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Suo Motu Limitation Extension Orders Applicable to Filing of Written Statements in Commercial Suits: Supreme Court

Team SoOLEGAL 15 Feb 2022 1:25pm

Suo Motu Limitation Extension Orders Applicable to Filing of Written Statements in Commercial Suits: Supreme Court

NEW DELHI: The Supreme Court noted that its Suo Motu limitation extension rulings apply to the time restriction for filing the written statement in commercial proceedings.


“The period envisaged finally in the order dated 23.09.2021 is required to be excluded in computing the period of limitation even for filing the written statement and even in cases where the delay is otherwise not condonable,” the bench comprising Justices Dinesh Maheshwari and Vikram Nath said.


In this case, the Commercial Court (District Level), Nava Rajpur, Chhattisgarh, denied the defendant’s request for additional time to file its written statement on the grounds that, under the proviso to Order VIII Rule 1 of the Code of Civil Procedure, 1908, as substituted by the Commercial Courts Act, 2015, the defendant’s right to file the written statement expired 120 days after service of summons. [The suit was initiated on 21.12.2020 – the defendant was served with summons in the subject suit on 06.01.2021 – the defendant appeared before the Trial Court in response to the said summons on the date fixed, i.e., 18.01.2021 – the defendant filed an application under Section 10 read with Section 151 CPC for stay of suit proceedings on the ground that the proceedings between the parties were pending before the NCLT – the 120th day from the date of service of summons expired on 06.05.2021]


Referring to the Supreme Court’s orders in Suo Motu Writ Petition (Civil) No. 3 of 2020, the appellant – defendant contended that, when computing the period of limitation prescribed under general law or special law, the period between 15.03.2020 and 14.03.2021 would be excluded; and on 27.04.2021, the Court further extended the suspension of limitation. Thus, it was argued that the Trial Court’s calculation of limitation without taking into account the time of lockdown was incorrect. The respondent – plaintiff, on the other hand, contended that the orders issued in SMWP No. 3 of 2020, extending the period of limitation from 23.03.2020 to 02.10.2021, were only for the institution of suits or applications; and even when Section 12 – A of the Act was brought within the purview of the extension of limitation period, there was no direction that the period to file the written statement before the commercial court would be automatically extended, despite the defendant appearing and participating in the proceedings.


Referring to the relevant provisions in Order V Rule 1, Order VIII Rule 1 and Order VIII Rule 10 CPC about the time limit for filing a written statement and the consequences of failure to do so, the court stated:


“Tersely put, as per the mandate of the said provisions: (a) the defendant is under an obligation to file the written statement of his defense within 30 days of service of summons; (b) if he fails to file the written statement within the said period of 30 days, he may be allowed to file the written statement on such other day as the court may specify for reasons to be recorded in writing and on payment of such costs as the Court may impose but this other day, in any case, cannot go beyond 120 days from the date of service of summons; (c) on expiry of 120th day from the date of service of summons, the defendant forfeits the right to file the written statement and no court can make an order to 32 extend such time beyond 120 days from the date of service of summons.”


According to the court, the question is whether the aforementioned laws and principles (regarding mandated timeframes) must be applied regardless of the operation and impact of other decisions passed/issued by the Courts under the force of aberrant, abnormal and unusual circumstances. In reference to the orders extending the limitation period, the bench stated:


“Having regard to the purpose for which this court had exercised the plenary powers under Article 142 of the constitution of India and issued necessary orders from time to time in SMWP No. 3 of 2020, we are clearly of the view that the period envisaged finally in the order dated 23.09.2021 is required to be excluded in computing the period of limitation even for filing the written statement and even in cases where the delay is otherwise not condonable. It gets perforce reiterated that the orders in SMWP No. 3 of 2020 were of extraordinary measures in extraordinary circumstances and their operation cannot be curtailed with reference to the ordinary operation of law.”


“In other words, the orders passed by this Court on 23.03.2020, 06.05.2020, 10.07.2020, 27.04.2021 and 23.09.2021 in SMWP No. 3 of 2020 leave nothing to doubt that special and extraordinary measures were provided by this Court for advancing the cause of justice in the wake of challenges thrown by the pandemic; and their applicability cannot be denied in relation to the period prescribed for filing the written statement. It would be unrealistic and illogical to assume that while this court hs provided for exclusion of period for institution of the suit and therefore, a suit otherwise filed beyond limitation (if the limitation has expired between 15.03.2020 to 02.10.2021) could still be filed within 90 days from 03.10.2021 but the period for filing written statement, if expired during that period, has to operate against the defendant.”


Having made this observation, the court overturned the orders of the trial court and the high court, concluding that the defendant – previously appellant’s prepared and notarized written statement needs to be taken into account.




Tagged: SupremeCourt   SuoMotu   Commercial   Statement   Written   Suits   Orders   Justices   DineshMaheshwari   Vikramnath  
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