Chamber Summons No.201 of 2010,Suit No.95 of 2006

20th February, 2014.

Petitioner Counsel: Mr. RAVI KADAM, Sr. Adv., a/w. Mr. D.D. MADAN, Sr. Adv., a/w. Mr. V.R. DHOND, Sr. Adv., a/w. Mr. S.V. DOIJODE, RASHNE MULLA - FEROZE, i/b. DOIJODE & ASSOCIATES
Respondent Counsel: Dr. MILIND SATHE, Sr. Adv., a/w. Mr. RISHIT BADIYANI, i/b. JUNNARKAR & ASSOCIATES

Cases Cited:
Shri M.L.Sethi Vs. Shri R.P.Kapur, (1972) 2 SCC 427 [Para 12,16,27]

JUDGMENT

JUDGMENT :- By this chamber summons, defendant seeks an order and direction against the plaintiff to disclose on oath and give inspection and copies of the documents listed in the schedule appended to the chamber summons. Some of the relevant facts which emerge from the pleadings filed by both parties and which are relevant for the purpose of deciding this chamber summons are as under:-

2. Pursuant to the bids invited by the plaintiff for supply of natural gas to power plants at Kawas at Jhanor - Gandhar, defendant, on 14th May 2004 the defendant confirmed that the defendant had perused the RFP documents and various amendments issued by the plaintiff and confirmed its unconditional acceptance to all provisions of the RFP document read with amendments in totality. The defendant submitted its bid document.

3. By letter dated 16th June 2004 the plaintiff issued a Letter of Intent in favour of the defendant conveying its acceptance to the proposal including financial and supplementary financial proposal submitted by the defendant. In the said Letter of Intent, it was provided that the defendant shall prepare and finalise the documents for signing of the Gas Sale and Purchase Agreement (GSPA) and shall enter into the said GSPA with the plaintiff as per proforma enclosed to the bidding document within 30 days from the date of said Letter of Intent. It was further provided that the terms and conditions of all the provisions such as scope, commencement of obligations, duration, build up period and delay in first delivery, quantities, quality, taxes, invoicing and payment etc. shall be governed by the GSPA to be entered into between the plaintiff and the defendant. The plaintiff requested the defendant to return its duplicate copy duly signed and stamped as a proof of its acknowledgment and confirmation.

4. By letter dated 17th June, 2004 to the plaintiff, the defendant acknowledged the receipt of Letter of Intent and forwarded a duplicate copy thereof duly signed and stamped as a proof of acknowledgment and confirmation of receipt.

5. By a letter dated 24th June, 2004 the plaintiff requested the defendant to accept the LOI unconditionally and prepare and finalise the documents for signing of GSPA agreement as per paragraphs 5 of Letter of Intent dated 16th June, 2004.

6. By letter dated 15th July, 2004, the defendant conveyed to the plaintiff its acceptance of the Letter of Intent based on the premise that the outstanding provisions in GSPA will require to be agreed and incorporated between the plaintiff and the defendant and further conveyed that the defendant would look forward to finalise the GSPA with the plaintiff for execution within the required period.

7. The plaintiff vide its letter dated 16th July, 2004 informed the defendant and clarified that the outstanding provisions in the GSPA relates to various details that were to be inserted at the time of signing of agreement as per agreed draft of the said GSPA and there were no other outstanding provisions to be incorporated in the GSPA. The plaintiff requested the defendant to furnish those details and prepare documents to sign the agreement and to indicate the date of execution of the agreement at the earliest.

8. The plaintiff by its letter dated 12th August, 2004 invited the attention of the defendant that under the provisions of RFP documents, the GSPA was required to be signed within 30 days from the acceptance of LOI. It was also placed on record that schedule of GSPA was discussed for finalisation in two meetings held on 26th July, 2004 and 5th August, 2004. Plaintiff requested the defendant to furnish the final GSPA immediately for verification by plaintiff and also to indicate the name of the authorised person and date for signing the agreement.

