Summary of Judgement

The Judgement

1.       This Notice of Motion seeks quashing and setting aside of orders passed by the learned Prothonotary and Senior Master transferring the suit with respect to the Applicants herein viz. the Defendants therein to the list of undefended suits as the Defendants failed to file written statement within time and and to condone the delay of 231 days in filing written statement of the Defendants and thereafter to take the written statement on their behalf on record.

2.       Mr. Palshikar, learned counsel for the Applicants would submit that the Writ of Summons was served upon the Defendants on 2nd November, 2016. That since the Applicants are based in Vidharbha, they immediately approached their panel Advocates who are based in Nagpur as the Applicants do not have a panel of Advocates for Mumbai. That therefore, the Applicants depended on their panel of Advocates at Nagpur for appointment of Advocate to defend the suit in Mumbai. That accordingly on the suggestion of their panel Advocates they appointed a panel Advocate from Mumbai for representing them in the suit before this Court who filed Vakalatnama on 15th November, 2016. Mr. Palshikar would further submit that the Applicants were coordinating with their Panel Advocate at Nagpur who in turn was coordinating with their panel Advocate at Mumbai. The Applicants were called upon to give parawise remarks for preparation of their written statement. Mr.Palshikar would submit that the Defendant No.1 is specifically constituted under the Maharashtra Act No.XXV of 1997 for the purpose of the irrigation project set up in District Bhandara. That the offices of the Applicants No.1, 3 and 4 are situated at Nagpur while that of Applicant No.2 is at Pauni, District Bhandara. It is further submitted that the plaint filed by the Plaintiff was voluminous having various Exhibits which needed to be verified and countered. It is submitted that the documents in respect of the disputes lying in different branch offices of the Applicants had to be collected and details from various employees stationed at the sites had to be obtained which took considerable time to give appropriate and parawise instructions for preparation of the written statement to their Advocate in Mumbai.

3.       It is submitted that the commercial suit came up before the learned Prothonotary and Senior Master on 3rd February, 2017 for directions and the Prothonotary passed a conditional order directing the Applicants to file their written statement on or before 8th March, 2017.

4.       Mr. Palshikar would submit that the Applicants had been taking all efforts to procure instructions and documents from the relevant officers and employees, however, due to workload and pressure to attend the day to day affairs there was delay in obtaining the same. That, therefore, a request was made to the learned Prothonotary and Senior Master to grant time, but despite request, the Prothonotary and Senior Master transferred the suit to the list of undefended suits on 8th March, 2017 for want of written statement of the Defendants.

5.       It is submitted that the Applicants were advised to initiate appropriate proceedings seeking condonation of delay for filing written statement. Therefore, it is submitted that upon advice of their Advocate, the Applicants, on 7th April 2017, filed Chamber Order (L) No.869 of 2017 alongwith the supporting affidavit setting out their case before the Prothonotary and Senior Master. Mr. Palshikar, learned counsel for the Applicants would submit that the said Chamber Order had been pending hearing and final disposal before the Prothonotary and Senior Master since then. That in the meantime, the panel Advocates for the Applicant No.1 were changed and hence their Advocate in Mumbai requested to take back the case from him. It is submitted that, therefore, the Applicants had to once again search for an Advocate in Mumbai. That accordingly the present Advocate was approached and the contest with respect to the Chamber Order was pursued. It is submitted that finally by order dated 14th August, 2017, the Prothonotary and Senior Master dismissed the Chamber Order, although the same was not uploaded at the time of filing the Notice of Motion and came to be uploaded only on 18th January, 2018, whereas the Notice of Motion has been filed on 11th October, 2017. Mr. Palshikar would submit that the written statement of the Applicants was ready and affirmed on the date of filing of the Notice of Motion and there is only a delay of 231 days of which 122 days have been spent in contesting the Chamber Order before the Prothonotary and Senior Master.

6.       Mr. Palshikar would submit that Defendants had been diligently following up the matter but due to locations of various departments at various places, they could not gather the entire information within time and the written statement could not be filed before 90 days. It is submitted that the Applicants being a Government Corporation and public money being involved, the delay be condoned and the written statement be taken on record for free and fair trial of the suit. It is submitted that the Applicants have a very good case on merits and that grave and irreparable harm and injury would be caused not only to the Defendants but also public money would be lost if they are not allowed to contest the suit by filing their written statement. That no harm or prejudice would be caused to the Plaintiff if the Notice of Motion is allowed and the written statement be taken on record for the suit to be decided on merits. That, the balance of convenience lies heavily in favour of the Applicants and therefore, the Notice of Motion be allowed.

7.       Mr. Palshikar relies upon the decision of this Court in the case of Iridium India Telecom Limited Bombay Vs. Motorola INC and anr. as well as the decision of the Hon’ble Supreme Court pursuant to the Special Leave Petition2 against the order of this Court in the said matter to submit that this Court as well as the Hon’ble Supreme Court affirming the decision of this Court, in view of Rule 129 of the High Court Original Side Rules, 1980 has observed that the amended provisions of Order VIII Rule 1 of the Code of Civil Procedure, 1908 (“CPC”) would not apply to the suits on the original side and such suits would continue to be governed by the Original Side Rules which empower the Judge in Chambers to enlarge the time for filing of the written statement under Rule 265. That in the event of a conflict between special law and general law, special law will always prevail the Bombay High Court Original Side Rules, which regulate the 1 2004 (1) Mh.L.J. 532 2 AIR 2005 SC 514 procedure to be followed by the Original Side of the Chartered High Court pursuant to clause 37 of the Letters Patent being a Special Law, in view of the principle elucidated by the Hon’ble Supreme Court in the case of Iridium India Telecom Limited Bombay Vs. Motorola INC and anr. (supra), will prevail over the Commercial Courts Act, 2015 (the “Commercial Courts Act”) which like the CPC is a general law applicable to all Courts.

