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AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
  • Ms. Palak Nenwani, Adv.
  • Mr. Sonal Sinha, Adv.
Judges
  • Rajiv Sahai Endlaw, J.
Acts
  • Commercial Courts Act, 2015,
  • Order XIV Rule 5 CPC)1.
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
  • Ms. Palak Nenwani, Adv.
  • Mr. Sonal Sinha, Adv.
Judges
  • Rajiv Sahai Endlaw, J.
Acts
  • Commercial Courts Act, 2015,
  • Order XIV Rule 5 CPC)1.
See more information ...
Smart Summary

Summary of Judicial Opinion — IA No. 10754/2019

Factual and Procedural Background

This application (IA No. 10754/2019) was filed by the defendant under Order XIV Rule 5 CPC after issues were framed on 24 July 2018 and after the defendant had partly cross‑examined the plaintiff's witness (PW1). The defendant sought amendment of the framed issues by adding an issue questioning the authority of the signatory of the plaint (Mr. Guiseppe Bontempi) to sign, verify the plaint and institute the suit on behalf of the plaintiff, M/s Tullio Giusi, SPA (an Italian company). The defendant's counsel said the proposed issue had been handed to the Court on 24 July 2018 but was not framed. The plaint pleads that Mr. Bontempi was authorised by a Board Resolution; the defendant in its written statement simply denied that authority. The suit was re‑numbered and is being pursued as a commercial suit after the Commercial Courts Act, 2015 came into force. The application was heard by Rajiv Sahai Endlaw, J., and the court dismissed the application.

Legal Issues Presented

  1. Whether an additional issue questioning the authority of the plaintiff's signatory should be framed at the stage after issues were framed and after the defendant had partly cross‑examined the plaintiff's witness.
  2. Whether a bare denial in the written statement (that the person signing the plaint was authorised) constitutes a "substantial plea" that requires framing of an issue.
  3. Whether, if the court permits framing of the additional issue at that stage, the defendant must reimburse costs and be allowed fresh filing of evidence and cross‑examination.

Arguments of the Parties

Applicant / Defendant's Arguments

  • The defendant's counsel contended that the proposed issue questioning the authority of the plaint's signatory had been handed to the Court on 24 July 2018 and therefore should have been framed.
  • Relying on the cross‑examination of PW1 conducted by the defendant on 30 July 2019, the defendant's counsel highlighted that matters relevant to the authority issue had been addressed and sought to rely on those proceedings.
  • The defendant's counsel later stated he had not consented to non‑framing of the issue on 24 July 2018 and offered to file an affidavit to that effect; he also sought an opportunity for the court to go through documents to show merit in the plea.

The opinion does not contain a detailed account of any specific arguments by the plaintiff in opposition to the application beyond factual observations by the Court (for example, that the order of 24 July 2018 records that issues were framed with the consent of the parties).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Kawal Sachdeva v. Madhu Bala Rana & Ors., 2013 SCC OnLine Del 1479 Cited for the proposition that issues are to be framed only on substantial pleas of law and fact and not on every plea. Referenced as authority supporting the court's view that a proposed issue does not automatically require framing absent a substantial plea.
Adarsh Kumar Puniyani v. Lajwanti Piplani, 2015 SCC OnLine Del 14022 Cited to support the principle that issues should be confined to substantial disputes rather than every denial in pleadings. Used by the court to reinforce that a bare denial is insufficient to warrant framing an issue.
Abbot Healthcare Pvt. Ltd. v. Raj Kumar Prasad, (2018) 249 DLT 220 Cited in the context of the limits on mechanically framing issues for each plea. Relied upon to support the court's caution against pedantic framing of numerous issues based on routine denials.
Bhavana Khanna v. Subir Tara Chand, 2019 SCC OnLine Del 6978 Cited as one of the cases recognising that issues must arise from substantial pleas. Invoked by the court for the general principle that not every denial leads to an issue to be tried.
Anil Kumar v. Devender Kumar, 2019 SCC OnLine Del 8782 Cited on the point that Courts should not frame issues for routine or non‑substantial denials. Referenced to support the court's approach in refusing to frame the additional issue on the basis of a bare denial.
Precision Steels v. Reeta Salwan, (2013) 205 DLT 695 Cited in the same group of authorities addressing framing of issues only on substantial pleas. Used to bolster the court's conclusion that the defendant's denial did not amount to a substantial plea necessitating an issue.
Vifor (International) Ltd. v. Suven Life Sciences Ltd., 2019 SCC OnLine Del 7514 Cited to emphasise the objective of the Commercial Courts Act to expedite disposal of commercial suits and avoid multiplicity of issues that delay proceedings. Applied to justify refusal to frame additional issues based on routine denials, in light of the need for expedition in commercial suits.

