Defendants in commercial suits forfeit the right to file a written statement if not submitted within 120 days from the service of summons, as per amendments in the Commercial Courts Act.

JUDGMENT :

BASANT BALAJI, J.

The question that arise for consideration in this Original Petition is whether the defendant can forfeit the right to file a written statement, if the same is not filed within 120 days from the date of service of summons.

2. The petitioner is the defendant in C.S.No.73 of 2021 on the files of Principal Sub Court, Thiruvananthapuram. The respondent filed the suit under Section 26 read with Order 37 Rules 1 and 2 CPC read with Section 6 of the COMMERCIAL COURTS ACT , 2015 (for short 'the C.C.Act'), for the realisation of an amount of Rs.5,03,79,000/- from the defendant, together with future interest at the rate of 18% p.a., from the date of institution of the suit till realisation. On receipt of summons, the petitioner entered appearance and sought leave of the court to defend the suit under Order 37 Rule 3(5) CPC as I.A.No.8 of 2021. By order dated 10.3.2022, leave was granted to the defendant, who was directed to file a written statement within 10 days. On 25.3.2022, the defendant sought time for filing a written statement, which was refused by the court and the defendant was set ex parte.

3. Meanwhile, the respondent/plaintiff challenged the order in I.A. No.8 of 2021 before this court, in O.P.(C) No.1234 of 2022 and the entire proceedings were stayed till the O.P. was dismissed on 25.7.2023. Immediately, a petition was filed by the petitioner to set aside the ex-parte order, along with a written statement and a petition to accept the same. An application to condone the delay in setting aside the ex-parte order, an application for setting aside the ex-parte order, and to accept the written statement were filed as I.A.Nos.15, 16 and 17 of 2023, respectively. The court below heard all the I.As together and dismissed as per Ext.P1 common order dated 16.2.2024. The petitioner has filed this Original Petition to set aside Ext.P1 and for a direction to the trial court to accept the written statement filed by the petitioner.

4. The reasoning given by the trial court is that as per the amended provision of Order 8 Rule 1 CPC, a written statement in a commercial suit is to be filed within 30 days from the date of service of summons on him, and if the defendant fails to file the written statement within the said period of 30 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 cost, as the court deems fit, which shall not be later than 120 days from the date of service of summons.

5. The court has directed the defendant to file a written statement within 10 days from 10.3.2022, and since the written statement was not filed, the defendant was set ex-parte on 25.3.2022 as the 10 days’ time expired on 24.3.2022. It was also found that under proviso to Order 8 Rule 1, the amendment is brought into the said Rule under Section 16 of the C.C. Act, the defendant shall forfeit the right to file the written statement, if it is not filed within 120 days from the date of service of summons and the court shall not allow the written statement to be taken on record.

6. Heard Sri.R T Pradeep, the counsel for the petitioner and Shri.C.S Manu for the respondent.

7. The counsel for the petitioner argued that the present suit, C.S. No.73 of 2021, is filed under Order 37 Rule 1 and 2. Order 37 deals with the summary procedure. Under Rule 2(2), once the suit is filed, the summons of the suit shall be sent to the defendant in Form No.4 in Appendix B or in such other form, as may, from time to ti