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CS(COMM) 1215/2016
Nitin Gupta v. Texmaco Infrastructure & Holding Limited
2019 SCC OnLine Del 8367
In the High Court of Delhi at New Delhi
(BEFORE RAJIV SAHAI ENDLAW, J.)
Nitin Gupta .…. Plaintiff;
v.
Texmaco Infrastructure & Holding Limited .…. Defendant.
CS(COMM) 1215/2016 and CC(COMM) 36/2017
Decided on April 29, 2019
Advocates who appeared in this case :
Mr. Ajay Kumar Gupta and Ms. Surbhi Gupta, Advs.
Ms. Gunjan Sinha Jain, Adv.
The Judgment of the Court was delivered by
RAJIV SAHAI ENDLAW, J.:—
IA No. 9/2019 (of plaintiff u/S 151 CPC)
1. The plaintiff, by this application post framing of issues, seeks to file an additional
document.
2. The plaintiff has instituted this suit for recovery of Rs. 2,36,95,461/-. It is inter
alia the case of the plaintiff, (i) that the defendant had agreed to sell an immovable
property to the plaintiff and one Ashwini Kumar Somany; (ii) that the plaintiff and the
said Ashwini Kumar Somany paid a sum of Rs. 1,75,00,000/- in pursuance to the said
Agreement to Sell; (iii) that the said amount of Rs. 1,75,00,000/- along with interest
has already been returned by the defendant to the plaintiff and the said Ashwini
Kumar Somany upon the Agreement of Sale of immovable property not fructifying;
and, (iv) the plaintiff however, besides the said sum of Rs. 1,75,00,000/- paid along
with Ashwini Kumar Somany had also paid a sum of Rs. 1,25,00,000/- in cash to the
defendant. This suit has been instituted for recovery of the said amount of Rs.
1,25,00,000/- with interest.
3. Needless to state, the defendant is contesting the suit.
4. Issues were framed in the suit on 13th November, 2018.
5. This application came up for hearing on 11th April, 2019, when the counsel for
the defendant pointed out that the plaintiff till then had neither filed list of witnesses
nor affidavits by way of examination-in-chief of his witnesses inspite of expiry of the
time granted therefor.
6. The plaintiff, by this application, post framing of issues, seeks to file a letter
dated 2nd September, 2013 of the defendant to the plaintiff and the said Ashwini
Kumar Somany.
7. The defendant, in the hearing on 11th April, 2019 denied the letter now sought to
be filed.
8. On 11th April, 2019, I had enquired from the plaintiff, then appearing in person,
the proof of being possessed of a cash amount of Rs. 1,25,00,000/- and the plaintiff
had stated that he had in his books of accounts shown cash in hand of Rs.
1,25,00,000/- on 3rd September, 2013, when according to the plaintiff the said
amount in cash had been paid and that the said cash payment to the defendant was
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also reflected in the Income Tax Returns of the plaintiff.
9. While adjourning the hearing on the application to today on request of the
plaintiff, the plaintiff was also directed to get his books of accounts and Income Tax
Returns to show being possessed of Rs. 1,25,00,000/- in cash on the date of payment
claimed thereof.
10. Though the counsel for the plaintiff today in Court has shown some photocopies
of documents in support of what was claimed by the plaintiff on the last date of
hearing but I am afraid the same do not reflect what was represented.
11. Be that as it may, the counsels have been heard further.
12. The counsel for the plaintiff, as in most of the cases, merely states that the
document now sought to be filed remained to be filed owing to the error of the earlier
Advocate for the plaintiff.
