Andhra Pradesh HC: Private Expert Reports Permissible in Commercial Suits, But Must Follow Prescribed Procedure
A Division Bench at Amaravati ruled that parties may engage private experts and file their reports in commercial suits, while separately setting aside an order that admitted a document by mere memo without following the procedure under Order XI of the CPC.
The High Court of Andhra Pradesh, sitting at Amaravati, decided two civil revision petitions arising from a commercial suit pending before the Special Court for Trial and Disposal of Commercial Disputes at Vijayawada. The Division Bench of Justice Ravi Nath Tilhari and Justice Balaji Medamalli, with the lead judgment authored by Justice Tilhari, resolved two distinct procedural disputes in ISGEC Heavy Engineering Limited v. M/s FE Engineering. In the first, the Bench set aside an order that allowed a document to be placed on record by filing a memo, holding that the prescribed procedure under Order XI Rules 4 and 5 of the CPC as amended for commercial courts must be followed. In the second, the Bench dismissed the challenge to an order permitting a privately engaged expert's report to be taken on record, holding that there is no bar in law against a party engaging a private expert and submitting that report as evidence.
The Underlying Commercial Suit
M/s FE Engineering, a Kerala-based firm represented by its Managing Partner Mr. Jyothish Kowal, filed C.O.S. No. 3 of 2022 before the Special Court at Vijayawada against ISGEC Heavy Engineering Limited, a company with its registered office at Yamuna Nagar, Haryana. The suit sought recovery of amounts under several heads arising from a construction or engineering contract, including unpaid approved running account bills of Rs. 57,34,825/-, retention money of Rs. 25,82,397/-, claims for partially completed work of Rs. 32,00,000/-, idling of men and machinery of Rs. 64,09,860/-, unpaid crane rent of Rs. 1,32,300/-, rework charges of Rs. 1,93,200/-, loss due to non-handover of tools and tackle of Rs. 35,30,444/-, loss of profits of Rs. 36,03,575/-, loss of overheads and profits of Rs. 84,70,980/-, loss of business opportunity of Rs. 1,00,00,000/-, and breach of agreement of Rs. 50,00,000/-. Interest at 18% per annum was claimed on most heads. The total claim including interest ran to Rs. 6,42,82,261/-. ISGEC was the defendant in that suit and the petitioner in both revision petitions before the High Court.
CRP No. 1209 of 2025: Document Admitted by Memo
During the cross-examination of P.W.1, FE Engineering filed a Certificate of Registration of Firm by way of a memo dated 28 March 2025. The Special Court, by order dated 15 April 2025, allowed the memo and took the document on record. ISGEC challenged this order in CRP No. 1209 of 2025.
ISGEC's counsel, Sri MRK Chakravarthy, argued that the Commercial Courts Act and the amended CPC prescribe a specific procedure under Order XI Rules 4 and 5 for placing documents on record. A party cannot bypass that procedure by simply filing a memo. Without an appropriate application and the leave of the court, the document could not have been admitted.
Counsel for FE Engineering, Sri D.S. Sivadarshan, did not contest the procedural objection. He submitted that FE Engineering was ready to file the same document by following the prescribed procedure and sought liberty to do so. ISGEC's counsel did not object to that course but maintained that the impugned order could not stand.
The Division Bench agreed. It held that once a procedure has been prescribed, the applicant must follow it. There is no mechanism to bring a document on record by filing a memo. The impugned order, having been passed on a memo, could not be sustained. The Bench set it aside but granted FE Engineering liberty to file an appropriate application following the correct procedure, upon which the Special Court would pass orders in accordance with law. The Bench also clarified that the setting aside of the impugned order would not prejudice the merits of any fresh application that FE Engineering might file.
CRP No. 1210 of 2025: The Private Expert Report
The second revision petition arose from a different order. FE Engineering filed I.A. No. 157 of 2024 under Order XI Rule 1(5) of the CPC as amended and applicable to the Commercial Court, seeking permission to place on record a report dated 26 August 2024 prepared by an expert privately engaged by FE Engineering. The I.A. was filed on 6 September 2024. ISGEC filed objections. The Special Court framed the question whether the defendant's plea could be accepted so as to refuse reception of the document, and by order dated 28 October 2024 granted leave, observing that the report was finalised on 26 August 2024, which was after the institution of the suit, and therefore was not in the power, possession or control of FE Engineering at the time of filing the suit. The Special Court also noted that no prejudice would be caused to ISGEC, subject to the report's relevancy and admissibility being determined at trial.
