Obligations under Section 15 of the Commercial Courts Act, 2015 and Order XI of the Code of Civil Procedure: Liberal Interpretation by the Calcutta High Court due to general lack of awareness

The Calcutta High Court had on 12th February, 2020 passed an order interpreting the application of the provisions of Order XI Rule 1(5) of the Code of Civil Procedure on the parties to a regular suit when it is transferred to the Commercial Courts pursuant to Section 15 of the Commercial Courts Act, 2015 and prescription of timelines under the Commercial Courts Act, 2015 from the date of service of fresh summons upon the defendants.

The application was filed by the Plaintiffs for recalling and/or clarification of an order dated 22nd January, 2020 wherein the plaintiffs were denied the opportunity file 91 additional documents in the suit as they failed to comply with Order XI Rule 1(5) of the Code of Civil Procedure which disallows the Plaintiffs from relying “on documents, which were in the plaintiff’s power, possession, control or custody and not disclosed along with plaint or within the extended period” except by leave of Court and such leave to be granted by the Court “only upon the plaintiff establishing reasonable cause for non–disclosure along with the plaint.”

The application arises out of a suit filed in the year 2017 by the Plaintiffs against 42 defendants as a regular suit before the Calcutta High Court and by an order of the Calcutta High Court dated 7th January, 2019, the regular suit was ordered to be “renumbered as a commercial cause”. 

The ground for filing the application was that the plaintiffs’ advocate on record was under the belief that the amended provisions of Order XI and the Rules thereunder would come into effect only after the suit is renumbered as a commercial cause. Based on that belief, the Plaintiffs had filed an amendment application to amend the plaint filed by them to comply with the provisions of the Commercial Court Act, 2015 but omitted to include 91 additional documents required for proving the Plaintiffs’ cause of action in the suit due to which the order dated 22nd January, 2020 was passed disallowing the Plaintiffs from relying on such additional documents.

Due to the limited scope of appeal before a Commercial Appellate Court under Section 13 of the Commercial Courts Act, 2015, the Plaintiffs had filed an application for recalling and/or clarification of the order dated 22nd January, 2020.

The Court held that the issues before the court stem from “a general lack of awareness of the procedural changes brought in by The Commercial Courts Act, 2015” and since there is no procedure in place for a designated indication for commercial suits court as apprise by the department “the suit continues to retain the old CS number”.

The Court further held that although the Plaintiffs failed to adhere to the provisions under Order XI Rule 1 by failing to disclose the additional documents in the amendment application, the plaintiffs had proceeded on the belief that the provisions under Order XI  “would kick in only after the suit is renumbered as a Commercial Cause”. 

The Court observed that the lack of familiarity with the "transformed procedural regime” on the part of the plaintiffs “was compounded by the department's silence” with regard to the subsequent steps to be taken by the plaintiffs in a transferred suit under the Commercial Courts Act. Thus,

“…a collective lack of acquaintance with the new rules cannot result in putting roadblocks to a litigant's right to present its best case for a complete adjudication of the issues which are to be decided in a suit…..The stage contemplated under Rule 1(9) and (10) of Order XI concerning filing of all documents with the written statement or counter claim is a mirror of Rules 1(4) and (5) of Order XI. The construction of the rules leads to the inescapable conclusion that all the parties to a commercial suit must be given a fair opportunity to disclose all documents in their power and possession at the relevant point of time with a declaration on oath under Order VI Rule 15-A(5) as amended.”

The court also opined that the Plaintiffs’ case was clearly a case where the discretion contemplated under Rule 1(5) Court should be exercised in favour of the plaintiffs as the plaintiffs and their advocate on record did not have the benefit of a correct construction of the rules as to the stage of filing of the relevant documents. 

The court also opined:
"Section 13 of the Commercial Courts Act limits the scope of appeal before a Commercial Appellate Court which means that a litigant may not have recourse to challenging an order passed by a Commercial Division under the amended provisions of Order XI. This would mean that a party would not have the chance to test the correctness of an order by which the party would not be permitted to bring in urgent documents for all times to come.

This surely cannot be the intended objective of any legislation, far less a legislation the nuances of which are yet to be fully comprehended by all concerned including the court. A just and fair decision entails consideration of all material documents throwing light on the controversy between the parties. After all, can any party be deprived of its right to present its complete evidence by reason of a collective awakening to the rigours of a new procedural regime introduced by the 2015 Act?”

The Court while allowing the application of the plaintiffs/petitioners and permitting them file all 106 documents (15 documents as already disclosed in the plaint and 91 additional documents), directed the Plaintiffs to comply with the stages enunciated by Order XI of the CPC.

The defendants who had already filed their written statements were allowed to respond to the additional documents brought in by the plaintiff by way of additional written statements or otherwise. The other defendants who had not filed their written statements or had failed to enter appearance in the suit were directed to proceed under the relevant rules of The Commercial Courts Act. 

Furthermore, the Court while exercising its discretion under the proviso to Section 15(4) of the Commercial Courts Act, 2015 directed that “the timelines prescribed by the Commercial Courts Act will apply to the suit from the date on which the summons are served on the defendants by the plaintiff.”

• The Plaintiffs/petitioners were represented by Senior Advocate, Mr. S. K. Kapur, Senior Advocate, Mr. S.N. Mookherjee, Mr. Rudraman Bhattacharyay, Ms. Priyanka Prasad, Mr. S. R. Kakrania, and Mr.Tanuj Kakrania.
• The Defendant No.1 was represented by Senior Advocate, Mr. Hirak Kumar Mitra, Senior Advocate, Mr. Ratnanko Banerji, Ms. Suchismita Chatterjee and Mr.S. Roy.
• The Defendant No.3 was represented by Senior Advocate, Mr. Siddhartha Mitra and Mr. Domingo Gomes.
• The Defendant Nos. 2, 4-6, 8-24, 26-30 & 32-38 were represented by Mr. Siddhartha Datta, Ms. Surabhi Binani, Mr. Anupam Prakash and Mr. Utkarsh Maria.
• The Defendant No.39 was represented by Senior Advocate Mr. T.K. Bose.
• The Defendant Nos. 41 & 42 were represented by Senior Advocate, Mr. Anindya Kumar Mitra, Senior Advocate, Mr. Soumabho Ghose, Ms. Anshumala Bansal, Mr. Arunabha Deb, Mr. Tanmoy Chakravarty, Ms. Ashika Daga and Ms. Arti Bhattacharyya.
• The Defendant No. 40 was represented by Mr. Rishad Medora and Mr. Avishek Roy Chowhdury.