HSIL LTD v. MANISH VIJ & ORS

13. He submits that while closing the evidence on 20.09.2015, the defendants had not reserved a liberty to lead rebuttal evidence and, therefore, cannot be allowed to lead rebuttal evidence once the evidence of the plaintiff has been closed. Placing reliance on the judgment of the Punjab & Haryana High Court in Surjit Singh & Ors. v. Jagtar Singh & Ors. 2006 SCC OnLine P&H 1334, and of this Court in Loh Vanizya Udyog Pvt. Ltd. v. Richie Khosla and Ors. 2019 SCC OnLine Del 11132; and Suman Kapoor v. Rakesh Kumar 2015 SCC OnLine Del 10056, he submits that under Order XVIII Rule 3 of the CPC, the party leading evidence first must exercise its option and reserve the right to lead rebuttal evidence before the other party begins its evidence. He submits that in the present case, the defendants having not done so, cannot now be allowed to lead rebuttal evidence.

SUBMISSIONS OF THE LEARNED SENIOR COUNSEL FOR THE DEFENDANTS:

14. On the other hand, the learned senior counsel for the defendants, placing reliance on the judgments of this Court in Wazirpur Small Industries Association (Regd.) v. Union of India & Ors. 2010 (115) DRJ 221; Ashish Tewari v. G.P. Tewari & Anr. N.C. No.2022/DHC/004103; Prem Sagar Gupta (deceased) thr. LRs v. Kamlesh Kumari & Anr. 2004 (72) DRJ 681; Ombir Singh & Anr.

V. Jaspali Chauhan & Ors. 2018 SCC OnLine Del 6675; and

Maharaj IS Wahi v. Renuka Wahi, NC No.2016:DHC:6142, submits that where onus on the issues has been placed on either party, the party beginning the evidence has a right to lead rebuttal evidence irrespective of its failure to express such reservation at an earlier stage.

15. He further submits that the evidence that is sought to be led by the defendants is relevant to the facts of the case inasmuch as the witness of the plaintiff, Mr.Paras Kumar, has now admitted that payments have been received from the third party, which have been also been taken into account by the plaintiff against the amount claimed from the defendants. He submits that the witness of the plaintiff was specifically asked if the EDPMS reflects any outstanding against the exports referred in Ex.PW3/2 (Colly), the statement of account produced by him, to which the witness expressed his ignorance to the same. He submits that, therefore, it is essential for the defendants to show that the EDPMS does not reflect any amount outstanding against the invoices for which the claim has been made in the present suit. He submits that the Supreme Court in K.K.Velusamy v. N.Palanisamy (2011) 11 SCC 275; and this Court in Telecommunications Consultants India Ltd. & Anr. V. Anil Bhasin & Anr. 2021 SCC OnLine Del 5359, has held that where the evidence is relevant and necessary, in the interest of justice, the party should be permitted to produce additional evidence.

16. The learned senior counsel for the defendants further submits that the defendants cannot be held bound by the statement recorded on 20.09.2019 once the plaintiff chose to produce an additional witness and such application being allowed by this Court vide its order dated 14.01.2020. He submits that in the order dated 14.01.2020, only the conditions in relation to cross-examination of the witness were extended and not the condition of the defendants being disentitled from leading any further evidence. He submits that, therefore, reliance of the learned counsel for the plaintiff on the order dated 20.09.2019 is ill-founded.

SUBMISSION OF THE LEARNED COUNSEL FOR THE

PLAINTIFF IN REJOINDER:

17. In rejoinder, the learned counsel for the plaintiff, while reiterating his submission in the opening, submits that the EDPMS is not relevant to the facts of the present case and, in any case, if the facts so warrant, this Court can draw an adverse inference on the nonproduction thereof against the plaintiff. He submits that EDPMS software has been in operation only since 2015 and, therefore, the defendants, if they felt the same to be relevant, should have led the evidence of the same in their opening evidence; they cannot now be permitted to lead such evidence after the plaintiff has already led its evidence. He submits that the present application is intended only to delay the adjudication of the present suit.

ANALYSIS AND FINDINGS:

18. I have considered the submissions made by the learned counsels for the parties.

19. From the above submissions, it is evident that for the purposes of the present application, two issues arise for consideration before this Court: a) The effect of Order XVIII Rule 3 of the Code of Civil Procedure, 1908 (hereinafter referred to as the ‘CPC’) read with the orders dated 20.09.2019 and 14.01.2020 of this Court passed in the present suit; b) Whether the defendants should otherwise and in the interest of justice be allowed to lead additional evidence.

