Back
SUPREME COURT OF INDIA
S. ABDUL NAZEER, V. RAMASUBRAMANIAN, JJ.
Raj Process Equipments and Systems Pvt. Ltd. and Others – Appellants
Versus
Honest Derivatives Pvt. Ltd. – Respondent
Civil Appeal No. 8089 of 2022, SLP (Civil) No. 19754 of 2022, Diary No. 43133 of 2019
Decided On : 03-11-2022
Civil Procedure Code, 1908 – Order VIII Rule 1 – Damage suit – Non-filing of written statement – Direction to proceed ex-parte – At the time when suit was filed and at the time when order was passed, court before which suit was pending was a normal Civil Court – It was only after order was passed directing the matter to proceed ex-parte that matter got transferred to a Commercial Court – Time of 120 days had expired even when matter was pending before normal Civil Court – Insofar as normal Civil Courts are concerned, it is proviso to Order VIII Rule 1 CPC which applies – Proviso to Rule 1 of Order VIII CPC is directory and not mandatory – What is to be applied to normal Civil Courts is Order VIII Rule 1 and interpretation given to the same in Salem Advocate Bar Association, (2005) 6 SCC 344 – This being a suit for damages for alleged loss suffered by respondent, on account of supply of defective machinery, Court cannot deprive appellants of opportunity to contest claim on merits – Impugned order passed by High Court and order of Commercial Court set aside – Commercial Court directed to take on record written statements filed by appellants and proceed with hearing of suit on merits. (Paras 10, 11, 13, 14, 15 and 16)
Facts of the case:
Present appeal arises out of an order passed by High Court of Judicature of Bombay, Aurangabad
Bench, confirming an order passed by the trial Court refusing to recall an order by which defendant Nos.1 and 2 were recorded as having filed no written statements and the suit directed to proceed ex-parte against defendant Nos.3 and 4.
Findings of Court:
Decision in SCG Contracts India Private Limited is by a 2-member Bench, which was dealing with the second proviso to sub-rule (1) of Rule 1 of Order V. Therefore, when decision of 3-member Bench in Salem Advocate Bar Association was cited before this Court in SCG Contracts India Private Limited, this Court held in paragraph 11 that the earlier law on Order VIII Rule 1 has now been set at naught.
Result : Appeal allowed.
ORDER :
1. Delay condoned.
2. Leave granted.
3. The appeal arises out of an order passed by the High Court of Judicature of Bombay, Aurangabad Bench, confirming an order passed by the trial Court refusing to recall an order by which the defendant Nos. 1 and 2 were recorded as having filed no written statements and the suit directed to proceed ex-parte against defendant Nos. 3 and 4.
4. We have heard the learned counsel on both sides.
5. The respondent herein filed a suit for recovery of damages on the file of the Civil Court Senior Division Jalgaon in December, 2017. Admittedly, the suit summons was served on the appellants herein (defendants in the suit) on 16.02.2018. Despite a number of opportunities given to them, the appellant Nos.1 and 2 herein (defendant Nos. 1 and 2) did not file their written statements. Defendant Nos. 3 and 4 did not even enter appearance.
6. Therefore, the trial Court passed an order on 3.7.2018 to the following effect:
“The Defendant No. 3 and 4 in spite of service of suit summons (Exh.6) failed to appear and defendant No. 1 and 2 in spite of giving opportunity failed to file their written statement. Hence, the suit proceeded ex-parte against defendant no. 3 and 4 and without written statement against defendant no. 1 and 2.”
7. On 11.08.2018, the District Court, Jalgaon was designated as a Commercial Court in terms of the Commercial Court Act, 2015 and the suit pending on the file of the Civil Judge, Senior Division was transferred to the Commercial Court. After transfer, defendant Nos. 1 to 4, who are the appellants herein moved three applications respectively for (i) condonation of delay; (ii) recalling the order of ‘no written statement’ dated 03.07.2018 passed against defendant Nos. 1 and 2 and (iii) setting aside the order directing the proceeding to go on ex-parte against defendant Nos. 3 and 4.
8. The Commercial Court rejected all the three applications by an order dated 11.04.2019, on the basis of the proviso to Order VIII Rule 1 CPC. The said order was affirmed by the High Court by the order impugned in this appeal, forcing the defendants to come up with the above appeal.
9. There is no dispute about the fact that at the time when the suit was filed and at the time when the order dated 03.07.2018 was passed, the court before which the suit was pending was a normal Civil Court. It was only after the order dated 03.07.2018 was passed directing the matter to proceed ex-parte that the matter got transferred to a Commercial Court.
10. It is also an admitted fact that the period of 120 days as stipulated in the second proviso to sub-rule (1) of Rule 1 of Order V CPC and the proviso to Rule 1 of Order VIII expired on 18.06.2018.
11. In other words, the time that was available, if a strict interpretation is given to the aforesaid provisions, was nothing because the time of 120 days had expired even when the matter was pending before the normal Civil Court.
12. Reliance was placed by the High Court on the judgment of this Court in SCG Contracts India Private Limited vs. K.S. Chamankar Infrastructure Limited, (2019) 12 SCC 210, in support of the contention that the time-line prescribed under the second proviso to sub-rule (1) of Rule 1 of Order V CPC is mandatory and that the appellants have forfeited their right to file written statements.
13. But we do not agree. The suit that became the subject matter of dispute in SCG Contracts India Private Limited, appears to have been filed before the Commercial Court and not before the normal Civil Court. Insofar as the normal Civil Courts are concerned, it is the proviso to Order VIII Rule 1 CPC which applies. In Salem Advocate Bar Association vs. Union of India, (2005) 6 SCC 344, this Court held that the proviso to Rule 1 of Order VIII CPC is directory and not mandatory. An exception was carved out in SCG Contracts India Private Limited to this Rule, by this Court insofar as the commercial disputes are concerned by invoking the second proviso to sub-rule (1) of Rule 1
Written Statement – Insofar as normal Civil Courts are concerned, it is proviso to Order VIII Rule 1 CPC which applies – Proviso to Rule 1 of Order VIII CPC is directory and not mandatory.
Point of Law : Honourable Supreme Court has held that amended provisions of Orders V and VIII of Code are mandatory.
The interpretation of procedural rules regarding the filing of written statements and the discretion of the court to permit filing beyond the stipulated period based on sufficient cause.
Mandatory provision of filing written statement within 120 days from receipt of summons in case of a commercial suit will not be applicable in case of a transferred suit.
The main legal point established in the judgment is the requirement for the defendant to file the written statement within the prescribed period, the consequences of failing to do so, and the applica....
The court established the discretion of the Commercial Court in accepting written statements in transferred suits and highlighted the applicability of the Commercial Courts Act, 2015 to suits filed b....
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
