M/S Anupama Wine Distributors Vs M/S Tilak Nagar Industries Limited

M/S ANUPAMA WINE DISTRIBUTORS A REGISTERED PARNTERSHIP FIRM NO.1313, 9TH CROSS, 27TH MAIN IST PHASE, J.P. NAGAR BANGALORE - 560 078 REPRESENTED BY ITS MANAGING PARTNER SRI K. ANANDA RAO.

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…PETITIONER

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(BY SRI RAJESH D.M, ADV.)

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AND:

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Digitally signed by NANDINI M S Location: HIGH COURT OF KARNATAKA

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M/S TILAK NAGAR INDUSTRIES LIMITED A COMPANY REGISTERED UNDER THE COMPANIES ACT, HAVING ITS REGD. OFFICE AT INDUSTRIAL ASSURANCE BUILDING, III FLOOR, CHURCHGATE MUMBAI - 400 020 AND AT NO.24, 12TH MAIN OPP TO WATER TANK IST STAGE BTM LAYOUT, BANGALORE - 560 029 REPRESENTED BY ITS CHAIRMAN AND MANAGING DIRECTOR.

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…RESPONDENT

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(BY MISS. PRARTHANA RADHAKRISHNA, ADV., SMT. LALITHA REDDY, ADV., SRI TEJAS KRISHNAMURTHY, ADV. FOR SRI VIVEK HOLLA, ADV., SRI NAMN K, ADV. .,ADVOCATE)

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HC-KAR

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THIS W.P IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE ORDER DTD.01.03.2021 PASSED IN COM O.S.NO.8311/2007 ON IA NO.10 FILED UNDER ORDER XVIII RULE 17 OF CPC REFUSING TO PERMIT THE PETITIONER TO ADDUCE ITS EVIDENCE ON THE COUNTER CLAIM FILED BY THE RESPONDENT ON THE FILE OF HONBLE LXXXII ADDITIONAL CITY CIVIL AND SESSIONS JUDGE BENGALURU VIDE ANNEXURE-A AND FURTHER BE PLEASED TO ALLOW THE APPLICATION FILED BY PETITIONER UNDER ORDER XVIII RULE 17 READ WITH SECTION 151 OF THE CODE OF CIVIL PROCEDURE 1908.

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THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN B GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE S VISHWAJITH SHETTY

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ORAL ORDER

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Plaintiff is before this Court in this writ petition filed under Article 227 of the Constitution of India, with a prayer to set aside the order dated 01.03.2021 passed on IA.nos.10 & 11 in Com.O.S.No.8311/2017 by the Court of LXXXII Addl. City Civil & Sessions Judge, Bengaluru.

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Heard the learned Counsel for the parties.

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Suit in Com.O.S.No.8311/2017 is filed by the petitioner herein before the jurisdictional Commercial Court at Bengaluru, seeking a decree for recovery of money.

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Defendant no.1 has filed written statement opposing the

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suit claim and also has raised a counter claim for recovery of a sum of Rs.11,93,16,733/- with interest at 18% per annum from the plaintiff.

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Plaintiff has filed separate written statement to the counter claim made by defendant no.1 as provided under Order VIII Rule 6A of CPC.

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Based on the rival pleadings, the Commercial Court has framed Issues in the suit.

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On the Issues in which the onus is on the plaintiff to prove the same, plaintiff had examined one witness as PW-1 and the said witness was cross-examined on behalf of the defendant. Thereafter, the defendant had examined one witness to prove the counter claim raised by him in the suit.

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After the evidence of PW-1 and DW-1 was completed, the Trial Court had posted the case for addressing final arguments. At that stage, IA.nos.10 & 11 were filed with prayers to re-open

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the stage of the case and to permit the plaintiff to tender its evidence on the counter claim filed by the defendant.

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The said applications were opposed by the defendant by filing objections.

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The Trial Court vide the order impugned has rejected IA.nos.10 & 11 and being aggrieved by the same, plaintiff is before this Court.

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Learned Counsel for the petitioner having reiterated the grounds urged in the Memorandum of writ petition, submits that since there is a counter claim raised by defendant no.1, the same is required to be considered as a separate suit and after defendant has examined its witness on the counter claim raised by it, the petitioner who has filed written statement to the counter claim was required to be granted an opportunity to lead his evidence. He submits that the Trial Court has erred in

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rejecting the applications on the ground that no liberty was reserved by the plaintiff after closing its side of evidence to lead rebuttal evidence. He submits that this approach of the Trial Court in a case where counter claim is made is not correct.

