Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2023 Supreme(Del) 3961

IN THE HIGH COURT OF DELHI AT NEW DELHI
Chandra Dhari Singh, J.
Gisil Designs Pvt. Ltd. – Appellant
Versus
Computer Junction Pvt. Ltd. – Respondent
C.R.P. 11 of 2023
Decided On : 11-08-2023

Advocates appeared:
Appearance not given, for the Petitioner.
Mr.Mudit Talesara and Mr.Prakash K.Jha, Advocates alongwith AR of respondent-company.

The main legal point established in the judgment is that mere admission of the existence of a document is not sufficient to presume fraud, and the issue of fraud can be considered at the final stage of the trial.

Headnote:
Fraud - Civil Procedure - CPC 1908 - Order VII Rule 11 - [CS DJ 754/20169287/16] - Summary judgment was sought by the petitioner under Order VII Rule 11(d) of the CPC, for rejection of the plaint due to the respondent's alleged concealment of a material document. The respondent admitted the existence of an agreement but failed to produce it despite an application under Order XI Rule 14 of the CPC. The court held that mere admission of the agreement is not sufficient to presume fraud and that the issue of fraud can be considered at the final stage of the trial. The court also discussed the limited scope of judicial inquiry under Order VII Rule 11 and the principles laid down by the Supreme Court in T. Arivandandam v. T.V. Satyapal and Mayar (H.K.) Ltd. v. Owners & Parties, Vessel M.V. Fortune Express. The court dismissed the revision petition, finding no error in the impugned order.
Fact of the Case:

The respondent filed a suit against the petitioner for recovery of dues. The petitioner sought rejection of the plaint, alleging fraud due to the respondent's failure to produce an agreement despite admission of its existence.
Finding of the Court:

The court held that mere admission of the agreement is not sufficient to presume fraud and that the issue of fraud can be considered at the final stage of the trial. The court also discussed the limited scope of judicial inquiry under Order VII Rule 11 and the principles laid down by the Supreme Court.
Issues: The main issue was whether the learned Trial Court was in error while passing the impugned order, thereby, rejecting the application of the petitioner under Order VII Rule 11 of the CPC on the basis that mere admission regarding existence of document/agreement is not in itself a sufficient ground to presume that fraud has been played upon the Court.
Ratio Decidendi: The court emphasized the limited scope of judicial inquiry under Order VII Rule 11 and the principles laid down by the Supreme Court in T. Arivandandam v. T.V. Satyapal and Mayar (H.K.) Ltd. v. Owners & Parties, Vessel M.V. Fortune Express. It held that the powers conferred on the Court to reject a plaint are not ordinary and must be strictly adhered to.
Final Decision: The court dismissed the revision petition, finding no error in the impugned order.

ORDER

Chandra Dhari Singh, J. (Oral)

1. The instant civil revision petition under Section 115 of the Code of Civil Procedure, 1908 (hereinafter "CPC"), has been filed on behalf of petitioner seeking the following reliefs:

"(a) Revise the impugned order (Annexure P/1) under Sec.115 of the CPC, 1908 dated 26.09.22 of the Hon'ble ADJ of the South East Saket District Court in Computer Junction vs Gisil Designs (CS DJ 754/20169287116) whereby the Hon'ble ADJ has dismissed the application U/o VII R.11(d) of the Petitioner (Respondent there-in).

(b) Reject the suit of the plaintiff (Respondent here-in) in the aforementioned case i.e., Computer Junction vs Gisil Designs (CS DJ 754/20169287/16) because of concealment of a material document.

2. The relevant factual matrix briefly recapitulated for the disposal of the present petition is reproduced herein:

a. A suit bearing No. CS DJ 754/20169287/16, was instituted on 20th April 2012, by the plaintiff (respondent herein) against the defendant (petitioner herein), for recovery of Rs. 37,30,525/- with pendente lite and future interest of 24% per annum with costs. It was alleged that the petitioner refused to clear the aforesaid dues despite having the respondent raised invoices/bills against the petitioner for rental of equipments which were also duly received and admitted by the petitioner.

b. Further, the petitioner in the Written Statement stated that the entire amount towards the renting of the said equipments was cleared and that the petitioner was not liable to pay any amount to the respondent as alleged in the aforesaid suit.

c. Thereafter, cross-examination of the Authorised Representative (hereinafter "AR") of the respondent took place on 10th October 2018 and 19th February 2019. The respondent in response to Q-3 as to `whether a contract exists between the plaintiff and defendant' admitted to the existence of such agreement in question.

d. On 1st February 2020, an application was moved by the defendant (petitioner herein) under Order XI Rule 14 of the CPC, for direction to the AR of the respondent to produce the agreement between the respondent and the petitioner.

e. Consequent thereto, another application was filed by the petitioner under Order VII Rule 11 (d) of the CPC, for rejection of the plaint of the respondent. The same was dismissed by the learned Trial Court vide Order dated 26th September 2022. Hence, the present petition has been filed.

3. Learned counsel appearing on behalf of the petitioner submitted that the petitioner has approached this Court challenging the impugned order under the revisional jurisdiction of this Court, after being aggrieved by the dismissal of its application under Order VII Rule 11 (d) of the CPC, by the learned Court vide order dated 26th September 2022.

4. It is submitted that the respondent had admitted in evidence qua the execution of an agreement dated 19th April 2008 (hereinafter "agreement"), between the respondent and the petitioner, and still it had failed to produce the same despite having an application moved by the petitioner under Order XI Rule 14 of the CPC. By not filing the said agreement, the respondent has committed fraud upon the Court.

5. It is submitted that the impugned order has been passed erroneously by the learned Trial Court as the Court below had failed to take into consideration that the AR of the respondent has stated in his cross- examination that an agreement has been executed between the respondent and the petitioner. The same is being sought because it is the basis of amount mentioned in the invoices which have been relied upon by the respondent in the recovery suit.

6. Learned counsel has placed reliance on K.D. Sharma vs. Steel Authority of India, (2008) 12 SCC 481; K. Jayaram vs. Bangalore Development Authority, Civil Appeal No. 7550-7553/2021 and Swaran Singh vs. Surinder Kumar, CS (OS) No. 166/1997. It is submitted that the law qua concealment of materia