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2008 DIGILAW 686 (GAU)

J. D. Pharmaceuticals v. Apashi Enterprise

2008-09-11

AMITAVA ROY

body2008
JUDGMENT Amitava Roy, J. 1. The supervisory jurisdiction of this Court under Article 227 of the Constitution of India is sought to be invoked to set at naught the order dated 1.3.2001 passed by the learned Assistant District Judge No. 1, Guwahati in Money Suit No. 226/1993 allowing the petition under Order 11, Rule 15 of the Code of Civil Procedure ('Code') read with Section 151 of the Code praying for discovery on oath of documents filed by the present Respondents/Defendants. In terms of the interim order of this Court, further prayers in the suit has remained in abeyance. 2. I have heard Mr. S.P. Roy, learned Counsel for the Petitioners and Mr. D.K. Bhattachaijee, senior Advocate assisted by Ms. S. Chakraborty, Advocate for the Respondents/Defendants. 3. An abridged narration of the factual backdrop is indispensable for proper comprehension of the rival contentions. 4. The Petitioner, which claims to be a registered partnership firm instituted the aforementioned suit in the Court of the learned Assistant District Judge No. l, Guwahati [since transferred to Civil Judge (Sr. Division) No. 3, Guwahati] against the Respondents praying for a decree, inter alia, for Rs. 8,12,671.62 by way of realization of payment made by it pertaining to an Agency Agreement between the parties. Its pleaded case in the plaint is that, the Respondent No. 2 on behalf of the Respondent No. 1 in the last week of June 1987 approached one of its partners expressing his desire to act as its commission agent in its business of medicine. The Petitioner firm which manufactures and sales medicines by its distributors, agents and retailers throughout the country, agreed to the proposal pursuant whereof, an Agency Agreement was executed between the parties on 1.7.1987 whereby the Respondents were appointed as Commission Agents of the Petitioner for a period of three years with the stipulation to extend the term thereafter. According to the Petitioner firm, in terms of the agreement the Respondents were to be paid commission of 15% on the sale price of the medicines. However, all incidental expenses relating to the procurement of business were to be borne by them. The payment according to it was remittable only after realization of the sale proceeds. The Respondents accordingly started acting as the commission agents of the Petitioner and on the expiry of the term of the agreement dated 1.7.1987, Anr. However, all incidental expenses relating to the procurement of business were to be borne by them. The payment according to it was remittable only after realization of the sale proceeds. The Respondents accordingly started acting as the commission agents of the Petitioner and on the expiry of the term of the agreement dated 1.7.1987, Anr. was executed between the parties on 1.7.1990 the same terms and conditions. Pursuant to the agreement, supply orders were procured by the Respondents and forwarded to the Petitioners and the latter used to effect supply of medicines to the Health Department of the State and make payments to the agents after realization of the sale proceeds as commission worked out @ 15% thereon. The Petitioner pleaded that under the agreement the Respondents were to realize the sale proceeds from different offices in respect of the supplies and forward the amount to it following which they were entitled to receive their commission at the agreed rate. The transactions were duly accounted for and proper books of account were maintained by the parties. As agreed to by them, copies of certificate of commission, statement of ledger and account for every financial year were prepared and despatched to the Respondents from time to time. According to the Petitioner, though the payment of commission was to be made after the realization of the sale proceeds, in fact, on the request of the Respondents it made payments on the basis of the supply orders acting on the assurance of the Respondents that the amount involved would be realized in due course. The Petitioners, however, alleged that the Respondents in fact started failing to realize the payments and it transpired that though an amount of Rs. 15,62,16,31 was outstanding, commission @ 15% amounting to Rs. 2,34,302.40 had been paid to the Respondents on that count. According to the Petitioner, it was also entitled to a sum of Rs. 46,226.96 from the Respondents as on 31.3.1992. The Respondents further refused to confirm the account for the financial year 1991-92, i.e., 1.4.1991 to 31.3.1992. The suit was, thus, filed for realization of Rs. 6,40,529 together with interest thereon. 5. The Respondents after entering appearance in the suit on 18.6.1994 submitted an application under Order 11, Rule 15 of the Code praying for a direction to the Petitioner-Plaintiff to produce in Court the documents enumerated in the schedule thereto for inspection. The suit was, thus, filed for realization of Rs. 6,40,529 together with interest thereon. 