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Smart Summary

Factual and Procedural Background

The plaintiff and five defendants entered into a partnership on October 17, 1950, for the business of builders and contractors. The partnership undertook three government contracts before August 31, 1952. On that date, the plaintiff executed an agreement retiring from the partnership, which included a final settlement amounting to approximately Rs. 700. The plaintiff filed the present suit on April 28, 1954, seeking a declaration that the retirement agreement dated August 31, 1952, was void due to undue influence, pressure, and coercion exerted by the defendants. He also sought cancellation of the document and declared that certain credit, debit items, and payments mentioned therein were neither owed nor received by him, as no accounts were settled on that day. The defendants contested the suit. The trial court framed several issues including whether the retirement agreement was executed under coercion, whether accounts were gone into at the time of the agreement, and whether certain sums were due or paid, among others.

Before evidence was led, the plaintiff applied under Order 11, rules 12 and 14 of the Civil Procedure Code for discovery and inspection of the partnership account-books. The defendants opposed the application but were ordered to discover the documents on oath. Upon discovery, the defendants applied under Order 11, rule 20, seeking deferment of inspection until the decision on issue No. 1, which concerns the plaintiff's right to inspect the accounts. The trial court dismissed this application, holding that the account-books were material evidence for issues Nos. 1 and 2 and that inspection could not be deferred. The defendants filed the present revision petition challenging this order.

Legal Issues Presented

  1. Whether the trial court erred in refusing to defer inspection of the partnership account-books until the determination of issue No. 1 concerning the plaintiff's right to inspect the accounts.
  2. Whether the trial court failed to judicially exercise its discretion under Order 11, rule 20, Civil Procedure Code, in ordering inspection of documents before establishing the plaintiff’s right.
  3. Whether inspection of the partnership account-books at this stage is necessary for the fair disposal of the suit or to save litigation expenses.

Arguments of the Parties

Plaintiff's Arguments

  • The plaintiff argued that inspection of the partnership account-books was necessary at this stage because it might reveal material relevant to proving issue No. 1 (whether the retirement agreement was executed under coercion and undue influence).
  • He relied on the principle that a party has the right to obtain documents from the adversary if they are relevant to the case at any stage, citing the case Sutherland v. Singhee Churan Dutt.
  • The plaintiff contended that inspection should not be denied except for strong reasons, emphasizing the potential relevance of the account-books to his case.

Defendants' Arguments

  • The defendants contended that the inspection should be deferred until issue No. 1 was decided, as the plaintiff’s right to inspect the accounts as a partner had not yet been established.
  • They argued that the documents were not referred to in their written statement and that the coercion alleged by the plaintiff was unrelated to the partnership accounts.
  • The defendants asserted that allowing inspection prematurely would amount to a fishing expedition and could be used to harass them.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
K.V Ramachari v. K.V Krishnamachari, I.L.R 47 Mad. 934 Inspection of adversary's documents is not a matter of routine; must be judicially decided considering stage of case and harm to parties. The Court agreed with the principle that inspection must be granted only after judicial discretion and not as a routine matter, emphasizing protection against harassment.
Gobinda Mohun Roy v. Magneram Bangur & Co., A.I.R 1940 Cal. 331 Power of revision under section 115, Civil Procedure Code, to interfere with trial court orders on discovery and inspection. The Court relied on this precedent to justify interference with the trial court’s order which failed to judicially exercise discretion.
Sutherland v. Singhee Churan Dutt, I.L.R 10 Cal. 808 Documents are material if they may reasonably be thought relevant to an issue to be raised at hearing. The Court acknowledged this principle but found it inapplicable here as the alleged coercion was unrelated to partnership accounts.
Compagnei Financiere du pacifique v. Peruvian Guano Co., 1883 11 Q.B.D 55 Documents that may contain information to advance a party’s case or damage adversary’s case are subject to discovery. The Court noted this general principle but emphasized the need for judicial discretion and relevance to the issues in the suit.
Whyte v. Ahrens, 1884 26 Ch. D. 717 Inspection allowed before trial where fraud was alleged and accounts were material to the case. The Court distinguished this case, noting that in the present case, the alleged coercion was unrelated to partnership accounts, making inspection premature.

Court's Reasoning and Analysis

The Court analyzed the statutory framework under Order 11, rules 12, 14, 15, 18(2), and 20 of the Civil Procedure Code, emphasizing that discovery and inspection orders must be granted judiciously and not as a matter of routine. The Court highlighted that such orders are intended to facilitate fair disposal of suits and reduce litigation expenses but must be balanced against potential prejudice to the party required to disclose documents.

