SIVAGAMI N. v. M/S. VINAYAKA TRAVELS

inference and deny cross-examination to the plaintiffs.

#2. Heard Sri K.B.S.Manian, learned counsel for the petitioner and Sri Dhananjay V. Joshi, learned senior counsel appearing for respondents 1 to 3.

#3. Facts, in brief, germane are as follows: - The petitioner’s late husband who was a partner in the 1st respondent/Vinayaka Travels (hereinafter referred to as ‘the firm’ for short) dies on 13-11-2020. The firm had to settle the accounts of the petitioner’s husband after his death. But did not do so, and there was no determination of his share qua the assets of the firm. Respondents 2 and 3/plaintiffs 2 and 3 institute commercial O.S.No.64 of 2022 claiming, inter alia, certain monetary benefits due and payable by the petitioner to the plaintiffs as legal representative of the deceased partner. The petitioner is said to have filed a counter-claim on 01-04-2022 seeking settlement of 5 accounts of the partnership firm as on the date of death of the husband of the petitioner and tentatively claimed ₹5/- crores to be payable to the petitioner in the counter claim.

3.1. The petitioner files an application in I.A.No.XIII seeking a direction from the Commercial Court directing the plaintiffs to furnish statement of accounts of the plaintiff No.1/firm. The Commercial Court directs production of documents/accounts as sought for. The respondents challenge the said order before this Court in Writ Petition No.22053 of 2022 which comes to be dismissed by upholding the order of the commercial Court and also observing that adverse inference would be drawn against the respondents on account of non-compliance with the order of this Court, which would be withholding the accounts pertaining to the partnership firm. Another writ petition comes to be filed in Writ Petition No.1597 of 2023 by the respondents only to withdraw the suit filed by them. A coordinate Bench of this Court accepting the petition permits withdrawal of the suit. Therefore, the suit comes to be dismissed as withdrawn. This Court however, directed that the counter claim can be proceeded with by the Court. The interim 6 direction so issued would continue to be valid till the disposal is what was directed by the coordinate Bench.

3.2. The petitioner then files an application in I.A.No.XXIV before the concerned Court seeking a direction that the plaintiffs have no right to cross-examine the petitioner/1st defendant on account of adverse inference to be drawn against the plaintiffs. The concerned Court, terms of impugned order dated 21-04-2025, rejects the application that adverse inference cannot be drawn midstream, as it is only at the end of the trial. The rejection of the application is what has driven the 1st defendant/ petitioner to this Court in the subject petition.

#4. The learned counsel appearing for the petitioner would vehemently contend that the statute recognizes drawing of adverse inference. This Court, had in fact, directed drawing of adverse inference in the event of the documents i.e., the accounts would not be furnished. The accounts have not been furnished in their entirety. He would, therefore, submit that adverse inference must be drawn and the result of drawal of such adverse inference would 7 be denial of cross-examination of 1st defendant by the plaintiffs. He would seek to place reliance upon a judgment of the learned s ingle Judge of this Court in the case of SMT. JUBEDABI v. SMT. JAINABI reported in ILR 1974 KAR 1473.

#5. Per contra, learned senior counsel Sri Dhananjay V. Joshi appearing for the respondents 1 to 3 would seek to contend that adverse inference can only be drawn at the end of the trial. There can no order of denial of cross-examination on the score that adverse inference has been drawn. He would seek to place reliance upon judgments rendered by the Apex Court and that of this Court to buttress his submission that right of cross-examination is a valuable right and cannot be taken away on the rebuttal plea of adverse inference as obtaining under the statute. He would seek dismissal of the petition.

#6. I have given my anxious consideration to the submissions made by the respective learned counsel and have perused the material on record. 8

#7. The afore-narrated facts and link in the chain of events are all a matter of record. A Commercial Original Suit is instituted by the plaintiffs 2 and 3 in Commercial O.S.No.64 of 2022 seeking the amounts that are due from the petitioner. The petitioner is said to have filed a counter claim in the said suit claiming a sum of ₹5/- crores. The issue does not relate to the merit of the matter. An application in I.A.No.XIII comes to be filed by the petitioner seeking a direction to the plaintiffs to furnish statement of accounts of 1st plaintiff/firm. The said application comes to be favoured by the concerned Court on the following reasons: “…. …. ….