9. By letter dated 12th August, 2004, the defendant requested the plaintiff to extend the date of signing of the GSPA by one month expecting that the Ministry of Petroleum and Natural Gas would start the ROU notification process. Plaintiff by its letter dated 16th August, 2004 conveyed that the date of signing of the GSPA was extended upto a period of one month subject to condition that the condition precedent satisfaction period as identified in the GSPA shall be reduced by number of days of delay in signing of GSPA. By letter dated 6th May, 2005 the defendant suggested various amendments to be included in the GSPA.

10. Dr.Sathe, learned senior counsel appearing for the defendant submits that merely by issuance of the Letter of Intent, contract was not concluded. My attention is invited to clause 12.6.1 of the bid document which provides for consequences of not entering into GSPA. It is submitted that various conditions which were in the nature of condition precedent were to be negotiated by both parties after issuance of Letter of Intent and only thereafter the GSPA was to be entered into recording all the terms and conditions finally after such negotiations were concluded. Learned senior counsel submits that during the period of between July 2004 and November, 2005, various meetings were held between the representatives of the plaintiff and the defendant wherein various issues for finalization of the GSPA were discussed. It is submitted that in affidavit in rejoinder dated 7th February, 2006 filed by the plaintiff in Notice of Motion No. 163 of 2006, plaintiff has submitted that such meetings were held between the representatives of the parties in which various discussions were held so as to amend the contract. The learned senior counsel submits that on 2nd February, 2010 the defendant called upon the plaintiff to disclose various documents on affidavit which were described in the schedule appended to the said letter and to give inspection and copies thereof to the plaintiff. In the said letter, the defendant referred to paragraph 2.20 of the written statement in which there was a reference to various meetings held from time to time during the period between July 2004 and November 2005 in which meetings various issues were discussed including settling the terms and conditions of GSPA. Th said letter was received by the advocates of the plaintiff on 2nd February, 2010. On 3rd February, 2010 the defendant filed this chamber summons seeking disclosure and copies of the documents described in the scheduled appended to the chamber summons.

11. Dr.Sathe, learned senior counsel submits that all these documents in respect of which disclosure is sought are relating to the subject matter of the suit and are relevant and germane to the issue to be decided in the suit as to whether issuance of the Letter of Intent itself would amount to a concluded contract or that concluded contract would come into existence only upon execution of GSPA. Learned senior counsel submits that the plaintiff cannot seek privilege in respect of some of these documents unless such documents which are admittedly in custody of the plaintiff are first disclosed in the affidavit of documents. Learned senior counsel submits that while preparing for the present case, the defendant came across the documents such as power point presentation made to the chairman and managing director of the plaintiff at the meting held on 6th July, 2005 and made on 7th October, 2005 by the plaintiff to the defendant. Learned senior counsel submits that it is not disputed by the plaintiff that such meetings were held in which various issues for finalization of GSPA were discussed. Some of the issues were agreed upon and some remained outstanding. It is submitted that the present application for discovery and inspection is in respect of such crucial, material and relevant documents which are required to be disclosed for the purpose of effecting, complete and full adjudication of the issues arising in the present suit. Learned senior counsel submits that the plaintiff however has deliberately suppressed these crucial and relevant documents from this court. It is submitted that every such document will throw light in the matter in dispute between the parties.

12. Dr.Sathe, learned senior counsel placed reliance on the judgment of the Supreme Court in case of Shri M.L.Sethi vs. Shri R.P.Kapur, (1972) 2 SCC 427 and in particular paragraphs 6 to 9 in support of his submission that discovery of inspection of the documents which are relevant which would throw light on the controversy in the dispute can be demanded. Paragraphs 6 to 9 of the said judgment reads thus :-