8.       Mr. Palshikar would submit that the order dated 4th September, 2017 also applied to the said principles, but erroneously, to treat the Commercial Courts Act, 2015 as a Special Act in contradistinction to the High Court Original Side Rules which in view of the law elucidated in the decision of this Court as the Hon’ble Supreme Court in Iridium India Telecom Limited Bombay Vs. Motorola INC and anr. (supra) would prevail over the Commercial Courts Act. Mr. Palshikar would further submit that on the date of the passing of the order rejecting the Chamber Order viz. 4th September, 2017, Rule 91 of the High Court Original Side Rules pursuant to which written statement could be filed beyond the period of limitation with the leave of the Judge in Chambers upon such terms as to the filing of the written statement as the Chamber Judge may think proper was deleted much later i.e. only on 24th March 2022, whereas the order has been passed on 4th September, 2017, when the written statement could be filed after the period fixed under Order VIII Rule 1 of the CPC with the leave of the Judge in Chambers. That the Chamber Order had also been filed prior to the deletion of the said Rule. Referring to the decision of the Hon’ble Supreme Court in the case of SCG Contracts (India) Private Limited Vs. K.S. Chamankar Infrastructure Private Limited and ors. Mr. Palshikar would submit that the said decision is effective only from 12th February, 2019 and would not apply with respect to the orders prior to that and would therefore not apply to the facts of this case as the delay pertains to a prior period and even the order on the Chamber order is dated 4th September 2019 which is prior to the date of the said decision. Mr. Palshikar would further submit that the said decision arises from a decision of Delhi High Court and does not consider the impact of the Letters Patent and Bombay High Court Original Side Rules and the fact that the Bombay High Court is a Chartered High Court constituted pursuant to the Letters Patent and that the Letters Patent is a special statute and that, therefore, the said decision would not also apply to the case at hand. Mr. Palshikar would therefore, submit that the Notice of Motion be allowed as prayed for. 3 (2019) 12 Supreme Court Cases 210

9.       On the other hand, Mr. Ativ Patel, learned counsel appearing for the Plaintiff would at the outset submit that the Applicants had incorrectly calculated the number of days for condonation of delay as 231 days whereas the same should be 313 days. Learned Counsel would submit that even otherwise for the last six years the Defendants had not taken any steps to move the Notice of Motion or even annex a copy of the notarized written statement to their application demonstrating their bonafides that the same is ready. It is also submitted that the reasons furnished by the Applicants to justify the delay are also without substance in the context of the time limit stipulated pursuant to the Section 16 of the Commercial Courts Act amending inter alia Rule 1 of Order VIII of the CPC in its application to the commercial disputes and in particular the proviso to Rule 1 in Order VIII of the CPC.

10.     Learned Counsel further submits that the Commercial Courts Act, is a Special Act and the proviso which has been substituted pursuant thereto with effect from 23rd October 2015 in Order VIII Rule 1 of the CPC with respect to commercial suits, clearly provides that where the Defendant fails to file the written statement within the period of 30 days, he shall be allowed to file the written statement on such other date as may be specified by the Court for reasons to be recorded in writing and on payment of such costs as the Court deems fit but which shall not be later than 120 days from the date of service of summons and on the expiry of 120 days from the date of service of summons, the Defendant shall forfeit the right to file written statement and the Court shall not allow the written statement to be taken on record. Mr. Patel would submit that this amendment has been brought into effect from the year 2015 and in its application to Commercial disputes and that the order rejecting the Chamber Order is dated 4th September, 2017. That therefore, in view of the interpretation of Order VIII Rule 1 of the CPC as applicable to Commercial disputes by the Hon’ble Supreme Court in the case of SCG Contracts (India) Private Limited Vs. K.S. Chamankar Infrastructure Private Limited and ors. (supra) which clearly holds that on expiry of 120 days from the date of service of summons on the Defendants, the Defendants shall forfeit the right to file written statement and the Court must not allow the written statement to be taken on record, the Notice of Motion be dismissed as admittedly there is a delay of 231 days. Learned counsel would further submit that the judgment of this Court as well as of the Hon’ble Supreme Court in the case of Iridium India Telecom Limited Bombay Vs. Motorola INC and anr. (supra) are of the years 2011 and 2014 respectively in the context of the CPC and not in the context of the Commercial Courts Act, 2015 which is a special statute as compared to the Bombay High Court Original Side Rules and the Letters Patent and that keeping in mind settled law, that a special statute has to prevail over a general statute, the Commercial Courts Act being a special statute would prevail over the general provisions of the High Court Original Side Rules and the Letters Patent. The learned counsel submits that moreover Rule 91 enabling filing of written statement after the limitation with the leave of the Chamber Judge is also not available to the Applicant as the said Rule clearly provides that the stage at which the leave of the Judge in Chambers can be obtained is if the suit has not been set down as undefended against him which is not the case here, as the suit had already been transferred to the list of undefended suits on 8th March 2017. The learned counsel therefore, submits that the Notice of Motion be dismissed.

11.     I have heard the learned counsel and considered the rival contentions. The basic facts are not in dispute. Admittedly, there is a delay of 231 days in filing the written statement. The Commercial Courts Act amended Rule 1 of Order VIII of the CPC by adding a proviso with retrospective effect from 23rd October, 2015 as under:-

“Provided that where the defendant fails to file the written statement within the said period of thirty 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 costs as the Court deems fit, but which shall not be late than one hundred twenty days from the date of service of summons and on expiry of one hundred twenty days from the date of service of summons, the defendant shall forfeit the right to file the written statement and the Court shall not allow the written statement to be taken on record.”              (Emphasis supplied)

12.     The said proviso clearly provides that after the period of 30 days within which the Defendant is permitted to file written statement, he shall be allowed to file written statement after that period on another date as specified by the Court for reasons to be recorded in writing and on payment of such costs as the Court may deem fit which shall not be later than 120 days from the date of the service of summons and on the expiry of the 120 days from the date of service of summons, the Defendant shall forfeit the right to file the written statement and the Court shall not allow the written statement to be taken on record. As can be seen, there is a clear prohibition after a period of 120 days from permitting filing of written statement by the Defendant as the Defendant forfeits such right upon the end of the 120 days period from the date of service of summons. The decision of the Hon’ble Supreme Court in the case of SCG Contracts (India) Private Limited Vs. K.S. Chamankar Infrastructure Private Limited and ors. (supra) has considered the impact of this proviso and concluded that although ordinarily the written statement is to be filed within a period of 30 days, however, grace period of further 90 days is granted which the Court may employ for reasons to be recorded in writing and on payment of such costs as it deems fit to allow such written statement to come on record. That, it is of great importance that beyond 120 days from the date of service of summons, the Defendant shall forfeit the right to file written statement and the Court shall not allow the written statement to be taken on record. That the proviso in Order VIII Rule 10 of the CPC also adds that the Court has no power to extend the time beyond this period of 120 days. Paragraph No.8 of the said decision is usefully quoted as under:

“8. The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 came into force on 23-10-2015 bringing in their wake certain amendments to the Code of Civil Procedure. In Order 5 Rule 1, sub-rule (1), for the second proviso, the following proviso was substituted:

“Provided further that where the defendant fails to file the written statement within the said period of thirty 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 costs as the court deems fit, but which shall not be later than one hundred twenty days from the date of service of summons and on expiry of one hundred and twenty days from the date of service of summons, the defendant shall forfeit the right to file the written statement and the court shall not allow the written statement to be taken on record.”