In the present case, the Court found that the trial court failed to judicially exercise its discretion when it ordered inspection of the partnership account-books before issue No. 1 was decided. The trial court did not consider whether inspection was necessary at that stage or whether the documents were relevant to the alleged coercion, which was independent of partnership affairs.

The Court rejected the plaintiff’s contention that inspection should be allowed as a matter of right at any stage, noting the risk of harassment and fishing expeditions in the Indian context. The Court also observed that the plaintiff’s refusal to limit inspection to a relevant period raised suspicion about the bona fides of the plaintiff’s request.

Ultimately, the Court concluded that the inspection order was made without proper judicial discretion, rendering it illegal or irregular, and that the revision petition should be accepted to set aside the trial court’s order.

Holding and Implications

The Court accepted the revision petition and set aside the trial court’s order dated February 4, 1955, which dismissed the defendants' application to defer inspection of the partnership account-books.

The direct effect is that the plaintiff is not entitled to inspect the partnership account-books before the determination of issue No. 1 regarding his right to inspect such accounts. The Court emphasized the necessity of judicial discretion in discovery and inspection matters to prevent misuse and harassment. No new precedent was established; rather, the decision reaffirmed the importance of judicial discretion under the relevant provisions of the Civil Procedure Code.

    Lajpat Rai v. Tej Bhan Etc.

    Bishan Narain, J.:— This revision petition under section 115, Civil Procedure Code, has been filed by the defendants in a suit which is pending in the Court of Sub Judge 1st Class, Delhi. The plaintiff and the five defendants entered into a partnership on certain terms on the 17th of October, 1950. The business of partnership was to be that of builders and contractors. The partnership took three contracts for execution from the Government before the 31st of August, 1952. On this date namely, the 31st of August, 1952 the plaintiff Tej Bhan executed an agreement retiring from the partnership and according to this document he went through the accounts and deceived about Rs. 700 in final settlement of the same. The plaintiff filed the present suit on the 28th of April 1954 seeking a declaration that the document of the 31st of August, 1952 is void as brought about by the defendants by undue influence, pressure and coercion and sought its cancellation. He also sought relief of declaration that the credit and debit items and payment of Rs. 783/9/- mentioned in the document were neither owned nor received by him as no accounts had been gone into between the parties on that day. This suit is contested by the defendants. On the 25th of November, 1954 the trial Court framed the following issues:—

    (1) Whether the agreement of retirement dated 31st August, 1952 was executed by the plaintiff under coercion and undue influence as alleged in the plaint? O.P.P

    (2) Whether no accounts were gone into by the parties at the time of the writing of the agreement Exhibit P. 1? O.P.P

    (3) Whether a sum of Rs. 23,000 was not found due from the plaintiff and adjusted in the account as stated in Exhibit P. 1? O.P.P

    (4) Whether a sum of Rs. 788/9/- was not paid in cash to the plaintiff as stated in Exhibit P. 1? O.P.P

    (5) Whether the plaintiff is estopped from filing this suit by his acts and conduct? O.P.P

    (6) Whether the defendants are entitled to special costs? If so to what amount? O.P.D

    (7) Relief.

    2. Before any evidence was led in the case the plaintiff applied under under 11, rules 12 and 14, Civil Procedure Code, for discovery and inspection of account-books of the partnership. The defendants contested this application but on the 30th of December 1954 the Court passed a short order reading—

    “The defendant to discover the documents on oath on 13th January, 1954 (?) 13th January, 1955.”

    3. On this date the defendants discovered the documents and made an application under Order 11, rule 20, Civil Procedure Code, requesting the Court that the inspection may be deferred till the decision on issue No. 1 which will decide the plaintiff's right to ask for rendition of partnership accounts. The plaintiff replied on the 4th of February 1955 and on that day the trial Court passed the order reading—

    “The discovery and production of the account-books relating to the partnership is material for the proof of issues Nos. 1 and 2. Therefore the application of the defendants is dismissed because the question of discovery and production of the accounts-books of the firm cannot be deferred till issue No. 1 is decided. But the plaintiff shall give detailed particulars of the books of accounts and the documents sought to be produced by the defendants.”

