005-NLR-NLR-V-51-SUNDARAM-Appellant-GONSALVES-Respondent.pdf
BASNAYA'KE J,—Sundaram t«. (Jonsalve.»
16
Present: Nagalingam and Basnayake JJ.SUNDAKAM, Appellant, and GONSALVES, Respondent
S. C. 51—D. C. Colombo, 17,804 M
Civil Procedure Code—Discovery of documents—Not in possession of party—Power of Court—Section 103—Order for costs—Discretion of Jttdgfr—When Appeal Court wiU interfere—Section 221.
A court has no power undor section 103 of the Civil Procedure Codeto order tho production of documents except such as aro known bydiscovery or otherwise to bo in the possession of a party. Possessionin this soction means solo legal possession or a power and right to dealwith them.
A court of trial has a discretion in tho matter of costs. But whereno discretion is exercised and costs are arbitrarily given, a Court of Appealwill interfere.
.^^.PPEAL from a judgment of the District Judge, Colombo.
H. V. Perera, K.C., with J. C Nadarajak, for plaintiff appellant.
J.H. V. Ferdinands, for defendant respondent.
Cur. adv. vult.
July 19, 1948. Basnayake J.—
The plaintiffs, two persons named Sundaram and Ganapathy, canyon business under the name of Pappa <fc Co. Tho defendant, Gonsalves,is the proprietor of a business known as Chemical Products Co. On July 7,1943, the plaintiffs and the defendant entered into an agreement, the tenorof which is that the plaintiffs would supply the defendant raw material andtools for the manufacture and supply to them by the defendant of certainmanufactured goods. The plaintiffs instituted the present suit on April 1,1947, on an alleged breach of that agreement by the defendant. OnJune 25, 1947, the defendant’s proctor submitted, with notice to thoplaintiffs’ proctor, the following motion praying for an order undersection 103 of the Civil Procedure Code (hereinafter referred to as theCode):—
“ The plaintiff on the 24th of September, 1945, removed fromthe Defendant his Two Ledgers, Two Journals and Two Cash Books,and these Books are at present in the possession of the plaintiff.
For the purpose of preparing the Defendant’s Answer to this actionit is necessary that these Books should be returned to the Defendant
16BASX.-IY.AKJ3 J.—Snndaratu iioftnnka
in order that they may be examined by a Chartered Accountant, whohad been already retained by the Defendant for this purpose. Plaintiffrefuses to return the Books.
In these circumstances l move in terms of Section 103 of the CivilProcedure Code for an Order on the plaintiff to produce the aboveBooks in Court. ”
On July 4, 1947, counsel for the plaintiffs stated that they had nobooks belonging to the defendant and desired the defendant to file anaffidavit giving particulars. On July If* the proctor lor the defendantfiled the following affidavit and moved that the Court be pleased todirect the plaintiffs in terms of section 103 of the Code to produce thedocuments referred to in the affidavit.
" I, J. C. Gonsalves of Lunawa, make Oath and state as follows : —
I am the Defendant in the above styled action.
On the 24th of September, 1945, Mr. K, V. S, Siindaratn, the 1stPlaintiff in this action, came to my house at “ Lyn Grove ”, Lunawa,and removed the following Books of Accounts, to wit-Two Ledgers,Two Journals, and Two Cash Books kept by me, and has failed toreturn same to me up to date.
The aforesaid Books of Accounts are at present in the possessionof the said Plaintiff.
I have for the purposes of getting ready for this action retaineda Chartered Accountant to examine these Books of Accounts and giveme a report.
My Proctor wrote to the Plaintiff asking for the said Books ofAccounts but the Plaintiffs deny that they have any Booksof Accounts belonging to me.
In these circumstances 1 move in terms of Section 103 of theCivil Procedure Code for an Order on the Plaintiffs to produce theabove Books of Accounts in Court. ”
On August 29, 1947, the following object ions were filed by theplaintiffs:—
“ The Statement of Objections of the plaintiffs aboveuamed appearingby Subramaniam Si vasubramaniam, their Proctor, sheweth asfollows:—
The plaintiffs do not have in their possession or power anybooks of account of the defendant.
The plaintiffs admit the correctness of jwiragraph five (5) ofthe defendant’s affidavit dated the 13th July, 1947. The allegationin paragraph 3 of the affidavit stating that the l>ooks of account areat present in the possession of the plaintiffs is entirely untrue.
During the period when the agreement of the 7th July, 1943, wasin operation, the plaintiffs had on different occasions obtained some
BA8NAYAKE J.—Sundown v. Gonsalves
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of the account books kept by the defendant for perusal and return.On all such occasions, the books had boon duly returned to thedefendant.
Section 103 of the Civil Procedure Code has no applicationto the facts of this case.
The application of the defendant is intended to harass theplaintiffs and to prejudice the mind of the Court by suggestingthat the plaintiffs have failed to return some of the books whichthey had removed on earlier occasions and all of which have beenreturned to defendant.
As a matter of fact the defendant did have in his possessionand power his account books subsequent to the 24th September, 1946.The plaintiffs have in their hands various statements of accountsprepared by the defendant from his own books of account includingsome statements signed by him in 1046.
