Delhi High Court ruling on the admission of additional documents under Order XI Rule 1(5) CPC in commercial suits

Introduction

The advent of the Commercial Courts Act, 2015, marked a significant shift in the procedural landscape for commercial disputes in India, particularly concerning the disclosure and discovery of documents. This Act aimed to expedite the resolution of commercial suits, leading to more stringent rules regarding the filing of documents compared to the more liberal approach under the unamended Civil Procedure Code (CPC), 1908. Despite these stricter provisions, the interpretation of “reasonable cause” for belated document production remains an evolving area, with courts striving to balance the need for timely disposal with the pursuit of substantive justice.

The Pre-Commercial Courts Act Regime: A Liberal Approach

Prior to the Commercial Courts Act, 2015, the CPC, 1908, offered a more lenient framework for filing documents. Under Order VII Rule 14 CPC, plaintiffs were required to produce documents in their possession or power at the time of filing the plaint or disclose their whereabouts. Similarly, Order VIII Rule 1A CPC mandated defendants to produce documents along with their written statement. However, a crucial provision, Order XIII Rule 1 CPC, allowed parties to produce all documentary evidence “at or before the settlement of issues.” This provision often led to a liberal interpretation by courts, permitting the filing of additional documents even at later stages, including during evidence or even at the appellate stage, provided a “sufficient cause” was demonstrated. This flexibility, while aimed at ensuring justice, often contributed to delays in the disposal of cases

The Commercial Courts Act, 2015: A Stricter Stance

To address the issue of delayed disposal, the Commercial Courts Act, 2015, introduced Order XI, which significantly tightened the rules for document disclosure. Order XI Rule 1 mandates that plaintiffs file a list and photocopies of all documents in their power, possession, control, or custody pertaining to the suit, along with the plaint. This includes documents referred to and relied upon, as well as those relating to any matter in question, irrespective of whether they support or are adverse to the plaintiff’s case. A similar obligation is placed on defendants to file documents along with their written statement or counterclaim.

A key departure from the old regime is Order XI Rule 1(5) CPC, which states that a 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”. This provision, along with the absence of a direct equivalent to Order XIII Rule 1 CPC for commercial disputes, clearly indicated the legislature’s intent to curb delays by enforcing strict adherence to disclosure timelines.

The Concept of “Reasonable Cause” and its Elasticity

Despite the stringent nature of Order XI, the phrase “reasonable cause” for non-disclosure, as stipulated in Rule 1(5), has become a focal point of judicial interpretation. The present case, Darrammek Hotels and Developers Private Limited v. Brilltech Engineers Private Limited¹, highlights this ongoing judicial discourse.

In this case, the plaintiff sought to introduce 75 additional emails out of a voluminous exchange of approximately 500 emails, arguing their necessity for a fair adjudication and to counter the defendant’s claims. The Delhi High Court observed that the documents were of “impeccable and unquestionable nature” and vital for understanding the core dispute. Crucially, the court emphasized that “reasonable cause is an elastic term and it cannot be put into any air-tight compartment“.

This elasticity implies that while parties are expected to be diligent, the courts will assess the specific factual matrix of each case, the nature and relevancy of the documents, and the reason for belated filing. The court also noted that the standard of “reasonable cause” is less rigorous than “sufficient cause” or “good cause,” affording a degree of flexibility.

Judicial Precedents Affirming Broad Interpretation of “Reasonable Cause”

Several judgments have supported a more liberal interpretation of “reasonable cause,” particularly when the suit is at an early stage and no prejudice is caused to the opposing party.

• Khurmi Associates (P) Ltd. vs. Maharishi Dayanand Co-Operative Group Housing Society²: The Delhi High Court allowed the production of additional documents, noting that issues were yet to be framed and the documents merely supported existing pleadings. This case emphasized that a lower degree of proof is required for “reasonable cause” compared to “good cause”.
• Agva Healthcare Private Limited v. Agfa-Gevaert NV³: A Division Bench of the Delhi High Court allowed additional documents, observing that the suit was at a “nascent stage,” issues had not yet been framed, and the documents did not introduce a new case or withdraw any admission. This judgment reiterated the principle that procedural hurdles should not impede substantial justice, drawing support from the Supreme Court’s observations in Sugandhi (Dead) by Legal Representatives v. P. Rajkumar⁴. The Supreme Court, in Sugandhi, highlighted that “If the procedural violation does not seriously cause prejudice to the adversary party, courts must lean towards doing substantial justice rather than relying upon procedural and technical violation”.
• Columbia Sportswear Company vs Galaxy Footwear Pvt Ltd⁵: Delhi High Court permitted the inclusion of over 2000 pages of plaintiff’s documents, even after issues were framed. The decision was based on the documents being in the public domain, relevant to the plaintiff’s case, and the evidence not yet having commenced.