20. For purposes of answering the first issue, Order XVIII Rule 3 of the CPC is reproduced herein below: “Evidence where several issues.— Where there are several issues, the burden of proving some of which lies on the other party, the party beginning may, at his option, either produce his evidence on those issues or reserve it by way of answer to the evidence produced by the other party; and, in the latter case, the party beginning may produce evidence on those issues after the other party has produced all his evidence, and the other party may then reply specially on the evidence so produce by the party beginning; but the party beginning will then be entitled to reply generally on the whole case.”

21. In Wazirpur Small Industries Association (Regd.) (supra), a learned Single Judge of this Court, while disagreeing with the judgment of the Orissa High Court in Aranya Kumar Panda v. Chintamani Panda & Ors. AIR 1997 Orissa 87 has held as under:

22. In Prem Sagar Gupta (supra), this Court again held that the right of the party to produce evidence in rebuttal cannot be denied on the account of delay. The delay can always be answered by burdening such party with costs. I may quote from the judgement as under: “1.Through this petition the impugned order dated 7th October, 2003, passed by the learned ASJ, whereby the application of the petitioner/plaintiff to produce the evidence in rebuttal was declined has been challenged. So far as the right of the plaintiff to lead the evidence in rebuttal after the closure of the evidence of defendants' on the issues onus of which was on the defendant is concerned this right is vested in the plaintiff by virtue of Order 18 Rule 3 CPC, which reads as under:-.......

2. The perusal of the impugned order shows that the application of the petitioner for exercising this right was dismissed mainly on the ground that the application has been moved after two months of the closure of the evidence by the defendant. According to the learned ADJ the plaintiff was required to move such an application on that very day when the evidence was closed by the defendant. I am afraid such a view is highly untenable and difficult to accept as for belated application the plaintiff could have been burdened with the cost as it is for such eventuality that cost is deemed as panacea. Rejection of a right of a person to produce evidence in rebuttal on account of delayed application is negation of the right itself. To deny this right on its belated exercise is not only infraction of a legal right but also amounts to defeating the interests of justice.” (Emphasis Supplied)

23. In Maharaj IS Wahi (supra), another learned Single Judge of this Court has observed as under:

24. The above view was recently followed by another learned Single Judge of this Court in Ashish Tewari (supra) observing as under:

25. The learned counsel for the plaintiff has placed reliance on the judgment of the learned Division Bench of Punjab and Haryana High Court in Surjit Singh (supra), wherein the High Court has held that the last stage for exercising the option to reserve the right of rebuttal can well be before the other party begins its evidence. It must be made at the time of the closing of the evidence of the party which leads evidence first. However, in view of the consistent opinion of this Court as noted in the above referred judgements, which hold that such option can be exercised at any time, I am bound by the same.

26. I may herein also note that the judgement of Punjab and Haryana High Court in Surjit Singh (supra) was cited before another learned Single Judge of this Court in Ombir Singh (supra), however, the learned Single Judge relying upon Wazirpur Small Industries Association (Regd.) (supra), held that the Court had judicial discretion to allow the party to lead rebuttal evidence for just and proper reasons, observing as under:

27. However, at the same time, in Suman Kapoor (supra) and in Loh Vanizya Udyog (supra), the Court held that the plaintiff cannot rely upon Order XVIII Rule 3 of the CPC to lead rebuttal evidence on issues for which the onus of proof was on such party. There can be no dispute with the above principle, and I find that the same squarely applies to the present case.

28. By the order dated 07.05.2015, the following issues were framed:- “(1) Whether the defendants No.3 to 6 are companies that have been incorporated by the defendant no.1 at the instance of the plaintiff? (OPDs) (2) Whether the plaintiff has already received a sum of Rs.3,79,06,333/- through the defendant No.1 and the defendant companies? (OPD) (3) Whether the plaintiff is entitled to a decree for a sum of Rs.3,79,06,333/- against the defendants, jointly and severally? (OPP) (4) If issue No.3 is decided in favour of the plaintiff, whether it would be entitled to interest on the awarded amount and if so, at what rate and for what period? (OPP) (5) Relief.”

29. By the same order, having regard to the issues framed, the defendants were directed to lead the evidence first, followed by the plaintiff. The evidence now sought to be led by the defendants is relevant to the issue no. 2, onus of which was on the defendants and the defendants should have led this evidence at the first instance itself. Having not done so, the defendants cannot claim a right to lead such evidence claiming the same to be in rebuttal.

