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Ram Hari De v. Niranjan Krishna Das & Co.
Judgment Summary
Factual and Procedural Background
The Petitioner applied under Order 11, rule 14 of the Civil Procedure Code for an order that all books of account of the Respondent firm covering the period 1 May 1943 to 7 May 1946 be delivered into the custody of the Court Registrar and that the Petitioner be permitted to take photographs of relevant entries. The Petitioner alleged that he had been engaged by the Respondent (a stock-broking firm) as an under-broker from about May 1943 on terms that he would introduce customers, be liable for default by those customers, and receive 50% of the commissions on transactions with such customers.
The Petitioner introduced one Kali Pada Mukherjee, who on 28 August 1943 sold 100 shares of the Indian Iron and Steel Co., Ltd. to the Respondent firm. In February 1945 the Respondent allegedly represented that Mukherjee had defaulted and, on that representation, the Petitioner delivered 100 shares on 9 March 1945, which were treated as delivered on Mukherjee's behalf. The Petitioner contends Mukherjee had actually delivered those 100 shares to the Respondent on 28 September 1943. The Petitioner asked for return of the shares but alleges the Respondent failed to return them, resulting in a loss of Rs. 2,659-6-0. The Petitioner also sued for Rs. 2,902-15-0 as the balance of under-brokerage commission (for May 1943 to 7 May 1946) and damages for loss of custom and reputation.
The suit was instituted on 20 May 1946 and the Notice of Motion for production was taken out on 21 May 1946, before any written statement had been filed or discovery ordered. The Petitioner’s affidavit stated that the Respondent’s books would show details of the Mukherjee transaction and the amount of under-brokerage commission, and that the Petitioner apprehended the Respondent might alter, secrete or otherwise deal with the books unless restrained.
The Respondent, in affidavit, admitted that Mukherjee delivered the shares on 28 September 1943 and that payment was made by cheque on that day, but explained that no remark was entered against the earlier contract because the Petitioner had not returned the receipted bill — resulting in a mistake. The Respondent further stated that it could not determine commission due without checking accounts and alleged that on a full account a large sum would be due from the Petitioner after crediting the price of the 100 shares. The Respondent admitted control of the books and that the books were likely to contain entries relevant to the suit.
Legal Issues Presented
- Whether an order for production under Order 11, rule 14 must follow an affidavit of documents/order for discovery under Order 11, rule 12, or whether it can be made prior to such steps.
- Whether the Court has any discretion in making an order for production under Order 11, rule 14, or is bound to make the order if the documents are in the possession of another party and relate to the matter in question (subject to privilege).
Arguments of the Parties
Petitioner's (Applicant's) Arguments (as advanced by Mr. H. C. Majumdar)
- Order 11, rule 14 should be exercised as of right: when documents relating to the matter in question are in another party's possession and are not privileged, the Court must order production (no judicial discretion to refuse).
- Relied on English authority Bustros v. White and the Bombay High Court decision in Wallace v. Jefferson to support the proposition that the rule confers no discretionary power to refuse production.
- Emphasised the phrase "it shall be lawful" in Order 11, rule 14 and relied on In re: Neath and Brecon Railway Co. to argue that those words should be construed as making it effectively unlawful to refuse production.
Respondent's Arguments (as advanced by Mr. Das Gupta)
- Contended that an order for production under Order 11, rule 14 must follow the affidavit of documents/order for discovery under Order 11, rule 12 (i.e., that production cannot precede discovery/written statement).
- Cited the Patna High Court decision in Baidya Nath v. Bholanath Roy in support of that contention; however, that case did not decide the point because production was ordered by consent.
- Alleged that a proper accounting might show sums due from the Petitioner and that production at that stage was contrary to the law and practice of that Court (this allegation of practice was not denied by the Petitioner).