Equally, in Order 8 Rule 1, a new proviso was substituted as follows:

“Provided that where the defendant fails to file the written statement within the said period of thirty 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 costs as the court deems fit, but which shall not be later than one hundred and twenty days from the date of service of summons and on expiry of one hundred and twenty days from the date of service of summons, the defendant shall forfeit the right to file the written statement and the court shall not allow the written statement to be taken on record.”

This was re-emphasized by re-inserting yet another proviso in Order 8 Rule 10 CPC, which reads as under:

“10. Procedure when party fails to present written statement called for by court.—Where any party from whom a written statement is required under Rule 1 or Rule 9 fails to present the same within the time permitted or fixed by the court, as the case may be, the court shall pronounce judgment against him, or make such order in relation to the suit as it thinks fit and on the pronouncement of such judgment a decree shall be drawn up:

Provided further that no court shall make an order to extend the time provided under Rule 1 of this Order for filing of the written statement.”

A perusal of these provisions would show that ordinarily a written statement is to be filed within a period of 30 days. However, grace period of a further 90 days is granted which the Court may employ for reasons to be recorded in writing and payment of such costs as it deems fit to allow such written statement to come on record. What is of great importance is the fact that beyond 120 days from the date of service of summons, the defendant shall forfeit the right to file the written statement and the Court shall not allow the written statement to be taken on record. This is further buttressed by the proviso in Order 8 Rule 10 also adding that the court has no further power to extend the time beyond this period of 120 days.”

13. The decisions of this Court and the Hon’ble Supreme Court in the case of Iridium India Telecom Limited Bombay Vs. Motorola INC and anr. (supra) which have been relied upon by the learned counsel for the Defendants which clearly deal with the Bombay High Court Original Sides Rules in contradistinction to the CPC observe that Rule 265 referred to in the High Court Original Side Rules, in view of the Letters Patent prevails over the CPC in view of Section 129 of the CPC which reads as under:

“129. Power of High Courts to make rules as to their original civil procedure. - Notwithstanding anything in this Code, any High Court not being the Court of a Judicial Commissioner, may make such rules not inconsistent with the Letters Patent or order or other law establishing it, to regulate its own procedure in the exercise of its original civil jurisdiction as it shall think fit, and nothing herein contained shall affect the validity of any such rules in force at the commencement of this Code.”

14.     The said Rule empowers the Chartered High Courts to make Rules as to their original civil procedure and it clearly provides that notwithstanding anything in the CPC, the High Court may make such rules not inconsistent with the Letters Patent or order or any other law establishing it, to regulate its own procedure in exercise of its original civil jurisdiction and nothing in the CPC shall affect the validity of any such rules in force at the commencement of the CPC.

15.     In the case of Iridium Indian Telecom Limited Bombay Vs. Motorola INC (supra) a Division Bench of this Court had while considering the provisions of Order VIII Rules 1 and 10 as amended by the Code of Civil Procedure (Amendment) Act, 2002 observed that in view of Section 129 of the CPC read with Rule 265 of the Bombay High Court Original side Rules, 1980, the amended provisions of Order VIII Rule 1 of the CPC would not apply to suits on the original side and such suits would continue to be governed by the Original Side Rules.

16.     It is to be noted that the amended Rules 1 and 10 of Order VIII of the CPC as considered by the Division Bench of this Court in the case of Iridium Indian Telecom Limited Bombay Vs. Motorola INC Bom H.C. (supra) read as under :

“1. Written statement – The defendant shall, within thirty days from the date of service of summons on him, present a written statement of his defence:

Provided that where the defendant fails to file the written statement within the said period of thirty days, he shall be allowed to file the same on such other day, as may be specified by the Court, for reasons to be recorded in writing, but which shall not be later than ninety days from the date of service of summons.

10. Procedure when party fails to present written statement called for by Court- Where any party from whom a written statement is required under rule 1 or rule 9 fails to present the same within the time permitted or fixed by the Court, as the case may be, the Court shall pronounce judgment against him, or make such order in relation to the suit as it thinks fit and on the pronouncement of such judgment a decree shall be drawn up.”

17.     By the said amendment, the legislature prescribed an outer limit for filing the written statement expressly limiting the power of a Court to extend time by 90 days.

18.     Rule 265 of the Bombay High Court (Original Side) Rules, which empowers a Chamber Judge or a Court to enlarge or abridge the time for doing any Act under the Rules reads as under :

“265. Power of Court or judge to enlarge or abridge time

The Court or the Judge in chambers shall have power to enlarge or abridge the time appointed by these Rules or fixed by any order for doing any act, or taking any proceedings, upon such terms (if any) as the justice of the case may require and any such enlargement may be ordered although the application for the same is not made and until after expiration of the time appointed or allotted.”

19.     Section 129 of the CPC as noted above is a non obstante provision empowering a Chartered High Court to make Rules and it clearly provides that nothing contained in the section shall affect the validity of the Rules even if they are inconsistent with the CPC but not inconsistent with the laws establishing the Chartered High Courts that is the Letters Patent. The Division Bench of this Court therefore observed that where a Rule has been made by a High Court under this section the provisions of the Code of Civil Procedure do not apply. It is considering the above provisions that the Division Bench of this Court after considering the rival contentions came to a conclusion that under Rule 265 the power to extend the time was very wide and that the Original Side Rules would prevail over the amended provisions of Order VIII Rules 1 and 10 and the Chamber Judge could condone the delay in filing written statement beyond 120 days pursuant to the said Rule 265.

20.     The Bombay High Court decision was carried to the Supreme Court by way of an SLP and the Hon’ble Supreme Court after recounting the genesis of the Bombay High Court Original Side Rules, 1980 to the Letters Patent or Charter establishing the High Courts of Calcutta, Bombay and Madras in contradistinction to the CPC as well as the purpose of retention of Section 129 in the CPC, treating the Letters Patent to be a special law for the concerned High Court and the CPC as a general law applicable to all Courts held that in view of the settled principle that in the event of a conflict between a special law and general law, the special law must always prevail, and that no fault could be found with the judgment of the Division Bench of the High Court and refused to interfere with the order of the Single Bench extending the time for the first Respondent to file its written statement beyond the period of 90 days permitted under Order VIII Rule 1 of the CPC after the expiry of the original period of 30 days from the date of service of summons.

