Crux:
The Court shall not allow the written statement to be taken on record beyond 120 days in a commercial suit.
Bench:
Justice V Saran and Justice R F Nariman
Appellant:
M/S SCG Contracts India Pvt. Ltd.
Respondent:
Chamankar Infrastructure Pvt. Ltd. & Ors.
Issue
Whether a written statement can be filed after 120 days by the defendant in a commercial
suit?
Facts
- The appellant had filed a suit against the defendant for the recovery of Rs. 6,94,63,114. The summons was served on the defendant on 14 July 2017. However, within a time period of 120 days, no written statement was filed by the defendant.
- Subsequently, the defendant filed an application under Order VII, Rule 11 of CPC for rejection of the plaint which was rejected on 5 December 2017. Then, the defendant asked for a 7 day period to file the written statement which was granted by the court till 15 December 2017.
- The plaintiff filed an application on 6 August 2018 that the defendant shouldn’t be permitted to file a written statement after the period of 120 days as per the provisions of CPC. However, the Court held on 24 September 2018 that the previous order has attained finality and since the defendant has filed its written statement, it should be taken on record.
- The special leave petition is filed by the appellant against the orders dated 5 December 2017 and 24 September 2018.
Appellant’s contentions
- It was contended that the amendments in Civil Procedure Code provide for the consequence of non-filing of the written statement by the defendant in the prescribed time period. Therefore, the other party shouldn’t be allowed to file the statement after 120 days.
Respondent’s contentions
- It was contended that it is the inherent powers of the Court to ignore a procedural provision that may lead to unjust consequences according to the facts of the case.
Relevant paragraphs from the original judgements ( paragraph 6 and 7)
- Bhanu Kumar Jain vs. Archana Kumar and Others, (2005) 1 SCC 787 and Shaikh Salim Haji Abdul Khayumsab vs. Kumar and Others, (2006) 1 SCC 46, that the crucial difference between res judicata in a subsequent suit and res judicata in two stages of the same proceeding must be distinguished. He noted that the order of 24.09.2018 is correct because the order of 05.12.2017 had reached finality and could only now be challenged after the decree in the Suit was passed. He further indicated that the order dated December 5, 2017, had already been implemented, and that the Court had committed an error.
- He further stated, citing R.K. Roja vs. U.S. Rayudu and Others, (2016) 14 SCC 275, that because an Order VII Rule 11 application had been made and required to be answered before the Suit's trial could begin, a written statement could not be filed. He then used Section 151 of the Code of Civil Procedure, which protects a court's inherent power, notably that of a Court of Record - the High Court - and can be used in circumstances like this one when severely unjust results would otherwise occur.
Judgement
The Supreme Court allowed the appeal. The impugned orders were set aside and the statements filed by the defendant were taken off the record. It was held that the time period of 120 days is mandatory in nature subsequent to the amendment in Order VIII Rule 11, Civil Procedure Code and a Court in a commercial suit cannot extend this time period beyond 120 days, after the service of summons.
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