-compliance with the discovery order and the consequences under Order XI Rule 21 of the CPC. It highlighted the legal provisions and their interpretations, emphasizing that the stringent provisions of Order XI Rule 21 should be applied only in extreme cases, where there is contumacy or a willful attempt to disregard the court's order. The court concluded that the circumstances did not depict any contumacy or deliberate and willful disobedience on the part of the plaintiff, and therefore, dismissed the application.
Fact of the Case:
The defendant filed an application for dismissal of the plaintiff's suit for non-production of documents as directed by the court. The plaintiff had filed a suit for recovery of ?14,92,00,000/- and for rendition of accounts. The defendant claimed that the plaintiff failed to comply with the court's order to produce certain documents, while the plaintiff argued that due compliance had been made to the best of its ability.
Finding of the Court:
The court found that the plaintiff did not demonstrate any contumacy or deliberate disobedience, and therefore dismissed the application. It emphasized that the stringent provisions of Order XI Rule 21 should be applied only in extreme cases, where there is willful disobedience, and concluded that no case for dismissal of the suit was made out.
Issues: The main issue was the non-compliance with the court's order for discovery of documents and the application for dismissal of the suit based on this non-compliance.
Ratio Decidendi: The court emphasized that the penalty imposed by Order XI Rule 21 of the CPC is of a highly penal nature and should only be used in extreme cases. It highlighted that the law does not contemplate dismissal of a suit if there is non-compliance with Order XI Rule 14 of the CPC, and that the provisions should be applied only in cases of contumacy or willful disobedience.
Final Decision: The application for dismissal of the suit based on non-compliance with the discovery order was dismissed by the court.
JUDGMENT
Neena Bansal Krishna, J. -
I.A. 11509/2021
1. An application under Order XI Rule 21 Read with Section 151 of the Code of Civil Procedure, 1908 (hereinafter referred to as 'CPC') has been filed on behalf of the defendant no. 1 for dismissal of the suit of the plaintiff for non-production of the documents as directed by the Court.
2. The plaintiff has filed a suit for recovery of ?14,92,00,000/- and for rendition of accounts. The defendant has stated that this Court vide Order dated 26th September, 2019 allowed the I.A. No. 11042/2019 under Order XI Rule 12 CPC filed by defendant no. 1 with the following directions:
'The plaintiff to file affidavit with respect to the documents of which discovery is sought, within one month from today. The documents, possession and custody of which is admitted, be filed along with the said affidavit'
3. It is submitted that out of 33 documents mentioned in the said application, the plaintiff has filed only 11 documents, that too photocopies, and blatantly refused/neglected to file remaining documents by taking totally baseless, untenable and impermissible pleas. The plaintiff has failed to file the documents, possession and custody of which is expressly admitted by the plaintiff.
4. The plaintiff had challenged the aforesaid Order before the Division Bench of this Court vide FAO(OS) No. 227 of 2019 but the Appeal was dismissed by the Hon'ble Division Bench vide Order dated 24th February, 2020. The Discovery Order dated 26th September, 2019 thus attained finality and is binding on the parties.
5. It is asserted that only on repeated directions by the learned Joint Registrar, the plaintiff finally filed an Affidavit dated 15th February, 2021 along with photocopies of some documents, purported to be in compliance of the Discovery Order dated 26th September, 2019. The perusal of the said Affidavit shows the obstinacy and contumacy on the part of the plaintiff and demonstrates its deliberate and willful attempt to disregard/disobey the discovery Order passed by this Court.
6. It has been explained that the plaintiff has admitted the documents at serial no. 6, 19, 23 and 24 of the application as being in its possession and custody. Document no. 6 are the quarterly reports of the Plaintiff Company as periodically reported to its Board of Directors, showing Inter-Corporate loans and investments for the period from 1st April, 2008 to 30th March, 2013. However, the plaintiff has refused to file this document on record by claiming that the defendant no. 1 has unnecessarily sought Quarterly reports which are 20 in number running into hundreds of pages, which has no relevance.
7. The Documents at Serial No. 19 show that as on 30th November, 2012, Mr. D P Jindal, his family members and his closely held entities were 100% stakeholders in Jindal Pipes Ltd. The plaintiff in respect of these documents has asserted that the documents sought are vague and are not specific and therefore, cannot be provided. Moreover, the documents sought pertain to Jindal Pipes Limited which is not a party to the present suit and the documents have no relevancy with the subject matter of the present suit since it pertain to the period of November, 2012 while defendant no. 1 was removed from the Directorship of the Plaintiff Company in March, 2011.
8. Document No. 23 relates to Loan Guarantees given by the Plaintiff Company to/for various related parties during the period from September, 2010 till date and Interest/ Guarantee fee earned by the Plaintiff Company on the same during the said period.
9. Document No. 24 relates to party transactions submitted by Plaintiff Company's Finance department for the Board Meetings held during the financial year 2009-2010. It is asserted that in respect of these documents it has been admitted that the Annual Reports are in the possession of Plaintiff Company but the same are not being filed herewith because they are extremely voluminous. The defendant has asserted that the plea of plaintiff that the
The stringent provisions of Order XI Rule 21 of the CPC should be applied only in extreme cases, where there is contumacy or a willful attempt to disregard the court's order.
The court held that lack of coordination between the plaintiff's director and legal counsel constituted reasonable cause for non-disclosure of documents, allowing their introduction in evidence.
The court allowed the production of documents not annexed to the plaint due to lack of coordination, establishing that reasonable cause for non-disclosure can be recognized under procedural rules.
Procedural rules should not obstruct substantial justice; reasonable cause for non-disclosure of documents must be interpreted liberally to ensure fair adjudication.
(1) After Order XI Rule 1 has been amended with respect to suits before commercial courts and a specific provision/procedure has been prescribed with respect to suits before commercial division and b....
Order XI Rule 1(c)(ii) of the CPC permits document production to counter claims made by defendants, allowing flexibility in commercial suits.
Point of Law : When document is found in possession of opposite party or under his power, an adverse inference can be drawn in proper cases, but court cannot substitute exercise of jurisdiction under....
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