21.     Paragraphs No.7,8,9,12,13 to 23, 25, 26, 37, 42, 46 to 48 of the said decision of the Hon’ble Supreme Court are usefully quoted as under :

“7. The Code of Civil Procedure, 1908 is an Act to consolidate and amend the law relating to the procedure of the Courts of Civil Judicature. It would, therefore, govern all actions of civil nature, unless otherwise provided for in the CPC. Some of the provisions of the CPC, however, do make some exceptions, and it is necessary to notice them.

Section 4(1) provides as follows:

"4. Savings: (1) In the absence of any specific provision to the contrary, nothing in this Code shall be deemed to limit or otherwise affect any special or local law now in force or any special jurisdiction or power conferred, or any special form of procedure prescribed, by or under any other law for the time being in force.

8. Apart from this section, Part IX of the CPC contains the fasciculus of Sections 116 to Section 120 delineating the manner of application of the CPC to the High Courts. Section 116 declares that Part IX applies only to High Courts not being the Court of a Judicial Commissioner. Section 117 provides that save as provided in Parts IX or X or in the rules, the provisions of the Code would apply to such High Courts. Section 120 provides that Sections 16, 17 and 20, which deal with the pecuniary and territorial jurisdictions, shall not apply to the High Court in the exercise of its original civil jurisdiction.

9. Then comes Part X, which deals with the rule making power. By Section 121 the rules prescribed in the First Schedule, being rules prescribed by the Legislature itself, have been declared to have the same effect as if enacted in the body of the Code until and or altered in accordance with the provisions of Part X. Section 122 confers power on a High Court, other than the Court of a Judicial Commissioner, to annul, alter or add to all or any of the rules in the First Schedule. This power is conferred with regard to rules regulating their own procedure and the procedure of the Civil Courts subject to their superintendence, but is subject to the condition of previous publication. Section 123 contemplates the constitution of Rule Committees in each of the High Courts as prescribed therein. Such a Committee makes its report to the High Court under Section 124 formulating and forwarding proposals with regard to annulment, alteration or addition in the First Schedule or for making new rules. Section 126 requires that the rules made by the High Court shall be subject to the previous approval of the State Government concerned. Section 127 requires previous publication of the rules so made in the Official Gazette. Section 128 enumerates a number of matters with regard to which rules may be framed by the High Courts. Then comes to Section 129, which is crucial for the present discussion. Section 129 reads as under:

"129. Power of High Courts to make rules as to their original civil procedure - Notwithstanding anything in this Code, any High Court not being the Court of a Judicial Commissioner, may make such rules not inconsistent with the Letters Patent or order or other law establishing it to regulate its own procedure in the exercise of its original civil jurisdiction as it shall think fit, and nothing herein contained shall affect the validity of any such rules in force at the commencement of this Code."

12. The CPC has been amended from time to time in order to meet with the changing situations. The historical developments as to the application of the CPC to the proceedings in the Chartered High Courts are illuminating. In order to appreciate the merit of the contention so strongly urged by the learned counsel for the appellant, it would be necessary to take a chronological perspective of the law. Chronological Perspective:

13. Prior to the establishing of the Chartered High Courts by the British Government in 1862, the Civil Courts in the Presidency of Bombay were governed by the Code of Civil Procedure, 1859 (Act No. VIII of 1859, which received the assent of the Governor General on 22-3-1859). This Act, as its preamble suggests, was 'an Act for simplifying the procedure of the Courts of Civil Judicature not established by Royal Charter' and was not intended to apply to High Courts established by Royal Charter.

14. The First Letters Patent or Charter establishing High Courts were accompanied by a Despatch from the Secretary of State on 14-5-1862, and were in force till revoked by a further Letters Patent on 28-12-1865. The learned counsel drew our attention to paragraph 36 of the Despatch, which explains the purpose of Clause 37 in the First Letters Patent. The said paragraph 36 of the Despatch reads as under:

"36. Clause 37 is a very important one, and there is little doubt, will prove a very salutary provision. It has, therefore, been inserted, although the change introduced is somewhat greater and more substantial than is generally aimed at in this Charter. It extends to the High Court the Code of Civil Procedure enacted by the Legislature of India for the Court, not established by Royal Charter, and thus accomplishes the object so long contemplated of substituting one simple Code of Procedure for the various systems (corresponding to its common law, equity and admiralty jurisdiction) which have been in operation in the Supreme CourtSC519 since the date of its establishment."

15. It is therefore seen that clause 37 of the Letters Patent was intended to extend to the High Courts the Code of Civil Procedure enacted by the Legislature of India for the Courts other than the Courts established by the Royal Charter. The intention was to substitute one simple Code of Procedure for the various systems which had been in operation in the Supreme Court since the date of its establishment. 16. Clause 37 of the Letters Patent of 1865, which deals with "civil procedure and regulation of proceedings", reads as follows:

"37. And we do further ordain that it shall be lawful for the said High Court of Judicature at Fort William in Bengal, from time to time, to make rules and orders for the purpose of regulating all proceedings in civil cases which may be brought before the said High Court, including proceedings in its Admiralty, Vice-Admiralty, Testamentary, Intestate and Matrimonial Jurisdictions, respectively: Provided that the said High Court shall be guided in making such rules and orders as far as possible, by the provisions of the Code of Civil Procedure, being an Act passed by the GovernorGeneral in Council, and being Act No. VIII of 1859, and the provisions of any law which has been made amending or altering the same, by competent legislative authority for India. "(Letters Patent of the three High Courts, namely, Calcutta, Bombay and Madras are identically worded).

17.     The Code of Civil Procedure, 1877 (Act No. X of 1877), which received the assent of the Governor General on 30-3-1877, and was thereafter brought into force with effect from 1-10-1877, was "an Act to consolidate and amend the laws relating to the procedure of the Court of Civil Judicature". Part IX of this Act contained special rules relating to the Chartered High Courts. Chapter XL-VIII of the Act applied only to the Chartered High Courts. Section 632 of the Civil Procedure Code of 1877, in express words, provided: "except as provided in this Chapter the provisions of this Court apply to such High Courts." Section 638 was the exception to the general rule and provided as under: "The following portions of this Code shall not apply to the High Court in the exercise of its ordinary or extraordinary original civil jurisdiction, namely Sections 16 and 17, Sections 54, clauses (a) and (b), 57, 119, 160, 182 to 185 (both inclusive), 187, 189, 190, 191, 192 (so far as relates to the manner of taking evidence), 198 to 206 (both inclusive), 261, and so much of Section 409 as relates to the making of a memorandum; and Section 579 shall not apply to the High Court in the exercise of its appellate jurisdiction. Nothing in this Code shall extend or apply to any High Court in the exercise of its jurisdiction as an Insolvent Court."