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HC-KAR

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He has placed reliance on the judgment of the Punjab & Haryana High Court in the case of NARANJAN VS AJAIB SINGH

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& ANOTHER - 2006 SCC OnLine P&H 225 , and also on the judgment of the Division Bench of the Punjab & Haryana High Court in the case of SURJIT SINGH & OTHERS VS JAGTAR SINGH & OTHERS - AIR 2007 P&H 1 .

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Per contra, learned Counsel for the respondent submits that based on the rival pleadings, the Trial Court has framed issues in the present case, and merely for the reason that there is a counter claim made on behalf of the defendant, it cannot be said that two separate set of trial is required to be held. Even in respect of a case where counter claim is made, Order XVIII Rule 3 of CPC would be applicable, and therefore, the plaintiff ought to have reserved liberty to lead rebuttal evidence after he had closed his side of evidence. He submits that if the plaintiff is allowed to lead rebuttal evidence at this stage, he would be granted an opportunity of filling up the lacuna and the same would seriously prejudice the case of the defendant. In support of his contentions, he has placed reliance on the

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judgment of the Gauhati High Court in the case of DEBARSHI

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BHATTACHARJEE VS BITHI DEY & ORS. - (2013)4 GLT 305 .

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In the present case, based on the rival pleadings of the parties, the Trial Court has framed the following Issues:

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"1. Whether the Plaintiff proves that his contract was wrongfully terminated by the Defendant and he is entitled for damages as prayed?

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2. Whether the Plaintiff proves that it is entitled for a sum of Rs.7,31,10,153/- with interest at the rate of 18% p.a. from the Defendant No.1?

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3. Whether the 1^st Defendant proves it is entitled for counterclaim of Rs.11,93,16,733/- with interest at the rate of 18%p.a.?

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4. Whether the Plaintiff proves that the other Defendants No.3 to 5 are necessary parties to this suit?

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5. Whether the Plaintiff is entitled for the relief sought for?

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6. What order or decree?"

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Perusal of the aforesaid Issues would go to show that except Issue no.3, the onus of proving the other Issues is on the plaintiff.

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HC-KAR

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Order XVIII of CPC provides for hearing of the suit and examination of witnesses. Order XVIII Rule 1 CPC provides for right to begin. In normal circumstances, the plaintiff is required to begin examination of witnesses unless the defendant admits the facts alleged by the plaintiff and contends that either in point of law, the plaintiff is not entitled to any part of the relief which he seeks, in which case the defendant has the right to begin.

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Order XVIII Rule 3 of CPC provides for the procedure when there are multiple Issues framed in the suit. In the event of there being multiple Issues framed in the suit, in all issues where the burden of proving lies on the plaintiff, he is required to begin with evidence and after reserving his liberty to lead rebuttal evidence, he may request the defendant to lead evidence on the Issues on which burden is on the defendant to prove the same.

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The Code of Civil Procedure does not provide any other procedure in a case where a counter claim is raised in the written statement and Issues are framed on the counter claim, wherein the burden of proving is on the defendant.

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HC-KAR

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Order VIII Rule 6A of CPC provides for counter-claim by

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defendant and Order VIII Rule 6C of CPC provides that in a case where counter-claim is raised, the plaintiff can raise a contention that the counter claim has to be disposed of separately as an independent suit and cannot be tried in the same suit.

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Sub-Rule (4) of Rule 6A of Order VIII of CPC provides that counter-claim shall be treated as a plaint and governed by the rules applicable to plaints. Order VIII Rule 6G of CPC provides that Rules relating to written statement by a defendant shall be applied to the written statement in answer to a counter-claim.

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The Punjab & Haryana High Court in Naranjan's case supra, after appreciating the aforesaid provisions of law, in paragraph no.7, has observed as under:

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"7. ……… From the bare perusal of Order 8 Rule 6-A (2, 3 & 4) it is revealed that a counter claim has to be treated as a cross suit or a separate suit. The onus to prove issue No. 3A with regard to possession of two biswas of land has been placed on the defendantrespondents If they are to be treated as plaintiff by fiction

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of law, then after adducing evidence by them, the defendant namely the present plaintiff-petitioner would be entitled to controvert the evidence adduced by them. Following the aforementioned analogy if must be concluded that the plaintiff-petitioner is not in fact adducing affirmative evidence in rebuttal. He is only controverting the evidence adduced by defendantrespondent in support of his counter-claim. It is further pertinent to mention that there is no requirement of any law that the plaintiff-petitioner is required to reserve his right to controvert the evidence of defendantrespondents, as has been provided for a different situation under Order 18 Rule 3 of the Code, Therefore, this petition deserves to be allowed. ………"

