Supreme Court Clarifies Rules for Additional Documents in Commercial Suits: Sudhir Kumar vs. Vinay Kumar (2021)

LEGAL ISSUE: Procedure for filing additional documents in commercial suits.

CASE TYPE: Commercial Litigation

Case Name: Sudhir Kumar @ S. Baliyan vs. Vinay Kumar G.B.

[Judgment Date]: September 15, 2021

Date of the Judgment: September 15, 2021

Citation: 2021 INSC 624

Judges: M. R. Shah, J. and Aniruddha Bose, J.

This judgment addresses the critical issue of whether a plaintiff in a commercial suit can introduce additional documents after the initial filing. The Supreme Court, in this case, examined the provisions of Order XI Rule 1 of the Code of Civil Procedure (CPC), as amended by the Commercial Courts Act, 2015, to determine the conditions under which such documents can be admitted. The bench comprised Justices M. R. Shah and Aniruddha Bose, with the opinion authored by Justice M.R. Shah.

Case Background

The appellant, Sudhir Kumar, originally filed a suit in October 2018 (TM No. 236 of 2018) to prevent the respondent, Vinay Kumar, from using trademarks similar to his. An interim injunction was granted in favor of the appellant on 29.10.2018. However, this suit was withdrawn on 27.07.2019 because it did not comply with the Commercial Courts Act, 2015. A new suit was filed on 31.08.2019, with the appellant claiming to have used the trademark since 2006. The appellant sought a permanent injunction against the respondent from using the trademarks “INSIGHT”, “INSIGHT ACADEMY”, “INSIGHT IAS ACADEMY”, and “INSIGHT PUBLICATIONS”. The appellant then filed an application to submit additional documents, including invoices, under Order VII Rule 14(3) of the CPC, which was rejected by the Commercial Court.

Timeline

Course of Proceedings

The Commercial Court initially dismissed the appellant’s application to file additional documents on 13.11.2019. Subsequently, the defendant filed a written statement on 06.01.2020 and also sought to produce additional documents, which was partly rejected by the Commercial Court on 08.10.2020. The Delhi High Court, on 07.12.2020, allowed the defendant’s appeal, admitting all the documents filed by the defendant. The Commercial Court then dismissed the plaintiff’s interim injunction application on 16.01.2021. The appellant challenged the Commercial Court’s order of 13.11.2019 before the Delhi High Court, which was dismissed on 06.04.2021, leading to the present appeal before the Supreme Court.

Legal Framework

The Supreme Court focused on Order XI Rule 1 of the Code of Civil Procedure (CPC), as amended by the Commercial Courts Act, 2015, which governs the disclosure, discovery, and inspection of documents in commercial suits.

Order XI Rule 1(1) of the CPC mandates that the plaintiff must file a list of all documents, along with photocopies, that are in their power, possession, control, or custody, pertaining to the suit, along with the plaint. This includes documents referred to in the plaint and those relevant to the case, whether they support or oppose the plaintiff’s claims.

Order XI Rule 1(3) of the CPC requires the plaintiff to declare on oath that all relevant documents have been disclosed and that no other documents are in their possession.

Order XI Rule 1(4) of the CPC allows for the submission of additional documents within thirty days of filing the suit, subject to the court’s leave, in cases of urgent filings.

Order XI Rule 1(5) of the CPC states that the plaintiff cannot rely on documents not disclosed with the plaint or within the extended period, except with the court’s leave, which is granted only if a reasonable cause for non-disclosure is established.

The Court also noted that Section 16 of the Commercial Courts Act, 2015, stipulates that the provisions of the CPC, as amended by this Act, shall prevail over any conflicting rules of the High Court or State Government.

Arguments

Appellant’s Arguments:

• The additional documents were necessary for a just decision of the suit.
• The plaintiff should have been allowed to produce additional documents, similar to how the defendant was permitted.
• The application to file additional documents was filed within 10 days of filing the suit, not at a belated stage.
• The High Court erred in considering the explanation for non-filing of additional documents as an afterthought.
• The application was filed within 30 days of filing the suit, satisfying Order XI Rule 1(4) of the CPC.
• The additional documents supported the pleadings already made in the plaint.
• The Commercial Court should not have considered the genuineness of the documents at the stage of production.
• The invoices were not in the plaintiff’s possession when the suit was filed and were discovered subsequently.
• Cogent reasons were provided for not producing the additional documents (other than invoices) along with the suit, as the suit was filed on an urgent basis and the documents were bulky.

Respondent’s Arguments:

• The application by the plaintiff was rightly dismissed by both the Commercial Court and the High Court, considering the object and purpose of Order XI Rule 1 of the CPC.
• No cogent reasons were provided by the plaintiff for not producing additional documents along with the plaint.
• The application was not in accordance with Order XI Rule 1(4) and 1(5) of the CPC.
• Order VII Rule 14(3) of the CPC is not applicable to commercial suits, and only Order XI Rule 1 of the CPC applies.
• The application lacked bonafides and was an afterthought, filed after realizing that non-production of documents might affect their interim injunction application.
• The reason for not producing additional documents (other than invoices) as they were bulky, cannot be a valid ground.