13. The counsel for the defendant has opposed the application, contending that (i)
the plaintiff has instituted this suit as a commercial suit; (ii) Order XI Rule 1(5) of the
Code of Civil Procedure, 1908 (CPC) as applicable to commercial suits provides that
the plaintiff shall not be allowed to rely on documents which were in the plaintiff's
power, possession, control or custody and not disclosed along with plaint or within the
extended period if any granted, save and except by leave of Court and which leave is
to be granted only on the plaintiff establishing reasonable cause for non-disclosure
along with the plaint; (iii) similarly Order XI Rule 1(6) requires the plaintiff in a
commercial suit to set out in detail the documents and Order XI Rule 1(2)&(3)
requires declaration of documents to be made on oath; (iv) the plaintiff, while filing
this suit nowhere disclosed that there was any such document addressed by the
defendant to the plaintiff and Ashwini Kumar Somany, as is sought to be filed now,
and which was immediately not available to him; (v) rather, the plaintiff declared that
there was no document other than those filed; (vi) the document now sought to be
filed, even otherwise does not inspire confidence; (vii) the plaintiff, along with the
plaint has filed a photocopy of another letter also dated 2nd September, 2013 written
by the defendant to the plaintiff and Ashwini Kumar Somany, containing an in-
principle agreement of sale of immoveable property for a total sale consideration of Rs.
11.50 crores and acknowledging receipt of advance therefor of Rs. 1.75 crore, leaving
the balance sale consideration of Rs. 9.75 crores to be paid; (viii) an identical letter
now sought to be filed, also of 2nd September, 2013, however mentions the sale
consideration as Rs. 10.25 crores with balance remaining to be paid of Rs. 8.50 crores;
(ix) if the plaintiff along with the said Ashwini Kumar Somany, besides Rs. 1.75 crore
recorded to have been paid in the copy of the letter already on record, had paid
another Rs. 1.25 crore i.e. a total of Rs. 3 crores out of the total sale consideration of
Rs. 10.25 crores, the balance payable would have been Rs. 7.25 crores and not Rs.
8.50 crores; (x) the claim of the plaintiff in the plaint also is of the total sale
consideration agreed being Rs. 11.50 crores and not Rs. 10.25 crores as is stated in
the document now sought to be filed; and, (xi) the document now sought to be filed is
thus clearly forged and fabricated and an afterthought.
14. The counsel for the plaintiff though has drawn attention to the photocopy of the
reverse of the letter dated 2nd September, 2013 already on record, showing
acknowledgment of Rs. 1.25 crore in cash on 3rd September, 2013, leaving a balance
of Rs. 8.50 crores but has no explanation with respect to the total sale consideration
shown of Rs. 10.25 crores and out of which, inspite of receipt of advance of Rs. 3
crores, Rs. 8.50 crores still remained payable. His only contention is that the
document now sought to be filed is also issued by the defendant itself.
15. I may mention that the two letters, though save for the amounts, are identical
and both emanating from the defendant on the same date, are signed by different
persons on behalf of the defendant.
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16. The arguments aforesaid of the counsel for the defendant do raise suspicion
about the authenticity of the document now sought to be filed and are also
inconsistent with pleadings of the plaintiff.
17. It is the case of the plaintiff in the plaint, (i) that an Agreement to Sell of
immovable property, for a total sale consideration of Rs. 11,50,00,000/- was entered;
copy of the Agreement to Sell is filed; (ii) that the plaintiff along with Ashwini Kumar
Somany paid a sum of Rs. 1,75,00,000/- to the defendant, out of which Rs.
1,00,00,000/- was paid from the account of the plaintiff and Rs. 75,00,000/- was paid
from the account of Ashwini Kumar Somany; (iii) that the defendant had also received
a sum of Rs. 1,25,00,000/- in cash on 3rd September, 2013 from the plaintiff; (iv) that
the defendant had settled the matter with Ashwini Kumar Somany in respect of the
monies paid by him; and, (v) however the matter had not been settled with the
plaintiff and the defendant has paid only a sum of Rs. 1,33,45,205/- to the plaintiff
and the defendant is liable to pay Rs. 2,36,95,461/- to the plaintiff inclusive of
interest at 18% per annum from the date of payment of Rs. 1,00,00,000/- as well as
Rs. 1,25,00,000/-, till the institution of the suit.
