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Commercial Suits: 120 Days Deadline To File Written Statement Mandatory: SC [Read Judgment]

Ashok Kini
19 Feb 2019 7:37 AM GMT
Commercial Suits: 120 Days Deadline To File Written Statement Mandatory: SC [Read Judgment]

“In view of the fact that the consequence 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 VIII Rule 1 has now been set at naught.”

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The Supreme Court has observed that proviso added to the Code of Civil Procedure by Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015, is mandatory and no written statement can be taken on record in commercial suits, if it is not filed within 120 days from the date of service of summons of the Suit.

The bench comprising Justice Rohinton Fali Nariman and Justice Vineet Saran was considering Special Leave Petitions (SCG Contracts India Pvt. Ltd vs. K.S. Chamankar Infrastructure Pvt. Ltd) against Delhi High Court orders allowing a written statement filed by the defendants even though 120 days had elapsed from the date of service of summons of this Suit.

CPC Amendments

The following proviso was added to Order VIII Rule 1 to the Code of Civil Procedure by the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 and was made applicable to commercial disputes of a specified value w.e.f 23.10.2015. (Similarly worded proviso was inserted in Order V as well)

*[Provided that where the defendant fails to file the written statement within the said period of thirty days, he shall be allowed to file the written statement on such other day, as may be specified by the Court, for reasons to be recorded in writing and on payment of such costs as the Court deems fit, but which shall not be later than one hundred twenty days from the date of service of summons and on expiry of one hundred twenty days from the date of service of summons, the defendant shall forfeit the right to file the written statement and the Court shall not allow the written statement to be taken on record.]

 Another proviso was added to Order VIII Rule 10

*[Provided further that no Court shall make an order to extend the time provided under Rule 1 of this Order for filing of the written statement.] 

Time Limits Mandatory

The bench took note of some Delhi HC judgments that have held that, given the consequence of non-filing of written statement, the amended provisions of the CPC will have to be held to be mandatory. The bench said:

"We are of the view that the view taken by the Delhi High Court in these judgments is correct in view of the fact that the consequence 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 VIII Rule 1 has now been set at naught."

The bench also rejected the contention that, Section 151 can be invoked in cases like the present where grossly unjust consequences would otherwise ensue. It said:

"Clearly, the clear, definite and mandatory provisions of Order V read with Order VIII Rule 1 and 10 cannot be circumvented by recourse to the inherent power under Section 151 to do the opposite of what is stated therein."

Res judicata cannot stand in the way of an erroneous interpretation of a statutory prohibition

The counsel also relied on earlier order by the High Court that had permitted him to file the written statement beyond 120 days, and principle of res judicata would apply. The bench, noted that the said order is also impugned in this SLP, observed:

"This doctrine cannot be used when the res is not yet judicata.. Even assuming that the 05.12.2017 order is final, res judicata cannot stand in the way of an erroneous interpretation of a statutory prohibition."

Read Judgment



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