Court's Reasoning and Analysis

The court followed a step‑by‑step analysis grounded in procedure and the nature of pleadings:

  1. The court observed there was no explanation why, if a proposed issue remained to be framed from 24 July 2018, the defendant's counsel had not pointed this out immediately and had allowed the proceedings to continue. Presence of the same counsel in court on 24 July was noted.
  2. Mere proposal of an issue does not automatically compel framing. The court reiterated the established principle (citing several authorities) that issues are to be framed only on substantial pleas of law and fact, not on every denial in pleadings.
  3. The order dated 24 July 2018 recorded that issues were framed with the consent of the parties; accordingly the defendant is deemed to have consented to the issues that were framed on that date and to the non‑framing of other proposed issues.
  4. The court examined the defendant's cross‑examination of PW1 on 30 July 2019 and found the defendant's counsel had questioned beyond the scope of the issues framed. The court held that those questions and that cross‑examination could not be relied upon because they were beyond the scope and ought not to have been permitted.
  5. The plaint expressly pleads that Mr. Guiseppe Bontempi was authorised by a Board Resolution to institute the suit. The defendant's response was a bare denial in the written statement and the parawise reply; the court held such a bare denial did not constitute a substantial plea warranting framing of a separate issue on authority of the signatory.
  6. The court noted a broader practical problem: routine denials of many pleas ("incorrect and denied") cannot be permitted to generate numerous issues in every suit, because that would produce excessive evidence, cross‑examination and delay. This point was reinforced by reference to the objectives of the Commercial Courts Act, 2015 to expedite commercial litigation.
  7. The court explained what would have been required for a substantial plea on authority: specific allegations about the plaintiff's constitution, the law of the country of incorporation as to who is competent to sue on its behalf, and identification of the persons with whom the defendant dealt. Those specifics were absent.
  8. As an alternative accommodation, the court offered the defendant the option of pursuing the sought issue provided the defendant accepted the consequences: opportunity to file documents, fresh evidence and cross‑examination, and reimbursement of plaintiffs' costs for the same assessed at Rs. 5,00,000. The defendant declined that option.
  9. Given the lack of a substantial plea, the prior consent to the framed issues, the impropriety of the cross‑examination relied upon, and the defendant's refusal to accept the court's conditional option, the application for amendment to frame the additional issue was held to be without merit and frivolous in intent to delay proceedings.

Holding and Implications

DISMISSED

Direct effects and practical consequences of the ruling:

  • The defendant's application under Order XIV Rule 5 CPC to frame an additional issue questioning the authority of the plaint's signatory was refused and the application dismissed.
  • The defendant is deemed to have consented to the issues framed on 24 July 2018; the court will not frame the additional issue in the absence of a substantial plea and in light of that prior consent.
  • The cross‑examination conducted on 30 July 2019 that went beyond the framed issues was held to be beyond the scope of proceedings and cannot be relied upon.
  • The court offered a conditional route to raise the issue (fresh evidence, documents and cross‑examination) subject to the defendant reimbursing costs assessed at Rs. 5,00,000; the defendant declined that condition.
  • No broader legal precedent was announced beyond affirming the established principle that issues should be framed only on substantial pleas and recognising the need for expedition in commercial suits under the Commercial Courts Act, 2015.
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    Tullio Giusi Spa v. House Of Trims Pvt. Ltd.

    Rajiv Sahai Endlaw, J.

    IA No. 10754/2019 (of the defendant under Order XIV Rule 5 CPC)

    1. The applicant/defendant, after framing of issues on 24 July, 2018 and after partly cross-examining the witness of the plaintiff, seeks amendment of issues by framing of an additional issue qua the authority of the signatory of the plaint to sign and verify the plaint and to institute the suit.

    2. The counsel for the applicant/defendant has argued, that the said issue was contained in the proposed issues handed over to the Court on 24 July, 2018 but remained to be framed.

    3. There is no explanation that if the same remained to be framed, why did the counsel for the applicant/defendant not noticed it till the filing of this application and allowed the proceedings to move further. Moreover, merely because an issue has been proposed, does not necessarily entail framing thereof. Issues are to be framed only on substantial pleas of laws and facts and not on each plea of law and fact. Reference if any required in this regard can be made to Kawal Sachdeva Plaintiff v. Madhu Bala Rana & Ors…., 2013 SCC OnLine Del 1479, Adarsh Kumar Puniyani v. Lajwanti Piplani, 2015 SCC OnLine Del 14022, Abbot Healthcare Pvt. Ltd. v. Raj Kumar Prasad, (2018) 249 DLT 220, Bhavana Khanna v. Subir Tara Chand, 2019 SCC OnLine Del 6978, Anil Kumar v. Devender Kumar, 2019 SCC OnLine Del 8782 and Precision Steels v. Reeta Salwan, (2013) 205 DLT 695.

    4. The order dated 24 July, 2018, as per its tenor, was dictated in open Court and the counsel who is appearing today for the applicant/defendant was present in the Court on that date also and again there is no explanation as to why the counsel, when present in the Court, if any issue proposed had inadvertently not been framed, not point out so.