#7. Point No.1: By filing the above application, 1st defendant sought for production of as many as 7 documents from plaintiffs stating that they are in possession of plaintiffs. Plaintiffs are not denying specifically the possession of said documents with them. It is their only contention that after trial if the documents now sought by the 1st defendant are not on record, 1st defendant can file such application and the application filed at this stage is premature. Whereas Order 11 Rule V(1) states that at any time during the pendency of any suit any party may seek direction to produce documents in the possession of other party. For the purpose of direction to be issued for production of a document it is necessary for the party to establish that said document has to be in custody of the person from whom the same is sought for production and further the document must relate to the controversy involved in the suit and are necessary to decide the matter in controversy. The plaintiffs in their objections statement not at all denied the possession of those documents. Direction to produce the documents sought by 1st defendant would not have caused any 9 detriment to the plaintiffs. Accordingly, 1st defendant has made out a ground to allow this application and thereby direct the plaintiffs to produce documents in their possession as sought by him so as to adjudicate the controversy between the parties. Accordingly, I have answered Point No.1 in the Affirmative.

#8. Point No.2: In view of my finding on point No.1, I proceed to pass the following O R D E R Interim Application No.13 filed by 1st defendant under Order 11 Rule V(1) of Commercial Courts Act r/w Sec. 151 CPC seeking direction to produce as many as 7 documents which are in possession of plaintiff is allowed with no cost.” This is called in question before this court in Writ Petition No.22053 of 2022. A coordinate Bench of this Court disposes of the petition by the following order: “This petition is by the plaintiffs in Commercial O.S. No.64/2022 on the file of the LXXXV Additional City Civil and Sessions Judge, Bengaluru [for short, 'the commercial Court']. The petitioners have impugned the commercial Court's order dated 14.10.2022. The commercial Court by this order has called upon the petitioners to produce the documents as sought for by the first respondent in her application [I.A. No.13] filed under Order 11 Rule 5[1] of the Code of Civil Procedure, 1908 as applicable to the commercial Courts [for short, 'the CPC']. Sri. Dhananjay Joshi, the learned senior counsel for the petitioner submits that the civil Court could have allowed the application only if the two conditions are satisfied viz. the petitioners have the custody of the original documents and it is germane to the matter in question in the suit. The commercial Court has allowed the first respondent’s application only because the petitioners cannot contest that the documents are 10 in their possession but without examining the question whether these documents relate to the subject matter of the suit. However, Sri. Dhananjay Joshi fairly submits that the first respondent has filed a counter claim which would essentially require the commercial Court to decide on whether there must be directions to the first respondent to produce audited balance sheets and whether expert valuator must be appointed to assess the market value of the firm's assets and the firm's goodwill. The first respondent has sought for the firm's IT/GST returns and audited balance sheets for the financial years commencing from 2014-15 to 2019-20. It emerges from the above that these documents relate to the subject matter of the suit. The petitioners must produce the documents, but if they fail to produce the documents, the consequence would be statutory because of the provisions of Order XI Rule 5[4] of CPC. The commercial Court will have to draw adverse inference. As such, the petition stands disposed of with the observation that if the petitioners fail to produce the documents despite the impugned order, the commercial Court, subject to all just exceptions in law, will have to consider drawing appropriate adverse inference.” The coordinate Bench observes that documents relate to the subject matter of the suit. The petitioners therein i.e., the firm and others were directed to produce documents. But, if they fail to do so, the consequence would be statutory as the provision of Order XI Rule 5(4) of the CPC permits the Commercial Court to draw adverse inference. The coordinate Bench observes that Commercial Court will have to draw the adverse inference. 11

#8. The plaintiffs then seek to withdraw the suit in Writ Petition No.1597 of 2023. This is permitted by an order of the coordinate Bench dated 25-01-2024. The order reads as follows: “ORDER Learned counsel for the petitioners has filed a memo, which reads as under: "The advocate for petitioner submits that the application under Order 23 Rule 1(3) of CPC was filed as a matter of abundant caution after repayment of loan to defendant No.4 during the pendency of the suit. As such the plaintiff steps into the shoes of the defendant No.4 and is entitled to file suit for foreclosure. Hence, the petitioner no longer presses his application under Order 23 Rule 1(3) of CPC and seeks to withdraw the suit simpliciter."

