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Dalgreen Agro Pvt. Ltd. v/s Shaikh Asadur Rahman & Others

    C.S. No. 58 of 2016
    Decided On, 28 January 2020
    At, High Court of Judicature at Calcutta
    For the Plaintiff: Anirban Ray, Jayanta Sengupta, Srinjoy Bhattacharya, Advocates. For the Defendants: Sarosij Dasgupta, Subhashis Sengupta, Advocates.

Judgment Text

1. Learned counsel for the defendant urges that the witness of the plaintiff must be put on the box for the examination-in-chief after the plaintiff has filed an affidavit of evidence based on the statement of admission or denial of documents disclosed by the plaintiff under Order XI Rule 4 of The Code of Civil Procedure, as amended by The Commercial Courts Act, 2015.

2. Learned counsel for the plaintiff, on the other hand, relies on the amended Order XI Rule 4 (Admission and Denial of Documents) and sub-section (2) thereunder listing five heads under which the statement of admissions and denials should specifically be made. Counsel submits that the defendant has admitted the existence of 27 documents which the plaintiff's witness seeks to rely on. Counsel submits that once the defendant has admitted to the existence of the documents, these documents should be marked as exhibits and should not require to be proved in evidence by examination-in-chief of the plaintiff's witness. Counsel submits that the amendment to Order XI Rule 4 was for the purpose of expedition of the proceeding so that a witness may not be required to prove each and every document. Counsel also relies on Section 58 of the Evidence Act which states that a fact need not be proved in any proceedings which the parties agree to admit at the hearing or they agree to admit by writing or which are deemed to have been admitted by their pleadings. Counsel submits that after the documents are tendered as evidence, the defendant would not be denuded of its right to cross-examine the witness on the said documents. Counsel relies on Messrs. Lionel Edwards Limited Vs. State of West Bengal reported in AIR 1967 CAL 191 for the proposition that when documents are marked on admission dispensing with formal proof, the concerned party retains the right to challenge the documents by way of cross-examination at a later stage.

3. Learned counsel for the defendant submits that both the contents as well as execution of the documents have been denied by the defendant under Order XI Rule 4(2)(a) and (c), namely, the correctness of contents of the documents and the execution of the documents. Counsel submits that since the denial is in relation to the contents and execution, admissibility of the documents must be decided during examination-in-chief of the witness and relies on Order XVIII Rule 4 (recording of evidence) and the amendments brought in to the Section by the 2015 Act. Counsel submits that the provisions of Order XVIII Rule 4 cannot dispense with the requirement by proving a document. Counsel relies on R.V.E. Venkatachala Gounder Vs. Arulmigu Viswesaraswami & V.P. Temple reported in (2003) 8 SCC 752 which held that the objection with regard to mode of proving has to be done at the time of tendering of a document and before the document is marked as an exhibit as otherwise a litigant may lose the opportunity of taking the objection at a subsequent point of time that the document has not been properly proved.

4. Upon hearing learned counsel appearing for the parties, certain provisions and the changes brought about in them needs to be mentioned. Order XI Rule 4 of The Code of Civil Procedure, before the amendment by the Commercial Courts Act, was concerned with the Form of interrogatories which was to be in a prescribed format in the Appendix with appropriate variations. The Commercial Courts Act, 2015 brought about a sea-change in the manner and mode of disclosure and discovery of documents in suits before the Commercial Division of a High Court or a Commercial Court. Under the provisions of the amended Rule 4 of Order XI related to admission and denial of documents, each party to a commercial suit shall submit a statement of admissions or denials of all documents disclosed after completion of inspection within a prescribed time period. The grounds on which a party may admit or deny have been set out in Rule 4(2) of Order XI are,

a) correctness of contents of a document;

b) existence of a document;

c) execution of a document;

d) issuance or receipt of a document;

e) custody of a document.

5. The Sub-Rules following these state the obligations on a party for the statement of admissions and denials of the documents including that each party shall set out the reasons for denying a document under any of the above five grounds and that proof of documents shall be dispensed with at the discretion of the Court where the statements contain bare and unsupported denials (Order XI Rule 4(3)). The next Sub-Rule i.e. Order XI Rule 4(4) however relaxes the preceding Rule in respect of third-party documents where the party denying does not have personal knowledge of or is not a party to the concerned transaction.

6. Order XVIII Rule 4 relates to filing of affidavit of evidence and the amendments brought in to such provision in its application to commercial disputes. Under XVIII Rule 4(1-A) affidavits of evidence of all witnesses whose evidence is proposed to be led by a party shall be filed simultaneously by that party at the time directed in the first case management hearing.

7. In the facts of the present case, all the 48 documents which form the statement of admission and denial of the defendants have been submitted under the five heads as provided under Order XI Rule 4(2) of the CPC, as amended by the 2015 Act. The defendants have admitted to the existence of 27 documents but have denied the contents of all these documents. The reason given by the defendants for the aforesaid is that all these documents are third party documents. In denying the contents of the documents, the defendants claim a right to object to the documents being marked as exhibits at the time of taking oral evidence of these documents by examination in chief of the plaintiff.

8. The question therefore is whether the documents annexed to the affidavit of evidence of the plaintiff should automatically be marked as exhibits and whether the necessity of proving the said documents should consequently be dispensed with.

