The High Court of Kerala has definitively ruled that the act of setting aside an ex parte order in a commercial litigation does not automatically grant a defendant the right to file a written statement once the statutory time limit has lapsed. In a significant judgment delivered by Justice Easwaran S, the court emphasized that the legislative intent behind the Commercial Courts Act, 2015, cannot be undermined by invoking routine procedural provisions from the Code of Civil Procedure, 1908. The decision directly impacts a recovery suit filed by M/s Abaan Impex Pvt. Ltd. against defendants Anwar Basheer and Basheer, involving a claim of over ₹5.63 crore.

The legal dispute originated from the Commercial Court in Thiruvananthapuram, where the plaintiff sought a decree for the recovery of ₹5,63,58,045, inclusive of interest. Upon receiving summons on June 2, 2025, the defendants were legally obligated to file their written statement within a 30-day window, extendable only up to a maximum of 120 days from the service of summons. This outer limit expired on October 2, 2025. Despite the clear statutory mandate, the defendants failed to submit their defense within the prescribed period. By September 9, 2025, the trial court had declared the defendants ex parte, a position that effectively locked the doors on their ability to file a written statement under the stringent timelines stipulated for commercial disputes.

Strict Adherence to Statutory Timelines

The defendants attempted to rectify their position by filing an application on January 27, 2026—several months after the final deadline—seeking to set aside the ex parte order and concurrently asking the court to accept their belated written statement. They argued that the order setting aside their ex parte status would effectively restore the parties to the position they held on September 9, 2025. By their calculation, if the clock were "reset" to that date, they would still have 22 days of the initial 120-day allowance remaining. However, the High Court found this line of reasoning incompatible with the specialized procedural framework designed for commercial matters.

Justice Easwaran S noted the tension between general procedural rules and specific legislative mandates, observing that the defendants’ argument might hold weight in an ordinary civil suit but fails in the context of the Commercial Courts Act. The court held: “The argument might have merit in an ordinary suit. In a commercial suit, however, the procedure is strictly governed by the proviso to Rule 1 of Order VIII of the CPC, which imposes an outer limit of 120 days.” By establishing this ceiling, the legislature intended to prevent the systemic delays that have historically plagued commercial litigation. The court clarified that the procedure under Order IX Rule 7 cannot be utilized as a tool to circumvent the absolute prohibition against accepting pleadings filed after the expiry of the 120-day statutory window.

Limitations of Procedural Restorations

The petitioners’ failure to act within the 120-day period was exacerbated by their own procedural delays. After the initial ex parte order was passed in September 2025, they entered an appearance in late November 2025 by filing a vakalath, yet still failed to file their written statement at that time. The eventual attempt to submit the defense in January 2026 was seen as a clear deviation from the disciplined timeline required by the Commercial Courts Act.

The court further elucidated that allowing such an exception would render the statutory amendment introduced by Section 16 of the Commercial Courts Act meaningless. “Order IX Rule 7 cannot operate as an exception to the proviso to Rule 1 of Order VIII,” the judge remarked, emphasizing that the primary objective of the commercial courts is to ensure speed and certainty in the resolution of high-value business disputes. By prioritizing the 120-day mandate, the court reinforced the policy of strict timelines, ensuring that defendants cannot use procedural tactics to buy extra time in matters involving substantial financial claims.

Despite the firm rejection of the petition, the High Court provided a measure of relief by clarifying the scope of the defendants' future involvement. While the right to file a written statement—and thus the ability to formally contest the assertions in the plaint through a structured defense—was forfeited, the court confirmed that this does not bar the defendants from all participation. The judgment ensures that the petitioners retain their right to engage with the proceedings at the trial stage, specifically by allowing them to cross-examine the plaintiff’s witnesses and address the evidence presented before the court.

This ruling clarifies the hierarchy of procedural rules in high-stakes litigation. It serves as a stern reminder that the “outer limit” of 120 days is not merely a flexible target but a hard legislative threshold that parties ignore at their own risk. For litigants and their legal counsel, the message is clear: the procedural mechanisms used to recall ex parte orders are not vehicles for extending statutory deadlines that have already passed. The case of Abaan Impex Pvt. Ltd. will now proceed to trial in the Commercial Court, Thiruvananthapuram, with the defendants restricted in their ability to introduce a formal written defense, yet empowered to challenge the plaintiff’s case during the live evidentiary phase. The dismissal of the original petition signifies that while defendants may retain their right to a fair trial, they are not exempt from the rigid timelines that govern modern commercial justice.