6. We think that the High Court was wrong in holding that since the application for discovery did not specify the documents sought to be discovered, the lower Court acted illegally in the exercise of its jurisdiction in ordering discovery. Generally speaking, a party is entitled to inspection of all documents which do not themselves constitute exclusively the other party's evidence of his case or title. If a party wants inspection of documents in the possession of the opposite party, he cannot inspect them unless the other party produces them. The party wanting inspection must, therefore, call upon the opposite party to produce the document. And how can a party do this unless he knows what documents are in the possession or power of the opposite party? In other words, unless the party seeking discovery knows what are the documents in the possession or custody of the opposite party which would throw light upon the question in controversy, how is it possible' for him to ask for discovery of specific documents? Order 11, Rule 12 provides:

12. Any party may, without filing any affidavit, apply to the Court for an order directing any other party to any suit to make discovery on oath of the documents which are or have been in his possession or power, relating to any matter in question therein. On the hearing of such application the Court may either refuse or adjourn the same, if satisfied that such discovery is not necessary or not necessary at that stage of the suit, or make such order, either generally or limited to certain classes of documents, as may, in its discretion, be thought fit: Provided that discovery shall not be ordered when and so far as the Court shall be of opinion that it is not necessary either for disposing fairly of the suit or for saving costs

7. When the Court makes an order for discovery under the rule, the opposite party is bound to make an affidavit of documents and if he fails to do so, he will be subject to the penalties specified in Rule 21 of Order 11. An affidavit of documents shall set forth all the documents which are, or have been in his possession or power relating to the matter in question in the proceedings. And as to the documents which are not, but have been in his possession or power, he must state what has become of them and in whose possession they are, in order that the opposite party may be enabled to get production from the persons who have possession of them (see form No. 5 in Appendix C of the Civil Procedure Code). After he has disclosed the documents by the affidavit, he may be required to produce for inspection such of the documents as he is in possession of and as are relevant.

8. The High Court was equally wrong in thinking that in passing the order for discovery, the trial Court acted illegally in the exercise of its jurisdiction as it deprived the respondent of his right to claim privilege for non-production of his pass book and personal accounts, because the stage for claiming privilege had not yet been reached. That would be reached only when the affidavit of discovery is made. Order 11, Rule 13 provides that every affidavit of documents should specify which of the documents therein set forth the party objects to produce for inspection of the opposite party together with the grounds of objection.

9. Nor do we think that the High Court was right in holding that the documents ordered to be discovered were not relevant to the injuiry. The documents sought to be discovered need not be admissible in evidence in the enquiry or proceedings. It is sufficient if the documents would be relevant for the purpose of throwing light on the matter in controversy. Every document which will throw any light on the case is a document relating to a matter in dispute in the proceedings, though it might not be admissible in evidence. In other words, a document might be inadmissible in evidence yet it may contain information which may either directly or indirectly enable the party seeking discovery either to advance his case or damage the adversary's case or which may lead to a trail of enquiry which may have either of these two consequences. The word 'document' in this context includes anything that is written or printed, no matter what the material may be upon which the writing or printing is inserted or imprinted. We think that the documents of which the discovery was sought, would throw light on the means of the respondent to pay court fee and hence relevant.

13. Mr.Kadam, learned senior counsel appearing on behalf of the plaintiff invited my attention to various orders passed by this court in suit as well as in interlocutory proceedings in support of his submission that the present chamber summons seeking discovery of documents is grossly belated application and has been filed with malafide intention with a view to delay the trial of the suit. Learned senior counsel submits that the case of the plaintiff is based on the correspondence already annexed to the plaint. It is case of the plaintiff that a concluded agreement has been arrived at between the parties on issuance of the Letter of Intent by the plaintiff which was accepted by the defendant unconditionally. Execution of GSPA was not mandatory and merely because such agreement was not executed, it cannot be concluded that a concluded agreement had not been arrived at between the parties. Learned senior counsel submits that in the affidavit in support of chamber summons, defendant has not explained the gross delay in filing this chamber summons at this stage. It is submitted that though the plaintiff had already filed affidavit of documents as far back as on 7th December, 2007 and issues have been settled as far as as on 6th October, 2008, present chamber summons came to be filed only in the month of February, 2010. It is submitted that the plaintiff had already filed affidavit of evidence. However, in view of the delay tactics on the part of the defendant, for one or the other reason, the trial has not been proceeded with expeditiously though hearing of the suit is expedited as far as back as in the year 2008.

