IN THE HIGH COURT OF DELHI AT NEW DELHI
Manmohan, Asha Menon, JJ.
Mukul Taneja - Appellant
Versus
Metro Lifestyles India Pvt Ltd - Respondent
First Appeal From Order (OS) (Comm) No. 53 of 2021; C.M. Appl No. 11459 of 2021
Decided On : 25-03-2021
Extension of Time - Written Statement - Commercial Suit - Order 5 Rule 1, Order 8 Rule 1, Order 8 Rule 10 - The court dismissed the appellant's application for extension of time to file the written statement in a Commercial Suit, citing the provisions of Order 5 Rule 1, Order 8 Rule 1, and Order 8 Rule 10 of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015. The court emphasized that beyond 120 days from the date of service of summons, the defendant forfeits the right to file the written statement and the court shall not allow the written statement to be taken on record. The judgment in Desh Raj vs. Balkishan (D) (supra) was found inapplicable as it pertained to an ordinary Civil Suit and not a Commercial Suit, and the Supreme Court clarified that the said judgment shall not be treated as a precedent.
Fact of the Case:
The appellant's application for extension of time to bring the written statement on record was dismissed by the learned Single Judge, as the written statement was not filed within the prescribed time period of 30 days or the extended period of 120 days, as per the provisions of the Commercial Courts Act.
Finding of the Court:
The court found that the impugned order was in conformity with law and suffered from no infirmity, and consequently dismissed the present appeal along with the pending application for extension of time.
Issues: The main issue was the appellant's request for extension of time to file the written statement in a Commercial Suit, citing unfortunate incidents involving the appellant's counsels as reasons for the delay.
Ratio Decidendi: The court applied the provisions of Order 5 Rule 1, Order 8 Rule 1, and Order 8 Rule 10 of the Commercial Courts Act, emphasizing that beyond 120 days from the date of service of summons, the defendant forfeits the right to file the written statement and the court shall not allow the written statement to be taken on record.
Final Decision: The court upheld the dismissal of the appellant's application for extension of time and found the impugned order to be in conformity with law, consequently dismissing the present appeal.
JUDGMENT
Manmohan, J. - Present appeal has been filed challenging the order dated 20th January 2020 passed by learned Single Judge in CS(COMM) 261/2017 whereby appellant's application being IA No. 18393/2019 for extension of time to bring the written statement on record was dismissed. Appellant also prays that the aforesaid application be allowed and his written statement be taken on record.
2. On 20th January, 2020, the learned Single Judge while dismissing the appellant's application for enlargement of time had observed as under:-
"I.A. 18393/2019 (enlargement of time to file W.S. by D-2)
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13. In the present application, the plea of the defendant No.2 is that subsequent to the order dated 2nd May, 2019 the counsel for the applicant/ defendant No.2 developed some serious ailments and left for heavenly abode on 4th July, 2019 and this fact was brought to the notice of the Court on 18th July, 2019. Thereafter the defendant No.2 engaged another counsel to pursue the present suit. The defendant No.2 claims that to the other counsel all inputs were given and the amount of ?40,0000/- was also given to the said counsel as cost. The said counsel filed the written statement on behalf of defendant No.2 on 27th August, 2019 vide diary No. 871663/2019 and the same is reflected in the status of the case. However, the written statement was not on record and thus this fact was noted by this Court vide order dated 28th August, 2019. Unfortunately, wife of the second counsel was detected with cancer and the second counsel for the defendant No.2 had to go abroad for his wife's treatment and thus could not take steps to remove objections in the written statement bringing the same on record. Finally, with the help of one another counsel defendant No.2 again filed the written statement on 4th December, 2019 vide diary No. 1501756/2019, however when the matter was listed on 5th December, 2019 the written statement was still not on record and was lying in objections and thus the opportunity of the defendant No.2 to file written statement as well as affidavit of admission/ denial was closed.
14. Defendant No.2 claims that his written statement had been filed much earlier i.e. on 27th August, 2019 and thus it ought to be taken on record and the defendant No.2 cannot be penalized due to exigencies i.e. first counsel having passed away and second counsel's wife falling seriously ill.
15. As noted above, while setting aside the order dated 25th April, 2018, proceeding the defendant No.2 ex-parte on 2nd May, 2019 this Court granted 30 days time to the defendant No.2 to file the written statement subject to payment of cost of ?40,000/-. Admittedly, as per the application the cost of ?40,000/- was not given to the first counsel but to the second counsel who was engaged in August, 2019. Further, it is the case of the defendant No.2 himself that he had filed an application for waiver of the cost, however till date the said application has not seen the light and is not on record. The first counsel for the defendant No.2 passed away on 4th July, 2019 whereas 30 days period for filing the written statement with defendant No.2 was over on 1st June, 2019. There is no explanation whatsoever as to why the written statement was not filed on or before 1st June, 2019. Orally, defendant No.2 argues that his mother passed away on 2nd June, 2018."
3. Learned counsel for the appellant states that the learned Single Judge failed to appreciate that non-removal of objections in respect to the written statement of the Appellant was beyond the control of the Appellant. He emphasizes that unfortunate incidents happened to the previous two counsel for the appellant, namely, that first counsel for the appellant died on 4th July 2019 and the second counsel's wife was diagnosed with cancer. He, therefore, prays that the time for filing the written statement be extended.
4. In support of his submission, learned counsel for the appellant relies upon the judgement of the Supreme Cou
Desh Raj vs. Balkishan (D) Through Proposed LR Ms. Rohini
SCG Contract (India) Pvt. Ltd. vs. K.S. Chamankar Infrastructure Pvt. Ltd.
AI
The judgment emphasized the mandatory nature of the provisions of the Commercial Courts Act regarding the time period for filing a written statement in Commercial Suits, and the consequences of faili....
The court emphasized that the extension of time to file the written statement must be justified and recorded in writing, and the defendant cannot claim an extension of time as a matter of course.
The right to file a written statement is forfeited after 120 days unless justifiable grounds for extension are shown, requiring substantive reasoning recorded by the court.
Defendants must file a formal application to extend time for the written statement beyond thirty days, as failure to do so results in forfeiture of the right to file.
The court affirmed that procedural rules regarding the filing of written statements can be interpreted flexibly to ensure justice, allowing extensions in exceptional circumstances.
The importance of serving the copy of the plaint along with the summons and the need for cogent reasons to extend the time for filing the written statement in commercial suits.
The Court highlighted the strict adherence to statutory timelines under the Commercial Courts Act for filing written statements, referencing precedent that restricts granting extensions.
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 affirmed that defendants lose the right to file a written statement if not submitted within the prescribed 120 days, highlighting the necessity of adhering to procedural timelines in commer....
The main legal point established is that the doctrine of relation back can be applied to deem a written statement as filed within the limitation period, considering the circumstances preventing its t....
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