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The judgment in Naranjan's case (supra), has been approved by the Division Bench of Punjab & Haryana High Court in Surjit Singh's case (supra), and in paragraph nos.30 & 31 of the said case, it is observed as under:

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"30. In the case of Naranjan Singh (supra), M.M. Kumar, J., in our opinion, has correctly distinguished the situation where the defendants had filed a counter-claim. The original plaintiff was not permitted to lead evidence in rebuttal of the evidence led by the defendant in support of the counter-claim. The request of the plaintiff to produce evidence to rebut the evidence led by the defendants was denied, on the basis of the judgment of this Court in the case of Dinesh Kumar (supra). In these circumstances, it was observed as follows:—

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“7. It is also evident that the plaintiff-petitioner has already tendered the report of the expert Shri Gopal Krishan Sharma, in pursuance to the opportunity granted by the trial Court. The plaintiff-petitioner deposited R.s. 200/- as diet money in the trial Court and thereafter Shri Gopal Krishan Sharma, Document Expert was summoned through dasti summons. When the case was posted for hearing on 6.1.2003, the expert witness has already placed on record an affidavit dated 6.1.2003 alongwith his report dated 2.1.2003. He was allowed to examine the writing dated 28.5.1958 and make comparison. It was after the aforementioned progress, that an application by defendant-respondent was filed restraining the plaintiff-petitioner to examine the expert. From the bare perusal of Order 8 Rule 6-A(2) (3) and (4), it is revealed that a counter claim has to be treated, as a cross suit or a separate suit. The onus to prove issue No. 3-A with regard to possession of two biswas of land has been placed on the defendant-respondents. If, they are to be treated as plaintiff by fiction of law then after adducing evidence by them, the defendant namely the present plaintiff-petitioner would be entitled to controvert the evidence adduced by them. Following the aforementioned analogy it must be concluded that the plaintiff-petitioner is not in fact adducing affirmative evidence in rebuttal. He is only controverting the evidence adduced by defendantrespondent in support of his counter claim. It is further pertinent to mention that there is no

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requirement of any law that the plaintiff petitioner is required to reserve his right to controvert the evidence of defendant-respondents, as has been provided for a different situation under Order 18 Rule 3 of the Code. Therefore, this petition deserves to be allowed.”

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31. The aforesaid reasoning of the learned Single

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Judge are unexceptionable."

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In the case of SMT. KALYANI BORKOTAKY V/S SRI

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KAMAKHYA BORTHAKUR & ANOTHER - CRP.No.296/2009

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dated 22.07.2011 the Gauhati High Court in paragraph nos.12

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to 14, has observed as under:

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"12. If we read Order 18, Rule 3 of the Code of Civil Procedure as a whole, it transpires that when several issues are framed in a suit, it would be the Plaintiff, who would lead evidence, since the onus to prove issues has been placed on the Plaintiff. Conversely, in a counter claim, obviously there are several issues and the onus to prove some of which is on the Plaintiffs and of some on the Defendants. The Plaintiff leads evidence only on those issues, in which the onus to prove is on him, and then he can reserve his right to lead rebuttal evidence on the issues, in which onus to prove is on the Defendant. If the Defendant is required to lead evidence on all issues, then the Plaintiff would have the right to lead evidence in rebuttal, on those issues in which the onus to prove is on the Defendant. This is obvious from the words used in this rule that in the latter case the party beginning may

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produce evidence on those issues after the other party has produced its own evidence on those issues. It is only when the other party is again given a right to lead evidence either by way of additional evidence or otherwise. More so, in a counter claim the Plaintiff would get a right to lead rebuttal evidence on those issues, which are required to be proved by the defendant as counter claimant. In these circumstances, the Plaintiff, apparently, cannot be denied the right to adduce rebuttal evidence.

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13. It is well settled law that the party, on whom the burden to prove an issue is given, has to prove the issue. It has to first lead evidence to prove the issue and the other party contesting the said issue leads evidence to discredit or disprove the evidence of the party on whom the onus to prove the issue lay. The party on whom the onus was initially laid to prove the issue cannot be permitted to lead rebuttal evidence as a matter of right. However, rebuttal evidence by the Plaintiff cannot be denied on those issues, which are required to be proved by the Defendant. Accordingly, in a counter claim, where the onus to prove the issues are on the defendant by adducing evidence, the plaintiff would have a right to adduce rebuttal evidence.

