1. Commercial suit for recovery of monies — Failure to file written statement within statutory period — Denial of right to cross-examine plaintiff's witness. (Para 4 , 6 , 7 , 8 , 9 , 10 , 11 , 12 )
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2025 Supreme(SC) 1789
SUPREME COURT OF INDIA
ARAVIND KUMAR, N.V. ANJARIA, JJ.
M/S Anvita Auto Tech Works Pvt. Ltd – Appellant
VERSUS
M/s Aroush Motors & Anr. – Respondents
Civil Appeal No. of 2025 (Arising out of Special Leave Petition (Civil) No. 21917 of 2025)
Decided On : 08-10-2025
Advocates appeared:
For the Petitioner(s): Mr. Sughosh Subramanyam, Adv. Mr. Kartik Pant, Adv. Ms. Sanskruti Samal, Adv. Mr. Chaitanya, AOR
For the Respondent(s): Mr. Balaji Srinivasan, AOR Mr. Vishwaditya Sharma, Adv. Ms. Harsha Tripathi, Adv. Ms. Kanishka Singh, Adv. Mr. Subornadeep Bhattacharjee, Adv. Mr. Suraj Sampath, Adv. Mr. K. Shiva, Adv. Ms. Aakriti Priya, Adv.
For the Petitioner(s): Mr. Sughosh Subramanyam, Adv. Mr. Kartik Pant, Adv. Ms. Sanskruti Samal, Adv. Mr. Chaitanya, AOR
For the Respondent(s): Mr. Balaji Srinivasan, AOR Mr. Vishwaditya Sharma, Adv. Ms. Harsha Tripathi, Adv. Ms. Kanishka Singh, Adv. Mr. Subornadeep Bhattacharjee, Adv. Mr. Suraj Sampath, Adv. Mr. K. Shiva, Adv. Ms. Aakriti Priya, Adv.
IMPORTANT POINTS
(1) Administration of Justice – Object of procedural rules is to advance cause of justice and not to thwart it.
(2) Written Statement – On account of non-filing of written statement by defendant, his right to cross-examination is not taken away – Purpose of cross-examination is to elicit truth from witness and impeach its credibility.
Headnote:
(A) Administration of Justice – Object of procedural rules is to advance cause of justice and not to thwart it – When rigid adherence to technicalities of procedure causes injustice, Courts have to come to rescue by adopting a liberal approach – Courts cannot countenance a situation where substantial justice is sacrificed at altar of procedural rigidity – Where substantial justice is at stake, technicalities must give way to ensure that litigant is afforded sufficient opportunity to defend. (Para 3)
(B) Civil Procedure Code, 1908 – Order VIII Rule 1 – Written Statement – Timeline of 120 days’ fixed by statute is not directory but rather mandatory – Commercial Courts cannot condone delay beyond 120 days in filing Written Statement – Purpose of cross-examination is to elicit truth from witness and impeach its credibility – When Written Statement was not allowed to be taken on record, denial of right to cross-examine cannot be taken away by leaving defendant in lurch – Even when defendant has not filed Written statement, his right to cross-examine plaintiff witnesses is not foreclosed – Impugned judgment set aside and matter remanded back to Trial Court to dispose of the same after allowing appellant to file Written Statement subject to payment of cost of Rs. 1,00,000/-. (Paras 27, 31 and 32)
Facts of the case:
The only issue that arises for consideration is:
“Whether High Court was correct in observing that on account of non-filing of written statement by the defendant, his right to cross-examination is taken away?”
Findings of Court:
impugned judgment dated 20.05.2025 in Commercial Appeal No. 19 of 2023 and consequently the judgment and decree passed in commercial suit No. 372/2021 by the Addl. City Civil and Sessions Judge (Exclusive Commercial Court) dated 15.11.2022 quo defendant No. 1 (Appellant herein) is set aside and the matter is remanded back to the trial Court to dispose of the same after allowing the appellant herein to file the Written Statement subject to payment of cost to the tune of Rs. 1,00,000/- (Rupees One Lakh Only) and to permit the appellant to exercise his right of cross-examination of plaintiff’s witnesses.
Result : Appeal allowed.
Legal Category Hierarchy
Table of Contents
2. Appellant: COVID-19 limitation extension applies; right to cross-examine survives non-filing of written statement. Respondent: Right to cross-examine forfeited due to willful delay and acquiescence. (Para 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 )
3. COVID-19 limitation extensions apply to commercial suits; denying cross-examination due to non-filing of written statement is perverse and violates the right of defence. (Para 25 , 26 , 27 , 28 , 29 , 30 , 31 )
4. COVID-19 limitation extensions apply to commercial suit written statements; non-filing of written statement does not automatically foreclose the defendant's right to cross-examine plaintiff witnesses. (Para 30 , 31 )
5. Appeal allowed — Impugned judgment set aside — Matter remanded for filing of written statement subject to costs and exercise of right to cross-examine. (Para 32 )
6. Does the Supreme Court's Suo Moto extension of limitation during COVID-19 apply to the mandatory 120-day period for filing written statements in commercial suits?