Issues Framed by the Supreme Court

The Supreme Court addressed the following issue:

✓ Whether the plaintiff should be granted leave to produce additional documents, considering the provisions of Order XI Rule 1 of the CPC as applicable to commercial suits.

Treatment of the Issue by the Court

Authorities

The Supreme Court primarily relied on the following legal provisions:

• Order XI Rule 1 of the Code of Civil Procedure (CPC), as amended by the Commercial Courts Act, 2015: This rule governs the disclosure, discovery, and inspection of documents in commercial suits.
• Section 16 of the Commercial Courts Act, 2015: This section specifies that the provisions of the CPC, as amended by this Act, shall prevail over any conflicting rules of the High Court or State Government.

Judgment

How each authority was viewed by the Court?

• The Court interpreted Order XI Rule 1 of the CPC* to mean that while all documents in a party’s possession must be disclosed at the time of filing, additional documents can be submitted with the court’s leave, provided a reasonable cause is shown for non-disclosure.
• The Court emphasized that Section 16 of the Commercial Courts Act, 2015* mandates that the amended provisions of the CPC, as per the Commercial Courts Act, shall prevail over conflicting rules.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to balance procedural compliance with the need for a just decision. The Court emphasized the importance of adhering to the disclosure requirements of Order XI Rule 1 of the CPC, particularly in commercial suits. However, it also recognized the need to allow for the production of documents that were not available at the time of filing, provided a reasonable explanation is given. The Court distinguished between the invoices, which were claimed to be discovered later, and other documents, which were admitted to be in the plaintiff’s possession but not produced due to being voluminous.

Logical Reasoning:

The court considered the alternative interpretation that all documents should be allowed if the application is made within 30 days of the suit, but rejected this interpretation because it would undermine the mandatory disclosure requirements of Order XI Rule 1 of the CPC. The court emphasized that the purpose of these provisions is to ensure transparency and prevent parties from ambushing each other with surprise documents at a later stage. The court also rejected the argument that the genuineness of the documents should not be considered at the stage of production, stating that the court can consider the genuineness at the stage of deciding the application under Order XXXIX Rule 1 of the CPC while considering the prima facie case.

The Supreme Court held that the plaintiff could rely on the invoices as additional documents, as they were not in the plaintiff’s possession at the time of filing the suit. However, the court upheld the rejection of other documents, as no reasonable cause was established for their non-disclosure along with the plaint.

The Court stated, “Therefore, the learned Commercial Court ought to have granted leave to the plaintiff to rely on/produce the invoices as mentioned in the application as additional documents.”

The Court also noted, “At the stage of granting leave to place on record additional documents the court is not required to consider the genuineness of the documents/additional documents, the stage at which genuineness of the documents to be considered during the trial…”

The Court further clarified, “While seeking leave of the court to rely on documents, which were in his power, possession, control or custody and not disclosed along with plaint or within the extended period set out in Order XI Rule 1 (4), the plaintiff has to establish the reasonable cause for non disclosure along with plaint.”

The Supreme Court’s decision was unanimous, with both judges agreeing on the final outcome.

Key Takeaways

✓ In commercial suits, plaintiffs must disclose all relevant documents at the time of filing the plaint.

✓ Additional documents can be submitted with the court’s leave within 30 days of filing the suit, in cases of urgent filings.

✓ A reasonable cause must be established for the non-disclosure of documents that were in the plaintiff’s possession at the time of filing.

✓ Documents discovered after the filing of the suit may be allowed as additional documents.

✓ Courts are not required to consider the genuineness of the documents at the stage of granting leave to produce additional documents.

Directions

The Supreme Court directed that the plaintiff be permitted to rely on the invoices mentioned in the application as additional documents. However, the court confirmed the rejection of the other documents as additional evidence. The court also clarified that this production shall not affect the outcome of the interim injunction application.

Development of Law

The ratio decidendi of this case is that in commercial suits, while all documents in a party’s possession must be disclosed at the time of filing, additional documents can be submitted with the court’s leave within 30 days of filing the suit in cases of urgent filings, provided a reasonable cause is shown for non-disclosure. However, the court clarified that documents discovered after the filing of the suit may be allowed as additional documents. This judgment clarifies the procedure for submitting additional documents in commercial suits and emphasizes the importance of adhering to the mandatory disclosure requirements of Order XI Rule 1 of the CPC, while also recognizing the need for flexibility in certain circumstances.

Conclusion

The Supreme Court partly allowed the appeal, permitting the plaintiff to produce invoices as additional documents, but upheld the rejection of other documents. The Court emphasized the importance of procedural compliance with Order XI Rule 1 of the CPC, while also recognizing the need to allow for the production of documents discovered after the filing of the suit. This judgment clarifies the rules for submitting additional documents in commercial suits, balancing the need for transparency with the need for a just decision.