5. The Respondents after entering appearance in the suit on 18.6.1994 submitted an application under Order 11, Rule 15 of the Code praying for a direction to the Petitioner-Plaintiff to produce in Court the documents enumerated in the schedule thereto for inspection. The learned trial Court allowed the prayer and further ordered the Petitioner to supply copies of the documents annexed to the plaint and after initial differences between the parties pertaining to the place of inspection of the documents in terms of the order of the Court below, the relevant sales ledgers, cash books and party sale ledgers produced by the Petitioner/Plaintiff were inspected by the learned Counsel for the Respondents. As it was contended on behalf of the Respondents that all such documents had not been produced for inspection, the learned trial Court ordered therefor. The parties, however, continued to remain at issue with regard to the production and inspection of the documents so much so that, on 7.2.1995 the learned Court below by its order of the even date consigned to the records, the rival pleadings in that regard. 6. Being aggrieved, the Respondents approached this Court with Revision Petition No. 55/1995 which was disposed of on 21.2.1995 after hearing both the parties with a direction to the learned Court below to decide the petition under Order 11, Rule 15 on merits. Subsequent thereto, the Respondents through an application registered as 1412/95 insisted on the production of the documents referred to in para 2(b) of the petition No. 746/95 dated 7.2.1995 for inspection. A written objection thereto was filed by the Petitioner/Plaintiff. The learned trial Court by its order dated 2.4.1997 recording the stand of the Petitioner/Plaintiff that the documents as mentioned in para 2(b) of the petition No. 746/1995, were not in its possession, directed the Respondents to file their written statement. The learned Court below observed that the Petitioner Plaintiff, would, however, be debarred thereafter from producing the aforesaid documents in the suit. While the matter rested at that, the Respondents Defendants after taking time for filing their written statement on some occasions, on 30.6.1998 submitted an application under Order 11, Rule 12 of the Code read with Section 151 thereof praying for an order for discovery on oath the documents referred to in paras 4, 5 and 6 thereof. While the matter rested at that, the Respondents Defendants after taking time for filing their written statement on some occasions, on 30.6.1998 submitted an application under Order 11, Rule 12 of the Code read with Section 151 thereof praying for an order for discovery on oath the documents referred to in paras 4, 5 and 6 thereof. The Petitioner/Plaintiff submitted its written objection and eventually by the impugned order, the application of the Respondent/Defendants, has been allowed. 7. Assailing the order, Mr. Roy has emphatically urged that as the Respondent/Defendants had from time to time inspected all relevant documents as sought for by them and produced in Court by the Petitioner Plaintiff in compliance of the orders passed relating thereto, the application under Order 11, Rule 12 of the Code is patently untenable and having been filed only to protract the suit ought to have been rejected in limine. The learned Court below having finally disposed of the application under Order 11, Rule 15 of the Code by its order dated 2.4.1997, the application under Order 11, Rule 12of the Code is an abuse of the process of law, he urged. The learned Counsel while accosting the application to be lacking in bona fide has maintained that the impugned order suffers from an erroneous exercise of jurisdiction inasmuch as the learned Court below in passing the same left out of consideration the antecedent facts as well as the written objection of the Petitioner/Plaintiff thereto. Mr. Roy contended that the Petitioner/Plaintiff having apprised the Court below that the documents contained in para 2(b) of the application No. 746/1998 dated 7.2.1998 are not in its possession, no fresh application under Order 11, Rule 12 of the Code was entertainable and on that count as well, the impugned order is unsustainable in law. While contending that in the facts and circumstances of the case, the Respondent/Defendants if advised, could have lodged a counter-claim in the suit, the learned Counsel asserted against any dealing between the parties after 31.3.1992 under the agency agreement. The claim of the Petitioner/Plaintiff being based on the transactions as of that date, the application under Order 11, Rule 12 is only a dilatory initiative on the part of the Respondents/Defendants, he urged, Mr. Roy maintained that the impugned order being vitiated by an error of jurisdiction is liable to be interfered with in the interest of justice. The claim of the Petitioner/Plaintiff being based on the transactions as of that date, the application under Order 11, Rule 12 is only a dilatory initiative on the part of the Respondents/Defendants, he urged, Mr. Roy maintained that the impugned order being vitiated by an error of jurisdiction is liable to be interfered with in the interest of justice. The learned Counsel placed reliance on the decisions of the Apex Court in Ram Sewak Yadav, Appellant v. Hussain Kamil Kidwai and Ors. AIR 1964 SC 1249 and Central Bank of India v. Shivam Udyog and Ors. AIR 1995 SC 711 to buttress his assertions. 