No Element Of Public Interest Or National Security Involved; Parties Are Commercial Men: Calcutta HC Rejects Request Of Filing Affidavit Of Assets In Sealed Cover

The Court said that the concept of sealed covers also makes serious inroads into the principle of natural justice and fairness.

The Court was hearing applications seeking permission to file their respective Affidavit of Assets in a sealed cover without handing over a copy to any third party.

The bench of Justice Ravi Krishan Kapur observed, “There is no element of public interest nor national security involved in these proceedings. The parties are commercial men. The disputes raised between the parties are purely contractual. The underlying interests of both parties is pure and simple money. In these commercial matters, there is no place for confidentiality nor privacy nor sealed covers. Such matters count for little in these cold Commercial Courts.”

Brief Facts-

In a post-award application under Section 9 of the Arbitration and Conciliation Act, 1996, the Court issued an interim order directing the respondents Glocal Healthcare Systems Pvt Ltd And Ors to file affidavits detailing their assets, liabilities, and financial obligations. The petitioner's Uphealth Holdings Inc. appeals were dismissed, requiring compliance with the asset disclosure directives, excluding the need for supporting documents.

In the present case, the petitioners have filed a new application, expressing concerns that disclosing detailed asset information could lead to misuse by third parties and that the affidavits contain confidential financial data, potentially causing them prejudice.

The Court noted that at the outset, the procedure of filing information in sealed covers it ordinarily contrary to the basic process of justice. According to the Court, it is elementary that in an adversarial proceeding anything that the Court can see, the opposite party must be allowed to see.

“In these commercial matters, there is no place for confidentiality nor privacy nor sealed covers. Such matters count for little in these cold Commercial Courts.”, the Court added.

The Court mentioned the decision in Madhyamam Broadcasting Limited vs. Union of India & Ors. 2023 SCC OnLine SC 366 where according to the Court it was observed that disclosure by way of sealed covers is antithetical to a transparent and accountable system.

The Court further mentioned the decision in Shew Kumar Nopany vs. Grindlays Bank Limited AIR 1986 Cal 328 and Mathiyam Bivi Ammal Vs. The Union Bank Ltd., Kumbakonam AIR 1938 Mad 771 where according to the Court it was observed that the entire object behind the filing of the Affidavit of Assets is to ascertain whether the petitioners have the money or assets to satisfy the awarded amount.

The Court noted that the petitioners are all debtors or potential debtors. According to the Court, entire rationale behind filing the Affidavit of Assets would be rendered nugatory and meaningless if the affidavits were kept in sealed covers.

Accordingly, the Court dismissed the applications and directed the sealed covers to be opened and shared with the respondents.