#2. Memo is placed on record.

#3. IA filed under Order XXIII Rule 1(3)(b) read with Section 151 of CPC is dismissed as not pressed and the suit is dismissed as withdrawn simpliciter.

#4. In view of the above, writ petition also does not survive for consideration. Accordingly, the writ petition is dismissed as withdrawn.

#4. It is made clear that the counter claim made by the defendants - respondents shall continue. The interim orders which are in operation in favour of the defendants - respondents shall be in force. It is also made clear that the observations made by the Trial Court in the impugned order, while dismissing IA is set aside, as the same are not relevant.” The coordinate Bench holds that the suit filed by the plaintiffs is dismissed as withdrawn and the counter-claim made by the 12 defendants would continue. The interim orders that were operating in favour of the defendants would continue to operate till the disposal of the suit.

#9. After the aforesaid order of the coordinate Bench, an application in I.A.No.XXIV comes to be filed stating that the plaintiffs have lost the right to cross-examine DW-1/defendant on the counter-claim, in the light of adverse inference to be drawn against the plaintiffs in terms of the order dated 08-12-2022 passed in Writ Petition No.22053 of 2022. This comes to be rejected by the concerned Court on the following reasoning: “…. …. ….

#11. I have gone through the decision cited by both sides wherein observations are made with regards drawing of adverse inference, where and in what circumstances it has to be drawn. In all these decisions it has been consistently held that adverse inference can be drawn only after trial is completed and evidence is being appreciated and not at this stage when D.W.1 is yet to be subjected to cross-examination. In the result and for the aforesaid reasons and following the observations made in the above cited decisions it cannot be said that justifiable grounds are made for granting the reliefs as claimed in the application. Accordingly, I answer Point No.1 in the Negative.

#12. POINT NO.2:- For the aforesaid reasons, I pass the following: ORDER 13 I.A.No.XXIV filed by the defendant No.1 U/Sec.151 of CPC is rejected. No order as to costs.” The Court holds that adverse inference can be drawn only after trial is completed and evidence would be appreciated and not at the stage DW-1 is yet to be subjected to cross-examination.

#10. The issue now would be, whether a direction to adverse inference can be given as mandated under the statute, to take away the right of the party to the lis to cross-examine. It, therefore, becomes necessary to notice Order XI Rule 5 of the CPC. It reads as follows: “5. Production of documents.—(1) Any party to a proceeding may seek or the court may order, at any time during the pendency of any suit, production by any party or person, of such documents in the possession or power of such party or person, relating to any matter in question in such suit. (2) Notice to produce such document shall be issued in the form provided in Form No. 7 in Appendix C to the Code of Civil Procedure, 1908 (5 of 1908). (3) Any party or person to whom such notice to produce is issued shall be given not less than seven days and not more than fifteen days to produce such document or to answer to their inability to produce such document. (4) The court may draw an adverse inference against a party refusing to produce such document after issuance of a 14 notice to produce and where sufficient reasons for such non- production are not given and order costs.” Order XI Rule 5 CPC mandates production of documents from the hands of the plaintiff. Sub-rule (4) of Rule 5 of Order XI observes that in the event documents are not produced as directed, it is open to the Court to draw an adverse inference. This is what is directed by the coordinate Bench. The issue now would be at what stage and whether it can take away the right of cross-examination.

#11. The right to cross-examine is not mere procedural privilege. It is the bedrock of fair hearing, a lodestar in the constellation of natural justice. It is trite law that right to cross-examine is a valuable right. If a Court were to pass an order taking away the right of cross-examination, it can be only in exceptional circumstances. There is no provision of law in the statute that would permit cross-examination to be denied. The provision available is only to strike off the defence. Striking off the defence can never mean striking off cross-examination. Right to cross-examination is a facet of natural justice. Statute or no statute, right to cross-examine 15 stems from the principles of natural justice and fair opportunity in a trial.

#12. The Apex Court the case of AYAAUBKHAN NOORKHAN PATHAN v. STATE OF MAHARASHTRA1 amplifies in lucid elucidation as to what is the right of cross-examination. The Apex Court has held as follows: “…. …. ….