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Baidya Nath v. Bholanath Roy | Cited by Respondent to support the proposition that production should not precede discovery/written statement. | The Court observed the Patna case did not decide the point because production was ordered by consent; therefore it was not treated as authority for the proposition relied upon. |
| Bustros v. White | English authority said to hold that under the corresponding rule a judge had no discretion to refuse production of documents (if not privileged). | The Court examined this case closely. It noted that the decision rested on established Chancery practice following the Judicature Act and that the rule's interpretation had been shaped by that practice. The Court declined to adopt Bustros v. White as mandating a no-discretion rule in the present context because no uniform practice in this Court required that construction. |
| Wallace v. Jefferson | Bombay High Court decision cited as supporting adoption of the English rule (Bustros) for the corresponding provision in the Code. | The Court noted Wallace v. Jefferson advised adopting Bustros v. White for construction of the corresponding section but observed that later Indian decisions showed differing approaches; accordingly Wallace was not treated as decisive here. |
| Union Bank of London v. Manby | Illustrative of a case where production was ordered before defence was delivered and a discussion of whether such production ought to be routine. | The Court cited the case to show that historic practice sometimes led to early production orders, but that earlier judges had acknowledged reasons why production immediately might not be appropriate in all cases. |
| Vishnu Yeshawant Wagh v. New York Life Insurance Co. | Indian decision holding that under the corresponding section the Court possessed a discretion to order production and that the discretion should be exercised according to practice. | The Court relied on this decision to show that Indian authorities had treated similar provisions as conferring discretion; this supported the conclusion that Bustros v. White did not automatically require a no-discretion rule in India. |
| Re: New Port Bridge | Authority on the construction of the words "it shall be lawful," indicating those words prima facie import discretion. | The Court cited it for the proposition that the phrase generally confers a power (i.e., is enabling) unless context shows Parliament intended to make exercise of the power obligatory. |
| Julius v. Bishop of Oxford | Discussion of the effect of the words "it shall be lawful" — that they confer a faculty or power but do not of themselves create a duty; circumstances may couple power with duty. | The Court used the observations of Lord Cairns and Lord Penzance in this case to analyze whether the phrase in Order 11, r. 14 imposed a duty or merely conferred a power to be exercised in discretion. |
Court's Reasoning and Analysis
The Court addressed the two central points sequentially.
First issue (Order 11, r. 14 vis-à-vis r. 12):
The Court concluded that an order under Order 11, rule 14 is not contingent on a previous order under rule 12 (affidavit of documents/discovery) and that r.14 can be invoked at any time during the pendency of the suit. The Court relied on the text of the rule itself — notably the phrase "at any time" — to infer that the legislature intended no temporal limitation on when the Court could make an order under r.14. The Court observed that the order under r.14 is distinct in purpose from an order for discovery under r.12 and may be made either on application or suo motu when the rule's conditions are satisfied.
Second issue (whether the Court has a discretion to refuse production):
The Court examined authorities both English and Indian. It noted that Bustros v. White (an English decision) held that under the corresponding Judicature rule a judge had no discretion to refuse production of documents (subject to privilege). However, that English decision reflected and relied upon the historical practice of the Chancery Courts and the terms of the earlier statutory scheme; its holding was intertwined with that established practice.
The Court reviewed later Indian decisions and practice. It observed that Wallace v. Jefferson had advised adopting the English rule, but a later Bombay decision (Vishnu Yeshawant Wagh v. New York Life Insurance Co.) considered the corresponding provision to confer discretion to be exercised according to practice. The Court found there was no established practice in its own Court denying it discretion under r.14. The Respondent's allegation as to local practice had not been denied by the Petitioner.
The Court then turned to the statutory language. It analysed the phrase "it shall be lawful" in the rule. Relying on authority (including Re: New Port Bridge and Julius v. Bishop of Oxford), it held that the words prima facie confer a power (i.e., are enabling) and do not of themselves create a duty to act. Although in particular contexts those words might be construed as obligatory (if the surrounding statutory scheme made refusal impossible), nothing in the context of Order 11, rule 14 demonstrated that the provision imposed such a duty.