30. In Subash Chander (supra), a learned Single Judge of this Court, on a witness being confronted with documents and on a right to lead rebuttal evidence based on the testimony of such witness, has observed as under:- “10. The next question which arises is that if the document is so placed on the court file, whether it becomes/is to be treated as the document of the party producing the same and is that party entitled to prove the said document notwithstanding having not filed the same earlier, as required by law, or the use of the said document is to be confined only to confront the witness to whom it was put and it cannot be permitted to be proved by that party in its own evidence.

11. The legislative intent behind order 7 Rule 14(4) and Order 8 Rule 1A(4) and Order 13 Rule 1(3) appears to be to permit an element of surprise, which is very important in the cross examination of witnesses. A litigant may well be of the opinion that if the document on the basis whereof he seeks to demolish the case of the adversary is filed on the court record along with pleadings or before framing of issues, with resultant knowledge to the adversary, the adversary may come prepared with his replies thereto. On the contrary, if permitted to show/produce the document owing to element of surprise, the adversary or witness, may blurt out the truth. Once it is held that a litigant is entitled to such right, in my view it would be too harsh to make the same subject to the condition that the litigant would thereafter be deprived of the right to prove the said documents himself. Thus, if the witness to whom the document is put in cross examination fails to admit the document, the party so putting the document, in its own evidence would be entitled to prove the same. However, the same should not be understood as laying down that such party for the said reason and to prove the said document would be entitled to lead evidence which otherwise it is not entitled to as per scheme of CPC and evidence law. For instance, if the document is shown by the defendant to the plaintiffs witness and the plaintiffs witness denies the same, the defendant can prove the document in his own evidence. Conversely, if the plaintiff puts the document to the defendant's witness and the defendant's witness denies the same, the plaintiff if entitled to lead rebuttal evidence would in his rebuttal evidence be entitled to prove the same. However, if the plaintiff has no right of rebuttal evidence in a particular case, the plaintiff would not be entitled to another chance to prove the document. In such a case, the plaintiff has to make a choice of either relying upon the surprise element in showing the document or to file the document along with its pleadings and/or before the settlement of issues and to prove the same. Similarly, if the defendant chooses to confront the document to the plaintiff's witness in rebuttal, merely because the witness denies the document would not entitle the defendant to a chance to prove the document subsequently.”

31. In the present case, the defendants would have no right to lead rebuttal evidence on the issues for which the onus of proof was on the defendants.

32. An additional factor also operates against the defendants in the present case, and that is the effect of the orders dated 20.09.2019 and 14.01.2020 of this Court in the present suit. The defendants had closed their evidence on 29.09.2015. While the evidence of the plaintiff was being recorded, the defendants filed an application praying for permission to confront the witnesses with certain additional documents. The said application was dismissed by the learned Joint challenged the same by way of an appeal. This Court, during the pendency of the said appeal, by its order dated 22.11.2016, directed that the cross-examination of the plaintiff’s witnesses may continue, however, it shall not be closed to the extent that the defendants seek to rely on their additional materials. The appeal was later dismissed by the learned Single Judge of this Court on 19.01.2018. Finally, on a remand from the learned Division Bench, the following order was passed:

33. The plaintiff sought substitution of its witness Mr.A.K. Mohanty with Mr.Paras Kumar. The same was allowed by this Court vide order dated 14.01.2020, holding as under:

34. The submissions of the learned senior counsel for the defendants that with the passing of the order dated 14.01.2020, the restraint on the defendants from producing further evidence, as contained in the paragraph 4(c) of the order dated 20.09.2019, disappeared, cannot be accepted. The Court had clarified that the order dated 14.01.2020 is only in respect of the cross-examination to be conducted in terms of the order dated 20.09.2019. The said order was necessitated because of the substitution of the witness of the plaintiff as the earlier witness had since retired from the plaintiff-company. The said order can by no stretch be interpreted to mean that the defendants would no longer be bound by its statement that it would lead no further evidence in the suit.

35. In view of the above, the defendants cannot claim a right to lead rebuttal evidence relying upon Order XVIII Rule 3 of the CPC, having specifically made a statement that they would not lead any further evidence.

36. However, for the purposes of the present application the matter does not rest here.

37. Pursuant to the order dated 14.01.2020, allowing substitution of its witness, the plaintiff filed an affidavit of evidence of Mr.Paras Kumar, who filed on record Ex.PW3/2, claiming the same to be an updated chart of the outstanding balance standing on the export account of the plaintiff-company as on 31.12.2020. He claims that an amount of Rs.20,586/- was inadvertently not mentioned/included in the original calculation sheet filed alongwith the Suit. He claims that accordingly the balance amount receivable by the plaintiff company was Rs.2,91,63,301/- as against Rs.3,79,06,333/- claimed in the Suit from the defendants.

