Sri Adinarayana Trading Co vs. S M J Margin Free Shop

Facts

The petitioner, Adinarayana Trading Co., filed a suit for recovery of Rs. 3,32,200/- against the respondent, S.M.J. Margin Free Shop, for alleged purchases of jaggery on credit. The petitioner claimed the respondent had been a customer for 5-6 years. At the time of filing the suit, the petitioner submitted ten documents. Subsequently, the petitioner filed an application (I.A.No.1) under Order XI(5) of the Commercial Courts Act, 2015, seeking leave to file the original of document No.1, a certified copy of document No.6, and computerized ledger accounts maintained by their auditor. The respondent was placed ex-parte. The Commercial Court rejected the petitioner's application, citing non-compliance with Section 4(E) and Section 4(D) of the Commercial Courts Act, 2015, and improper verification of the plaint.

Held

The High Court held that the Commercial Court's rejection of the petitioner's application was unsustainable. The Court found that the Commercial Court had adopted a hyper-technical approach by venturing into an inquiry regarding defects in the plaint filing while considering an application for leave to produce documents under Order XI(5). The Court reasoned that Order XI(5) clearly contemplates that a party can be permitted to rely on documents with the leave of the Court, and the application should have been considered on its merits regarding the production of documents. The High Court opined that even if there were minor errors or material irregularities in the plaint verification or document filing, the Court should not non-suit the plaintiff on technical objections, particularly in a recovery suit. The Court emphasized the need to take a lenient view to achieve substantial justice. Therefore, the High Court allowed the writ petition, set aside the order of the Commercial Court, and permitted the petitioner to produce the documents cited in their application.

Key Issues

1. Whether the Commercial Court erred in rejecting the petitioner's application for leave to produce additional documents under Order XI(5) of the Commercial Courts Act, 2015, on grounds of procedural non-compliance, despite the respondent being ex-parte? Petitioner's arguments: The petitioner contended that the application was made under Order XI(5) which permits reliance on documents with the leave of the Court. They argued that the documents sought to be produced were either originals/certified copies of documents already on record or computerized ledger accounts held by their auditor, with a reasonable explanation for their delayed production. The petitioner asserted that the Commercial Court's approach was hyper-technical and that the Court should have taken a lenient view to do substantial justice, especially in a recovery suit where the defendant was ex-parte. They also argued that the Court should not have delved into defects in the plaint filing while considering an application for document production. Revenue/State's arguments: The judgment records no specific arguments made by the respondent, as they were placed ex-parte.