Wherefore the plaintiffs pray that tho application of the 23rd Juue,1947, be dismissed with costs and for such other and further reliefas to this Court shall seem meet.”
On September 4, 1947, the plaintiffs tiled a list of witnesses anddocuments in connexion with the inquiry for the production of accountbooks and obtained summons on their witnesses. Eventually the mattercame up for hearing on September 10, 1947. On that day counsel forthe defendant submitted that, as the plaintiff had filed a statement ofobjections stating that the books of which inspection is sought are not inhis power or possession, he did not desire the Court to go into an inquirywhether the plaintiff had such books os the matter could bo more properlyconsidered at the trial. Counsel for the plaintiff then pressed for his costsstating that he had documents to show that the books in question werein the defendant’s hands. He also submitted that the application was notone which lay under section 103 of the Code. In reserving the considera-tion of costs till the trial stage the learned District Judge observes:—
“ I shall defer it till after the trial. If at the trial I am satisfiedthat the defendants made a frivolous or unnecessary application1 shall mulct them in costs. If on the other hand, I find that theplaintiffs did in fact have in their possession or power certain of thedefendants’ books in respect of which they had the right to obtainan order for production I shall mulct the plaintiffs in costs. ”
The rules as to costs are to be found in Chapter XXI of tho Code. Forthe purpose of this appeal only sections 209 and 211 need be notioed.
“ 209. When disposing of any application or action under thisOrdinance, whether of regular or of summary procedure, the courtmay, unless elsewhere in this Ordinance otherwise directed, give toeither party the costs of such application or action, or may reservethe consideration of such costs for any future stage of the proceed-ings ; any order for the payment of costs only is a decree for moneywithin the provisions of section 194 as to payment by instalments. ”
BASNAYAKil J.—Sundaram v. ('Onaalves
‘"211. The court shall have full power to give and apportioncosts of every application and action in any manner it thinks fit,and the fact that the court has no jurisdiction to try the case isno bar to the exercise of such power:
Provided that if the court directs that the costs of any applicationor action shall not follow the event, the court shall state its reasonsin writing. “
By these sections the Court is invested with a discretion in the matterof costs. But that discretion must be exercised judicially. It is notfree to do what it chooses. It will be helpful to note in this connexionthe words of Lord Halsbury :
“ ‘ Discretion ’ means when it is said that something is to be donewithin the discretion of the authorities that that something is to bedone according to the rules of reason and justice, not according toprivate opinion : according to law, and not humour. It is tobe, not arbitrary, vague, and fanciful, but legal and regular. Andit must be exercised within the limit, to which an honest mancompetent to the discharge of his office ought to confinehimself. ” 1
Lord Wrenbury’s dictum on the same subject is an equally good guide.He says:
“ A person in whom is vested a discretion must exercise his discre-tion upon reasonable grounds. A discretion does not empower aman to do what he likes merely because he is minded to do so—hemust in the exercise of his discretion do not. what he likes butwhat he ought. In other words, he must, by use of his reason,ascertain and follow the course which reason directs. He mustact reasonably.” 2
Learned counsel for the appellant submits that the learned DistrictJudge has not exercised his discretion in his order as to costs and that hehas proceeded on a wrong interpretation of section 103 of the Code.1 shall first consider whether the learned District Judge has exercisedbis discretion in regard to costs. Tho defendant’s proctor alleged thatthe plaintiffs on September 24, 1915, removed his client’s books and thatthey were in the possession of the plaintiffs. He stated that he wantedthem for Hie preparation of the answer. When the plaintiffs denied theallegation that the books were with them, the defendant swore anaffidavit that, on September 24,1945, the first plaintiff removed the booksspecified therein by him. When tho plaintiffs by their counter-affidavitdenied his allegations, he lost courage and although he was representedby eminent counsel did not desire the Court to inquire into the matter.Defendant’s counsel’s suggestion that the matter could more properly •
• Sharp v. Wakefield, (1801) A. C. J73 at 170.
1 Roberta v. Hojncood, (1925) A. C. 578 at 513-
BASNAYAKB J.—Sundaram v. Gonsalves
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be considered at the trial is irreconcilable with the earlier submissionof the defendant’s proctor that the boohs were necessary for the pre-paration of his answer. The defendant did, on October 30,1947, actuallyfile h is answer without the aid of the books which he said were so necessaryand for the examination of which he had engaged a Chartered Accountant.I can find no redeeming feature in the case of the defendant. Havingmado allegations which he was not prepared to substantiate, and havingput the plaintiffs to the expense of meeting them, he Beeks to avoidcosts without even explaining his conduct.
The learned District Judge gives no reasons for reserving the con-sideration of the costs of the inquiry till the trial stage of the case. Ican find no material in the record on which the order can be sustained.It appears from section 211 of the Code which I have quoted above thatthe rule is that the successful party is entitled to his costs. Wherethe Court does not award costs to the successful party it is required bystatute to state its reasons in writing. As I have stated earlier, thelearned District Judge has not done so. Ho has not acted in accordancewith the principles by which a tribunal vested with discretion shouldexercise that discretion. In the circumstances the submission of teamedcounsel for the appellant is entitled to succeed.