14. Mr.Kadam, learned senior counsel submits that if there were any shortcomings in the affidavit of documents filed by the plaintiff in the month of December 2007, defendant ought to have pointed out the same and appropriate proceedings ought to have been filed immediately.

15. Mr.Kadam learned senior counsel invited my attention to the proviso to Order 11 Rule 12 of the Code of Civil Procedure and submits that this court shall not order for discovery of documents since none of the documents are necessary either for disposing fairly of the suit or for saving cost. It is submitted that the schedule appended to the chamber summons is absolutely vague and no such order can be passed directing the plaintiff to disclose those documents. It is submitted that in any event the present application under Order 11 Rule 12 of Code of Civil Procedure, 1908, the defendant ought to have filed such application before filing any affidavit. It is submitted that this application is not under Order 11 Rule 14 and cannot be filed at this stage after plaintiff already having filed affidavit of evidence. It is submitted that in this case the plaintiff has also filed affidavit of documents. No order for discovery thus can be made under Order 11 Rule 12 for such disclosure at this stage.

16. Mr.Kadam, learned senior counsel distinguished the judgment of the Supreme Court in case of Shri M.L.Shetty (supra) relied upon by Dr.Sathe, learned senior counsel appearing for the defendant.

17. It is submitted that in any event the plaintiff has already setout in detail in the plaint whether any such meetings were held and for what purpose and has annexed large number of documents. The chamber summons is thus thoroughly misconceived and cannot be entertain at this stage.

18. Dr.Sathe, learned senior counsel in rejoinder submits that application filed by the defendant is not under Order 11 Rule 12 of the Code of Civil Procedure, 1908 but is filed under Order 11 Rule 14 and such application can be filed at any stage. On the issue of delay raised by the plaintiff, it is submitted that in view of the negotiations for settlement going on between the parties, defendant did not file chamber summons for disclosure earlier which fact has been explained in the affidavit in support of the chamber summons.

19. For deciding this chamber summons, a reference to some of the orders passed by this court would be relevant. Suit is filed in the year 2005. On 19th September, 2007 at the request of the defendant this court granted four weeks time to file written statement and affidavit of documents. This court directed the office to place the matter for framing issues after eight weeks and directed the parties in the meantime to exchange the affidavit of documents so also admit or deny the documents of each other. On 6th October, 2008 after considering the pleadings, this court settled the issues. One of the issues framed is " whether plaintiff prove that there exist valid, concluded and binding contract as reflected in exhibits D, E, F and G and the Letter of Intent issued by the plaintiff and signed and returned by the defendant". In paragraph (2) of the said order, this court directed that the parties to complete discovery and inspection. Plaintiff was directed to file affidavit of evidence in the court directly on 11th November, 2008 alongwith the documents. Though the court granted liberty to the parties to settle the matter on the request of the defendant, it was made clear that the same had nothing to do with the court working so far as recording of evidence was concerned. Matter was adjourned to 11th November, 2008 for recording of evidence.

20. On 11th November, 2008 the learned senior counsel appearing on behalf of the plaintiff made a statement that the parties were in process of finalizing admission and denial of the documents. By consent of parties, matter was adjourned for recording of evidence by an order dated 4th December, 2008. By an order dated 13th January, 2009, this court fixed the matter for recording evidence on 27th January, 2009. Sometime in the year 2009, the defendant filed a chamber summons inter alia praying for amendment of the written statement. By an order dated 22nd April, 2009 passed by Anoop V Mohta, J., this court allowed the said chamber summons and permitted the defendant to carry out amendment to the written statement. This court also directed the defendant to file further affidavit and documents within two weeks from the date of carrying out amendments. Both parties were directed to exchange draft additional issues if any. The said order passed by this court allowing amendment was impugned by the plaintiff by filing an appeal. By an order dated 30th July, 2005, Division Bench of this court dismissed the appeal filed by the plaintiff. Special Leave Petition filed against the order passed by the Division Bench is rejected.

