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Rohini Traders v. J.K. Lakshmi Cement Limited .
Factual and Procedural Background
The appellant, M/s Rohini Traders, a sole proprietorship acting as a commission agent for the respondent, M/s J.K. Lakshmi Cement Ltd., claimed that the respondent owed it Rs 12,05,231 as on 31-3-2004. After unanswered requests and a legal notice dated 9-4-2004, the appellant filed Suit No. 125 of 2004 seeking Rs 14,21,250 (principal plus interest at 18% p.a.). The respondent denied liability, asserted that the suit was time-barred, and counter-alleged that the appellant in fact owed it Rs 4,62,000.
During the suit the appellant issued a notice under Order 12 Rule 8 CPC on 5-7-2006 calling upon the respondent to produce specified documents. At trial the respondent’s General Manager (DW-1) produced documents relating to Items 3-6 of the notice and stated that Items 1-2 were with the appellant. The appellant did not have those documents exhibited.
The Additional District Judge decreed the suit on 14-3-2007 for Rs 14,21,250 with 9% interest, drawing an adverse inference because the respondent’s documents were not formally placed on record. On appeal, the Delhi High Court on 7-11-2008 set aside the decree and remanded the suit for fresh trial, observing that the documents had in fact been produced and DW-1 had been cross-examined. A review petition was dismissed on 16-12-2008. The present civil appeals challenge those High Court orders.
Legal Issues Presented
- Whether the trial court was justified in drawing an adverse inference against the respondent for allegedly failing to produce documents demanded under Order 12 Rule 8 CPC.
- Whether the High Court erred in setting aside the decree and remanding the suit for fresh trial when some documents had been produced but not exhibited.
Arguments of the Parties
Appellant's Arguments
- The respondent filed no documentary evidence with its written statement and did not comply with the Order 12 Rule 8 notice; therefore the trial court correctly drew an adverse inference.
- Cited Badri Parshad v. Shanti Lal Seth (1941) to contend that documents produced pursuant to such a notice must be admitted in toto.
- Cited Union of India v. Firm Vishudh Ghee Vyopar Mandal (1953) to emphasise that non-production permits secondary evidence and supports an adverse inference.
- The High Court should not have remanded the matter merely because DW-1 brought documents to court without their formal exhibition.
Respondent's Arguments
- Although documents were not filed earlier, they were produced in court in response to the Order 12 Rule 8 notice and DW-1 was cross-examined on them; the trial court should have considered them.
- Because the appellant chose not to have the documents exhibited, no adverse inference could be drawn against the respondent.
- The High Court correctly restored the suit for proper consideration of the produced documents.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Badri Parshad v. Shanti Lal Seth, 1941 SCC OnLine Lah 7 (AIR 1941 Lah 228) | Documents produced pursuant to an Order 12 Rule 8 notice must be admitted into evidence in their entirety. | Relied on by the appellant to justify the trial court’s adverse inference. The Supreme Court did not adopt this position. |
| Union of India v. Firm Vishudh Ghee Vyopar Mandal, 1953 SCC OnLine All 81 (AIR 1953 All 689) | Failure to produce documents after an Order 12 Rule 8 notice allows the requesting party to give secondary evidence. | Cited by the appellant; the Supreme Court held that once documents were produced, the requesting party had the duty to have them exhibited. |
Court's Reasoning and Analysis
The Court examined Order 12 Rule 8 CPC and emphasised its purpose: to enable a party to obtain documents not in its possession. Once such documents are produced, the requesting party must have them placed on record. The Court noted that:
- DW-1 produced documents corresponding to Items 3-6 of the notice and confirmed that Items 1-2 were with the appellant.
- The appellant did not take steps to mark or exhibit the produced documents despite cross-examining DW-1 on them.
- An adverse inference cannot be drawn against a party that has produced documents, especially when it has been cross-examined about them; the failure lies with the requesting party for not tendering them in evidence.
Consequently, the trial court’s decree—premised on an improper adverse inference—was unsustainable. The High Court’s order remanding the suit for a proper trial, with directions to consider the documents, was therefore correct.
Holding and Implications
APPEALS DISMISSED; the Delhi High Court’s orders of 7-11-2008 and 16-12-2008 are affirmed.