9. On a careful reading of the amended provisions of Order XI Rule 4, it appears that the Explanation to Rule 4(2) provides that a statement of admission or denial of the existence of a document made in accordance with Rule 2(b) shall include the admission or denial of the contents of a document. The plaintiff's first witness seeks to prove 27 out of the 48 documents contained in the statement of admission/denial of documents of the defendant nos.6 and 7. Of the 27 documents, the defendants have admitted to the existence of all 27 documents but have denied the contents and the mode of execution of all 27 documents. The sequence of the sub-Rules under Order XI Rule 4, in its new-fangled (commercial) avatar, contemplates an opportunity being given to a party for admitting/denying the documents disclosed by the other party and accompanying such statement of admission or denial by an affidavit under Order XI, Rule 4(5). This provision also gives the power to a Court to pass appropriate orders in respect of admitted documents and for waiver of further proof on the same (Order XI Rule 4(7)). The sequence of Order XI Rule 4 leaves little room for doubt that the window of taking an objection to a document under any of the five heads under Order XI Rule 4(2) is closed once a statement of admission/denial of documents is submitted by a party. The amended provisions of the CPC do not deprive a party from the right of cross-examination in respect of documents to a witness after filing of the affidavit of evidence.

10. Section 58 of The Indian Evidence Act, 1872, provides that a fact, which the parties to a proceeding have admitted at the hearing or by writing or by any rule of pleading in force, is not required to be proved. Section 58 read with the amended provisions of Order XI Rule 4 leads to the inescapable conclusion that the objective of a detailed Statement of admission and denial accompanied by an affidavit confirming the correctness of such Statement is to do away with the rigours of proving the documents which already form part of the affidavit of evidence. The five heads provided under sub- Rule (2) of Order XI Rule 4 gives the right as well as sufficient opportunity to a party to decide whether a document should be admitted or denied under any of the heads provided. But once the party exercises that right and submits a statement together with an affidavit vouching for the stand taken by it, that party cannot insist upon a further right to call for further proof of those documents in examination-in-chief.

11. A relevant point in context is the thrust of The Commercial Courts Act, 2015 for expeditious hearing and disposal of commercial suits. The Statement of Objects and Reasons of the 2015 Act and the various provisions under the said Act including the mandate of holding case management hearings makes the primacy of expedition abundantly clear. The completely new and different procedural regime brought in by the 2015 Act can be seen from the almost unrecognisable Order XI, which was only concerned with "Form of Interrogatories" before the amendments made to it by the 2015 Act. In Venkatachala Gounder, the Supreme Court drew a distinction between documents which are inadmissible in evidence altogether and those where the mode of proving is alleged to be irregular or insufficient. In the first case, a party can raise an objection to the admissibility of the document at any point of time subsequent to the document being marked as an exhibit. In the latter case, the objection as to admissibility should be taken at the time the document is tendered and before it is marked as an exhibit. The reason for this, according to the Supreme Court, was the rule of fair play which demands that the party which tenders its documents, upon notice of the objection taken, should have a chance to cure the defect. Omission to take the objection at an appropriate point of time would deprive that party of the opportunity to present its evidence in the best possible way. In the case before this Court, the defendants were given the opportunity to raise an objection in the Statement of Admission and Denial. They also had the option of denying the existence of the documents in their entirety and consequently availing of the chance to take such objection even at a later stage. Under Order XI Rule 4 (4), a party may submit bare denials for third party documents of which the party has no personal knowledge or is not a party to in any manner. Having admitted to the existence of all 27 documents, the defendants cannot now insist that they be given a further opportunity to raise an objection as to the admissibility of the same documents at the time of examination in chief. Indeed, if the plaintiff had been put on notice that the defendants had denied the very existence of the documents, the plaintiff could have attempted to cure such defect in is affidavit of evidence. It may be reiterated that although the defendants have denied the contents of the 27 documents, the Explanation to Rule 4 (2) of Order XI clarifies that a statement of admission or denial of the existence of a document shall include the admission or denial of the contents of the document. Order XVIII Rule 4 (1) -inserted on 1.7.2002 - relating to Affidavits of Evidence states that the examination in chief of a witness shall be on affidavit with the proviso that the proof and admissibility of the documents filed with the affidavit on which the parties intend to rely on, shall be subject to the orders of the court. Order XVIII Rule 4 was amended on 23.10.2015 mandating inter alia that affidavits of evidence of all witnesses shall be filed simultaneously at the time directed at the first case management hearing.

12. A central issue which would arise in this discussion would be;

What is the significance of a document being marked as an exhibit? Order XIII Rule 4 of the CPC provides for appropriate endorsements on the documents which have been admitted as evidence in a suit. Under Order XIII Rule 7, every document which has been admitted in evidence shall form part of the record of the suit. These provisions would show that marking a document as an exhibit is only for the purpose of identificat

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ion and has no bearing with proof of the document. Hence, admission of documents as exhibits is not equivalent to the documents being proved and does not bind the parties. A document is proved - or disproved- only when the Court is called upon to apply its judicial mind to the document with reference to section 3 of the Evidence Act. This would also be in line with Lionel Edwards where the Supreme Court held that a party does not lose its right to cross examination in respect of documents whose contents are disputed. In the present case therefore, the defendants will not be deprived of their right to cross-examine the plaintiff's witness on the documents disclosed in the affidavit of evidence and which are proposed to be marked as exhibits. On the other hand, if the plaintiff is called upon to lead oral evidence on these documents by way of an examination in chief, the amendments introduced by the Commercial Courts Act to Order XI Rule 4 to expedite and streamline the hearing of commercial suits will be reduced to a pointless insertion. 13. In view of the above discussion, the documents tendered with the affidavit of the plaintiff's first witness shall be admitted as evidence in the suit and the plaintiff will not be required to lead oral evidence on these documents. List the suit on 5th February 2020 for cross-examination of the plaintiff's witness.