Commercial Suits & Requirement Of Establishing Reasonable Cause For Non Disclosure Of Documents Under Order XI Rule 1 (4) CPC: Supreme Court Explains

The Supreme Court observed that the requirement under Order XI Rule 1(4) of Code of Civil Procedure (as applicable to commercial suits) of establishing the reasonable cause for non disclosure of the documents along with the plaint  under shall not be applicable if it is averred and it is the case of the plaintiff that those documents have been found subsequently and in fact were not in the plaintiff's power, possession, control or custody at the time when the plaint was filed. 

Order XI Rule 1 of the CPC as applicable to the commercial suits mandates the plaintiff to file a list of all documents, photocopies of all documents, in its power, possession, control or custody, pertaining to the suit, along with the plaint.  

Order XI Rule 1 (3) provides that the plaint shall contain a declaration on oath from the plaintiff that all documents in the power, possession, control or custody of the plaintiff, pertaining to the facts and circumstances of the proceeding initiated by him have been disclosed and copies thereof annexed with the plaint, and that the plaintiff does not have other documents in its power, possession, control or custody.

Order XI Rule 1 (4) provides that in case of urgent filings, the plaintiff may seek leave to rely on additional documents as part of the above declaration on oath [as provided under Order 11 Rule 1 (3)] and subject to grant of such leave by Court, the plaintiff shall file such additional documents in Court, within thirty days of filing the suit, along with a declaration on oath that the plaintiff has produced all documents in its power, possession, control or custody, pertaining to the facts and circumstances of the proceedings initiated by the plaintiff and that the plaintiff does not have any other documents, in its power, possession, control or custody.

Order XI Rule 1 (5) further 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 set out above, save and except by leave of Court and such leave shall be granted only upon the plaintiff establishing reasonable cause for non disclosure along with the plaint.

In this case, the Commercial Court dismissed the application filed by the plaintiff seeking its leave to file additional documents on the ground of lack of reasonable cause in non disclosure along with plaint. The High Court dismissed the plea challenging the dismissal.

Taking note of the provisions of the Code (Order XI Rule 1 (4) read with Order XI Rule 1 (5),) as applicable to Commercial Suits, the Apex Court bench of Justices MR Shah and Aniruddha Bose noticed the following:

(i) in case of urgent filings the plaintiff may seek leave to rely on additional documents;

(ii) within thirty days of filing of the suit;

(iii) making out a reasonable cause for non disclosure along with plaint.

The court observed that a further thirty days time is provided to the plaintiff to place on record or file such additional documents in court and a declaration on oath is required to be filed by the plaintiff as was required as per Order XI Rule 1 (3) if for any reasonable cause for non disclosure along with the plaint, the documents, which were in the plaintiff's power, possession, control or custody and not disclosed along with plaint. Therefore plaintiff has to satisfy and establish a reasonable cause for non disclosure along with plaint.

"However, at the same time, the requirement of establishing the reasonable cause for non disclosure of the documents along with the plaint shall not be applicable if it is averred and it is the case of the plaintiff that those documents have been found subsequently and in fact were not in the plaintiff's power, possession, control or custody at the time when the plaint was filed. Therefore Order XI Rule 1 (4) and Order XI Rule 1 (5) applicable to the commercial suit shall be applicable only with respect to the documents which were in plaintiff's power, possession, control or custody and not disclosed along with plaint. Therefore, the rigour of establishing the reasonable cause in non disclosure along with plaint may not arise in the case where the additional documents sought to be produced/relied upon are discovered subsequent to the filing of the plaint." (Para 7.6)

In the application filed by plaintiff, the court noted, it was specifically mentioned that so far as the invoices are concerned, the same were not in its possession at the time of the filing of the plaint and so far as the other documents are concerned they were not filed due to they being voluminous. Therefore, so far as the invoices sought to be relied on/produced as additional documents ought to have been permitted to be relied on/produced as it was specifically asserted that they were not in his possession at the time of filing of the plaint/suit, the court said. (Para 8.1)

The court also disagreed with the reason given by the Commercial Court that leave cannot be granted because the invoices are suspicious.

"At the stage of granting leave to place on record additional documents the court is not required to consider the genuineness of the documents/additional documents, the stage at which genuineness of the documents to be considered during the trial and/or even at the stage of deciding the application under Order XXXIX Rule 1 that too while considering prima facie case.", the court said. (Para 8.3)

The court noted that other documents sought to be relied on/produced as additional documents other than the invoices are concerned the same stands on different footing.

"While seeking leave of the court to rely on documents, which were in his power, possession, control or custody and not disclosed along with plaint or within the extended period set out in Order XI Rule 1 (4), the plaintiff has to establish the reasonable cause for non disclosure along with plaint.", the court added. (Para 8.4)

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