Written Statement In Commercial Suit Can't Be Deferred Beyond Prescribed Time Merely Because Demurrer Application For Dismissal Is Pending: Calcutta HC

The Calcutta High Court on Friday held that filing of written statement in commercial suits cannot be permitted beyond the prescribed time limit (of 120 days) merely because a demurrer application for rejection of plaint moved by the defendant is pending.While hearing one such application seeking extension of time to file written statement in a commercial suit, the High Court reiterated that such direction to defer filing of written statement until the demurrer application fails, can be given only in respect of suits filed in Ordinary Original Civil Jurisdiction of the Court and not for suits filed before its Commercial Division. The instant proceedings arose out of a suit filed before the Court's Commercial Division which was, at the time of the passing of this order, accompanied by three interlocutory applications: (i) seeking injunctive and consequential reliefs by the plaintiff, (ii) extension of time to file written statement by the defendant and (iii) rejection of plaint and/or rejection of suit by the defendant. Counsels for the defendant contended that as its demurrer application for rejection of plaint went to the root of the matter, the said application ought to be decided first and consequently, any occasion for direction to file written statement can only arise upon such demurrer application being decided against the defendant. In contrasting the difference in practice and procedure between suits arising before the Court's Ordinary Original Civil Jurisdiction and Commercial Division, Justice Arindam Mukherjee observed that while for suits filed before the Court's Ordinary Original Civil Jurisdiction a direction for filing written statement arises only when a demurrer application for rejection of plaint which goes to the root of the matter fails, for suits filed before the Court's Commercial Division, the amended provisions of Order VIII of the Code of Civil Procedure ("CPC") applies which imposes a mandatory prescribed time frame of 120 days for filing of written statement from date of service of summons. The Court further observed that the position of law with respect to the impermissibility of filing written statements in commercial suits beyond the mandatory prescribed 120 days' time frame is no longer res integra. Such distinction was drawn out by the Court to establish that whereas for suits filed before the Ordinary Original Civil Jurisdiction, the occasion for filing written statement is contingent and condition subsequent upon the Court first assessing a demurrer application for rejection of plaint on merits, commercial suits however, are governed under the amended provisions of Order VIII Rule 1 CPC which mandatorily prescribe such suits to be accompanied by a written statement within 120 days from date of service of summons, irrespective of whether a demurrer application for rejection of plaint in respect of the said commercial suit has been filed or not. In this regard, the Court held: "The defendant is right in its submission that an application for rejection of plaint goes to the root of the matter and there has been a consistent view in such a situation the written statement is directed to be filed only if such demurrer application fails. However, this view is in respect of suits in the Ordinary Original Civil Jurisdiction and not with regard to suits in the Commercial Division. In view of the provisions of the Commercial Courts Act, 2015 read with the amended provisions of Order VIII of the Code of Civil Procedure, 1908 made applicable to suits arising out of commercial disputes there is a fixed time frame provided for filing of the written statement. A written statement in such a suit cannot be filed under any circumstances beyond 120 days. This point is no more res integra." Within the factual matrix of the instant proceedings, the Court found the written statement of the defendant was affirmed on the 120th day and accordingly permitted the defendant to file such written statement without prejudice to its demurrer application for rejection of plaint. Case: M/s. Neo Carbons Pvt. Ltd. v. National Insurance Company Limited, CS 45 of 2022 Date: 06.11.2022Citation: 2022 LiveLaw (Cal) 331 Click Here To Read/Download Order

Written Statement In Commercial Suit Can't Be Deferred Beyond Prescribed Time Merely Because Demurrer Application For Dismissal Is Pending: Calcutta HC

SAMRIDDHA SEN

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