Source: Jharkhand High Court 

Why in News? 

Recently, the Jharkhand High Court in the matter of M/s City Alloys Private Limited & Ors vs M/s Hari Om & Co. has held that amendment to the affidavit under commercial suits for the purpose of incorporating statement of truth is not permissible. 

What was the Background of the M/s City Alloys Private Limited & Ors vs M/s Hari Om & Co. Case?    

• A commercial suit has been filed between M/s Hari Om & Co. (Plaintiff) and M/s City Alloys Private Limited & Others (Defendants). 
• M/s City Alloys Private Limited operates through: 
  • Vikash Kumar Gaddhyan (Managing Director), aged 50 years, based in Chirkunda, District Dhanbad. 
  • Narendra Gopal Singhal (Director), aged 56 years, based in Hanuman Charai, Barakar, District Bardman. 
• The opposing party, M/s Hari Om & Co., operates through its Proprietor Shri Ajay Kumar (son of late Ramjee Saw) and has its factory at B-2, Industrial Area, Adityapur, Jamshedpur 
• The plaintiff filed an application under Order VI Rule 17 of the Code of Civil Procedure, 1908 (CPC) seeking to incorporate the statement of truth under Order-VI, Rule-15A of the Commercial Court Act, 2015 (CC). 
• The defendants opposed this application by filing an objection/reply. 
• The case involves compliance with Rule-15A of CC Act which requires verification of pleadings in commercial disputes through an affidavit in a prescribed manner and form as per the schedule. 
• The original plaint in the Commercial Suit did not contain the verification of pleading as required under Rule-15A of the CC Act. 
• This forms the essential background of the legal dispute that led to the present Civil Miscellaneous Petition before the High Court of Jharkhand at Ranchi. 

What were the Observations of the Court? 

• The Jharkhand High Court observed that:  
  • Regarding Service of Notice: 
    • The court noted that the notice to the sole opposite party was received by his brother. 
    • This was deemed as sufficient service of notice. 
    • The court observed that no one appeared on behalf of the opposite party despite deemed service. 
  • On Amendment of Pleadings: 
    • The court observed that while amendments can be made in pleadings (which include plaint and written statement), there are limitations. 
    • The court noted that applications in any proceeding can also be amended as per settled propositions of law. 
  • On the Lower Court's Approach: 
    • The High Court observed that the lower court should have provided an opportunity to file the statement of truth (affidavit) in the prescribed form under Rule-15A of CC Act. 
    • This could have been done either in addition to or in place of the general affidavit annexed with the plaint. 
    • The court found that allowing amendment to the affidavit itself was not the correct approach. 
  • Critical Observation on Statement of Truth: 
    • The court emphasized that an affidavit does not come within the purview of pleading. 
    • If an affidavit was not properly filed as per Rule-15A of the CC Act, the only available option was to file a fresh statement of truth in the format prescribed in the Act's schedule. 
  • On Lower Court's Order: 
    • The High Court found that the order passed by the lower court was based on "perverse finding." 
    • The court observed that the amendment allowed by the lower court needed interference. 
• These observations led the High Court to conclude that the matter required correction and appropriate directions for compliance with the CC Act. 

What are Affidavits? 

About: 

• It is considered as a declaration of facts, made in writing sworn before a person having authority to administer oath.  
• Every affidavit should be drawn up in the first person and should contain only facts and not inferences.  
• Order XIX of CPC deals with the provision relating to affidavits. 

Essentials: 

• The essential elements of an affidavit are:  
  • It must be a declaration made by a person.  
  • It must relate to facts.  
  • It must be in writing.  
  • It must be in the first person.  
  • Must be sworn or affirmed before a Magistrate or any other authorized officer. 

Contents: 

• An affidavit should be confined to such facts as the deponent is able to prove to his personal knowledge.  
• Rule 3(1) of Order XIX of CPC states that the affidavits shall be confined to such facts as the deponent is able of his own knowledge to prove, except on interlocutory applications, on which statements of his belief may be admitted; provided that the grounds thereof are stated. 
• Rule 3(2) of Order XIX of CPC states that the costs of every affidavit which shall unnecessarily set forth matters of hearsay or argumentative matter, or copies of or extracts from documents, shall (unless the Court otherwise directs) be paid by the party filing the same. 

Verification: 

• An affidavit should be verified.  
• The importance of verification is to test the genuineness and authenticity of the of the averments and allegations made by the deponent.  

Power to Prove: 

• Rule 1 of Order XIX of CPC deals with the power to order any point to be proved by affidavit. 
• It states that any Court may at any time for sufficient reason order that any particular fact or facts may be proved by affidavit, or that the affidavit of any witness may be read at the hearing, on such conditions as the Court thinks reasonable.  
• Provided that where it appears to the Court that either party bona fide desires the production of a witness for cross-examination, and that such witness can be produced, an order shall not be made authorizing the evidence of such witness to be given by affidavit.  

Evidence on Affidavit: 

• A Court may order that the any fact may be proved by affidavit.  
• If the affidavits are not properly verified and are in conformity with the rules, they will be rejected by the Court.  
• Rule 2 of Order XIX of CPC deals with the power to order attendance of deponent for cross-examination. It states that-  

(1) Upon any application evidence may be given by affidavit, but the Court may, at the instance of either party, order the attendance for cross-examination of the deponent.  

(2) Such attendance shall be in Court, unless the deponent is exempted from personal appearance in Court, or the Court otherwise directs.

False Affidavit:

• Swearing of false affidavit is an offence of perjury which is punishable 
• It is a grave and serious matter, and a lenient view is not warranted.

What is Order VI, Rule 15-A of the CC Act?

• Rule 15 A of Order VI, states the Rules regarding verification of Pleadings in Commercial Disputes as: 
  • Every pleading in commercial disputes must be verified by affidavit. 
  • This requirement overrides Rule 15. 
  • Must follow manner and form prescribed in Schedule Appendix. 
  • Authorized Signatories: 
    • Party to the proceedings. 
    • One of the parties to the proceedings. 
    • Any other authorized person who: 
      • Is acquainted with case facts. 
      • Can prove such acquaintance to court's satisfaction. 
      • Has proper authorization from party/parties. 
  • Amendment Verification: 
    • All amendments must be verified in the same form/manner as the original. 
    • Exception: Court orders otherwise. 
  • Evidentiary Consequences: 
    • Party cannot rely on unverified pleading as evidence. 
    • Matters set out in unverified pleading cannot be used as evidence. 
  • Court's Powers 
    • Court may strike out any pleading. 
    • Grounds for striking out: Not verified by Statement of Truth. 
    • Statement of Truth refers to affidavit in Schedule Appendix.