    5. Moreover, the order dated 24 July, 2018 records that the issues were framed with the consent of the parties.

    6. The applicant/defendant for this reason also is deemed to have consented to only the issues framed on 24 July, 2018 and to any other issue even if proposed being not framed.

    7. The counsel for the applicant/defendant draws attention to the cross-examination by the applicant/defendant on 30 July, 2019 of PW1.

    8. A perusal of the said cross-examination shows the counsel for the applicant/defendant to have cross-examined PW1 on matters beyond the issues framed in this suit on 24 July, 2018. It is unfortunate that neither the counsel for the plaintiff nor the learned Joint Registrar who was recording the evidence, noticed the same and allowed questions beyond issues to be asked. Thus no reliance can be placed on the cross-examination conducted on 30 July, 2019 which itself is beyond the scope of the proceedings and ought not to have been conducted/permitted.

    9. Else the suit, as per the memo of parties, shows M/s. Tullio Giusi, SPA through its Managing Director/General Manager as the plaintiff and in paragraph 1 of the plaint it is pleaded that the plaintiff is a company incorporated under the laws of Italy and is filing the suit through Mr. Guiseppe Bontempi who is the Managing Director/General Manager of the plaintiff and has been authorized by the Board Resolution of the plaintiff to institute the suit. The applicant/defendant in its written statement, in paragraph 4 of the preliminary objections, merely denied that Mr. Guiseppe Bontempi was authorized to institute the suit and pleaded that the suit had been filed without proper authority and competence on behalf of the plaintiff. To the same effect is paragraph 11 of the parawise reply in response to paragraph 1 of the plaint. Such a bare denial does not constitute a substantial plea, to invite framing of issue thereon.

    10. A practice has developed in the Courts, of denying each and every plea in the pleadings of the opposite party, with the phrase “incorrect and denied” being found tens, if not hundreds of times in each pleading. Attempt is made to play a game of litigation in Courts, governed by law, by putting on the opposite party, the onus of proving each and every plea, most of which are not really disputed, and in an attempt to take advantage, in my view unfair, of lapse in proving any of the pleas. If each and every such denial were to invite an issue, a large number of issues would be framed in each suit, requiring equally voluminous evidence and cross-examination and resultant delays in disposal of suits. The Courts are not required to pedantically frame such issues and to allow such a game to be played.

    11. The present suit, though filed as an ordinary suit, on coming into force of the Commercial Courts Act, 2015, falling in the category of a commercial suit, was re-numbered as a commercial suit and is being pursued as such.

    12. The Commercial Courts Act endeavours to expedite the disposal of suits carved out as commercial suits. Such an expeditious disposal would not be possible if each and every denial were to invite the framing of an issue. Further reference in this regard may be made to Vifor (International) Ltd. v. Suven Life Sciences Ltd., 2019 SCC OnLine Del 7514.

    13. For an issue to be framed on the authority of the person suing on behalf of the plaintiff, the applicant/defendant who otherwise admits commercial dealings with the plaintiff, was required to take specific pleas as to the constitution of the plaintiff, the person who according to the laws of the country in which the plaintiff is incorporated is competent to sue on behalf of the plaintiff and the persons of the plaintiff with whom the applicant/defendant was dealing, to constitute a substantial plea. A bare denial does not suffice, specially when in the event of the plaintiff in this suit for recovery of money succeeding, it is not as if the money therein can be recovered by any person other than the plaintiff. The money can be recovered and will go in the account of the plaintiff only and in this case, also by repatriation to the country in which the plaintiff is incorporated.

    14. In view of the aforesaid circumstances, I have still given an option to the counsel for the applicant/defendant, that if the applicant/defendant desires the framing of an issue as sought and which will entail giving of an opportunity to file documents if any in proof of the issue, fresh filing of evidence and cross-examination, the defendant/applicant should be willing to reimburse the costs of the same to the plaintiff and which costs are assessed at Rs. 5 lacs.

    15. The counsel for the applicant/defendant is not willing.

    16. The same shows the frivolous manner in which an issue is sought to be raised, to delay the proceedings and perhaps to delay the passing of a decree for recovery of money against the applicant/defendant.

    17. The counsel for the applicant/defendant, who was interrupting in between the dictation, now when given an opportunity wants me to go through the documents to contend that there is merit in the plea.

    18. Issues are framed on the basis of the pleadings and once the pleadings in this respect are not found to be substantial and the counsel for the applicant/defendant on 24 July, 2018 consented to non-framing of the said issue, the said arguments are not open to the applicant/defendant.

    19. The counsel for the applicant/defendant states that he had not consented and can file his own affidavit to the said effect.

    20. There is no explanation however as to why no such plea was raised immediately after 24 July, 2018.

    21. There is no merit in the application.

    22. Dismissed.

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    Comments

    Tullio Giusi Spa v. House Of Trims Pvt. Ltd.
    (Aug 7, 2019)