M/S Vinayaka Travels vs. Smt Sivagami N

Held

The Court held that the IT/GST returns and audited balance sheets sought by the first respondent are indeed related to the subject matter of the suit, particularly in light of the first respondent's counter-claim. The Court acknowledged the petitioners' contention regarding the conditions for production of documents under Order 11 Rule 5(1) CPC but found that the documents in question were relevant to the ongoing dispute. The Court did not set aside the impugned order. Instead, it disposed of the petition with a clear observation that if the petitioners fail to produce the documents as directed, the Commercial Court will have to consider drawing appropriate adverse inference against them, subject to all just exceptions in law, as per Order XI Rule 5(4) of CPC.

Facts

The petitioners, M/s Vinayaka Travels and its partners, filed a writ petition before the Karnataka High Court challenging an order dated 14.10.2022 passed by the LXXXV Additional District and Sessions Judge, Bengaluru (Commercial Court). The Commercial Court, in its order in Comm.O.S.No.64/2022, directed the petitioners to produce documents sought by the first respondent in her application (I.A. No.13) under Order 11 Rule 5(1) of the Code of Civil Procedure, 1908. The first respondent had sought the firm's IT/GST returns and audited balance sheets for the financial years 2014-15 to 2019-20.

Key Issues

1. Whether the Commercial Court erred in directing the production of documents sought by the first respondent without adequately examining if these documents are germane to the matter in question in the suit, as required by Order 11 Rule 5(1) of the CPC. The petitioners argued that the Court should have satisfied two conditions: possession of the documents by the petitioners and their relevance to the suit. They contended that the Commercial Court allowed the application solely based on the petitioners' possession of the documents, without assessing their relevance. The revenue or State did not present arguments in this regard. 2. Whether the IT/GST returns and audited balance sheets for the financial years 2014-15 to 2019-20 are relevant to the subject matter of the suit, considering the first respondent's counter-claim for directions regarding audited balance sheets and appointment of an expert valuator for the firm's assets and goodwill.