A. The Ninety Day Limit is Directory:
A catena of judgements by the Hon'ble Supreme Court of India, interpreting Order 8 Rule 1 of the Code of Civil Procedure, 1908 ("CPC"), had settled the position that the requirement to file a Written Statement within 30 days (extendable to 90 days) of receipt of summons is directory and not a mandatory requirement.
As a result, litigators have long used the language used of the twin decisions of the Supreme Court of India (Kailash v. Nankhu (2005) 4 SCC 480 ("Kailash") and Salem Advocates Bar Association, T.N. v. Union of India (2005) 6 SCC 344 ("Salem Advocates")), i.e. that procedural law is the handmaid of justice and not its mistress. These decisions were particularly useful when filing applications to condone a delay in filing Written Statements beyond the outer limit of 90 days set out in the CPC.
In those two decisions, the Supreme Court has held that the extendable period of 90 days within which to file a Written Statement does not carry any penal consequences. Further, it held that Order 8 Rule 1, CPC should not be interpreted to mean that in no event whatsoever can a Written Statement not be taken on record beyond the extendable time period of 90 days from receipt of summons. Accordingly, in both Kailash and Salem Advocates, it has been held that Order 8 Rule 1, CPC, being in the domain of procedural law, is directory and not mandatory.
Of course, in both Kailash and Salem Advocates, the Supreme Court was careful to add that a decision to condone delay beyond the 90 day period is not to be passed in a routine manner and that such discretion is to be exercised by the Court only in exceptionally hard cases. Subsequently in Atcom Technologies Pvt. Ltd. v. Y.A. Chunawala (2018) 6 SCC 639 ("Atcom") the Supreme Court again reiterated its findings in Kailash and Salem Advocates. Further, in Atcom, the Supreme Court reiterated its prior holding that when seeking condonation of delay beyond the 90 day period set out in Order 8 Rule 1, CPC the Defendant is required to furnish a proper and satisfactory explanation. It was further held in Atcom that merely because Order 8 Rule 1, CPC is directory does not mean that a Defendant can take as much time as desired or is absolved from giving convincing and cogent reasons for the delay beyond 90 days. A decision to condone delay beyond the 90 day extendable period is not to be granted in a mechanical fashion merely because of the earlier decisions that Order 8 Rule 1, CPC is directory and not mandatory.
A contradiction can be drawn here, between the decisions of the Supreme Court in Kailash, Salem Advocates and Atcom, and the decision in Union of India v. Popular Construction Co. (2001) 8 SCC 470 ("Popular Constructions"). In Popular Constructions, the effect of the use of the words "but not thereafter" in relation to the time limit for filing an appeal against an Arbitral Award was in question. The Supreme Court came to hold that use of the words "but not thereafter" in the proviso to Section 34(3) of the Arbitration and Conciliation Act, 1996 ("Arbitration Act") amounted to an express exclusion within the meaning of Section 29(2) of the Limitation Act, 1963 ("Limitation Act") and would bar the application of Section 4 of the Limitation Act. As such, it was held that a Court could not entertain an application to set aside an award beyond the extendable period provided in the proviso to Section 34(3) of the Arbitration Act. It was held that any other interpretation would render the words "but not thereafter" in the said provision otiose.
B. Effect of the Commercial Courts Act:
In 2015, the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 ("Commercial Courts Act") was brought in to force. By way of Section 16, the Commercial Courts Act amended various portions of the CPC in a legislative attempt to bring about a more efficacious and speedy resolution to matters which fall in to the category of "Commercial Disputes" - as defined in Section 2(c) of the Commercial Courts Act. Pertinently, in terms of Section 21 of the Commercial Courts Act its provisions shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. This non-obstante clause is of particular importance when considering the amendments made to Order 8 Rules 1 & 10, CPC.
By way of the Commercial Courts Act, certain amendments were made and provisos were inserted as a result of which the period for filing of a Written Statement in Commercial Disputes, in terms of Order 8 Rule 1, CPC, was extended from 90 days to a maximum of 120 days from receipt of summons. However, in case a Written Statement is not filed within 120 days of receipt of summons, the Defendant shall forfeit the right to file its Written Statement and the Court is not permitted to allow such a Written Statement to be taken on record. Further, by way of another proviso (inserted by the Commercial Courts Act to Order 8 Rule 10, CPC) the Court is not permitted to make an order to extend the time for filing of a Written Statement even when pronouncing judgment or passing other orders under Order 8 Rule 10, CPC.
Soon after the coming in to force of the Commercial Courts Act the High Court of Delhi in Oku Tech Pvt Ltd v. Sangeet Agarwal and Others 2016 SCC OnLine Del 6601 ("Oku Tech") considered a case falling under the ambit of the Commercial Courts Act. In Oku Tech, a Single Judge of the High Court of Delhi held that in commercial disputes the legislative intention is to take away the discretion of the Court in extending time to file a Written Statement after the amendments to the CPC made by Section 16 of the Commercial Courts Act. Accordingly, the Court could not condone a delay or allow a Written Statement to be brought on record beyond the extendable 120 day period.