ISGEC challenged the order dated 28 October 2024 in CRP No. 1210 of 2025, raising two principal arguments. First, that the appointment of an expert is a judicial function of the court, and since the court had not appointed any expert, the report of a privately engaged expert could not be placed on record. Second, that the plaint itself, at paragraph 101, referred to a claims expert having been engaged for calculating overheads and profits at Rs. 84,70,980/- — the same figure that appeared in the report — which showed the report was already in FE Engineering's possession at the time of institution of the suit. ISGEC also argued that the report was filed at a belated stage without justifiable cause.
How the Bench Reasoned on Private Expert Reports
The Division Bench rejected both arguments. On the question of whether a party can engage a private expert, the Bench held that Order XXVI Rules 9 and 10 of the CPC provide for court-appointed commissioners, but that power does not preclude a party from engaging an expert privately and submitting that expert's report as evidence. The Bench drew a clear distinction: the court's power to appoint a commissioner is one thing; a party's right to engage an expert and produce that expert as a witness is another. If such a report is filed, the opposing party retains the right to cross-examine the expert and to file its own evidence in response.
The Bench relied on two High Court decisions. In Santhosh K.S. v. State of Kerala and Ors. (MANU/KE/3572/2024), the Kerala High Court had held that while a court should be circumspect in appreciating the evidentiary value of a report obtained without the court's intervention, there is no restriction on obtaining such a report, and a private witness can certainly be brought in by parties to litigation. In Parappa and Ors. v. Bhimappa and Ors. (MANU/KA/0059/2008), the Karnataka High Court had held that a party in a civil case may rely on an expert report obtained either before or after institution of the suit, but the report does not become evidence merely by production — the party must examine the expert, produce the report through that witness, get it marked, and subject the expert to cross-examination. Only after such examination does the report become admissible. The Bench expressed agreement with both decisions.
The Bench also addressed the three Supreme Court decisions cited by ISGEC — Sudhir Kumar alias S. Baliya v. Vinay Kumar G.B. (AIR 2021 SC 4303), Narayana Menoki v. Raan Nair (1966 Supreme (Ker) 301), and Pada Sen and Anr. v. The State of U.P. (AIR 1961 SC 218) — and found that none of them directly addressed whether a private expert could be engaged or whether such a report could be submitted. Those authorities dealt with the judicial character of the power to appoint an expert. The Bench held that the inference ISGEC sought to draw from them — that because appointment of an expert is a judicial function, a party cannot engage one privately — was not a proposition laid down in those judgments and could not be drawn from them.
On the argument that the report was already in FE Engineering's possession at the time of filing the suit, the Bench noted that this plea had not been raised before the Special Court in ISGEC's objections to I.A. No. 157 of 2024, nor had it been taken in the civil revision petition itself. It was raised only during oral arguments. The Bench held that a plea of fact cannot be taken for the first time in a revision under Article 227 of the Constitution of India. It further held that the mere coincidence of the figure of Rs. 84,70,980/- appearing both in paragraph 101 of the plaint and in the expert report was not sufficient to presume that the report dated 26 August 2024 was in existence before the suit was filed. FE Engineering's counsel had also pointed to paragraph 104 of the plaint, which pleaded that the plaintiff was entitled to revise the figure after ascertaining the exact amount through an expert — a pleading consistent with the report being obtained after institution.
The Bench found that the Special Court had assigned reasons for granting leave, had expressly made the report subject to its relevancy and admissibility at trial, and had not committed any illegality. There was no error of law warranting interference under Article 227 of the Constitution of India.
Outcome
CRP No. 1209 of 2025 was allowed. The Special Court's order admitting the Certificate of Registration of Firm by memo was set aside. FE Engineering was granted liberty to file an appropriate application following the procedure prescribed under Order XI Rules 4 and 5 of the CPC as applicable to commercial courts, upon which the Special Court would pass orders on the merits. The setting aside of the impugned order was stated not to prejudice any such fresh application.
CRP No. 1210 of 2025 was dismissed. The Special Court's order dated 28 October 2024 granting leave to take the private expert's report on record in I.A. No. 157 of 2024 was upheld. No order as to costs was made. Pending interlocutory applications, if any, were closed.