8. Per contra, Mr. Bhattacharjee has urged that Rules 12 and 13 dealing with discovery on oath of documents proprio vigore from a code by themselves and though constitute an inseverable segment of Order XI of the Code, are independent of the scheme as envisaged under Rules 1 to 11 and 14 onwards relating to discovery by interrogatories and production and inspection of documents. The learned senior counsel thereby sought to avow that mere inspection of some documents at any earlier stage of a suit would not be bar for a subsequent application for discovery on oath of documents if considered imperative for the fair trial thereof. Mr. Bhattacharjee contended that the impugned order having been passed on a correct exposition of the underlying objectives of Order 11, Rule 12 of the Code being cognizant of the written objection filed by the Petitioner-Plaintiff as well as the long pendency of the suit, no interference therewith is called for. The learned senior counsel insisted that the impugned order passed on an in-depth consideration of all relevant facts, does not suffer from any illegality far less an jurisdictional error to warrant the invocation of the High Courts' power of superintendence under Article 227 of the Constitution of India. As the order would facilitate the real state of affairs to surface with no prejudice to the Petitioner/Plaintiff, in the interest of justice as well, the same ought to be left uninterfered. Further, having regard to the constricted scope of application of the above constitutional provision, the petition being without any merit is liable to be dismissed, he urged. Mr. As the order would facilitate the real state of affairs to surface with no prejudice to the Petitioner/Plaintiff, in the interest of justice as well, the same ought to be left uninterfered. Further, having regard to the constricted scope of application of the above constitutional provision, the petition being without any merit is liable to be dismissed, he urged. Mr. Bhattacharjee to reinforce his submissions, placed reliance on the decisions of the Apex Court in Shri M.L. Sethi v. Shri R.P. Kapur AIR 1972 SC 2379 and Surya Dev Rai v. Ram Chander Rai (2003) 6 SCC 675 . 9. I have bestowed by anxious consideration to the competing propositions. Admittedly, the Respondents have not yet filed their written statement. The records of the suit reveal that on 18.6.1994 they submitted an application No. 3043/1994 under Order 11, Rule 15 of the Code for an order to the Petitioner/Plaintiff for production of the documents referred to therein for their inspection. The pleadings of the parties and the orders passed thereon from time to time thereafter disclose that some documents were also produced and were inspected by the Respondents/Defendants as desired. After the earlier round of litigation before this Court in CRP No. 55/1995 in which the application under Order 11, Rule 15 for inspection of documents formed the subject-matter of the debate, the Petitioner/Plaintiff, reiterated its stand that the documents contained in para 2(b) in the application dated 7.2.1995 are not in its custody whereupon the issue was closed on 2.4.1997 with the observation that it would be debarred from producing the same later in the suit. The documents mentioned in para 2(b) of the application dated 7.2.1995 deserve to be extracted in the above context: 2. (b). 6 Nos. of Money Receipt books of collection entry from C.M. and H.O. and Additional C.M. and H.O. of different districts of Assam by cash, bank drafts and cheques submitted to the Plaintiff by the Defendants on various dates for the period from 1.7.1987 to 30.6.1993. 10. (b). 6 Nos. of Money Receipt books of collection entry from C.M. and H.O. and Additional C.M. and H.O. of different districts of Assam by cash, bank drafts and cheques submitted to the Plaintiff by the Defendants on various dates for the period from 1.7.1987 to 30.6.1993. 10. In the application under Order 11, Rule 12 thereafter filed the Respondents/Defendants while emphasizing that no duty under the agency agreement was cast upon them to make collection and realisation of the price averred that though payment in respect of some supply order produced by them had been received by the Petitioner-Plaintiff before the institution of the suit no reference thereof finds place in the plaint. According to the Respondents/Defendants as all documents pertaining to such receipts are in the possession and power of the Petitioner-Plaintiff, it is essential to make the discovery on oath thereof as the same would have a vital bearing on the relief claimed in the suit. The Respondents/Defendants in the application also averred about the institution