Consequently, the Court held that Order 11, rule 14 confers a discretionary power on the Court to order production of documents; it is not an absolute right enforceable as a matter of course in every instance where documents are in another party's possession and relate to the matter in suit.
Application of the discretionary standard to the facts:
Although the Respondent admitted control of the books and the Court considered that the books were likely to contain relevant entries, the Court noted shortcomings in the Petitioner’s case: the Petitioner did not state the grounds upon which his apprehension of alteration or suppression of the books was based. Having considered the pleadings and affidavits, the Court was not satisfied that the circumstances warranted exercise of its discretion to order production in the manner sought. On that basis, the Court refused to make the production order and dismissed the application, awarding costs.
Holding and Implications
Core Ruling: APPLICATION DISMISSED — the application under Order 11, rule 14 for delivery into court custody of the Respondent's books and permission to photograph relevant entries is dismissed, with costs.
Implications:
- Direct effect: The Petitioner's motion for production/delivery of the Respondent's books into the custody of the Registrar and permission to photograph entries is refused; the application stands dismissed with costs.
- Legal/interpretive guidance: The Court held two principal legal points:
- Order 11, rule 14 may be invoked at any time during the pendency of a suit and is not dependent on a prior order for discovery/affidavit under Order 11, rule 12.
- The phrase "it shall be lawful" in Order 11, rule 14 is enabling rather than peremptory in the context of the rule; the rule confers a discretionary power on the Court to order production of documents rather than creating an absolute, non-discretionary right to production in every instance.
- Practical consequence: A party seeking production under Order 11, rule 14 must persuade the Court, in the exercise of its discretion, that the circumstances justify such an order (for example, by demonstrating credible grounds for apprehension of interference with documents or other strong reasons). Mere possession of relevant documents by the other party is not, by itself, an automatic entitlement to production without regard to the Court's discretion.
Solicitor noted in the record: A. N. Bose for the Applicant.
The Judgment of the Court was as follows:
1. The Petitioner in this case has asked for an order under Or. 11, r. 14 of the Civil Procedure Code that all books of account of the Respondent firm relating to the period between May 1st, 1943, and May 7th, 1946, be delivered to the custody of the Registrar of this Court and that he may be allowed to have the photograph of the relevant entries in those books and for other reliefs.
2. The Petitioner alleges that in or about May, 1943, the Respondent firm, which carries on business as stock brokers, engaged him as an under-broker on the terms and conditions that the Petitioner should introduce customers and be answerable to the Respondent firm for the default of such customers and he would get 50 per cent, of the commissions earned on transactions between the Respondent firm and such customers. As an under-broker he introduced one Kali Pada Mukherjee to the Respondent firm, who on the 28th August, 1943, sold to the Respondent firm 100 shares of the Indian Iron and Steel Co., Ltd. In February, 1945, the Respondent firm represented to the Petitioner that there was a default by Kali Pada Mukherjee who did not deliver 100 shares of Indian Iron and Steel Co., Ltd. and on such representation the Petitioner had to deliver 100 shares of Indian Iron and Steel Co., Ltd., on the 9th March, 1945, and the same was treated as delivery for and on behalf of the said Kali Pada Mukherjee. In fact the said Kali Pada Mukherjee had already delivered the 100 shares to the Respondent firm on the 28th September, 1943. The Petitioner thereupon asked for the return of the shares delivered by him but the Respondent firm failed and neglected to deliver the said 100 shares. As a result thereof the Petitioner suffered loss of Rs. 2,659-6-0.
3. The Petitioner instituted this suit on 20th May, 1946, against the Respondent firm for the recovery of the said sum of Rs. 2,659-6-0, as also the sum of Rs. 2,902-15-0 being the balance of under-brokerage commission due to the Petitioner between May, 1943 and 7th May, 1946, and damages for loss of custom and reputation.
