Unsubstantiated or Bare Denials in Commercial Suits – Whether Sufficient to Frame Issues?

It is fairly common for trials in intellectual property law suits to get prolonged incessantly owing to delaying tactics adopted by one or more parties to such suits. One such practice is that of making unsubstantiated/blanket/bare denials of each and every plea/ document of the adverse party to a suit.

Recently, a single judge bench of the Delhi High Court in the case of Tullio Giusi SPA v. House of Trims Pvt. Ltd. (CS (COMM) 221/2016) came down heavily upon the practice of making bare denials as an attempt to “play a game of litigation in courts, governed by law, by putting on the opposite party, the onus of proving each and every plea, most of which are not really disputed, and in an attempt to take advantage, in my view unfair, of lapse in proving any of the pleas.”

In this case, the defendant, more than a year after the framing of issues in the suit, filed a motion seeking amendment of the issues framed. The amendment sought was the addition of an issue with respect to the authority of the signatory of the plaint to sign and verify the plaint and to institute the suit. While the plaintiff had a specific plea regarding the signatory’s authority in its plaint, the defendant merely denied this authority in its written statement without any reasoning. Further, while this issue was present in the list of proposed issues handed over to the court before the framing of issues, it was not framed as an issue by the court. There was no explanation for the delay in noticing the non-framing of the issue.

The court, while dismissing the defendant’s motion as being non-meritorious, noted that issues are to be framed only on ‘substantial pleas of laws and facts’ and not on each plea of law and fact. It further ruled that a bare denial of the signatory’s authority as above does not constitute a substantial plea, to invite framing of an issue thereon. The court observed that “if each and every such denial were to invite an issue, a large number of issues would be framed in each suit, requiring equally voluminous evidence and cross-examination and resultant delays in disposal of suits.” The expeditious disposal of suits envisioned by the Commercial Courts Act, 2015 will merely be diluted if bare denials were given due credence. 

Furthermore, the court gave an option to the defendant that if it desired the framing of the aforesaid issue (which would entail filing of documents in support of the issue, fresh filing of evidence and cross-examination), it should be willing to reimburse the costs (which were assessed at INR 5 lacs) associated with it to the plaintiff. The defendant’s rejection of the option only proved the frivolous manner in which an issue was sought to be framed to delay the suit proceeding.

In another case of Burger King Corporation v. Techchand Shewakramani and Ors. (CS (COMM) 919/2016 and CC (COMM) 122/2017), a single judge of the Delhi High Court, while condemning the practice of indiscriminate denials of the documents filed by a party to a suit, observed that “such denials are completely bereft of merit and tend to prolong the trial in a suit.” She further opined that “the purpose of admission/denial is to deny only those documents whose existence, genuinity or authenticity is disputed and not to merely harass the opposite side into proving each and every document with certified copies/original.” The court, in this case, observed that documents which are publicly available and are verifiable, such as trademark certificates, copyright certificates from India and other countries, documents issued by governmental authorities and documents such as e-mail correspondences, legal notices, replies, Internet printouts, etc. ought not to be permitted to be denied.

The foundation to expedited disposal of suits, laid down by the Commercial Courts Act, 2015 can only be strengthened if parties to a suit endeavour to adopt fair and bona fide practices and not intend to prolong proceedings. More the delaying tactics employed by parties to suits, more will be the timelines for their disposition, and, consequently, the prolongation of justice in the Indian judicial system.