Implications: The suit will proceed afresh before the trial court with appropriate exhibition and consideration of the documents produced by the respondent. The decision reinforces that after documents are produced pursuant to Order 12 Rule 8 CPC, the onus shifts to the requesting party to bring them formally on record; failure to do so precludes an adverse inference against the producing party. No new substantive precedent is set beyond clarifying this procedural obligation.
R.K. Agrawal, J.— These appeals have been filed against the orders dated 7-11-2008 RFA No. 406 of 2007 and 16-12-2008 Review Petition No. 415 of 2008 in RFA No. 406 of 2007 passed by the High Court of Delhi at New Delhi in RFA No. 406 of 2007 and RP No. 415 of 2008, respectively. Vide order dated 7-11-2008 RFA No. 406 of 2007, the High Court allowed the appeal filed by M/s J.K. Lakshmi Cement Ltd., the respondent herein and set aside the judgment and decree dated 14-3-2007, passed by the Additional District Judge, Delhi in Suit No. 125 of 2004, while restoring the suit filed by M/s Rohini Traders, the appellant herein for trial afresh as per the observations made in the judgment.
Brief Facts
2. The appellant claims itself to be a sole proprietorship concern working as third-party commission agent of the respondent Company. The appellant claimed a sum of Rs 12,05,231 as dues to be payable by the respondent Company as on 31-3-2004. Several requests were made to the respondent Company to pay the amount due but to no effect. Even after serving a legal notice dated 9-4-2004 to the respondent Company, it remained uncomplied with. The appellant filed a suit praying for decree of Rs 14,21,250 including the principal amount as also interest @ 18 % p.a. The suit was contested by the respondent Company on the ground that it was barred by limitation as also on merits. The claim of the appellant was denied and it was stated that as per the record of the respondent Company, a sum of Rs 4,62,000 is liable to be paid by the appellant to the respondent Company. The other claims made by the appellant were also denied.
3. During the pendency of the suit, the appellant served a notice dated 5-7-2006 under Order 12 Rule 8 of the Code of Civil Procedure, 1908 (in short “the Code”) calling upon the respondent Company to produce and show to the Court on the first date of hearing of the suit the following documents viz.:
1. Purchase orders pertaining to the order placed by the plaintiff;
2. Original record of the TDS certificate issued by the company to the plaintiff;
3. Details of the payment made to the plaintiff;
4. Details of the payment received from the party whom order was placed by the plaintiff;
5. Copy of the ledger of the company related to the plaintiff from Financial Year 1997 to 2004; and
6. Copies of the balance sheets filed in the Income Tax Department and ROC for the years 1997 to 2004.
4. It appears that the documents were not produced on the first date of hearing. However, during the course of the hearing one Shri R.K. Gupta, General Manager of the respondent Company (DW 1) appeared before the Court and produced the documents mentioned at Items 3-6 and also stated that Items 1 and 2 would be available with the appellant. The appellant did not make any endeavour to get the documents produced by the respondent Company on record and to mark them and get exhibited.
5. The trial court, vide judgment dated 14-3-2007, decreed the suit in favour of the appellant herein for a sum of Rs 14,21,250 along with the interest @ 9 % p.a. from the date of institution of the suit till the date of its realisation. The trial court held that the respondent Company had failed to explain as to why it had not placed on record its books of accounts and other related papers as asked for in the notice under Order 12 Rule 8 of the Code and drew an adverse inference.
6. Feeling aggrieved, the respondent Company preferred an appeal before the High Court of Delhi. The High Court, after considering the material on record, came to the finding that the witness of the respondent Company (DW 1) was cross-examined in support of the documents produced by him in the Court pursuant to the notice under Order 12 Rule 8 of the Code. However, since the documents were neither exhibited nor brought on record, the High Court felt it proper in the interest of justice to restore the suit for further trial with certain directions.
7. An application seeking review of the judgment and order dated 7-11-2008 RFA No. 406 of 2007 was filed whereupon the High Court re-summoned the trial court record and re-perused the testimony of DW 1 from which it gathered that the witness had brought all the documents pertaining to the notice dated 5-7-2006 with respect to Items 3-6 and the other documents were with the appellant and the witness was also cross-examined in respect of the documents so produced. The review application was, therefore, dismissed. Against the said orders, the appellant has preferred these appeals before this Court.