The defendant’s application under section 103 of the Code was madenot in consequence of an admission by the plaintiffs either in an affidavitunder section 102 of the Code or in their plaint or otherwise that the bookswere in their possession or power. The learned District Judge appearsto have taken the view that he had a right to order the production of any. document regardless of whether it was admitted to bo in the possessionor power of a party or not. I can find no authority in the Code for hisview. Under section 103 of the Code, the Court may at any time duringthe pendency therein of any action order the production by any partyof suck of the documents in his possession or power relating to any matterin question in such action or proceeding os the Court thinks right. TheCourt's power to order production is confinod to such documents as are. known by discovery or otherwise to be in the possession dr power of anyparty. Unless there is an admission direct or indirect that the documentsare in the possession or power of any party at the time, no order undersection 103 can be made. The words “as the Court thinks right” vestthe tribunal with a discretion in granting an application. The Courtwill not order the production of a document even where it is admittedto be in a party’s possession or power unless it thinks it right to do so.Possession in this section means sole legal possession, or a power and rightto deal with them. In the instant case there is no admission in thepleadings nor has the defendant taken the irouble to ascertain, byobtaining discovery under section 102, whether the books arcin the plaintiffs’ |K>ssession before making his application undersection 103.
The corresponding provisions both in England1 and in India2 are inthe main the same R3 our section. I am fortifiod in my view by the *
1 Order 3L Huh 14.
* Order II. Huh I t.
-0HASNAYAKK J.—Sundaram v. Gonsalves
decisions of the English 1 and Indian 2 Courts which have given the samemeaning to corresponding provisions of thc^T Civil Procedurerules.
Learned counsel for the respondent submits that the learned DistrictJudge has exercised his discretion as to costs on the material before himand that when discretion has been properly exercised it will not ordinarilybe reviewed in appeal. Hus Court has undoubtedly the power to enter-tain an appeal against an order as to costs3. An appeal lies from anyerror in law or in fact committed by a District Court4. A question ofcosts may, like any other order whioh involves the exercise of discretion,fall under either category. In this connection one is reminded of thefollowing observations of Lord Sumner :
“ Justiciable questions are not divisible into three kinds, questionsof law, questions of fact, and questions of discretion. Judicialdiscretion as to costs goes to the judge’s powers over questions oflaw and questions of fact-, but the powers themselves alike are powersover costs and costs only. ”5
The powers of this Court in regard to an appeal as to costs appearto have been considered by Hearoe J. in Yapa Appuhnmy v. Don. DavUh •,wherein he remarks:
“ It is true that a Court of Appeal does not ordinarily interferewith the discretion exercised by a court of trial as to costs. But,where it is clear that a court of trial has exercised no discretionat all and has arbitrarily given costs against the party who succeededon the issue before the court, it would be contrary to all principlesof justice if it did not interfere. ”
/ am in agreement with tfearne J. when he says that this Court has powerto interfere when the court of trial has exercised no discretion at all andhas arbitrarily given costs, but I do not wish to restrict, to the instancegiven by him, the power to review in appeal an order involving the exerciseof discretion, I prefer to adopt the principles enunciated by LordWright in regard to the powers of the Court of Appeal in England toreview orders involving the exercise of discretion. He says :
“It is clear that the Court of Appeal should not interfere withthe discretion of a judge acting within his jurisdiction unless theCourt is clearly satisfied that he was wrong. But the Court is not
1 KcarsUy v. Phillips, JO Q- B. D. 36, 40, and 465.
Murray v. Walter, Cr. and Ph. 114.
Hteman v. Midland, 4 Madd. 391.
Princes* of Wales v. Liverpool, 1 Sw. p. It3.
Bray on Discovery, p. 191.
See also the eases cited at p. 153 of Bray on Discovery. *
*Rameswtr Narayan Singh v. Rikhanath Koert, {1920) A. 1. R. Patna 121
at 136.
Baidyanath and othera i>. Bholanoth Roy and others, {1922) A. 1. R. Patna337 at 33H.
Government Agent, Vva, v. Banda el al, (1910) 13 S. C. R. 241.
4 Section 73, Courts Ordinance,
Donald Campbell <fc Co. v. Poliak, (1927) A. C. 732 at 763.
(1937) 10 C. L. W. 25.
In re Athurupane
21
entitled simply to say that if the judge had jurisdiction and hadall the faots before him, the Court of Appeal cannot review his orderunless he is shown to have applied a wrong principle. The Courtmust if necessary examine anew the relevant facts and circumstancesin order to exercise a discretion by way of review which may reverseor vary the order. Otherwise in interlooutory matters the judgemight be regarded as independent of supervision. Yet an inter-locutory order of the judge may often be of decisive importance onthe final issue of the case, and one which requires a careful examina-tion by the Court of Appeal. ” 1
I think the above remarks apply with equal force to appeals provided■by the Courts Ordinance and may fairly be used as a guide.
The judgment of the learned District Judge is set aside and the plaintiffis declared entitled to his costs. This appeal is allowed with costs.
NagaM^oam J.—I agree.
Appeal allowed.