18. The Legislature recognized the special role assigned to the Chartered High Courts and exempted them from the application of several provisions of the Code in the exercise of their ordinary or extra-ordinary civil jurisdiction for the simple reason that those jurisdictions were governed by the procedure prescribed by the rules made in exercise of the powers of the Chartered High Courts under clause 37 of the Letters Patent. Interestingly, Section 652 of this Act itself empowered the High Courts to make rules "consistent with this Code to regulate any matter connected with the procedure of the Courts of Civil Judicature subject to its superintendence", suggesting that consistency with the Code was a sine qua non only when making rules for the subordinate courts.

19. The Code of Civil Procedure, 1882 (Act No. XIV of 1882) received the assent of the Governor General on 17-3-1882. It also contained Part IX dealing with special rules relating to the Chartered High Courts. Section 638 of this Code also exempted the Chartered High Courts in the exercise of their ordinary or extraordinary original civil jurisdiction from the application of the Code. Section 652 invested with the High Courts with power to make rules "consistent with this Code to regulate any matter connected with its own procedure or the procedure of the Courts of Civil Judicature subject to its superintendence." (Emphasis ours).

20. By an amendment made by Act No. XIII of 1895, Sections 632 and 652 of the Code of Civil Procedure, 1882, were amended. Section 632, as amended by this Act, reads as under :Except as provided in this chapter and in Section 652 the provisions of this Code SC520 apply to such High Courts" The amendment made in Section 652 provides an apercu to the controversy. Section 652 was amended by adding the following "Notwithstanding anything in this Code contained, any High Court established under the said Act for establishing High Courts of Judicature in India may make such Rules consistent with the Letters Patent establishing it to regulate its own procedure in the exercise of its original civil jurisdiction as it shall think fit” "All such rules shall be published in the local official Gazette, and shall thereupon have the force of law."

21. The reason for making this amendment is clarified in the Statement of Objects and Reasons accompanying the relevant Bill No. 13 of 1895 in the following words : "Section 652 of the Code of Civil Procedure, as it now stands, purports to require that any rules to regulate its own procedure made by the High Court, even although it be established by Royal Charter, shall be consistent with that Code. The Letters Patent of the High Courts at Fort William, Madras and Bombay, appear, however, to recognize the practical expediency of leaving such High Courts some latitude in the direction of adapting the provisions of the ordinary law to meet their requirements. It has been found by experience that these provisions are not in all respects convenient in the case of original proceedings in those Courts, and the object of this Bill is, by an amendment of Section 652 and, an ancillary amendment of Section 632, to bring the Code into perfect harmony with the provisions of those Letters Patent and to enable the High Courts referred to regulate the exercise of their original civil jurisdiction accordingly."

22. Then we come to the 1908 Act, which made a drastic departure from the hitherto pattern of the Code. The Code was now divided into a fascicle of substantive sections and a Schedule containing Rules, which by force of Section 121 were declared to have effect as if enacted in the body of the Code until and or altered in accordance with the provisions of Part X of the CPC.

23. Despite the sweeping change made by the 1908 Act, interestingly, the amendment introduced in the Code of Civil Procedure, 1882 by the Act No. XIII of 1895, which we have quoted above was retained in a slightly modified form in section 129.The Arguments:

25. The learned counsel for the respondent, however, justifiably contends that the purpose of retaining Section 129 in the present form is exactly the purpose for which it was inserted, in the first place, in the CPC of 1882 by amending Act No. XIII of 1895, namely, "to recognize the practical expediency of leaving such High Courts some latitude in the direction of adapting the provisions of the ordinary law to meet their requirements", and further, "it had been found by experience that these provisions were not in all respects convenient in the case of original proceedings in those Courts." The amendment, therefore, became necessary "to bring the Code into perfect harmony with the provisions of the Letters Patent and to enable the High Courts referred to to regulate the exercise of their original civil jurisdiction accordingly."

26. It appears to us that this was the real reason why a distinction was drawn between the proceedings in original jurisdiction before the Chartered High Court and those in other Courts. For historical reasons this distinction was maintained right from the time the Letters Patent was issued, and has not been disturbed by the Code of Civil Procedure, 1908, despite the amendments made in the CPC from 1976 to 2002.

37. Taking into account the extrinsic evidence, i.e. the historical circumstances in which the precursor of Section 129 was introduced into the 1882 Code by a specific amendment made in 1895, we are of the view that the non obstante clause used in Section 129 is not merely declaratory, but indicative of Parliament's intention to prevent the application of the CPC in respect of civil proceedings on the Original Side of the High Courts.

42. The Full Bench of the High Court of Calcutta in Manikchand v. Pratabmull AIR 1961 Cal 483 para 13 had occasion to consider this very contention with regard to clause 37 of the Letters Patent and observed: ".....The restriction upon the power of the Court as contained in the proviso to cl. 37 of the Letters Patent is that the rules framed under that clause should, "as far as possible" be in conformity with the provisions of the Code of Civil Procedure. This restriction as the phrase "as far as possible" indicates is merely directory. The provisions of the Code of Civil Procedure are intended for the purpose of guidance of this Court in framing rules under Cl. 37 of the Letters Patent. Consequently, if any rule framed by the High Court under cl. 37 be inconsistent with or confers any additional power besides what is granted by the Code of Civiil Procedure SC524 the rule framed under cl. 37 will prevail over the corresponding provisions of the Code of Civil Procedure. This we think is the correct view to be taken in interpreting the words "as far as possible" in clause 37 of the Letters Patent. This interpretation would be consistent with the amplitude of the words used in Section 129 of the CPC by which the High Court is empowered to make rules "not inconsistent with the Letters Patent to regulate its own procedure in the exercise of its original jurisdiction as it shall think fit."