21. On 4th December, 2009, this court framed an additional issue. By the said order, this court directed that the discovery/inspection if any shall be completed. The parties had already filed further affidavit of documents. The parties were directed to exchange the notice to admit documents.

22. It is not in dispute that on 7th December, 2007 the plaintiff had already filed affidavit of documents. On 9th January, 2009 the plaintiff' first witness filed affidavit of evidence. On 14th January, 2010 this court has taken affidavit of the General Manager of plaintiff in lieu of further examination of chief on record. On 28th January, 2010, this court recorded that the defendant were filing three additional documents. The plaintiff had been directed to deny or accept such documents by 3rd February, 2010. On 2nd February, 2010, defendant after referring to paragraph 2.20 of the written statement filed by the defendant on 31st October, 2007 alleged that between July 2004 and November, 2005, several meetings were held between the representatives of the plaintiff and the defendant and various issues were discussed including settling the terms and conditions of GSPA. The defendant called upon the plaintiff to disclose various documents referred to in the schedule appended to the said letter forthwith on affidavit and to arrange to give inspection and copies thereof. The said letter was received by the plaintiff' advocate on 2nd February, 2010. On 3rd February, 2010, the defendant filed this chamber summons inter alia praying for disclosure of those documents.

23. A perusal of the record indicates that the plaintiff did not rely upon the documents in respect of which disclosure is sought in the plaint. In the written statement filed by the defendant, the defendant has alleged about the discussions held between the plaintiff and the defendant and not the officials of the plaintiff inter se. The defendant had already affirmed the affidavit of documents on 31st October, 2007 but did not serve a copy of the said affidavit to the plaintiff' advocate till January 2008. The defendant was fully aware about the documents, plaintiff had proposed to rely upon from the affidavit of documents dated 14th December, 2007. The plaintiff has not referred to any of the documents which are setout by the defendant in the schedule appended to the chamber summons. Defendant did not request the plaintiff to disclose such documents if according to the defendant, such documents were relevant and necessary. On 14th January, 2010 the defendant made a statement that the defendant would be filing further affidavit of documents and on that ground the plaintiff agreed to an adjournment of the matter by a period of two weeks. Though the further affidavit of documents of the defendant was ready on 23rd January, 2010, the same was not served upon the plaintiff in advance. The plaintiff thus could not complete the exercise of admission and denial in respect of such documents. A perusal of the schedule to the chamber summons and the record indicates that the discovery and inspection prayed for by the defendant is in respect of alleged conversation which are not for the recent period but are for much prior period before filing of written statement and affidavit of documents including additional affidavit of documents by the defendant.