4. The Notice of Motion was taken out on the 21st May, 1946, when no written statement had been filed or discovery made. The case made out by the Petitioner in his affidavit in support of the said notice is that the details of the transaction of Kali Pada Mukherjee and the amount of under-brokerage commission would appear from the relevant books of account of the Respondent firm and that he apprehends that the Respondent firm may interfere, alter, secrete or otherwise deal with the books of account or entries herein unless promptly prevented.
5. The Respondent firm in its affidavit in opposition admitted that Kali Pada Mukherjee did in fact deliver the shares on the 28th September, 1943, and it paid off the price on the same day by a cheque but as the Petitioner did not return to the Respondent firm the receipted bill in respect of the said shares and so no remark was entered in the remark column in respect of the contract of the 28th of August. This occasioned a mistake. It further alleged with regard to the claim of the Petitioner for underbrokerage commission that without going through the accounts it could not be said what amount was clue to him and that there were certain outstanding deliveries in respect of the transactions entered into between the customers introduced by the Petitioner and the Respondent firm and on full account being taken a large sum would be found due from the Petitioner to the Respondent firm, after giving credit for the price of the 100 shares delivered by the Petitioner as mentioned above.
6. On these facts this application has been made but the Petitioner does not mention any grounds on which his apprehension regarding the alteration of the books of account as already referred to is based.
7. It is, however, admitted by the Respondent firm that the books in question are in their control or power. From the facts as alleged it appears to me that those books are likely to contain entries relating to the matters in question in this suit.
8. Or. 11, r. 14 provides as follows:—
“It shall be lawful for the Court at any time during the pendency of any suit to order the production by any party thereto, upon oath, of such of the documents in his possession or power relating to any matter in question in such suit as the Court shall think right; and the Court may deal with such documents when produced, in such manner as shall appear just.”
9. Arguments have been addressed at length, on both sides with regard to the scope and application of this rule, and the points that arise for consideration on the argument are:—
(a) whether an order for production under Or. 11 r. 14 must follow an order as to affidavit of documents which is dealt with by Or. 11, r. 12 of the Code or can precede it.
(b) whether the Court has any discretion in the matter of making the order of production of the documents or ft is bound to make the order at the instance of the party provided the documents are in the possession of another party and they relate to the matter in question.
10. With regard to (a) above—No. Indian case was cited where with reference to Or. 11, r. 14 the question in the present form had been decided. The only case on the point cited by Mr. Das Gupta in support of his contention on behalf of the Respondent was a decision of the Patna High Court in Baidya Nath v. Bholanath Roy(1). Although the identical point was raised it was not required to be decided as the order for production was ultimately made by consent of parties. In my judgment the order to be made under Or. 11, r. 14 is not dependent upon any prior order being made under r. 12. From an examination of the rules that precede and follow r. 14, it is clear that the order for production under r. 14 is an altogether different matter and distinct from an order for discovery and can be made by the Court at any time either on the application of a party or suo motu, provided the requisite conditions under the rule are satisfied. The use of the words “at any time” in the rule indicates that the legislature intend-ed that there should be no limitation with regard to the point of time when the order could be made. If it was otherwise then the rule should have been appropriately worded. To give effect to the contention of Mr. Das Gupta would in my opinion be putting an unjustified restriction on the plain language of that rule. Consequently I am of opinion that the Court has power to make the order under Or. 11, r. 14 even before the written statement is filed or the order for discovery is made.
11. Regarding (b):— Mr. H.C Majumdar on behalf of the Petitioner contends that a Judge has no discretion in the matter of making an order for production of documents in the possession of another party provided they relate to the matter in question and are not privileged. In support of that contention he has relied upon an English decision: Bustros v. White(2) and a decision of the Bombay High Court in Wallace v. Jefferson(3).