18. The plaintiff, along with the plaint has filed Agreement to Sell on the letter
head of the defendant as under:—
“02.09.2013
1) Shri Ashwini Kumar Somany 2) Shri Nitin Gupta
69, Engineers Enclave, 7, Flag Staff Road,
Pitampura, Delhi - 110034 Civil Lines, Delhi - 110007
Re: Sale of “Triangular Plot” measuring 270 Sq. Mtrs approx., located on
Mandelia Road, Kamla Nagar, Delhi - 110007.
Sirs,
We refer to our discussions with your goodselves on 21st May 2013, when in
principle we agreed to sell the above plot to you at a total consideration of Rs.
11.50 Crores (Rs. Elevan Crores Fifty Lacs Only).
You made the following advance payment to us towards the cost of this “Plot”.
1) Cheque No. 579249 dated 21.05.2013 drawn on HDFC Bank for Rs. 50 Lacs.
(Fifty Lacs) only from Shri Nitin Gupta.
2) Cheque No. 579250 dated 21.06.2013 drawn on HDFC Bank for Rs. 50 Lacs.
(Fifty Lacs) only from Shri Nitin Gupta.
3) Cheque No. 348666 dated 24.05.2013 drawn on HDFC Bank for Rs. 25 Lacs.
(Twenty Five Lacs) only from Shri Ashwini Kumar Somany.
4) Cheque No. 348668 dated 21.06.2013 drawn on HDFC Bank for Rs. 50 Lacs.
(Fifty Lacs) only from Shri Ashwini Kumar Somany.
TOTAL Rs. 175 Lacs.
(Rs. One Crore and seventy Five Lacs Only).
As per the understanding the balance payment amounting to Rs. 9.75 Crores
(Rs. Nine Crores and Seventy Five Lacs) only was to be made by you on or before
21st August, 2013; so that the Title Deed is registered in your favour and
possession given to you.
As discussed in the meeting held with your goodselves today i.e. 2nd September,
2013, we hereby agree to extend the due date for making the balance payment for
which the schedule will be mutually discussed.
This letter is being issued in duplicate. Kindly, sign one copy and return to us as
a token of your acceptance.
Thanking you
Yours Faithfully
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For Texmaco Infrastructure & Holdings Ltd.
(Hemant Kumar)”
19. On the reverse of the aforesaid document is a handwritten endorsement as
under:—
“This is to confirm that Rs. 1.25 crores (Rs. one crores twenty five lacs) has been
received in cash on 3.9.2013. Now balance remains to be received Rs. 8.50 crores
(Rs. Eight crores fifty lacs only)”
20. The defendant, besides contesting the suit has also filed a Counter Claim of
recovery of Rs. 2,19,55,396/- from the plaintiff.
21. One of the issues framed in the suit and the Counter Claim is,
“Whether the suit and/or the Counter Claim are bad for non-joinder of Ashwini
Kumar Somany?”
22. The document now sought to be filed by the plaintiff, also on the letter head of
the defendant, is as under:—
“02.09.2013
1) Shri Ashwini Kumar Somany 2) Shri Nitin Gupta
69, Engineers Enclave 7, Flag staff Road,
Pitampura, Delhi - 110034 Civil Lines, Delhi-11007.
Re: Sale of “Triangular Plot” measuring 270 Sq. Mtrs approx., located on
Mandelia Road, Kamla Nagar, Delhi - 110007.
Sirs,
We refer to our discussions with your goodselves on 21st May 2013, when in
principle we agreed to sell the above plot to you at a total consideration of Rs.
10.25 Crores (Rs. Ten Crores Twenty Five Lacs only).
You made the following advance payment to us towards the cost of this “Plot”:
1) Cheque No. 579249 dated 21.05.2013 drawn on HDFC Bank for Rs. 50 Lacs.
(Fifty Lacs) only from Shri Nitin Gupta.
2) Cheque No. 579250 dated 21.06.2013 drawn on HDFC Bank for Rs. 50 Lacs.
(Fifty Lacs) only from Shri Nitin Gupta.
3) Cheque No. 348666 dated 24.05.2013 drawn on HDFC Bank for Rs. 25 Lacs.
(Twenty Five Lacs) only from Shri Ashwini Kumar Somany.