46. Finally, it was argued SC525 Mr. Jethmalani that the Letters Patent, and the rules made thereunder by the High Court for regulating its procedure on the Original Side, were subordinate legislation and, therefore, must give way to the superior legislation, namely, the substantive provisions of the Code of Civil Procedure. There are two difficulties in accepting this argument. In the first place, Section 2(18) of the CPC defines "rules" to mean "rules and forms contained in the First Schedule or made under section 122 or section 125". The conspicuous absence of reference to the rules regulating the procedure to be followed on the Original Side of a Chartered High Court makes it clear that those rules are not "rules as defined in the Code of Civil Procedure, 1908. Secondly, it is not possible to accept the contention that the Letters Patent and rules made thereunder, which are recognized and specifically protected by section 129, are relegated to a subordinate status, as contended by the learned counsel. We might usefully refer to the observations of the Constitutional Bench of this Court in P. S. Santhappan (Dead) by L.Rs. v. Andhra Bank Ltd. and Ors. JT 2004(8) SC 464. With reference to Letters Patent, this is what the Constitution Bench said: 148. It was next submitted that Clause 44 of the Letters Patent showed that Letters Patent were subject to amendment and alteration. It was submitted that this showed that a Letters Patent was a subordinate or subservient piece of law. Undoubtedly, Clause 44 permits amendment or alteration of Letters Patent but then which legislation is not subject to amendment or alteration. CPC is also subject to amendments and alterations. In fact it has been amended on a number of occasions. The only unalterable provisions are the basic structure of our Constitution. Merely because there is a provision for amendment does not mean that, in the absence of an amendment or a contrary provision, the Letters Patent is to be ignored. To submit that a Letters Patent is a subordinate piece of legislation is to not understand the true nature of a Letters patent. As has been held in Vinita Khanolkar's case JT 1997 (9) SC 490 and Sharda Devi's case JT 2002 (3) SC 43 a Letters Patent is the charter of the High Court. As held in Shah Babulal Khimaji's case 1982 (1) SCR 187 a Letters Patent is the specific law under which a High Court derives its powers. It is not any subordinate piece of legislation. As set out in aforementioned two cases a Letters Patent cannot be excluded by implication. Further it is settled law that between a special law and a general law the special law will always prevail. A Letters Patent is a special law for the concerned High Court. Civil Procedure Code is a general law applicable to all Courts. It is well settled law, that in the event of a conflict between a special law and a general law, the special law must always prevail. We see no conflict between Letters Patent and Section 104 but if there was any conflict between a Letters Patent and the Civil Procedure Code then the provisions of Letters Patent would always prevail unless there was a specific exclusion. This is also clear from Section 4 Civil Procedure Code which provides that nothing in the Code shall limit or affect any special law. As set out in Section 4 C.P.C. only a specific provision to the contrary can exclude the special law. The specific provision would be a provision like Section 100A."

47. Far from doing away with the Letters Patent, the amending Act of 2002 has left unscathed the provisions of section 129 and what follows therefrom. The contention must, therefore, fail.

48. In the result, we are of the view that no fault can be found with the impugned judgment of the High Court under appeal. There is no merit in the appeal and it is hereby dismissed. However, there shall be no order as to costs.”

22.     No doubt as observed in the decision quoted above, that as far as the CPC is concerned, the Letters Patent pursuant to which the Bombay High Court Rules, 1980 have been made, is a special law for the concerned High Court and the CPC is a general law applicable to all Courts and that the provisions of the Bombay High Court Original Side Rules would prevail over the CPC. However what is firstly pertinent to note is that Section 129 of the CPC refers only to the Rules under Letters Patent and the CPC but not to the Commercial Court’s Act, 2015.

23.     The Commercial Courts Act which was Act 4 of 2016 received the assent of the President on 31.12.2015 and was published in the Gazette of India Extraordinary, Pt-II, S.1 dated 01.01.2016. Thereafter it was amended by act 28 of 2018, S.3 and became the Commercial Courts, Commercial Division and Commercial Appellate Division of the High Courts Act, 2015 with retrospective effect from 3rd May, 2018. As its preamble suggests the Commercial Courts Act is an Act for the constitution of commercial courts, commercial appellate courts, commercial division and commercial appellate division in the high courts for adjudicating commercial disputes of specified value and for matters connected therewith or incidental thereto.

24.     The Statement of Objects and Reasons of the initial Act 4 of 2016 and the Amendment Act 28 of 2018 suggests that the Commercial Courts Act was enacted to accelerate economic growth, improve the international image of the Indian justice delivery system and the faith of the investor world in the legal culture of the nation keeping in mind the increasingly competitive global economic environment and to attract business at the international level India, to further improve its ranking in the World Bank “Doing Business” Report which considered the dispute resolution environment in the country as one of the parameters for doing business and for speedy settlement of commercial disputes by widening the scope of the courts to deal with commercial disputes as tremendous economic development had ushered in enormous commercial activities in the country including foreign direct investments, public private partnership etc. prompting initiation of legislative measures and to facilitate ease of doing business to create a positive image amongst the investors about the strong and responsive legal system so that there is an early resolution of commercial disputes.

25.     For the above purpose, the Commercial Courts Act inter alia provides for the following:

(a) constitution of Commercial Divisions in the High Courts exercising Ordinary Original Civil Jurisdiction having territorial jurisdiction over such areas on which it has original jurisdiction to hear commercial disputes of a specified value of not less than Rs.3 lakh.

(b) constitution of Commercial Appellate Division in all the High Courts to hear the appeals against the Orders of the Commercial Courts and the Orders of the Commercial Division of the High Court.

(c) constitution of Commercial Courts at District Judge level to hear commercial disputes of a specified value of not less than Rs.3 lakh and not more than the pecuniary jurisdiction of the said court.

(d) designation of Commercial Appellate Courts at District Judge level to exercise appellate jurisdiction over Commercial Courts below the District Judge level.

(e) to provide for compulsory mediation before institution of a suit, where no urgent interim relief is contemplated and for this purpose, to introduce the Pre-Institution Mediation and Settlement Mechanism.

(f) to amend the Code of Civil Procedure, 1908 as applicable to the Commercial Courts and Commercial Divisions which shall prevail over the existing High Courts Rules and other provisions of the Code of Civil Procedure, 1908 so as to improve the efficiency and reduce delays in disposal of commercial cases.”

26.     The text of the Statement of Objects and Reasons of Act 4 of 2016 as well as of the Amendment Act of 2018 is usefully quoted as under:

“Statement of Objects and Reasons - The proposal to provide for speedy disposal of high value commercial disputes has been under consideration of the Government for quite some time. The high value commercial disputes involve complex facts and question of law. Therefore, there is a need to provide for an independent mechanism for their early resolution. Early resolution of commercial disputes shall create a positive image to the investor world about the independent and responsive Indian legal system.