    4. And it is against this order that the present revision petition has been filed. Now, it cannot be doubted that in certain circumstances it may fee necessary to afford facilities to a party to the suit to prove his case or to demolish his opponent's case by allowing him to have access to the documents in the possession or in the power of the opponent and the provisions of Order 11, rules 12 to 20, have been enacted to give the necessary power to Courts. A party is entitled to claim inspection of documents mentioned in the opponent's pleadings (vide Order 11, rule 15), but if the opponent refuses to comply with this notice then the Court may fix time and place for inspection of the same provided it is of the opinion that the order is necessary for fair disposal of the suit for saying costs of litigation (vide Order 11 rule 18(2) As or the documents that are not mentioned in the pleadings a party may apply under Order 11, rule 12, or Order 11, rule 18(2) Civil Procedure Code, but the application cannot be granted unless the Court is of the opinion that the discovery or inspection is necessary for fair disposal of the suit or for saving costs. The Court may defer an order under Order 11, rule 12, Civil Procedure Code, if it is satisfied that such discovery is not necessary at that stage of the suit. If a party from whom discovery or inspection is sought objects to the same, the determination of any issue or question in dispute or for any other reason it is desirable to do so till that issue or question is decided (vide Order 11, rule 20).

    5. Therefore, it is dear that the intention of the legislature in enacting these provisions of law is to empower courts to require a party's adversary to give discovery or inspection of ??? documents if such an order is considered necessary in the interests of fair disposal of the suit or to reduce litigation expenses. The primary object of these provisions is to save costs and to assist Courts in the administration of justice. It necessarily follows that the Court concerned must judicially exercise its discretion keeping the object of these provisions of law in view. An order granting discovery and inspection may in some cases result in serious prejudice and injury to the party that has to comply with it and, therefore it is necessary that the Court should apply its mind carefully before making the order. It is not the intention of the legislature that such an order should be made as a matter of routine and as one of no serious consequence. The Courts, when moved under these provisions of law must first decide whether the documents of which discovery or inspection is sought relate to any question in the suit and then decide if it is necessary to grant the application at that stage of the suit in the interests of its fair disposal or to save litigation expenses. The discretion vested in Courts must be exercised judicially to further the primary object of these provisions and care must be taken that they are not used with an ulterior motive. Obviously, the decision rests on the circumstances of each case and it is not possible lay any hard and fast rule in this matter.

    6. I am unable to accept the contention of Mr. Chawla that a party has a right to obtain an order of discovery and inspection and that in any case it must be granted by Courts unless cogent reasons are shown against it. This contention is not in accord with the language used by the legislature in enacting these provisions of law. It may be that in England or in other countries it is well established that this right should be granted as a matter of routine, but considering the conditions prevailing in this country it appears to me to be dangerous to hold that such a right should be considered to have been established in this country. It is well known that litigants here are as much interested in securing a decision of the suit in their favour as in harassing their opponents and in compelling them to incur heavy expenses. Such a right can easily become a handy weapon which may be used by unscrupulous litigants merely to harass or annoy their opponents. I am in respectful agreement with the following observations of Wallace J. in K.V Ramachari v. K.V Krishnamachari . I.L.R 47 Mad. 934, at p. 941., at p. 941, para 10:

    “I must impress on the lower Court that such a privilege as inspection by a party of his adversary's documents is not a matter of routine, but is to be permitted or refused only after a judicial decision not only as to the right to inspection itself, but with reference also to the stage of the case at which such right is to be permitted, and that it is to be exercised so as to result in as lit the harm as possible to parties who are entitled to have the protection of the Court in carrying on their lawful pursuits.”

    7. Now, in the present case the plaintiff desires discovery and inspection of the partnership account before any evidence is led in the case. It is nobody's case that the defendants referred to these documents in their written statement. The order on the plaintiff's application under Order 11, rules 12 and 14, Civil Procedure Code is dated the 30th of December 1954 and has been reproduced above. In this order there is no reference to the defendants' objections dated the 28th of December 1954 and in any case it does not give any reason for exercising the discretion vested in the Court in favour of the plaintiff. The order appears to have been made as a matter of routine. The defendants however, had complied with this order and had given discovery of the documents on the 13th of January 1954 as ordered. The defendants then applied on the same day under Order 11, rule 20 Civil Procedure Code, objecting to the inspection of the account-books by the plaintiff before issue No. 1 was decided and before the plaintiff established his right, as a partner to inspect accounts. The trial Court dismissed this application on the 4th of February 1959 and observed that the account-books are material evidence for the decision of issues Nos. 1 and 2 and that there is no reason for deferring the decision of the application till issue No. 1 is decided. It will be noticed that this is not a correct approach to the case. There is no reference in the order as to whether the inspection of these books at that stage was necessary or not. No reason is given for refusing to reserve the order till issue No. 1 had been decided. It is, therefore, clear that the trial Court making this order did not judicially examine the defendants' objection to it, nor did it decide whether issue No. 1 should or should not be decided before the inspection of the account-books was allowed to the plaintiff. In these circumstances it appears to me that this Court has ample power to interfere with the order under revision and accordingly I reject the plaintiff-respondent's objection that this Court has no power under section 115, Civil Procedure Code, to interfere with the order. Clearly, the Court did not judicially exercise the discretion vested in it under Order 11, rule 20 and therefore, it acted illegally or with material irregularity in the exercise of its jurisdiction. In this connection the judgments reported in K.V Ramachari v. K.V Krishnamachari, and Gobinda Mohun Roy v. Magneram Bangur & Co. . A.I.R 1940 Cal. 331., may be seen. In these cases the learned Judges interfered with suet an order under section 115, Civil Procedure Code.