4) Cheque No. 348668 dated 21.06.2013 drawn on HDFC Bank for Rs. 50 Lacs.
(Fifty Lacs) only from Shri Ashwini Kumar Somany.
TOTAL Rs. 175 Lacs.
(Rs. One Crore and seventy Five Lacs only).
As per the understanding the balance payment amounting to Rs. 8.50Crores (Rs.
Eight Crores and Fifty Lacs) only was to be made by you on or before 21st August,
2013; so that the Title Deed is registered in your favour and possession given to
you.
As discussed in the meeting held with your goodselves today i.e. 2nd September,
2013, we hereby agree to extend the due date for making the balance payment for
which the schedule will be mutually discussed.
This letter is being issued in duplicate. Kindly, sign one copy and return to us as
a token of your acceptance.
Thanking you
Yours faithfully
For Texmaco Infrastructure & Holdings Ltd.
(L.K. Jain)
Sr. General Manager”
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23. In contradistinction to the case of the plaintiff as aforesaid in the plaint and the
document filed therewith, the document now sought to be filed shows the total sale
consideration agreed between the parties to be of Rs. 10.25 crores, instead of Rs.
11.50 crores as in the document filed along with the plaint and as pleaded in the
plaint.
24. While as per the document filed along with the plaint, the balance consideration
remaining unpaid was of Rs. 9.75 crores, as per the document now sought to be filed,
the balance sale consideration remaining payable was only of Rs. 8.50 crores.
25. Even though as per the handwritten endorsement on the reverse of the
document filed along with the plaint the balance sale consideration remaining unpaid
was of Rs. 8.50 crores as in the document now sought to be filed, but while as per the
document filed with the plaint the said balance was out of total sale consideration of
Rs. 11.50 crores, as per the document now sought to be filed, the said balance is out
of the total sale consideration of Rs. 10.25 crores.
26. It is thus clear that the document now sought to be filed is also inconsistent
with the pleadings and on the basis whereof issues have already been framed in the
suit.
27. A document is filed and can be permitted to be filed beyond the stage
prescribed for filing thereof, only in proof and aid of the pleaded case. No document
which runs contrary to or is inconsistent with the pleaded case and on which issues
have to be framed, can be permitted to be filed.
28. Significantly the plaintiff is not seeking to amend his pleadings.
29. There is another aspect. As per the Agreement to Sell pleaded by the plaintiff,
the Agreement to Sell by the defendant was jointly and severally with the plaintiff and
Ashwini Kumar Somany. Merely because the plaintiff and Ashwini Kumar Somany,
jointly entering into an Agreement of Purchase with the defendant, as per their own
inter se understanding or convenience paid monies payable under their agreement
with the defendant to the defendant out of their separate accounts, would not
constitute two separate agreements, one of the defendant with the plaintiff and the
other of the defendant with Ashwini Kumar Somany. Such is not the case of the
plaintiff in the plaint either. Though the plaintiff claims the defendant to have settled
with Ashwini Kumar Somany but as per the document filed by the plaintiff along with
the plaint also, including the handwritten endorsement on the reverse thereof, the
amount of Rs. 1.25 crores was received by the defendant jointly from the plaintiff and
Ashwini Kumar Somany. The said endorsement does not show the amount to have
been received only from the plaintiff.
30. Even as per the document now sought to be filed, though inconsistent with the
pleadings and the document already on record, the agreement of the defendant was
with the plaintiff as well as Ashwini Kumar Somany.
31. Section 45 of the Indian Contract Act, 1872 provides that when a person has
made a promise to two or more persons jointly, then unless a contrary intention
appears from the contract, the right to claim performance rests, as between him and
them, with them. Thus, as per document already on record, the right to claim refund
of the balance amount due from the defendant vests jointly in the plaintiff and Ashwini
Kumar Somany and the plaintiff is not entitled alone to sue the defendant for recovery
thereof. It thus appears that the issue aforesaid reproduced needs to be treated as a
preliminary issue though it was not ordered so while framing issues on 13th November,
2018.
32. Be that as it may, the plaintiff is not found entitled to belatedly file a document
in contradiction and negation of the pleaded case.