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14. The right of rebuttal is provided under Order 8 Rule 3 CPC and the Order does not specify that a choice or option is to be exercised by the plaintiff after its evidence is over. This right has been given irrespective of exercise of the option at that stage. It is only after

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defendant's evidence in the counter claim the plaintiff can decide whether there is necessity of leading evidence in rebuttal or not. Therefore, at that stage also, plaintiff can exercise his right of leading evidence in rebuttal."

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In Debarshi Bhattacharjee's case (supra), which was rendered by the High Court of Gauhati prior to the judgment in the case of Smt. Kalyani Borkotaky's case supra, it was observed in paragraphs 82 to 84, as under:

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"82. Order XVIII Rule 3 applies to cases, where there are several issues and out of such several issues, the burden of proof, on some of the issues, lies on the party other than the one, who has the right to begin. In such a case only, question arises of reserving the right to adduce evidence on the issue on which the burden of proof lies on the other party.

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83. Thus, the scheme of recording evidence, as reflected by Order XVIII Rule 3, completely fits into the scheme of disposal of counter-claims. The scheme of the Code the can, therefore, be summarised thus: In a suit, the defendant may deny the contentions of the plaintiff or may admit the plaintiff's claim or part of the claim. While admitting or denying the contentions of the plaintiff and his entitlement to receive the reliefs, which Sue a plaintiff seeks, the defendant may raise a counterclaim. If the defendant admits the fari contentions and files a counterclaim, the plaintiff's burden to prove his case stands the discharged under Section 101. The burden to prove what

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the defendant contends in his the circumstances, the defendant, having the burden to prove the issues, which are raised the counter-claim, then, rests, in the light of Section 102, on the defendant. In such den begin, this right casts the liability on him to, first, adduce evidence. While adducing ant in such a counter-claim, has the right to begin. As the defendant receives the right to evidence, the defendant may reserve his right to give evidence on issues on which the onus of proof lies on the plaintiff.

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84. Conversely, when the defendant does not admit the claim of the plaintiff and/or part of the claim of the plaintiff, which may be raised in the suit and also raises a counterclaim, the burden to prove some of the issues would obviously be on the plaintiff and some of the issues, the burden would be on the defendant The plaintiff would, then, have the right to begin and would have to adduce evidence. With regard to, however, the issues, which place the burden of proof on the defendant, the plaintiff may, in such a case, reserve his right to give evidence if the defendant adduces evidence on the issues, which place the burden on the defendant."

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In the said case, it was observed that the scheme as provided under Order XVIII Rule 3 of CPC would also be applicable to disposal of counter claims. However, it was further observed in the said case that the courts in their discretion can

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grant plaintiff, an opportunity to lead rebuttal evidence. In paragraph no.89 of the said order, it was observed as under:

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"89. Ordinarily, the plaintiff must indicate, while adducing his evidence or while, at least, before his evidence is closed, that he reserves his right to give evidence on those issues, which the defendant has the burden to prove. Unless he specifically reserves his right to give his evidence as mentioned hereinbefore or gives a clear indication in this regard, he cannot -- after the defendant has already adduced evidence in support of his case, which he may have set up by way of a written statement and also by the counter-claim seek to adduce evidence, in rebuttal, on the issues, which the defendant the burden to prove. However, the Court is not wholly powerless in this regard and, in exceptional circumstances, it can allow the plaintiff to adduce evidence in rebuttal of the issues, which place burden of proof on the defendant. Such exceptional exercise of power is possible provided no prejudice is caused to the defendant or the Court, for some reason, which shall be assigned, consider it necessary, in the interest of justice, to so allow the plaintiff to adduce evidence."

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In the case on hand, the burden to prove Issue no.3 which relates to counter claim raised by the defendant is always on the defendant. The plaintiff is required to be granted an opportunity to lead his evidence after defendant leads his evidence on the counter claim made by him. In a case where

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plaintiff has filed written statement opposing the counter claim, opportunity to lead evidence is required to be granted to the plaintiff notwithstanding that the plaintiff has not reserved liberty as provided under Order XVIII Rule 3 CPC, which does not provide a scheme for examination of the witnesses in a case where counter claim is raised. It is only after defendant leads evidence on counter claim, the plaintiff has to decide whether there is necessity to lead rebuttal evidence.

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The Trial Court has failed to appreciate the aforesaid aspects of the matter, and therefore, in my considered opinion, the order impugned cannot be sustained. Accordingly, the following order:

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Writ petition is allowed. The impugned order 01.03.2021 passed on IA.nos.10 & 11 in Com.O.S.No.8311/2017 by the Court of LXXXII Addl. City Civil & Sessions Judge, Bengaluru, is set aside. Consequently, the prayers sought for in IA.nos.10 & 11 are granted.

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