of civil suits by the Petitioner/Plaintiff against the State of Assam and Ors. for realization of the unpaid sale price for supplies as well as the decrees obtained by him. They, therefore, sought for an order for discovery on oath of the pleadings of the said suits and the documents for a fair adjudication of the Petitioner/Plaintiff's claim against them. They pleaded that though they had acted as the Commission agent of the Petitioner/Plaintiff till March 1993, the accounts referred and annexed to the plaint in the suit are confined to the transactions up to November 1991. According to them without the discovery as prayed for, it is not possible for them to effectively counter the claim of the Petitioner/Plaintiff made in the suit. 11. The Petitioner/Plaintiff in its written objection while highlighting the delay caused due to the persistent pleas of the Respondents/Defendants for inspection of the documents pleaded against the necessity of the discovery on oath as prayed for. It reiterated that the Respondents/Defendants had already inspected all relevant documents more than once. While contending that mere subsistence of the agency agreement up to 30.6.1993 would not entitle the Respondents/Defendants to realize the commission, as no supply order was procured by them in the year 1993, the Petitioner/Plaintiff prayed for rejection of the application. 12. It reiterated that the Respondents/Defendants had already inspected all relevant documents more than once. While contending that mere subsistence of the agency agreement up to 30.6.1993 would not entitle the Respondents/Defendants to realize the commission, as no supply order was procured by them in the year 1993, the Petitioner/Plaintiff prayed for rejection of the application. 12. The objection to the prayer for discovery on oath of documents is, therefore, two-fold, namely, undue delay in filing of the written statement and inspection of all relevant documents at the earlier stages of the suit. 13. From the pith and substance of the application under Order 11, Rule 12 of the Code, documents sought to be discovered on oath appear to be those particularly relating to the receipt of sale proceeds by the Petitioner Plaintiff after the institution of the suit and not referred to in the plaint. These documents as asserted are with regard to the supply orders procured by the Respondents/Defendants during the subsistence of the agency agreement on which though entitled, no commission at the agreed rate had been paid to them. They contend that the amount payable to them once quantified would not only neutralize the Petitioner/Plaintiffs claim in the suit, but may make it liable to pay further amount to them by way of commission. It has been asserted that the documents are not only to the knowledge of the Petitioner/Plaintiff but also are in its custody and possession. According to them, the discovery on oath of these documents is unavoidably essential for them to appropriately resist the suit and for fair adjudication thereof. 14. Having regard to the nature of the documents sought to be discovered on oath, the factum of inspection of the documents as listed in the application under Order 11, Rule 15 of the Code, cannot be construed to be a legally enjoined embargo therefor. The Petitioner/Plaintiff's claim is based on the plea of payment made to the Respondents/Defendants on the supply orders for which full realization has not been made. The determination of the actual amount of sale proceeds realized is, therefore, of decisive significance for a complete resolution of the controversy. The Petitioner/Plaintiff's claim is based on the plea of payment made to the Respondents/Defendants on the supply orders for which full realization has not been made. The determination of the actual amount of sale proceeds realized is, therefore, of decisive significance for a complete resolution of the controversy. While the Respondents/Defendants assert that realizations of sale price even after the suit have been effected fetching substantial amounts to the Petitioner/Plaintiff the latter contends that no transaction took place in the year 1993 enabling them to any commission beyond November 1991. The Petitioner/Plaintiff seeks to substantiate its claim maintaining that all payments against the supply orders though not realized, compassion thereon has already been advanced to the Respondents/Defendants in excess which is, thus, realizable. The pivotal fact which needs to be determined is the actual realization of the sale proceeds based on the supply orders procured by the Respondents/Defendants so as to ascertain the entitlements of the parties under the agency agreement. 