12. He also contends that the words “it shall be lawful” in Or. 11, r. 14 are significant and they mean in substance that it shall not be lawful to do otherwise. He relies upon the decision In re: Neath and Brecon Railway Co.(4) for the purpose and maintains that it is incumbent upon this Court to make an order for production and to do otherwise would be unlawful.
13. As the foundation of Mr. Majumdar's argument is the case of Bustros v. White, it is necessary to examine that case minutely in order to find out what is the principle enunciated therein and whether it should be applied in the interpretation of Or. 11, r. 14 of our Code. That case was decided upon Or. 31, r. 11 of the Rules under Judicature Act (38 & 39 Vict., c. 77) which corresponds to Or. 31, r. 14 of the present Supreme Court Rules. Or. 11, r. 14 of cur Code again is identical with Or. 31, r. 14 of the present Supreme Court Rules. Sir George Jessel, M.R, held in that case that under Or. 31, r. 11 a Judge has no discretion as to refusing to allow, at the instance of one party to the action, the production of documents in the possession of another party relating to the matter in question provided the documents are not privileged. The reasons for such decision are to be found in his judgment which I quote below:—
“The rule which governs the practice under the Judicature Act is the 11th Rule of Or. XXXI. . . . . . It is to be observed that this rule was copied from sec. 18 of 15 and 16 Vict. C. 86 which settled the practice of the Court of Chancery which obtained from the year 1852 until last year when the Judicature Act came into force and enacted, what should be the practice by which both Common Law & Equity Courts should be governed …… It was decided soon after the passing of the Act 15 & 16 Vict. C. 86 that see. 18 did not alter the Rules of the Court of Chancery as to the right to production of documents and did not conifer any discretionary power on, the Judges; but the right remained unaffected and was exercisable at the option of the parties where no privilege could be established. The fact of the rule being copied from the Act of course makes it incumbent upon us to give it the same interpretation as that which has already been fixed by judicial decision upon the terms used; and, therefore even were our opinion different from what it is as to the construction of the Rule standing alone we should not be at liberty to put any other construction upon it than that which had been so long adopted. Besides this it was to be observed that under see. 35 sub-sec. 11 of Statute 36 & 37 Vic. C. 66 (i.e, the Judicature Act) if there be any difference between the practice of the Courts of Law and Equity the practice of the Courts of Equity will prevail.”
14. It seems that what prevailed upon, the learned Judge in deciding the case were that judicial decisions made soon after the passing of the Act 15 & 16 Vic, c. 86 of 1352 by which the terms used in the said Act were interpreted in a manner so as to bring them in conformity with the then existing practice in Equity Courts and also the continuance of that practice ever since in Chancery Courts. He accepted the interpretation of the rule according to the construction which for a long period of time was put upon it on the principle of Optima legum interpres consuetude
15. In 1879 in an action for redemption against the mortgagee in possession [Union Bank of London v. Manby(5)], James, L.J, while making an order for production of, documents before defence was delivered, observed that although there was a great deal to be said in support of the proposition that it ought not to be a matter of course for a Plaintiff to rush in at once with an application for production as soon as his claim has been delivered and the Court ought to have the power of saying that it will refuse production but in a suit of that description where there could be no doubt what the matter in question was, there appeared to be no reason why common order for production should not be made at once. It thus appears that at the time when these cases were decided the order for production was a common order having regard to the prevailing practice and the interpretation given of the rules then existing under the Judicature Act. My attention has not been drawn to any Indian decision when the application of the principle of Bustros v. White to Or. 11, r. 14 of Civil Procedure Code was considered except the case of Wallace v. Jefferson. There the Court in deciding an application for inspection of certain documents under sec. 130, C.P.C, of 1877, observed that ……” In Bustros v. White it was decided that under Or. 31, r. 11 of the rules under the Judicature Act a Judge had no discretion as to refusing to allow the production of documents in possession of a party and as sec. 130, C.P.C 1877, appears to have been copied from Or. 31, r. 11 of the rules under Judicature Act, it was advisable to adopt the English ruling for its construction.” That case was decided in 1878. But nn a later case in 1905 [Vishnu Yeshawant Wagh v. New York Life Insurance Co.