8. Heard Shri Sunil Kumar, learned Senior Counsel for the appellant and Shri M.L. Lahoty, learned counsel for the respondent Company.
Contentions
9. The learned Senior Counsel for the appellant submitted that the respondent Company had not filed any document before the trial court in support of its claim made in the written statement. Further, it had not complied with the notice dated 5-7-2006 under Order 12 Rule 8 of the Code requiring it to place certain documents before the Court at the time of first date of hearing and, therefore, an adverse inference ought to have been drawn and which was rightly drawn by the trial court. According to him, the High Court ought not to have remanded the matter for fresh trial only on the ground that such documents were produced before the Court by DW 1.
10. The learned Senior Counsel has relied upon a decision of the Lahore High Court in Badri Parshad v. Shanti Lal Seth 1941 SCC OnLine Lah 7, AIR 1941 Lah 228 and submitted that the documents so produced are to be given in evidence and must be admitted in toto. He further relied on a decision of the Allahabad High Court in Union of India v. Firm Vishudh Ghee Vyopar Mandal 1953 SCC OnLine All 81, AIR 1953 All 689 wherein it was held that the provision of Order 12 Rule 8 of the Code refers to notice to produce documents at the time of the hearing, so that if they are not produced, the party calling for them may give secondary evidence of the same. According to him, as the respondent Company has failed to produce the documents mentioned in the notice dated 5-7-2006 under Order 12 Rule 8 of the Code, the trial court had rightly drawn an adverse inference and decreed the suit on the basis of the evidence on record.
11. The learned counsel for the respondent Company, however, submitted that even though the respondent Company had not filed any document before the trial court yet it produced the same before the Court as asked for in the notice dated 5-7-2006 and DW 1 was also cross-examined by the appellant. Therefore, the trial court ought not to have discarded the documents so produced by the respondent Company. The High Court had rightly remanded the matter for fresh trial.
Discussion
12. We have gone through the materials on record and find that even though the respondent Company had not brought on record any document before the trial court yet it had produced certain documents mentioned at Items 3-6 in the notice dated 5-7-2006 and DW 1 was also cross-examined with regard to the same. The relevant portion of the statement made by Shri R.K. Gupta (DW 1) in the cross-examination is as under:
“However, I have brought the documents required by the plaintiff in terms of the notice dated 5-7-2006 vide Items 3 to 6 and the record in terms of Items 1 and 2 of the said notice would be available with the plaintiff.”
“I cannot say if payment to M/s Rohini Traders was being made on transaction-to-transaction basis or consolidatedly. I have seen the statement of account from which it is clear that payments have been made both ways i.e. transaction to transaction as well as month to month. It is correct that the last entry in the statement of account is dated 30-4-2003. It is correct that till date we have not filed any suit against the plaintiff for recovery.”
The claim of the appellant is that if the facts mentioned in the said documents are taken into consideration, it may just be possible that the claim of the appellant may not stand.
13. At this juncture, it is relevant to quote Order 12 Rule 8 of the Code which is as under:
“8. Notice to produce documents.—Notice to produce documents shall be in Form No. 12 in Appendix C, with such variations as circumstances may require. An affidavit of the pleader, or his clerk, of the service of any notice to produce, and of the time when it was served, with a copy of the notice to produce, shall in all cases be sufficient evidence of the service of the notice, and of the time when it was served.”
From a reading of the aforesaid provision as also the law settled on this aspect, we are of the view that it was the duty of the appellant herein to get the documents produced by the respondent Company under Order 12 Rule 8 of the Code exhibited in the suit proceedings so that a true and correct finding either way could have been recorded by the trial court. It is not in dispute that the appellant did not take any step to get those documents marked and exhibited before the trial court.
14. The object of Order 12 Rule 8 of the Code is to facilitate the plaintiff or any other party to get a document on record which is not in their possession or in possession of the other party. If a document has been produced then it is the duty of the party who has asked for such production to get it placed on record. If, however, the said document is not placed on record, then adverse inference against the party who has produced the same cannot be drawn, more so, when the party who has produced the said document before the Court has been cross-examined vis-à-vis that document.
15. In our considered opinion, the High Court was right in setting aside the judgment and decree passed by the trial court and remanding the matter for fresh decision. The directions given by the High Court do not call for any interference.
16. In view of the above discussion, the appeals fail and are hereby dismissed with no order as to costs.
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