Calcutta High Court analyses the effect of amendments introduced by the Commercial Courts Act on the right of a defendant to file additional documents under CPC

The Calcutta High Court on June 11, 2020 in the case of ITC Limited vs. JP Morgan Mutual Fund India Private Limited and ors., decided upon whether the right of a defendant with respect to filing of additional documents under the Code of Civil Procedure, 1908 (“CPC”) has undergone any change after the amendments introduced by the Commercial Courts Act, 2015 (“the Act”). Facts of the case The dispute arose out of an application which was filed by JP Morgan Asset Management India Private Limited (“Defendant no.2”), for leave to produce further 9 (nine) documents in support of its defence. Arguments The counsel for the applicant/Defendant no.2 submitted that The 9 (nine) documents became necessary to produce after the evidence given by the plaintiff’s witness and that the present application was filed before the examination-in-chief of the defendant’s witness commenced on February 21, 2020. The written statements were filed before the suit was transferred under the Act and thus, the procedure prescribed under the mandatory provisions of Order VIII Rule (1-A) under CPC would apply even after such transfer. Further, under the proviso to section 15(4) of the Act dealing with transfer of pending suits, the court has discretion to prescribe a new time line under section 15(3) of the Act which provides that the Act will apply only to those procedures which were not completed at the time of transfer. Moreover, even if Order XI of CPC (disclosure, discovery and inspection of documents in suits before the Commercial Division of a High Court or a Commercial Court) as amended by the Act applies to the defendant, Order XI Rule 1 sub-rule 7(c) of CPC makes an exception to the obligation of a defendant to file all documents in its power, possession, control or custody, etc. where further documents are required for the cross-examination of the plaintiff’s witnesses, or is not necessary to any new case set up by the plaintiff or handed over to a witness for refreshing his memory. The counsel for the plaintiff submitted that The unamended Order XIII Rule 1 of the CPC casted an obligation on parties to produce all documentary evidence in original, copies of which have been filed with the plaint or written statement, at or before the settlement of issues. Relying on the effect of the Code of Civil Procedure (Amendment) Act, 2002 (“Amendment Act”), it was argued that Rule 1(2) of Order XIII has closed the window which had been available to a party to produce additional documents on condition of the “good cause” requirement and that after the 2002 amendment, no such liberty has been retained for a party who fails to produce documentary evidence at or before the settlement of issues. Since the issues were settled on January 24, 2019 and there is no statutory provision available to the defendant for filing further documents after the commencement of evidence. Issue The issue before the court was whether the right of the defendant with respect to filing of additional documents under CPC has undergone any change after the amendments introduced by the Act? Decision by the court The court discussed the change in the position of law as follow Case of the Defendant no.2 if considered under the law as existed before the Act coming into force The court stated that the Amendment Act did away with the “good cause” window available to a party for production of documentary evidence at a subsequent stage of the proceedings. Under the existing provisions, the only exception to the obligation upon a party for producing all documentary evidence in original at or before the settlement of issues can be found under Order XIII Rule 1(3) of CPC which provides a relaxation for the purpose of the cross-examination of the witness of the other party or where a document is handed over to a witness merely to refresh his memory. The court also observed that under Order VIII Rule 1-A (3) (inserted with effect from July 1, 2002), a defendant can produce a document which ought to have been produced under Rule 1-A(1) but has not been produced, with the leave of the court and such document may be received in evidence on behalf of the defendant. The court thus, noted that “10....It can therefore be seen that under the un-amended provisions of the CPC, a defendant’s right to produce documents on which relief is claimed or reliance is placed, has been preserved under Order VIII Rule 1-A(3) subject to the defendant obtaining leave from the court. Unlike Order XIII Rule 1, Order VIII Rule 1-A does not mention the time line within which the defendant has to exercise its right to produce additional documents.” (emphasis supplied) Explaining further, the court also enumerated that ‘leave of court’ would necessarily mean that a defendant cannot take the liberty as a matter of right and the court must assess whether the law in the instant case calls for the leave or not. Case of the Defendant No. 2 if considered under the law as existed after the Act coming into force The court after examining Order XI Rule 1(7) and Rule 1(10) of CPC noted that under the new law, i.e. after the Act came into force, a defendant can rely on additional documents provided the court grants it leave to do so and upon being satisfied as to the reasons for non-disclosure of the documents along with the written statement. Further, the court went onto accept the argument of the Defendant no.2 that the procedure for discovery and disclosure of documents in the present suit falls outside the scope of the Act since both the defendants had already filed their written statements in 2016 and their affidavits of documents in July, 2017 i.e. before the present suit was directed to appear as a commercial suit on November 6, 2017. The court also relied upon section 15 of Chapter V of the Act and held that “12....Hence, as the filing of the written statements as well as the disclosure and discovery were all completed before the suit migrated to a commercial suit, the defendant would be governed by the un-amended provisions of the CPC, namely, Order VIII Rule 1-A (3) under which, the defendant has only to obtain leave for producing additional documents.” (emphasis supplied) Therefore, the court observed that that leave cannot be obtained or granted as a matter of right. The court further observed that although Order VIII Rule 1-A(3) of CPC does not place additional obligations on a defendant as contained in Order XI Rule 1(10) as amended by the Act, a court should grant leave upon recording its satisfaction as to why a defendant should have the benefit of the relaxed timelines provided under Order VIII Rule 1-A of CPC, which otherwise mandates that documents should be filed along-with the written statement. The Calcutta High Court thus, considering the facts and circumstances of the case and also that, allowing the further documents would not mean that the Defendant no.2 will gain an edge over the plaintiff in the proceedings as the plaintiff will get an opportunity to cross-examine the Defendant no.2`s witness on the 9 (nine) documents produced later and also have the liberty of recalling its witness under Order XVIII Rule 17 of CPC, allowed the application of the Defendant no.2 to produce further documents. This update has been contributed by Pooja Chakrabarti (Partner) and Kunal Dey (Associate). Download Pdf