Non-filing of ‘Statement of Truth’ in a Written Statement of a commercial suit is a curable defect

In the matter of Harji Engineering Works Pvt. Ltd Vs. Hindustan Steelworks Construction Ltd. decided by the Hon’ble Calcutta High Court on 14.09.2021, the question before the Hon’ble Court was whether a Statement of Truth in a Written Statement in a Commercial Suit is a mandatory requirement under the Commercial Courts Act, 2015 and whether the absence thereof warrants striking out of the defence in the suit.

It is the stand of the Plaintiff that a WS without a Statement of Truth is an incurable defect while the Defendant sought to cure the defect.

Observations of the Court-

The Court noted that the amendment of Order VI Rule 15 of the CPC brought by the Commercial Courts Act, 2015 introduced a new procedural regime in matters of verification of pleadings and the competence of the party taking responsibility thereof.

The requirements introduced under Rule 15A is that every pleading in a Commercial Dispute shall be verified by an affidavit as prescribed in the Appendix to the Schedule to the 2015 Act. Appendix I to the Schedule contains the “Statement of Truth”, which has been made applicable to Order VI Rule 15A. The facts which a deponent has to solemnly affirm and declare in the Statement of Truth makes it clear that the purpose of Rule 15A read with Appendix I to the Schedule is to expedite disposal of commercial disputes and effectively bypass any procedural roadblocks which could result in delay in the disposal of a commercial dispute. Contents of Appendix-I – Statement of Truth- read with some of the provisions introduced by 2015 Act further indicates the legislative intention to expedite the process of trial in commercial disputes by minimising the evidence at the stage of trial.

The parties in furtherance of their arguments, brought out the inconsistency between sub-rule (4) and (5) of Order VI Rule 15A. Sub-rule (4) and (5) are reproduced herein-

4) Where a pleading is not verified in the manner provided under sub-rule (1), the party shall not be permitted to rely on such pleading as evidence or any of the matters set out therein. ……………………………

(5) The Court may strike out a pleading which is not verified by a Statement of Truth, namely, the affidavit set out in the Appendix to this Schedule.

The Plaintiff relied on the word “shall” in sub-rule (4) whereas, the Defendant relied on the word “may” in sub-rule (5). In regard to this apparent conflict, the Court noted that “Sub-rule (4) curtails the power of the court to receive a pleading as evidence if it is improperly verified, the prohibition essentially being on the party who is prevented from relying on a pleading as evidence. Sub-rule (4) however does not say that the defect in the pleading cannot be cured. Sub-rule (5) empowers the court to strike out a pleading which is not verified by a Statement of Truth where the word “may” clearly indicates that the court is vested with the discretion to allow a party to rectify or cure the defect.” This discretion is in harmonious construction with all sub-rules of Rule 15A as otherwise the legislature would have clarified its intention to non-suit a litigant in the absence of Statement of Truth.

The Court therefore allowed the application of the Defendant to cure the defect of ‘statement of truth’ by concluding that “introducing Sub-rule (5) as the last requirement – and the finishing line – to Rule 15A supports the inescapable conclusion that a party cannot be deprived of its claim or defence in a commercial dispute by reason of improper verification of its pleading. It can even be said that by vesting the court with the power to decide whether a pleading should be struck out in Sub-rule (5), unquestionably qualifies and mitigates the harshness of Sub-rule (4). Any other construction of the sequence of sub-rules to Rule 15A would render Rule 15A (5) completely otiose and Rule 15A patchy and discordant.”