These cases collectively illustrate a judicial inclination to allow additional documents, especially when they are crucial for a fair determination of the dispute, do not introduce a new case, and the trial is at an early stage, thereby causing no significant prejudice to the opposing party.

The Balance: Striking a Chord Between Stringency and Justice

While the Commercial Courts Act aimed for strict timelines, the judiciary has consistently tried to strike a balance. The Supreme Court’s decision in Sudhir Kumar @ S. Baliyan vs. Vinay Kumar G.B⁶, provides crucial guidance on this balance. In this case, the Supreme Court distinguished between documents that were not in the party’s possession and those that were but were not filed due to being voluminous. The Court allowed the invoices to be taken on record as they were genuinely not in the plaintiff’s possession at the time of filing. However, it rejected other documents that were in the plaintiff’s possession but not filed, stating that the “voluminous” nature was not a “reasonable cause” given the sufficient time available for filing. The Court clarified that at the stage of granting leave, the genuineness of documents is not to be considered; that is a matter for trial.

This judgment underscores that while courts will be liberal when documents are genuinely unavailable, the “reasonable cause” standard is not a carte blanche for negligence. Parties are expected to exercise due diligence in disclosing all documents in their power and possession at the outset.

In contrast, earlier cases like Societe Des Produits Nestle S.A. and Another Vs Essar Industries & Ors⁷, by Justice Rajiv Sahai Endlaw, adopted a stricter interpretation, refusing to allow additional documents in an old suit, emphasizing the legislative intent of expeditious disposal under the Commercial Courts Act and differentiating commercial litigants as sophisticated entities not suffering from the handicaps of ordinary litigants.

Conclusion: Navigating the Nuances

The current legal position, as illuminated by the recent judgments, suggests that while the Commercial Courts Act, 2015, imposes stricter rules for document disclosure, the concept of “reasonable cause” provides a necessary safety valve. Courts will generally lean towards allowing additional documents if:

• They are critical for a just and fair adjudication of the dispute.
• They do not introduce a new case or contradict existing pleadings.
• The suit is at a nascent stage (issues yet to be framed, evidence not commenced).
• No significant prejudice is caused to the opposing party, especially if a reciprocal opportunity is provided (e.g., to file trailing documents).
• The reason for non-disclosure is genuinely “reasonable,” implying something more than mere oversight or voluminous nature of documents when sufficient time was available.

Ultimately, the power to grant leave for belated document production remains discretionary, exercised judiciously by the courts after evaluating the unique circumstances of each case, ensuring that procedural rigor does not overshadow the fundamental pursuit of truth and justice. Therefore, while preparing for a commercial suit, it is advisable for parties to meticulously compile and disclose all relevant documents in their possession or power along with their initial pleadings to avoid potential procedural hurdles later in the litigation.

Citations

1. Darrammek Hotels and Developers Private Limited v. Brilltech Engineers Private Limited ( CM(M) 2333/2024 & CM APPL. 21568/2024)
2. Khurmi Associates (P) Ltd. vs. Maharishi Dayanand Co-Operative Group Housing Society 2022 SCC OnLine Del 1011
3. Agva Healthcare Private Limited v. Agfa-Gevaert NV 2023 SCC OnLine Del 7914
4. Sugandhi (Dead) by Legal Representatives v. P. Rajkumar (2020) 10 SCC 706
5. Columbia Sportswear Company vs Galaxy Footwear Pvt Ltd CS(COMM) 1611/2016
6. Sudhir Kumar @ S. Baliyan vs. Vinay Kumar G.B (2021) 13 SCC 71
7. Societe Des Produits Nestle S.A. and Another Vs Essar Industries & Ors CS(Comm) 587 of 2016

Expositor(s):  Adv. Archana Shukla