M/S. Dev Polymers vs. M/S. Shri Polyplast

Facts

The petitioner, M/s. Dev Polymers, filed a writ petition challenging an order passed by the Commercial Court No.2, Jodhpur. The dispute arose from a suit filed by the respondent, M/s. Shri Polyplast, for recovery of money on 12.01.2021, alleging that the petitioner owed money for materials supplied on credit. The Commercial Court allowed two applications filed by the respondent. The first application, under Section 151 of the Code of Civil Procedure (CPC), sought disclosure of the petitioner's movable and immovable assets, citing the Supreme Court's decision in Rahul S. Shah. The second application, under Order 11 Rule 5 of the CPC, sought various financial documents, including books of accounts, balance sheets, ITRs, GST returns, and bank statements for the periods 2017-19, 2019-20, and 2020-21.

Held

The Court allowed the petitioner's challenge to the order concerning the application under Section 151 CPC. It held that the Supreme Court's directions in Rahul S. Shah were aimed at ensuring smooth execution of decrees by allowing parties to seek property details when an apprehension of non-execution exists. Since the respondent's application under Section 151 CPC did not project any such apprehension in its pleadings, the reliance on Rahul S. Shah by the trial court was misplaced, and thus, that portion of the impugned order was quashed and set aside. However, the Court upheld the Commercial Court's decision regarding the application under Order 11 Rule 5 CPC. It reasoned that when the petitioner had denied the transactions and liability, the requested financial documents (books of accounts, balance sheets, GST returns, etc.) were the best source of information to verify the alleged transactions and dues. These authentic documents would assist the trial court in arriving at a conclusion regarding the disputed transactions.

Key Issues

1. Whether the Commercial Court erred in allowing the respondent's application under Section 151 CPC for disclosure of the petitioner's assets, despite the absence of specific pleadings demonstrating an apprehension of non-execution of a potential decree, as per the principles laid down in Rahul S. Shah (Supra)? 2. Whether the Commercial Court was justified in allowing the respondent's application under Order 11 Rule 5 CPC for production of the petitioner's financial documents, considering the petitioner's contention that these were private documents and the respondent had not sufficiently demonstrated their necessity for adjudication? Petitioner's arguments: The petitioner argued that the application under Section 151 CPC lacked the necessary averments to justify the disclosure of assets, as required by Rahul S. Shah, and that the requested financial documents were private and their disclosure would be prejudicial. The petitioner also contended that the respondent had not specified the exact requirement of these documents for the adjudication of the suit. Respondent's arguments: The respondent argued that the suit was based on transactions from 2015 onwards involving materials used for PVC pipes, and that while some payments were made, the remaining credits were allegedly mis-utilized. The respondent contended that the requested documents were essential to ascertain the transactions and dues, especially given the petitioner's denial of liability.