    8. As for the merits the learned counsel for the plaintiff respondent in his able arguments has urged that the inspection of there books is necessary at this stage because after inspection the plaintiff may discover some material which is relevant or may be relevant for the proof of issue No. 1. He argued that a party has a right to get documents produced by his adversary, for they are relevant to the case at any stage and that Court should not deny this right except, as I have already mentioned, for strong reasons in support of his argument he has placed his reliance on the judgment in Sutherland v. Singhee Churan Dutt . I.L.R 10 Cal. 808., wherein it is observed regarding the documents sought to be discovered and inspected.—

    “*** whether the contract, if made, is voidable on the ground of misrepresentation, they are or they probably are, or they may be, material to the defendant's case, so far as I can judge from the correspondence, I should think it probable that they are material I do not like saying more than that; it is not the time to construe the letter of October 6th. But it is enough if they may reasonably he thought material to an issue which must, be raised at the hearing.”

    9. Mr. Chawla has also relied on the observations of Brett J. in Compagnei Financiere du pacifique v. Peruvian Guano Co. . 1883 11 Q.B.D 55. which is cited with approval by Edgley J. in Gobinda Mohun Roy v. Magneram Bangur & Co.. The observation reads—

    “It seems to me that every document relates to the matters in question in the action which not only would be evidence upon any issue, but also which it is reasonable to suppose contains information which may, not which must, either directly or indirectly enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary.”

    10. Thus according to Mr. Chawla the inspection of the account-books should be allowed inasmuch as it is possible on inspection to discover that the entries in the account-books do not tally with the recitals in the impugned documents. According to him, if such an evidence becomes avilable to the plaintiff then it would be relevant for the purposes of showing that the document was brought about by coercion etc. and for this purpose, according to him, it is necessary to examine the account-books from the inception of the partnership till the contracts undertaken by the partnership before the 31st of August, 1952 were completed. It is, however, to be noted that in the plaint the fraud and coercion, which are alleged by the plaintiff, have nothing to do with the affairs of the partnership and the allegations are independent of it. In para 5 of the plaint it is alleged that the defendants brought to bear undue pressure on the plaintiff if he did not severe his connection with the partnership in view of the fact that the M.E.S Western Command Department had appointed a Court of Enquiry to investigate into the complaints against the plaintiff regarding transactions which had nothing to do with the partnership in suit. Thus, as I have stated, the coercion alleged is independent of the partnership now in suit. In these circumstances it cannot be said that it can be reasonably thought that the entries in the account-books are material to issue No. 1 framed in the present suit. I suggested in the course of arguments that the plaintiff may inspect the account-books from the 1st of April 1952 to the 31st of August 1952 but this suggestion of mine was not accepted by Mr. Chawla. This rejection makes me suspicious of the bona fides of the plaintiff. Mr. Chawla relied on certain cases in which inspection was allowed before the trial began and placed particular reliance on Whyte v. Ahrens . 1884 26 Ch. D. 717.. In that case, however, the plaintiff, resident of London, had alleged fraud on the ground that his agent in, Japan sent false accounts and defrauded him and, therefore, the settled accounts between the parties should be reopened. Obviously, in such a case the entries in the agent's books are very material for the decision of the case. Even in that case Fry L.J, took a view different from the view taken by Bacon, V.C, and Cotton, L.J In the present case the plaintiff wishes to inspect the books with a view to fish Out, if possible, some possible entries in the account-books in support of his case and I for one would not encourage such a fishing enquiry. I am, therefore, of the opinion that this is not a case in which the Court should have allowed inspection of the partnership books before the trial had begun and before the plaintiff had made out a case that the inspection was necessary for the purposes of fair disposal of the case and for saving litigation expenses. I accordingly accept this petition and set aside the Court's order dated the 4th of February 1955 dismissing the defendants' application under Order 11, rule 20, Civil Procedure Code. There will be no order as to costs. The parties have been directed to appear before the trial Court on 8th October, 1956.

    11. Petition accepted.

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    Lajpat Rai v. Tej Bhan Etc.
    (Aug 31, 1956)