33. Merit is found also in the contention of the counsel for the defendant, of the
plaintiff, under Order XI of the CPC as applicable to Commercial Suits, being entitled
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to belatedly file a document only if ‘establishes reasonable cause for non-disclosure (of
the document now sought to be filed) along with the plaint’.
34. The plaintiff in this application has pleaded (i) that the ‘defendant’ had changed
its counsel in the month of November, 2018 and engaged Mr. R.Y. Kalia, Advocate who
asked the plaintiff to bring all the papers related to the above-noted case so that the
proposed issues be drafted for the convenience of the Court; (ii) Mr. R.Y. Kalia,
Advocate, while going through the documents brought by the plaintiff “lay his hands
on the” document now sought to be filed and “during the conference/discussion of the
case the plaintiff explained to his Counsel Mr. R.Y. Kalia, Advocate that he had found
this Letter signed by Mr. L.K. Jain, in the pocket of his old clothes when he was
distributing his old warm clothes to poor indigent persons in the last week of August,
2018 and could not find the above-said letter at the time of filing of the above-noted
Suit”; (iii) the said letter was also handed over to the plaintiff by Mr. Hemant Kumar,
Executive Director of the defendant Company when the plaintiff again visited the office
of the defendant and requested Mr. Hemant Kumar on the same day i.e. 03.09.2013 to
issue receipt on the company's letterhead with respect to the amount received of Rs.
1,25,00,000/- in cash; (iv) Mr. Hemant Kumar told the plaintiff that as per Income
Tax Rules the defendant cannot show receipt of cash and in order to avoid any
problem he had issued the letter dated 2nd September, 2013 after reducing the sale
consideration from Rs. 11,50,00,000/- to Rs. 8,50,00,000/- as they had already
received Rs. 1,75,00,000/- through cheque and Rs. 1,25,00,000/- in cash; and, (v)
that non-filing of the document is not deliberate but due to an inadvertent bona fide
mistake.
35. As would immediately be evident from the averments aforesaid, the plaintiff
claims the letter now sought to be filed, to have been delivered to him only and is also
pleading the circumstances in which it was so issued. The plaintiff having himself
transacted qua the said letter, at the time of institution of the suit, must have been
aware of the same and even if was immediately unable to find the document now
sought to be filed, should have pleaded, in terms of the document now sought to be
filed and should have in the affidavit of documents disclosed another letter dated 2nd
September, 2013 and further stated that the same was immediately not available or
untraceable. The plaintiff did nothing of the sort and on the contrary pleaded a case
contrary to what emerges now and from the document now sought to be filed. Not a
whisper was made in the declaration on oath in terms of Order XI Rule 1(3) of the CPC
as applicable to Commercial Suits, of there being in existence, besides the document
dated 2nd September, 2013 being filed, also another document also dated 2nd
September, 2013 and that the same had been lost or was not available. In this
application also, there is no explanation or even a whisper as to non-disclosure along
with the plaint. For a plaintiff to be entitled to leave of the Court under Order XI Rule 1
(5) of the CPC for belatedly filing a document, it is essential for the plaintiff to not only
plead but ‘establish’ “reasonable cause for non-disclosure along with the plaint”. Here,
what to talk of establishing, the plaintiff has not even pleaded reasonable cause for
non-disclosure along with the plaint.
36. There is no Vakalatnama of Mr. R.Y. Kalia, Advocate named in the application on
record. The plaintiff, at one place in the application has described him as Advocate for
the defendant and at another place as Advocate for the plaintiff. However this
application is filed by Mr. R.Y. Kalia, Advocate on behalf of plaintiff and the presence of
Mr. R.Y. Kalia, Advocate for the defendant in the order dated 13th November, 2018 is
an error. The plaintiff has not even explained in the application as to why on finding
the letter in the pocket of his old warm clothes in August, 2018, the plaintiff did not
disclose it to his Advocate immediately after discovery and it was only in November,
2018 that Mr. R.Y. Kalia, Advocate discovered it amongst the documents handed over
by the plaintiff. The story set-up, of Mr. R.Y. Kalia, Advocate in November, 2018
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having asked the plaintiff to bring all papers for drafting proposed issues also does not
inspire confidence. For drafting proposed issues, there is no need to call for the
documents beyond those already on record.