Thereafter, the Supreme Court of India, while examining the amendments to the CPC after the coming in to force of the Commercial Courts Act, held in SCGContracts India Pvt. Ltd. v. K.S. Chamankar Infrastructure Pvt. Ltd. and Ors. (2019) 12 SCC 210 ("SCG Contracts") that no extension of time can be granted for filing of the Written Statement beyond 120 days. In SCG Contracts, the Supreme Court of India concurred with the view taken by the High Court of Delhi in Oku Tech by holding that:
" … the consequences of forfeiting a right to file the Written Statement; non-extension of any further time; and the fact that the Court shall not allow the Written Statement to be taken on record all points to the fact that the earlier law on Order VIII Rule 1 on the filing of Written Statement under Order VIIII Rule 1 has now been set at naught."
However, perhaps more important is, the observation in SCG Contracts that the inherent powers granted to a Court under Section 151, CPC cannot be used to circumvent the "clear, definite and mandatory provisions of Order V Read with Order VIII Rule 1 and 10".
More recently, the Supreme Court has held in Desh Raj v. Balkishan (Dead) Through Proposed Legal Representative Ms. Rohini (2020) 2 SCC 708 ("Desh Raj") that after the Commercial Courts Act has come in to force, two regimes now govern civil procedure. First, for Commercial Disputes (as defined in Section 2(c) of the Commercial Courts Act) the regime set out in terms of the amendments introduced to the CPC by Section 16 of the Commercial Courts Act will govern. Second, another regime continues to exist under the unamended CPC for all other disputes that do not fall within the ambit of Section 2(c) of the Commercial Courts Act.
In Desh Raj, the Supreme Court clarified that for Commercial Disputes the decision in Oku Tech followed in SCG Contracts would govern and the amended provisions of the CPC would make the extendable time period of 120 days to file a Written Statement mandatory with no discretion to the Court to condone delay beyond this 120 day period. However, the ratio in those decisions would not cover suits which do not fall under the ambit of the Commercial Courts Act.
Therefore, in non-commercial matters the decision in Atcom (following, as it does the decisions in Kailash and Salem Advocates) would continue to govern the field. Accordingly, for non-commercial disputes the extendable period of 90 days to file a Written Statement continues to be directory in nature. However, in suits governed by the unamended CPC a Defendant seeking condonation of delay beyond 90 days would still be required to furnish convincing and cogent reasons for the Court to exercise its discretion to condone such delay.
C. A Special Law Prevails over a General Law:
The decision in Desh Raj appears to have clarified that, in non-commercial disputes, the requirement to file a Written Statement within the 90 day extendable period in terms of Order 8 Rule 1, CPC is directory and not mandatory. Nonetheless, it is important to remember that the CPC, being a general law would not prevail where the procedure regarding time limits to file pleadings is governed by a special law, e.g. High Court Acts and Rules framed thereunder or the Letters Patent of a High Court. This is in keeping with the principle that the provisions of a special law will prevail over those of a general law. Further, it is important to keep in mind that rules made under a statute must be treated for all purposes of construction or obligation exactly as if they were in the Act and are to be of the same effect as if contained in the Act (See: State of U.P. & Ors v. Babu Ram Upadhya AIR 1961 SC 751 at paragraph 23). Further, the Supreme Court of India has long held that when rules are validly framed, they should be treated as a part of the Act (See: Chief Forest Conservator (Wildlife) & Ors. v. Nisar Khan (2003) 4 SCC 595 at paragraph 19).
Pertinently, the Supreme Court, prior to the coming in to force of the Commercial Courts Act, has held in Iridium India Telecom Ltd. v. Motorola Inc. (2005) 2 SCC 145 ("Iridium") that the proviso to Order 8 Rule 1, CPC would not apply to suits before the Original Side of the Bombay High Court. It was further held that such suits would continue to be governed by the Bombay High Court Original Side Rules as they have been framed in accordance with Section 129, CPC (power of High Courts to make rules as to their original civil procedure) and the relevant Letters Patent for the High Court. For this reason, these rules would benefit from the saving provision contained in Section 4(1), CPC, i.e. that nothing in the CPC shall be deemed to limit or otherwise affect any: (i) special or local law now in force, or (ii) any special jurisdiction or power conferred, or (iii) any special form of procedure prescribed, by or under any other law for the time being in force.
Another example of such a special law (which would prevail over the provisions of Order 8 Rule 1, CPC and its various provisos) that applies to non-commercial disputes are the Delhi High Court (Original Side) Rules, 2018 ("Delhi HC Rules"). Chapter VII of the Delhi HC Rules deal with the time limits for filing of Written Statements and Replications. Interestingly, under Chapter VII, Rule 2 a Defendant is required to file a Written Statement within 30 days of the date of service of summons, or within the time provided by the Delhi HC Rules, CPC or the Commercial Courts Act – whichever is applicable. Chapter VII, Rule 3 then goes on to state that all Written Statements are to be filed together with an affidavit of admission/denial of documents and if not so done the Written Statement will not be taken on record.
