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Elucidating the significance of Order VI Rule 15A CPC, which mandates the verification of pleadings in commercial disputes through an affidavit: Delhi High Court

Elucidating the significance of Order VI Rule 15A CPC, which mandates the verification of pleadings in commercial disputes through an affidavit: Delhi High Court

Case title:  DECCAN EDIBLES PRIVATE LIMITED VS S P J CARGO PRIVATE LIMITED

Case no.: CM(M) 216/2024, CM APPL. 6750/2024

Dated on: 20TH May 2024

Quorum:  Hon’ble MS. JUSTICE SHALINDER KAUR.

FACTS OF THE CASE

The background of the present case unfurl that the respondent filed a commercial suit numbered as CS (COMM) No. 813/2023 titled as “Cargo Private Limited v. Deccan Edibles Private Limited” for recovery of Rs. 1,06,27,996/- (Rupees One Crore Six Lakhs Twenty-Seven Thousand Nine Hundred Ninety-Six) along with 24% interest rate till the date of realization against the petitioner. Summons were issued in the said suit by the learned Trial Court on 13.09.2023. The petitioner herein filed its written statement along with affidavit of admission and denial and two applications, one being of condonation of delay in filing of the written statement and the other under Order VI Rule 15A CPC for striking out the pleadings of the respondent in the plaint for the same were not verified by the Statement of Truth. The said application of the petitioner under Order VI Rule 15A CPC was listed before the learned Trial Court on 12.01.2024 and on the very same day the said application was dismissed. Aggrieved by the said decision of the learned Trial Court, the petitioner has impugned the order dated 12.01.2024 before this court under Article 227 of the Constitution of India, 1950.

CONTENTIONS OF THE APPELLANT

Ms. Sakshi Mehley, learned counsel for the petitioner submitted that the learned Trial Court mistakenly ignored the mandatory provisions of Order VI Rule 15A CPC which makes verification of the pleadings in a commercial dispute mandatory. With regard to the plaint filed by the respondent, there is no verification of paragraph no. 24 to 38 therefore, the pleadings in the suit cannot be considered to have been verified in the manner provided under Order VI Rule 15A sub-rule (1) CPC and therefore the respondent cannot be permitted to rely on such pleadings as evidence or any of the matters set out therein and hence, the entire pleadings are liable to be struck out for non-filing of the appropriate Statement of Truth as non-est. Learned counsel for the petitioner submitted that the learned Trial Court burdened the petitioner with cost for delay in filing of the written statement and has considered that the suit was properly instituted on 13.09.2023, when admittedly the same was not the case as the Statement of Truth in support of the plaint has been filed on 12.01.2024 and therefore the same should be considered as the date of institution of the suit. Consequently, the written statement of the petitioner was well within the statutory period of 30 days and it could not have been burdened with costs. Ms. Mehley submitted that the learned Trial Court by allowing the respondent to bring on record a fresh Statement of Truth has rendered the objection taken by the petitioner in its written statement redundant. The fresh Statement of Truth, even if, in the nature of the rectification amounts to amendment of the suit and the same would have necessitated the respondent filing an application under Order VI Rule 17 CPC, yet the learned Trial Court renders the said provision to CPC to be redundant by simply allowing the respondent to file a fresh Statement of Truth and takes the same on record without following the due process of law. Learned counsel for the petitioner further submitted that on one hand the respondent has pleaded that the error pointed out by the petitioner was merely a typographical one and yet, the paragraph no. 3 of the new Statement of Truth filed by the respondent on 12.01.2024 has been changed substantially by the respondent and the learned Trial Court has allowed the same at a belated stage thus prejudicing the interest of the petitioner for not only the relief of striking out of the pleadings has being denied but now the respondent will have to rely on the said pleadings. To conclude, learned counsel for the petitioner submitted that the verification contained in paragraph 3 of the Statement of Truth is not in consonance with the paragraphs as contained in the plaint and the same can be ascertained by the fact that the respondent has deposed on oath that paragraph numbers 16 to 23 are based on legal advice, whereas perusal of the said paragraphs describe the manner in which the petitioner and the respondent has been transacting with each other in the past. Therefore, only respondent could have been aware of the alleged facts as contained in paragraphs number 16 to 23 and the verification could have been based only on the personal knowledge of the respondent and not on legal advice. Consequently, the advice is untenable and cannot be considered to be a typographical error. Hence, the respondent in paragraph number 3 of the Statement of Truth has made substantial changes thus, the plea of defect being merely a typographical error is not tenable.

CONTENTIONS OF THE RESPONDENTS

Mr. Laksh Khanna, learned counsel for the respondent has refuted the submissions made by the counsel for petitioner by stating that the petitioner has wrongly invoked the jurisdiction of this court under Article 227 of the Constitution of India, 1950 as the order is well reasoned and there is no perversity from the order which is impugned. The defect was typographical in nature and was curable and therefore no substantive harm was caused to the petitioner. Learned counsel for the respondents submitted that the intention to file the present petition is to pre-empt the averments made in the replication and to „correct‟ the contentions in the written statement by misusing the plenary powers of this court. Further, the hyper-technical approach opted by the petitioner is likely to cause delay in trial of the suit.

LEGAL PROVISIONS

Order VI Rule 15A of the Code of Civil Procedure (CPC), 1908

This rule pertains specifically to the verification of pleadings in commercial disputes, introduced by the amendments under the Commercial Courts Act, 2015.

Article 227 of the Constitution of India, 1950

This article provides the High Courts with the power of superintendence over all courts and tribunals within their jurisdiction.

Commercial Courts Act, 2015

This act introduces several amendments to the CPC, particularly concerning the handling of commercial disputes.