2. The Law Commissioner of India in its 188 th Report had recommended the constitution of the Commercial Division in each High Court. Accordingly, the Commercial Division of High Courts Bill, 2009 was introduced and passed by the Lok Sabha. However, during the discussion of the aforesaid Bill in the Rajya Sabha, some Members raised certain issues and in view thereof, the matter was again referred to the Law Commission of India for its examination. The Law Commissioner of India, in its 253 rd Report, has recommended for the establishment of the Commercial Courts, the Commercial Division and the Commercial Appellate Divisions in the High Courts for disposal of commercial disputes of special value.

3. Based on the recommendations of the Law Commission made in its 253 rd Report, a Bill namely, the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Bill, 2015 was introduced in the Rajya Sabha on 24 th April, 2015 and the same is at present under the consideration of the Department related Parliamentary Standing Committee on Personnel, Public Grievances, Law and Justice. As provided in the said Bill, 2015, all the suits, appeals or applications related to commercial disputes of specified value, i.e., one crore or above, are to be dealt with by the Commercial Courts or the Commercial Division of the High Court.

4. By way of the Delhi High Court (Amendment) Act, 2015, the ordinary original jurisdiction of the Delhi High Court has been increased from rupees twenty lakhs to rupees two crore and there is a provision for transfer of pending case from the Delhi High Court to District Courts. On the enactment of Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Bill, 2015, some fo the Commercial Disputes which are to be transferred to the District Courts from the Delhi High Court may again be required to be transferred to the Commercial Division of the High Court of Delhi. It would cause delay in the disposal of cases as well as inconvenience to the parties and counsels and may also result in confusion. Therefore, it became necessary that provisions of the Delhi High Court (Amendment) Act, 2015 and establishment of the Commercial Courts and Commercial Division of the High Courts maybe brought into force simultaneously.

5. As Parliament was not in session and urgent steps were needed to be taken,t he Commercial Courts, Commercial Division and Commercial Appellate Division in High Courts Ordinance, 2015 was promulgated on 23 rd October, 2015.

6. It is proposed to introduce the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Bill, 2015 to rep;ace the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Ordinance, 2015 which inter alia, provides for the following namely:-

(i) constitution of the Commercial Courts at District level except for the territory over which any High Court is having ordinary original civil jurisdiction;

(ii) constitution of the Commercial Divisions in those High Courts which are already exercising ordinary civil jurisdiction and they shall have territorial jurisdiction over such areas on which it has original jurisdiction;

(iii) constitution of the Commercial Appellate Division in all the High Courts

to hear the appeals against the Orders of the Commercial Courts and the Orders of the Commercial Division of the High Court;

(iv) the minimum pecuniary jurisdiction of such Commercial Courts and Commercial Division is proposed as one crore rupees; and

(v) to amend the Code of Civil Procedure, 1908 as applicable to the commercial Courts and Commercial Divisions which shall prevail over the existing High Court Rules and other provisions of the code of Civil Procedure, 1908 so as to improve the efficiency and reduce delays in disposal of commercial cases.

7. The proposed Bill shall accelerate economic growth, improve the international image of the Indian Justice delivery system, and the faith of the investor world in the legal culture of the nation.

8. The Bill seeks to replace the aforesaid Ordinance.

Amendment Act 28 of 2018 - Statement of Objects and Reasons

The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 was enacted for the constitution of Commercial Courts, Commercial Division and Commercial Appellate Division in the High Courts for adjudicating commercial disputes of specified value and for matters connected therewith or incidental thereto.

2. The global economic environment has since become increasingly competitive and to attract business at international level, India needs to further improve its ranking in the World Bank “Doing Business Report” which, inter alia, considers the dispute resolution environment in the country as one of the parameters for doing business. Further the tremendous economic development has ushered in enormous commercial activities in the county including foreign direct investments, pubic private partnership, etc. which has prompted initiating legislative measures for speedy settlement of commercial disputes, widen the scope of the Courts to deal with commercial disputes and facilitate ease of doing business. Needless to say that early resolution of commercial disputes of even lesser value creates a positive image amongst the investors about the strong and responsive Indian legal system. It is, therefore, proposed to amend the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015.

3. As Parliament was not in session and immediate action was required to be taken to make necessary amendments in the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015, to further improve India’s ranking in the “Doing Business Report”, the President promulgated the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Ordinance, 2018 on 3 rd May, 2018.

4. It is proposed to introduce the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Bill, 2018 to replace the Commercial Courts, Commercial Division and Commercial Appellate Division of High Court (Amendment) Ordinance, 2018, which inter alia, provides for the following namely:-

(i) to reduce the specified value of commercial disputes from the existing one crore rupees to three lakh rupees, and to enable the parties to approach the lowest level of subordinate Courts fro speedy resolution of commercial disputes;

(ii) to enable the State Governments, with respect to the High Courts having ordinary original civil jurisdiction, to constitute commercial courts at District Judge level and to specify such pecuniary value of commercial disputes which shall not be less than three lakh rupees and not more than the pecuniary jurisdiction of the district courts;

(iii) to enable the Sate Governments, except the territories over which the High Courts have ordinary original civil jurisdiction, to designate such number of Commercial Appellate Courts at district judge level to exercise the appellate jurisdiction over the commercial courts below the district judge level;

(iv) to enable the Sate Governments to specify such pecuniary value of a commercial dispute which shall not be less than three lakh rupees or such higher value, for the whole or part of the State; and

(v) to provide fro compulsory mediation before institution of a suit, where no urgent interim relief is contemplated and for this purpose, to introduce the Pre-Institution Mediation and Settlement Mechanism and to enable the Central Government to authorise the authorities constituted under the Legal Services Authorities Act, 1987 for this purpose.

5. The Bill seeks to achieve the above objectives.”

27. Pursuant to the aforesaid, Chapter VI of the Commercial Courts Act entitled amendments to the provisions of the CPC which contains Section 16 providing for amendments to the CPC in its application to commercial disputes provides that the provisions of the CPC shall in their application to any suit in respect of a commercial dispute of a specified value, stand amended in the manner as specified in the Schedule and that the Commercial Division of the High Court and the Commercial Courts of the districts shall follow the provisions of the Code of Civil Procedure, 1908 as amended by the Commercial Courts Act in the trial of a suit in respect of a commercial dispute of a specified value. It is also provided in the said section that where any provision of any rule of the jurisdictional High Court or any amendment to the CPC by the State Government is in conflict with the provisions of the CPC as amended by the Commercial Courts Act, the provisions of the CPC as amended by the Commercial Courts Act shall prevail. Section 16 of the Commercial Courts Act is usefully quoted as under:”

“16. Amendments to the Code of Civil Procedure, 1908 in its application to commercial disputes.— (1) The provisions of the Code of Civil Procedure, 1908 (5 of 1908) shall, in their application to any suit in respect of a commercial dispute of a Specified Value, stand amended in the manner as specified in the Schedule.