15. The underlying objective of Order 11, Rule 12 appears to be to ascertain the existence, location, custody, availability and utility of the documents sought to be discovered in relation to matters in question in the suit for a fair disposal thereof. The documents as indicated in the application under Order 11, Rule 12 of the Code, in the instant case, having regard to the rival positions do not appear to be irrelevant for the adjudication of the issues in the suit and rather, proclaim to be essentially needful for a fair, comprehensive and final settlement of the lingering lis. The scheme of Order 11 as a whole as well, do not enounce a bar to an application for discovery of documents on oath if the same is preceded by a discovery by interrogatories or inspection of other documents. Though the Petitioner/Plaintiff has sought to suggest that the documents are same, the materials on record demonstrate to the contrary. 16. The Apex Court in Sri M.L. Sethi (supra) while dwelling on the purport of Order 11, Rule 12 of the Code ruled against the insistence for specification of documents in an application for discovery on oath. Though the Petitioner/Plaintiff has sought to suggest that the documents are same, the materials on record demonstrate to the contrary. 16. The Apex Court in Sri M.L. Sethi (supra) while dwelling on the purport of Order 11, Rule 12 of the Code ruled against the insistence for specification of documents in an application for discovery on oath. Their lordships held the view that the documents sought to be discovered need not be admissible in evidence in the enquiry or proceedings and it would be sufficient if those would be relevant for the purpose of throwing light on the matter in controversy. It was propounded that every such document would then relate to a matter in dispute in the proceeding and though would not be admissible in evidence it may contain information which may either directly or indirectly enable a person to advance his case or damage the adversary's case or may lead to a trail of enquiry which may have either of these two consequences. The expansive play of this provision of the Code is understandably in furtherance of the quest for justice, which a procedural law is solemnly committed to achieve. 17. The decision in Mr. Sivam Udyog (supra) is distinguishable on fact an application under Order 11, Rule 12 of the Code for summoning the departmental proceedings against the employees of the Appellant-bank was rejected as unnecessary in a money suit filed by it against the Respondent. 18. In Ram Sewak Yadav (supra) the Apex Court was seized with the issue of inspection of ballot papers and mainly dwelt upon the scope of Order 11, Rule 15 of the Code vis-a-vis an Election Tribunal for the Representation of the Peoples Act, 1951. This decision in the opinion of this Court is of no avail to the Petitioner/Plaintiff. 19. The impugned order reflects the learned court's alertness to the aspect of delay in the progress of the suit. The written objection of the Petitioner/Plaintiff has also been taken note of though not elaborated upon in details. The averments made in the application under Order 11, Rule 12 and the purport thereof qua, the rival assertions have been duly taken note of. The written objection of the Petitioner/Plaintiff has also been taken note of though not elaborated upon in details. The averments made in the application under Order 11, Rule 12 and the purport thereof qua, the rival assertions have been duly taken note of. The impugned order, thus, appears to have been passed on a conscious consideration of all relevant aspects in exercise of the learned Court's judicial discretion it being satisfied that the same is called for in the interest of justice. No perversity or absurdity in approach or infraction of any substantive or procedural law is discernible. The order impugned seeks to ferret out the correct state of affairs to ensure fair and holistic adjudication of the suit and does not work injustice for the Petitioner/Plaintiff. 20. The Apex Court in Surya Dev Rai (supra) while dilating on the ambit of the supervisory jurisdiction under Article 227 of the Constitution of India held it to be exercisable for keeping the subordinate courts within the bounds of their jurisdiction. While emphasizing that the invocation of such extraordinary power would be permissible in the eventualities of error of jurisdiction or failure of justice on the exercise thereof, their lordships ruled against the correction of mere error of facts or law unless afflicted by clear ignorance of or utter disregard to legal provisions occasioning grave injustice. Their lordships elucidated that where two inferences are reasonably possible and the subordinate court has chosen to take one view, the error cannot be called gross or patent. 21. The impugned order is the accompanying factual premise when tested on the touch tone of the above judicially propounded principles cannot be repudiated to be visited by any error of jurisdiction or contravention of any provisions of law or causative of any failure of justice. 22. The petition in the above view of the matter lacks substance and is dismissed. The learned trial court, however, would make all possible endeavours to pass appropriate orders hereafter and ensure expeditious disposal of the suit. The parties hereby are expected to co-operate in the process so much so that the proceedings are not unduly delayed. No costs.