37. The counsel for the plaintiff, during his argument has also stated that a police
complaint was filed with respect to the same transaction in 2016. However on further
enquiry, the counsel for the plaintiff states that the document now sought to be filed
was not produced before the police also.
38. Unless, the Commercial Divisions, while dealing with the commercial suits, so
start enforcing Rules legislated for commercial suits, and refuse to entertain
applications for late filing of documents, especially with respect to documents of
suspicious character and continue to show leniency in the name of ‘interest of justice’
and ‘a litigant ought not to suffer for default of advocate’, the commercial suits will
start suffering from the same malady with which the ordinary suits have come to
suffer and owing whereto the need for the Commercial Courts Act, 2015 was felt.
Commercial Division is thus not required to entertain or allow applications for late
filing of documents, without any good cause being established for non-disclosure
thereof along with pleadings. The plaintiff herein has utterly failed in this regard. The
application nowhere explains as to why the plaintiff, if had obtained the said letter
from the defendant, did not remember the same and make disclosure of the same at
the time of filing the police complaint and/or at the time of filing of this suit, even if
the letter had been misplaced or was not immediately available. The form prescribed
for filing affidavit of documents requires a litigant in a commercial suit to, even if not
immediately possessed of a relevant document, disclose the same. A litigant who fails
to do so and also does not satisfy the Court while seeking to belatedly file the
document, why no disclosure of such document was made, cannot be permitted to so
file documents.
39. Order XIII Rules (1) & (2) of the CPC as it existed prior to amendment with
effect from 1st July, 2002, required the documents to be filed at or before the
settlement of issues and no documents could be received at any subsequent stage
unless “good cause was shown to the satisfaction of the Court for non-production
thereof”. Post amendment with effect from 1st July, 2002 of CPC, vide Order VII Rule
14(1)&(3) and Order VIII Rule 1A(1)&(3) a plaintiff was required to file documents
along with plaint and a defendant required to file documents along with written
statement and documents were not permitted to be received thereafter without leave
of the Court. Prior to 2002, the parties, if had not filed the document prior to
settlement of issues, were required to satisfy the Court as to why the document was
not filed till the stage of settlement of issues and were not required by language of
Order XIII Rule (2) to satisfy whether the document was within their knowledge or
not. I emphasise, only reason for ‘non-production’ was to be stated and not the reason
for ‘non-disclosure’. Though with effect from 1st July, 2002, for late filing of documents
only leave of the Court was required to be taken but the test continued to be applied
by the Courts for granting such leave continued to be as prior to 2002 i.e. of reasons
for ‘non-production’ of documents at the stage provided therefor. Order XI Rule (1) of
the CPC as applicable to commercial suits brought about a radical change. The late
filing of documents thereunder is permitted applying the test of reasonable cause of
‘non-disclosure’ of the document at the stage provided for filing thereof. An applicant
now is required to satisfy the Court as to why the document was not in his knowledge
and if in his knowledge why was the document not disclosed at the appropriate time.
Thereunder, documents, even if not immediately available, are required to be
disclosed.
40. Rather, even if what the counsel for the plaintiff is arguing is correct, it shows
an attempt to deal in unaccounted money in the matter of sale/purchase of property
and in which respect again, as long as the Courts continue to lend their shoulder to tax
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evaders, tax evasion would continue. Time has thus come for the Courts to not come
to the rescue of tax evaders, on the argument that the Civil Court is not concerned
with the evasion even if any of tax, indulged in by the plaintiff.
41. No merit is also found in the contention of the counsel for the plaintiff, that the
defendant is equally to blame. When two parties collude to evade tax, the party which
would suffer owing to consequence thereof has to suffer and such suffering cannot be
alleviated on the ground that the other party was also in collusion.
42. There is thus no merit in the application.
43. Dismissed.
———
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