Interestingly, Chapter VII Rule 4 permits the Court (on an application demonstrating sufficient cause) to extend the time for filing of a Written Statement beyond 30 days for a period not exceeding 90 days, but not thereafter. So far this is in line with the existing provisions of the CPC. However, the same Rule then requires the Defendant to be burdened with costs (as deemed appropriate by the Court) for such extension of time. The rule also explicitly states that the Written Statement will not be taken on record during this extended time period unless costs have been paid and the admission/denial affidavit has been filed. Lastly, the Joint Registrar of the High Court has been given the power to pass orders closing the right to file Written Statement in case no Written Statement is filed at all within the extended 90 day period.
Similar, but not identical limits for filing a Replication and mandatory requirements for closure of the right to file the Replication, is contained in Chapter VII Rule 5 of the Delhi HC Rules. As such, the various rules in Chapter VII of the Delhi HC Rules appear to travel beyond the merely directory nature of the CPC towards making filing of a Written Statement/Replication within the extendable time period mandatory in nature.
Buttressing this view is the inclusion of the words "but not thereafter" in Chapter VII Rule 4 of the Delhi HC Rules. This mirrors the wording of the proviso to Section 34(3) of the Arbitration Act. As noted above, this provision of the Arbitration Act and the specific words "but not thereafter" were interpreted as mandatorily closing the right to file an appeal beyond the extendable time period provided in Section 34(3) of the Arbitration Act by the Hon'ble Supreme Court in Popular Constructions.
The High Court of Delhi has also recently had opportunity to interpret the various provisions of Chapter VII of the Delhi HC Rules. Some recent judgments have sought to interpret the stringent time limit requirements and the ability of the Court and the Joint Registrar to close the right to file a Written Statement or Replication if they are not filed within the extendable period or without an affidavit of Admission/Denial.
In relation to the requirement to file the affidavit of Admission/Denial along with a Written Statement a Single Judge of the High Court of Delhi in Unilin Beheer B.V. v. Balaji Action Buildwell : 250 (2019) DLT 478 ("Unilin") has held that a Written Statement not filed together with an affidavit of admission/denial shall not be taken on record. Another Single Judge of the High Court of Delhi then held in Odeon Builders Pvt Ltd. v. NBCC (India) Limited 2019 SCC OnLine Del 10795 ("Odeon Builders") that the use of the words "but not thereafter" in Chapter VII Rule 5 excluded the grant of further time to file a Replication and affidavit of admission/denial of documents after expiry of the extendable period of 45 days. It further held that this time period (30 days extendable by another 15 days) is mandatory with no power being granted for extension thereof.
Subsequently, another Single Judge of the High Court of Delhi relied on the decisions in Unilin and Odeon Builders to hold that timelines set in the Delhi HC Rules for filing of replication and affidavit of admission/denial are mandatory. See: Atlanta Limited v. National Highways and Infrastructure Development Corporation Limited 2019 SCC OnLine Del 11276 ("Atlanta Limited").
All of these decisions are noteworthy because, despite being Commercial Disputes, they rely on the Delhi HC Rules in order to arrive at the conclusion that the time limits for filing of Written Statements/Replications are mandatory. Although all of these decisions were made before the clarification set out in Desh Raj, it appears that even in non-commercial suits before the Delhi HC (or perhaps any other Court with similarly stringent rules of procedure) the time period within which to file a Written Statement or Replication will be mandatory and not merely directory.
From a review of the above it becomes apparent that the Supreme Court has clarified that for non-commercial suits governed by the unamended provisions of the CPC, the provisions of Order 8 Rule 1, CPC are directory and not mandatory in nature. However, if a special law exists to govern the procedure for and exercise of original civil jurisdiction in a particular Court (most notably in High Courts exercising Ordinary Original Civil Jurisdiction) then, any mandatory time limits for filing of Written Statements contained therein would prevail over of the unamended provisions of Order 8 Rule 1, CPC.
The High Court of Delhi in its three recent judgments (Unilin, Odeon and Atlanta Limited) has already provided parties with the warning that the time limits for filing of Written Statements and Replications are to be respected. It therefore remains to be seen whether any challenge will be mounted to these three decisions in light of the clarification made by the Supreme Court in Desh Raj. Will the Supreme Court now be required to clarify that there are in fact three regimes governing civil procedure? One under the Commercial Courts Act, another in terms of the specific rules framed by individual courts and a third under the unamended CPC for courts where no specific time limits have been set out in its rules of procedure?
In the meantime, as a matter of abundant caution, litigators would be wise to ensure adherence to the the time limits set out in the rules of procedure in their respective courts, whether it be in terms of the Commercial Courts Act or the specific Rules framed for a High Court exercising Ordinary Original Civil Jurisdiction.
(The author is an advocate practicing before the Supreme Court of India, the High Court of Delhi and is currently a Managing Associate in the dispute resolution practice at L&L Partners, Law Offices, New Delhi. Views are strictly personal)