Commercial Suits - Time Limit Of 120 Days For Filing Written Statements Not Mandatory For Written Statements To Counter Claims: Madras High Court

In a significant decision, the Madras High Court recently held that the mandatory time limit of 120 days to file a written statement in a commercial suit is not applicable to written statement to a counter-claim."... this Court holds that the Proviso to Order VIII Rule 1 of Code of Civil Procedure, which fixes the maximum period for filing the written statement as 120 days and which was held to be mandatory by the Hon'ble Supreme Court in SCG Contracts India Pvt. Ltd. Vs. K. S. Chamankar Infrasturcture Pvt. Ltd. and Ors., reported in 2019 (2) CTC 294, beyond which the right to file the written statement will stand forfeited, will not apply to a written statement filed by the plaintiffs for the counter claim made by the defendants and such cases will be governed only by the time period fixed by the Court under Order VIII Rule 6 A(3) of CPC".Justice N. Anand Venkatesh was considering if it would be prudent according to the provisions of Civil Procedure Code and Madras High Court Original Side Rules to condone the delay of 563 days in filing the Written Statement of the Plaintiffs for a Counter Claim filed by Defendant.While holding that the right to file a written statement to a counterclaim won't be forfeited unless there is explicit time limit fixed by the court under Order VIII Rule 6 A(3) of CPC, the High Court concluded that the applicants, CSCO LLC and Base IX Company LLC, have shown a reasonable cause for the delay in filing the said written statement for the counterclaim. Though the apex court has clarified in SCG Contracts India Pvt. Ltd. v. K. S. Chamankar Infrastructure Pvt. Ltd. & Ors that the Proviso to Order VIIIRule 1 of Code of Civil Procedure r/w Order VIII Rule 10 of CPC fixes the maximum period for filing the written statement in commercial suits as 120 days from the date of service of summons of the Suit, Madras High Court has observed that it's solely applicable to written statement filed by defendants under Order VIII Rule 1 CPC.Referring to the duty cast upon the court to fix the time limit for filing the written statement by the plaintiff under Order VIII Rule 6 A (3), the court observed as below:"...While fixing such time limits, the Court is guided by Order VIII Rule 9 of CPC., wherein the Court can fix a time limit of not more than 30 days for presenting the written statement for a counterclaim. Even though leave is not required for filing a written statement for the counterclaim, since it is a matter of right for the plaintiffs, the Court can always fix a time limit for filing such a written statement. Hence, when a counter claim is filed by the defendants, the Court has to specifically pass an order while taking the counterclaim on file, directing summons to be served on the plaintiffs or if the plaintiff is represented by a counsel, directing the counsel to accept service of summons on behalf of the plaintiff. The time limit for filing the written statement for the counterclaim will commence only thereafter."In the case before the court, the respondent company, Lakshmi Saraswathi Spintex Limited, had filed a written statement in the applicant's suit for relief of permanent injunction and damages, among other reliefs, with a delay of 113 days. The said delay was condoned by the High Court. It is pertinent to note here that the respondent company filed the written statement along with a counterclaim. The appeal filed by the plaintiff/ applicant against condonation of delay in Original Second Appeal was dismissed by the court. Aggrieved by the dismissal of appeal, the plaintiff/ applicant approached Supreme Court through a special leave petition where the matter is currently pending adjudication.Therefore, the court noted in the order that there was no time limit against the plaintiff since the court did not pass any order, directing the applicants to file a written statement to the counterclaim within a specified period under Order VIII Rule 6 A(3) of CPC, while condoning the delay in filing the written statement by respondents."The plaintiffs were awaiting for the orders of the Apex Court and hence did not proceed to file the written statement for the counter claim made by the defendants. This Court made it very clear while passing an order on 01.12.2021 that in the absence of an order of stay passed by the Apex Court, the proceedings cannot be kept in abeyance and that this Court will proceed further with the suit. It is only thereafter, the present application came to be filed to condone the delay in filing the written statement for the counterclaim. Hence, the applicants/plaintiffs have shown a reasonable cause for the delay in filing the written statement for the counterclaim. That apart, when the application was allowed in Application No. 6464 of 2018 by an order dated 20.09.2018, this Court did not direct the counsel for plaintiffs to accept summons in the counterclaim and this Court also did not pass any order fixing the period for filing the written statement for the...

Commercial Suits - Time Limit Of 120 Days For Filing Written Statements Not Mandatory For Written Statements To Counter Claims: Madras High Court

Sebin James

"...such cases will be governed only by the time period fixed by the Court under Order VIII Rule 6 A(3) of CPC after passing appropriate orders", the court clarified.

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