HIGH COURT HOLDS THAT A PLAINT NOT SUPPORTED BY A STATEMENT OF TRUTH CANNOT BE READ IN EVIDENCE

A two Judge Bench of the Hon’ble High Court of Delhi, comprising of Hon’ble Mr. Justice Yashwant Varma and Hon’ble Mr. Justice Tushar Rao Gedela in the matter of M/S AV Industries vs. M/S Neo Neon Electrical Pvt Ltd, Regular First Appeal (COMM) 2/2021, passed a judgement dated 01/09/2023 and held that a pleading that is not supported by a statement of truth cannot be read in evidence, prescribed by sub-rule (5) of Rule 15A of Order VI of Code of Civil Procedure 1908[1], as amended by the Commercial Courts Act 2015.

Facts

(1) In the present case, as per the Respondent/Plaintiff, M/s Neo Neon Electrical Pvt Ltd, it is a private company and is running its business of manufacturing and trading of LED lights etc for the last 20 years.

(2) The Appellant/Defendant, M/s AV Industries approached the Respondent/Plaintiff at his registered office in Noida stating that he was involved in making LED bulbs and other accessories, and assured the Plaintiff of timely delivery, hence, the Respondent/Plaintiff provided the Appellant/Defendant the work of making LED bulbs for which the latter was paid Rs 6,00,000/- by way of cheque.

(3) In February 2018, the Appellant/Defendant purchased the material/flood lights on credit basis from the Respondent/Plaintiff for Rs.26,992/- against the Invoice no. NN/17- 18/244 dated 07/02/2018.

(4) That the Appellant/Defendant defaulted in completion of the work given, hence, the Respondent/Plaintiff asked for refund of the advance paid for the said work. Despite repeated demands, the Appellant/Defendant paid only Rs. 2,00,000/- to the Respondent/Plaintiff through Cheque dated 09/03/2018 and failed to pay the remaining balance amount of Rs.4,26,992/- which is outstanding as per the statement of account maintained by the Respondent/Plaintiff.

(5) Aggrieved, the Respondent/Plaintiff filed a suit for recovery in Civil Suit (Comm.) No. 253/2019 before the Ld. District Judge (Commercial Court) – 01, South-East, Saket Courts, Delhi (Trial Court) under the provisions of the Commercial Courts Act 2015 for recovery of an amount of Rs. 4,26,992/- along with interest @ 24% per annum.

(6) However, the Appellant/Defendant was proceeded ex-parte vide Order dated 09/10/2019 due to his non-appearance.

(7) Finally, the Ld. Trial Court on the basis of the evidence on record vide Order dated 21/09/2020 held that the Respondent/Plaintiff is entitled to the recovery of Rs.4,26,992/- @ 12% interest per annum from the date of filing of the Suit till the realization of the decretal amount.

Observations of the High Court

Aggrieved by the aforesaid Trial Court’s Order dated 21/09/2020, the Appellant/Defendant filed a Regular First Appeal (COMM) 2/2021 before the Delhi High Court, under Section 96 of the Code of Civil Procedure, 1908(CPC) (Appeal from original decree), and Section 13 of the Commercial Courts Act, 2015 (Appeals from decrees of Commercial Courts and Commercial Divisions). The High Court, vide Order dated 01/09/2023, made the following observations:

(i) That the Suit could not have been filed in Delhi, as the Appellant/Defendant was not situated within the territorial jurisdiction of the local limits of Delhi and is admittedly residing at Ghaziabad, Uttar Pradesh. It was also submitted by the Counsel that the Respondent/Plaintiff itself is located in Noida and not Delhi.

(ii) That the High Court observed, that no credible documents were presented by the Counsel of the Respondent/Plaintiff, to establish that the cause of action partly arose in Delhi. Thus, the High Court held that the Delhi Courts had no territorial jurisdiction.

(iii) That the High Court was of the opinion that the Respondent/Plaintiff was under a legal obligation to file the Statement of Truth in accordance with Order VI sub-rule (4) and (5) of Rule 15 A of CPC (Verification of pleadings in a Commercial Dispute) as amended by the Commercial Courts Act, 2015, while conforming to the mandatory procedural formalities contained therein. Therefore, the Respondent/Plaintiff now cannot be permitted to contend that no such directions were issued for filing the statement of truth after the transfer of Suit from ordinary court to designated Commercial Court.

(iv) Furthermore, as admitted by the learned Counsel for the Respondent/Plaintiff that the statement of truth, was never filed either with the Plaint or any time later at all, so the High Court was of the opinion, that the same would fall within the purview of issue of law and hold that the Plaint itself is non est and could not have been read in evidence either.

Conclusion

Thus, based on the aforesaid observations, the High Court resultantly allowed the Appeal filed by the Defendant and set aside the Order dated 21.09.2020 passed by the Ld. District Judge (Commercial Court).

Shaurya Mani Pandey

Associate,

The Indian Lawyer

 

[1] “Order 6 Rule 15-A of CPC: Verification of pleadings in a Commercial Dispute. —

….

(4)Where a pleading is not verified in the manner provided under sub-rule (1), the party shall not be permitted to rely on such pleading as evidence or any of the matters set out therein.

(5) The court may strike out a pleading which is not verified by a Statement of Truth, namely, the affidavit set out in the Appendix to this Schedule.”