24. The short controversy which is raised in the plaint is whether Letter of Intent issued by the plaintiff itself is a concluded contract or execution of the GSPA was mandatory. It is the case of the plaintiff that issuance of Letter of Intent and unconditional acceptance thereof by the defendant was concluded contract whereas it is the case of the defendant that since no GSPA was executed, there was no concluded contract. It is the case of the defendant that after issuance of Letter of Intent by the plaintiff and conditional acceptance by the defendant, several terms and conditions of the contract where to be finalized and based on such concluded terms, the said GSPA was to be executed. It is the case of the defendant that during the period between July, 2004 to November 2005 various meetings were held between the plaintiff and defendant in which the officers of the plaintiff discussed the terms and conditions for execution of the contract which ultimately was not executed. According to the defendant, since discussions were held post acceptance of Letter of Intent, it presupposes that the acceptance of Letter of Intent even if considered as unconditional, execution of GSPA was mandatory to arrive at concluded contract. The defendant therefore, sought discovery of various such documents which would indicate that such meetings were held between the officers of the plaintiff themselves and or with the defendant. A perusal of the record and also the pleadings filed by the defendant themselves shows that the defendant themselves have annexed some of these documents. Plaintiff has annexed several documents which demonstrates what transpired during the period between July, 2004 to November, 2005. Defendant has already filed written statement on 31st October, 2007. Defendant had also filed affidavit of documents affirmed on 31st October, 2007. Plaintiff has filed affidavit of documents on 7th December, 2007. Affidavit of documents of the defendant though was affirmed on 31st October, 2007, was served upon the plaintiff only in the month of January, 2008. Issues were settled on 6th October, 2008. Defendant thereafter applied for amendment to the written statement. Hearing of the suit is already expedited as far back as in the year 2008. Plaintiff has already filed affidavit in lieu of examination in chief as far back as on 9th January, 2009. The matter was adjourned from time on one or the other ground. Cross examination of the witness of the plaintiff who had filed affidavit in lieu of examination in chief was not commenced. For the first time defendant by their letter dated 2nd February, 2010 referred to their own written statement and alleged that in the written statement filed by the defendant, it as alleged that during the period between July, 2004 and November, 2005, several meetings were held from time to time between the representatives of the plaintiff and defendant and various issues were discussed including settling the terms and conditions of GSPA. For the first time it was alleged that various documents, notices of meetings, agenda and minutes of the meeting and internal correspondence relating to the meetings at which presentations in writing were made as also notes and records of such discussions which were in custody, power, possession and control of the plaintiff ought to have been disclosed by the plaintiff but not disclosed and all such documents were related to the said meetings are relevant for effecting and complete adjudication of issues involved in the matter. The said letter was served upon the plaintiff's advocate on 2nd February, 2010. On 3rd February, 2010, the defendant filed this chamber summons. The aforesaid facts clearly indicate that the defendant wants to some how delay the trial of the suit. The chamber summon is though filed in the year 2010, has not been heard till 2014. As a result thereof, the cross examination of the plaintiff's witness could not commence.

25. In my view the application, filed by the defendant for discovery and inspection is not under Order 11 rule 14 of C.P.C., as is apparent from the affidavit in support and prayers in the chamber summons but is under Order 11 Rule 12 of C.P.C. A perusal of the schedule to the chamber summons, it clearly indicates that the discovery sought in respect of the documents described in the schedule is totally vague and is also by way of fishing enquiry. In my view none of these documents, would be relevant for the purpose of deciding the issue already framed as to why the Letter of Intent issued by the plaintiff and accepted by the defendant is a concluded contract or not.

26. Before directing discovery or production of documents, court has to be satisfied whether any of these documents are relevant for the purpose of disposing of the suit and not to enable the party to cause a roving enquiry to fish out information which may or may not be relevant. Court has to consider before passing an order for discovery of documents about the relevancy of such documents with regard to dispute or controversy between the parties. In my view discovery of any of the documents described in the schedule appended to the chamber summons is not necessary and in any event could not be permitted at this stage. Both parties have filed their respective affidavits of documents. Plaintiff has already filed affidavit of its first witness in lieu of examination in chief as far back as on 9th January, 2009. This chamber summons is pending for last four years for hearing and final disposal. Defendant has not disclosed any reasons as to why there was gross delay in filing his application for disclosure.

27. In so far as judgment of Supreme Court in case of M.L. Sethi (supra) relied upon by Dr. Sathe is concerned, the Supreme Court had come to the conclusion that the documents in respect of which discovery was sought were relevant to the enquiry. In my view the judgment of the Supreme Court in the case of M.L. Sethi (supra) is clearly distinguishable with the facts of this case. Since none of the documents in respect of which discovery is sought are relevant for the purpose of deciding the issue as to whether Letter of Intent issued by the plaintiff and accepted by the defendant would be a concluded contract or not, in my view there is no merit in the chamber summons filed by the defendant and the same thus deserves to be dismissed. I therefore, pass the following order :-

(a) Chamber summons is dismissed.

(b) No order as to costs.

Chamber summons dismissed.