38. The learned senior counsel for the defendants has placed reliance on the following in the cross-examination of Mr.Paras Kumar (PW[3]): “Q.[8] Is it correct that certain payments mentioned in Exh. PW-3/6 were received by you from parties other than the parties to whom the exports were made and invoices were raised? Ans. Yes.”

39. He further places reliance on the answer of the witness to question nos.34, 35 and 41 of the cross-examination of Mr.Paras Kumar recorded on 29.11.2022. The same are reproduced herein below: “Q.34. Is it correct that as per Exhibit PW-3/2 (Colly) payment against shipping bills must be outstanding and so declared to the authorised dealer/bank? Ans. Yes. Q.35. Is there any communication to your knowledge by RBI or customs or the authorised dealers regarding the outstanding shown in Exhibit PW-3/2 (Colly)? Ans. I cannot say. xxx Q.41. I put it to you that the Export Data Processing and Monitoring System (EDPMS) does not reflect any outstanding against the exports refer to in Exhibit PW-3/2(Colly). What do you have to say? Ans. I do not know.”

40. The learned senior counsel for the defendants has submitted that while admitting the shipping bills outstanding must be so declared to the authorized dealer/bank, the witness has expressed ignorance on whether any outstanding bills against the exports has been reflected in the EDPMS of the plaintiff. He submits that, therefore, it would be in the interest of justice to allow the defendants to lead additional evidence on these two issues.

41. On the other hand, the learned counsel for the plaintiff has submitted that the EDPMS is not relevant to the facts of the present case and, in any case, if the facts so warrant, this Court can draw an adverse inference on the non-production of the documents against the plaintiff.

42. In K.K.Velusamy (supra), the Supreme Court in relation to the production of additional evidence has held as under:

43. In the present case, the learned senior counsel for the defendants has submitted that the additional evidence sought to be produced is only in relation to the EDPMS and no further. He has submitted that the said evidence would be relevant inasmuch as the EDPMS is to reflect if any payment remains outstanding against the invoices raised against the export of goods and for which the plaintiff has filed the present suit.

44. As observed by the Supreme Court, the Court would have the discretion to allow the party to lead such additional evidence, if the interest of justice so requires and where such evidence can be relevant for a just and effective adjudication of the disputes between the parties. In the present case, though recording of the evidence of the parties has been completed otherwise, in my opinion, in the interest of justice, the defendants can be allowed one final opportunity to lead the additional evidence, as has been prayed for in the present application.

45. The submission of the learned counsel for the plaintiff that in case such evidence is found relevant on the hearing of the Suit, this court may draw adverse inference against the plaintiff for not leading the same, though attractive, does not impress me. Drawing of an adverse inference is a default tool used by the court. It cannot be placed in service when one of the parties does wish to lead such evidence before even beginning the final arguments. In such a situation, the balance of justice may demand such party to be allowed to lead such evidence so as bring about a just and effective adjudication of the disputes based on the actual evidence led by the parties and not on the abstract principle of law.

46. However, in the present case, the grant of such permission to the defendants, specially taking note of the previous conduct of the defendants, has to be on conditions and subject to cost.

47. Accordingly, the present applications are allowed. The defendants are permitted to summon the witnesses as requested for in the application, being I.A. 21707/2022, subject to payment of cost of Rs.[1] Lakh to the plaintiff for the delay caused. It is further made clear that no further witnesses would be allowed to be summoned or produced by the defendants, and the witnesses allowed to be summoned by the present order shall be confined only to the production of the EDPMS report of the plaintiff- company and the bank remittances.

48. The application is disposed of in the above terms. CS(OS) 486/2014 & CRL.M.A. 35425/2018, CRL.M.A. 3621/2019

49. As the evidence was being recorded before the learned Local Commissioner, the additional evidence shall also be produced before the same learned Local Commissioner.

50. The parties shall appear before the learned Local Commissioner on 23.05.2023 for fixing the date for production of additional evidence. Summons shall be issued to the additional witnesses for the dates so fixed by the learned Local Commissioner.

51. The fee of the learned Local Commissioner shall be the same as had been fixed earlier by this Court.

NAVIN CHAWLA, J. MAY 02, 2023 RN/Arya