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Delhi High Court Upholds Striking Off Defence for Non-Payment of Costs, Slams Litigant's "Casual Manner"

New Delhi: In a firm stance against procedural delays in commercial litigation, the Delhi High Court has upheld a commercial court's decision to strike a defendant's written statement off the record due to their failure to pay imposed costs. Justice Girish Kathpalia, while dismissing the petition, underscored that the expedited nature of the Commercial Courts Act cannot be undermined by a litigant's "casual manner" and dilatory tactics.

Case Background

The case, M/S Om Fire Safety Company Pvt Ltd vs Umakant , originated from a commercial suit where the petitioner (defendant) failed to file their Written Statement within the stipulated time. The commercial court had previously shown indulgence, allowing the delayed filing on 07.08.2025, but made it conditional upon the payment of costs to the plaintiff.

Despite this leniency, the defendant failed to pay the costs. The matter was adjourned, but the costs remained unpaid on the subsequent hearing dates. On 17.10.2025, when the plaintiff's counsel again raised the issue of non-payment, the defendant's counsel reportedly responded in a "casual manner, 'de denge' (will give it)." This prompted the commercial court to pass the impugned order, taking the Written Statement off the record.

Petitioner's Arguments

Before the High Court, the petitioner argued that their failure to pay was due to "confusion" as the lower court's order did not specify to whom the costs were to be paid. They contended that this ambiguity was the reason for the delay in payment.

High Court's Stern Rebuke

Justice Kathpalia found the petitioner's explanation to be "completely flimsy." The court rejected the argument of confusion, noting that the petitioner made no effort to seek clarification from the court over a period of more than two months.

In his order, Justice Kathpalia stated, "In any case, where the order is silent as to whom the cost is to be paid, it is clear that the cost has to be paid to the opposite side which has suffered adjournment. I find the excuse for non-payment of cost completely flimsy."

The court further observed that the petitioner's conduct displayed a clear intent to protract the proceedings. Upon inquiry, the petitioner's counsel stated that their primary defence was that the goods supplied by the plaintiff were defective. However, the court noted with significance that the petitioner had admittedly never issued a formal notice to the plaintiff regarding these alleged defects prior to the litigation.

Legal Principles Applied

The High Court reinforced the legal consequences of non-compliance with court orders, citing the Supreme Court's judgment in *** Manohar Singh vs D.S. Sharma (2010)***. This precedent establishes that as a consequence of non-payment of costs, the defaulting party can be prohibited from participating in further proceedings.

Justice Kathpalia emphasized the legislative intent behind the Commercial Courts Act , stating:

> "The Commercial Courts Act was enacted with a specific aim of expediting the commercial disputes... The commercial courts and the processes adopted by the same cannot be allowed to be dealt with in such casual manner, so as to convert the same into general civil suit."

Final Decision and Implications

Finding no "infirmity, much less any perversity" in the commercial court's order, the High Court dismissed the petition. The decision serves as a stark reminder to litigants that court-imposed conditions, such as the payment of costs, are not mere formalities. A failure to comply, especially when coupled with a casual attitude, can lead to severe consequences, including the forfeiture of the right to defend a suit. This ruling reinforces the judiciary's commitment to ensuring the timely and efficient resolution of commercial disputes.