Yes, the court held that the period from 15.03.2020 to 28.02.2022 is excluded for computing limitation in all judicial proceedings, including the mandatory 120-day period for filing written statements in commercial disputes. (Para 28 , 29 , 30 )
7. Does the failure to file a written statement within the statutory period result in the forfeiture of the defendant's right to cross-examine the plaintiff's witnesses?
No, the right to cross-examine is not foreclosed even if a written statement is not filed. A defendant can still cross-examine witnesses to prove the falsity of the plaintiff's case or raise statutory bars like limitation. (Para 31 )
8. Is the 120-day timeline for filing a written statement in a commercial suit directory or mandatory?
The timeline is mandatory, and commercial courts generally cannot condone delays beyond 120 days, except where specific extensions, such as the COVID-19 Suo Moto orders, apply. (Para 26 , 27 )
JUDGMENT
ARAVIND KUMAR, J.
1. Heard. Leave Granted.
2. The present controversy can be encapsulated in words of the Hon’ble Justice V.R. Krishna Iyer:
“Procedural law is not to be a tyrant but a servant, not an obstruction but an aid to justice. It is the handmaid of justice and not its mistress”
3. The object of the procedural rules is to advance the cause of justice and not to thwart it and when the rigid adherence to technicalities of procedure causes injustice, courts have to come to the rescue by adopting a liberal approach. The courts cannot countenance a situation where substantial justice is sacrificed at the altar of procedural rigidity. Where substantial justice is at stake, technicalities must give way to ensure that the litigant is afforded sufficient opportunity to defend. The present controversy must be tested on the said principle.
4. The Appellant herein challenges the Impugned Judgement and order dated 20.05.2025 passed by the High Court of Karnataka at Bengaluru in Commercial Appeal No. 19 of 2023 which has affirmed the Judgement and decree dated 15.11.2022 passed by the Additional City Civil & Sessions Judge (Exclusive Commercial Court) in Original Commercial Suit No. 372 of 2021 filed by the Respondent No. 1-M/s. Aroush Motors for recovery of monies.
5. For convenience, we will be referring the parties as per their rank before the Trial Court, as such, the Appellant herein being Defendant No. 1 and Respondent No. 1 & 2, being Plaintiff and Defendant No. 2, respectively.
6. The facts shorn of unnecessary details are summarized hereinunder:
7. The Defendant No. 1-M/s. Anvita Auto Tech Works Pvt. Ltd. (Appellant-herein), launched a flagship motorcycle by the name of CFMOTO in India in 2019 and invited applications for its dealership across the country including Bengaluru City. Plaintiff-M/s. Aroush Motors (Respondent No. 1-herein) applied and was provisionally appointed dealer under a Letter of Intent dated 03.09.2019. In consideration of the dealership, the plaintiff remitted a sum of Rs. 20,00,000/- (Rupees Twenty Lakhs Only) towards security deposit to Defendant No. 1, incurred expenditure of rent and interiors for setting up a showroom. Further, the plaintiff paid sum amount to Rs. 70,00,000/- (Rupees Seventy Lakhs Only) towards spare parts, software, equipment and initial stock of motorcycles. Moreover, additional sum of Rs. 5,00,000/- (Rupees Five Lakhs Only) was remitted to Defendant No. 1 and on the advice of Defendant No. 1, the plaintiff also remitted Rs. 7,06,900/- (Rupees Seven Lakhs Six Thousand Nine Hundred Only) to Defendant No. 2-Conair Equipment Pvt. Ltd (Respondent No. 2-herein) for service centre equipment being its authorised service provider.
8. The Defendant No. 1 supplied Nineteen (19) motorbikes of BS-IV Category to Plaintiff out of which the Eight (8) were sold. On 01.04.2020, the Government imposed ban on the sale of BS-IV Category vehicles, as such, Defendant No. 1 imposed prohibition upon sale of the such motorcycles but promised to supply Kits and Equipment to upgrade the motorcycles to BS-VI Category. Nevertheless, due to the inability of Defendant No. 1 to supply the same, the plaintiff’s business was stalled and is said to have sustained substantial loss, following which, the plaintiff terminated the dealership of Defendant No. 1 on 14.09.2020 alleging breach of obligations and sought recovery of monies invested by way of filing the present Commercial Original Suit (Com. O.S.) No. 372 of 2021 claiming a sum of Rs. 1,78,03,090/- (Rupees One Crore Seventy-Eight Lakhs Three Thousand Ninety Only) from Defendant No. 1 with an Interest of 18% (Eighteen Percent) and Rs. 7,06,900/- (Rupees Seven Lakhs Six Thousand Nine Hundred Only) from Defendant No. 2 with an Interest of 18% (Eighteen Percent) till the realization of payments along with 3 (Three) Interim Applications (IAs) No. I to III.
9. After the service of summons, the Defendant No. 1 appeared on 07.08.2021 but did not file the Written Statem