Order VI Rule 17 CPC

This rule deals with the amendment of pleadings:

Amendment for Clarification: The court may permit amendments to the pleadings if it is necessary for the purpose of determining the real questions in controversy between the parties.

Timing of Amendments: Amendments should generally be allowed before the trial begins. However, after the trial has commenced, amendments are permitted only if the party seeking the amendment can demonstrate that it could not have raised the matter earlier despite due diligence.

COURT’S ANALYSIS AND JUDGEMENT

The Commercial Courts Act, 2015 introduced several amendments to the Civil Procedure Code (CPC), 1908 concerning commercial disputes, including provisions related to the verification of pleadings for which Order VI Rule 15A CPC was added. Order VI Rule 15A mandates the verification of pleadings by way of an affidavit. This requirement ensures that the statements made in the pleadings are authenticated and verified under oath in the absence of verification, the pleadings cannot be relied as evidence. If the pleading is amended, the same has to be verified. Failure to comply with the verification requirement can have legal consequences, as the court may reject the pleading or require the party to rectify the defect. This underscores the importance of strict compliance with the verification mandate. The core question which arises for adjudication in the present petition is whether the first filing of the plaint when filed within prescribed limitation period can be considered a valid filing in case it suffers from inherent defects. Hence, the position of law is well settled by various judgments observing that in case, it is found that the filing of fresh suit consists of inherent defects, such filing then has to be held as no nest and when the defects have been found to be formal in nature, it can be rectified. Reverting to the facts of the present case, the petitioner herein had pointed out before the learned Trial Court at the time of disposal of the application moved by the respondent under Order VI Rule 15A CPC, for striking of paragraphs from 24 to 38 of the plaints from the record as the Statement of Truth filed along with the plaint is incomplete inasmuch as there is no verification of the paragraphs 24 to 38, therefore, the said documents are liable to be struck off. However, the learned Trial Court declined the prayer of the petitioner and disposed of the application. Needless to say, the defects pointed out by the petitioner as the paragraphs 24 to 38 of the Statement of Truth not being appropriately verified is a curable defect. Moreso, the said defect was cured by the respondent on the very same day before the learned Trial Court by filing the complete Statement of Truth, a copy of which was also supplied to the petitioner herein. Thus, there is no merit in the submission raised by the petitioner that plaint should be considered of having only paragraphs 1 to 23 and remaining are liable to be struck off. The other judgments relied upon by the parties are decided on their own facts distinguishable from the facts of the present case. Accordingly, no reason is made out to set aside the impugned order. The present petition along with the pending application is dismissed.

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Judgement Reviewed by – HARIRAGHAVA JP

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The Legal Heirs of A Deceased Partner are not held Liable for the Liability of Partnership Firm upon the Partner’s Demise : The Supreme Court

Case title: Annapurna B. Uppin & Ors. V. Malsiddappa & Anr.

Case no.: Arising Out Of SLP (C.) No.11757 Of 2022

Order on: 5th April 2024

Quorum: Justice Vikram Nath and Justice Satish Chandra Sharma

FACTS OF THE CASE

The case concerns the retrieval of an investment made by the complainant in a partnership firm from the legal heirs of the deceased partner, pursuant to the Consumer Protection Act of 1986. The complainant aimed to recover the investment from the appellants, who were the legal heirs of the deceased partner, arguing that they had inherited the estate of the deceased partner and therefore could not evade responsibility for fulfilling the payment owed to the complainant, who was respondent no.1.

The respondent, Malsiddappa, filed a complaint alleging that he had invested Rs. 5 Lakhs in the partnership firm M/s Annapurneshwari Cotton Co. on May 21, 2002, with a promised repayment after 120 months with interest at 18% per annum. Despite multiple requests for premature payment, the payment was denied. The complaint was filed before the District Consumer Disputes Redressal Forum (DCDRF) alleging deficiency in service.

CONTENTIONS OF THE APPELLANT

The appellants, legal heirs of the deceased managing partner of the firm, argued that they were never part of the partnership and that the complaint was not maintainable under the Consumer Protection Act, 1986.

The present appeal is not maintainable in view of the recent judgment of this Court in the case of Universal Sompo General Insurance Company Ltd. vs. Suresh Chand Jain and Another[1]:

wherein this Court has held that the remedy of Article 226 of the Constitution before the High Court would be available to an aggrieved party where the NCDRC[2] has decided an appeal or a revision but no such remedy would be available where it was an original complaint before the NCDRC. The present petition should be dismissed on the ground of alternative remedy.

CONTENTIONS OF THE RESPONDENTS

Respondent contended that the appellants, as legal heirs of the deceased partner, were liable for the payment, and the complaint was maintainable under the 1986 Act.

 ISSUE

  • Whether the complaint filed under the Consumer Protection Act, 1986, is maintainable.
  • Whether the appellants were liable for the investment returns as legal heirs of the deceased partner.
  • And Availability of alternative legal remedies.

COURT’S ANALYSIS AND JUDGEMENT

The Supreme Court observed that the respondent was deemed a partner of the firm as per the registered partnership deed. The investment being commercial in nature fell outside the purview of the Consumer Protection Act.

It was held that legal heirs do not automatically become liable for the firm’s debts upon the death of a partner unless explicitly stated and dismissed the complaint.

It advised the complainant to seek redressal in a civil court. The Supreme Court’s decision set aside the orders of lower consumer forums and provided guidance on resolving partnership investment disputes.

This judgment underscores the importance of understanding the legal framework governing partnership firms and consumer protection laws. It clarifies the scope of the Consumer Protection Act and the liability of legal heirs in partnership matters.

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Judgement Reviewed by – Chiraag K A

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[1] (2023) SCC Online SC 877

[2] National Consumer Disputes Redressal Commission