Sri Adinarayana Trading Co Regd vs. Swapna Traders

Facts

The petitioner, Sri.Adinarayana Trading Co (Regd), a partnership firm dealing in jaggery, filed a suit for recovery of Rs.5,74,626/- against the respondent, Swapna Traders, a customer who allegedly purchased jaggery on credit for 8-10 years. The petitioner claimed the respondent owed money for 110 bags of jaggery at Rs.4,100/- per quintal. At the time of filing the suit, the petitioner had furnished documents at Sl. Nos. 1 to 10. During ocular evidence, the petitioner filed an application (I.A.No.1) under Order XI(5) of the Commercial Courts Act, 2015, seeking leave to file original documents (Nos. 1 and 2) and a certified copy of document No.10, which were initially submitted as photocopies. Additionally, the petitioner sought to produce a computerized ledger account maintained by its auditor. The respondent, despite being served summons, remained ex-parte.

Held

The High Court held that the Commercial Court's rejection of the petitioner's application (I.A.No.1) was unsustainable and based on a hyper-technical approach. The Court found that the Commercial Court should have restricted its inquiry to whether the petitioner was entitled to seek leave to produce the documents, as contemplated under Order XI Rule 5. The petitioner's explanation for producing original and additional documents, including the computerized ledger account held by the auditor, was deemed reasonable. The High Court observed that the Commercial Court erred by delving into defects in the filing of the plaint, such as non-compliance with Section 4(E) and 4(D) of the Commercial Courts Act, 2015, and the verification of the plaint. The Court noted that even if there were minor irregularities in the verifying affidavit, the Court should have adopted a lenient view to ensure substantial justice, particularly in a recovery suit where the defendant was ex-parte. The ratio decidendi is that procedural technicalities should not non-suit a plaintiff, especially when seeking to produce relevant documents with a reasonable explanation, and when the opposing party is absent. The order dated 12.04.2022 passed by the Principal District and Sessions Judge at Kolar was set aside, and the petitioner was permitted to produce the documents cited in I.A.No.1.

Key Issues

1. Whether the Commercial Court erred in rejecting the petitioner's application (I.A.No.1) for leave to produce original and additional documents, despite the respondent being placed ex-parte? 2. Whether the Commercial Court was justified in holding that the petitioner had not complied with the prescribed statutory procedure under the Commercial Courts Act, 2015, specifically Sections 4(E) and 4(D), and the verifying affidavit requirements? Petitioner's Arguments: The petitioner contended that the Commercial Court's rejection of the application was hyper-technical. They argued that Order XI Rule 5 clearly permits reliance on documents with the Court's leave. The petitioner explained that the additional documents were in the custody of their auditor and that the initial submission of photocopies was an oversight. They asserted that the Court should have taken a lenient view to do substantial justice, especially in a recovery suit where the defendant was ex-parte. The petitioner also relied on the verifying affidavit filed with the writ petition to counter the Court's finding on improper verification. Revenue/State's Arguments: The judgment records no specific arguments from the respondent (Revenue/State) as they remained ex-parte. The Commercial Court's reasoning, as reflected in the judgment, was that the petitioner failed to comply with Section 4(E) and 4(D) of the Commercial Courts Act, 2015, and did not file the verifying affidavit in the prescribed manner.