(6)] in an application under sec. 130, C.P.C of 1882, the same High Court held that under that section the Court did possess a discretion but that discretion was to be exercised according to the practice of the Court. Though it does not appear from the report if any reference was made in course of the trial to the case of Bustros v. White there does not seem to exist, in my opinion, any fundamental difference in the principle enunciated therein though there is some apparent difference. In Bustros v. White it was held that the rule gives no discretion because practice was otherwise, while in the Bombay case it was that the rule gave a discretion but it was to be exercised having regard to the practice. It appears that the deciding factor in both the cases for interpreting the rules had been the existing practice. I do not know what practice prevailed in Bombay in 1878 or whether having regard to the then existing practice there, the decision in Wallace v. Jefferson was given under sec. 130, C.P.C, 1877. I am not therefore prepared to rely upon that decision for my purpose. The decisions in Bustros v. White and the laiter Bombay case could serve as guidance for interpreting Or. 11, r. 14, C.P.C only when there is a uniform or established practice.
16. I have made enquiries and ascertained that there is no established practice in this Court which denies the Court a discretion in the matter of making an order for production under Or. 11, r. 14, C.P.C Moreover in his affidavit in opposition the Respondent alleged that the order asked for is contrary to law and practice of this Court and this allegation as to practice has not been denied by the Petitioner in his affidavit in reply. I shall therefore have to construe the language of Or. 11, r. 14, C.P.C “According to the intent of them that made it” independently of any question of practice.
17. The important words in Or. 11, r. 14, C.P.C that determine the power of the Court are the words “it shall be lawful.” Prima facie these words import discretion and they have been judicially construed as discretionary unless there be anything in the subject-matter to which they are applied or in any other part of the statute to show that they are meant to be imperative. [In Re: New Port Bridge(7)]. Lord Cairns in Julius v. Bishop of Oxford(8) observes that the words “it shall be lawful “are words making that legal and possible which there would otherwise be no right or authority to do. They confer a faculty or power and they do not of themselves do more than confer a faculty or power. But there may be circumstances as Lord Cairns further observed, “which may couple the power with duty and make it the duty of the person in whom the power is reposed to exercise that power when called upon to do so.” In the same case Lord Penzance observed that the words “it shall be lawful,” are distinctly words of permission. I do not propose to refer to all the cases in which the words “it shall be lawful” as used in the different statutes have been judicially considered but suffice it to say that the effect of the cases in which the exercise of the power conferred was held to be obligatory was that though the statutes concerned had in terms only conferred power the circumstances were such as to create a duty and to show that the exercise of any discretion by the person empowered could not have been intended. One of such cases is the case Re: Neath and Brecon Rly. relied upon by Mr. Majumdar, where Lord Justice James in construing the words “it shall be lawful” as used in sec. 85 of the Land Clauses Act of 1845 said that “they meant in substance that it would not be lawful to do otherwise.” This meaning was given having regard to the language of secs. 85 and 87 of the Land Clauses Act of 1845 which appears to me to have left no discretion with the Court. This meaning was not intended by his Lordship to be of general application.
18. Considering the language of the rule with reference to the context, I do not find any circumstances from which I could conclude that a duty was imposed upon the Court under Or. 11, r. 14, C.P.C I therefore hold that the words “it shall be lawful” used in Or. 11, r. 14, C.P.C are merely enabling. They confer a power on the Court which it could exercise in its discretion.
19. I am not satisfied on the evidence that this is a case in which I should exercise my discretion in making an order for production as asked for. The application therefore stands dismissed with costs.
20. Solicitor: A.N Bose for the Applicant.
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