(2) The Commercial Division and Commercial Court shall follow the provisions of the Code of Civil Procedure, 1908 (5 of 1908), as amended by this Act, in the trial of a suit in respect of a commercial dispute of a Specified Value.

(3) Where any provision of any Rule of the jurisdictional High Court or any amendment to the Code of Civil Procedure, 1908 (5 of 1908), by the State Government is in conflict with the provisions of the Code of Civil Procedure, 1908 (5 of 1908), as amended by this Act, the provisions of the Code of Civil Procedure as amended by this Act shall prevail.”

28.     It is therefore clear that in accordance with Section 16 of the Commercial Courts Act, the provisions of the CPC as amended by the Commercial Courts Act shall prevail over any rule of the jurisdictional High Court, which in my view includes the Bombay High Court Original Side Rules and the Letters Patent.

29.     From the above elucidation it emerges that as far as the High Courts are concerned, Commercial Divisions are courts in the High Courts having Ordinary Original Civil Jurisdiction and are designated as such to try any suit in respect of a commercial dispute of a specified value. The Statement of Objects and Reasons as quoted above as well as Section 16 clearly provides that the provisions of the CPC shall in their application to any suit in respect of a commercial dispute of a specified value, stand amended in the manner as specified in the Schedule. Clause IV (D) of the Schedule amends Order VIII in the First Schedule of the CPC by substituting the proviso in Rule I as under:

“(i) In Rule 1, for the proviso, the following proviso shall be substituted, namely:-

“Provided that where the defendant fails to file the written statement within the said period of thirty 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 costs as the Court deems fit, but which shall not be later than one hundred twenty days from the date of service of summons and on expiry of one hundred twenty days from the date of service summons, the defendant shall forfeit the right to file the written statement and the Court shall not allow the written statement to be taken on record.”

30.     As noted above, the proviso clearly provides that if the Defendant has failed to file Written Statement within the 30 day period 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 costs as the Court deems fit but which shall not be later than 120 days from the date of service of Summons and that on the expiry of 120 days from the date of such service, the Defendant shall not only forfeit the right to file Written Statement but the Court shall also not allow the Written Statement to be taken on record.

31.     The aforementioned provision as can be seen from the decision of the Hon’ble Supreme Court in the case of M/s SCG Contracts India Pvt. Ltd. Vs. K. S. Chamankar Infrastructure Pvt. Ltd. And Ors.(supra) is mandatory and there is no way out of it. The proviso as applicable to Commercial Courts clearly mandates that no more than 90 days delay can be condoned by the Commercial Court and that too for reasons to be recorded in writing and on payment of costs and that there is a prohibition from allowing the Written Statement to be taken on record beyond such period as the Defendant forfeits the right to file the Written Statement upon the expiry of such period. In contradistinction to this, the proviso contained in the CPC as amended by Act 22 of 2002 but not amended pursuant to Section 16 of the Commercial Courts Act is the proviso as applicable to any Suit not in respect of a commercial dispute of a specified value but simply provides that if the Defendant fails to file the Written Statement within the period of 30 days he shall be allowed to file the same on a day as may be specified by the Court for reasons to be recorded in writing but which shall not be later than 90 days from the date of service of Summons. As can be seen that the mandatory and prohibitory language introduced in the proviso to Rule 1 of Order VIII as applicable to Suits in respect of a commercial dispute of a specified value pursuant to Section 16 of the Commercial Courts Act is not there.

32.     Therefore if the Suit is not a Suit in respect of a commercial dispute of a specified value filed on the Original Side of the High Court having Ordinary Original Civil Jurisdiction then the proviso to Rule 1 of Order VIII of the CPC as amended by Act 22 of 2002 would apply with respect to the time limit for filing Written Statement and in respect whereof the Hon’ble Supreme Court in the case of Kailash v. Nankhu and Others 4 (supra) has held that the provision is directory and not mandatory. That in respect of such a Suit in view of the decision of this Court and the Hon’ble Supreme Court in the case of Iridium India Telecom Ltd. Vs. Motorola INC (supra), Rule 265 of the Bombay High Court Original Side Rules would be available to seek leave of the Court of the Judge in Chambers to file Written Statement beyond the limitation period.

33.     However, since as noted above sub-section (3) of Section 16 of the Commercial Courts Act clearly provides that the provisions of the CPC as amended by the Commercial Courts Act will prevail over any rule of the jurisdictional High Court, in my view the proviso in Rule I of Order VIII of the CPC as amended pursuant to Section 16(1) of the Commercial Courts Act clearly forfeiting the right of the Defendant to file Written Statement beyond the period of 120 days from the date of 4 (2005) 4 SCC 480. service of Summons and prohibiting filing of Written Statement beyond that period making the proviso in Rule I of Order VIII of the CPC as amended pursuant to Section 16(1) of the Commercial Courts Act as applicable to a Suit in respect of a commercial dispute of a specified value mandatory in nature, thereby to prevail even over the Bombay High Court Original Side Rules including Rule 265, the High Court at such time not merely exercising ordinary civil jurisdiction but acting as a commercial court to which the specially amended provisions of the CPC pursuant to Section 16 of the Commercial Courts Act apply. It does not mean that the Letters Patent or the Bombay High Court Original Side Rules would not apply, but in the event of a conflict with any rule under the Original Side Rules, the provisions of the CPC as amended pursuant to the Commercial Courts Act would prevail.

34.     Further, Section 21 of the Commercial Courts Act provides that the Commercial Courts Act has an overriding effect notwithstanding anything inconsistent contained in any other law. Section 21 of the Commercial Courts Act is usefully quoted as under :

“21. Act to have overriding effect – Save as otherwise provided, the provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law for the time being in force other than this Act.”

(Emphasis supplied)

35.     It is clear from the above that notwithstanding anything inconsistent between the Commercial Courts Act and any other law, the Commercial Courts Act shall have an overriding effect.

36.     Even the decisions in the case of Iridium India Telecom Ltd. Vs. Motorola INC (supra) were concerned with the CPC Amendment of 2002, amending Order 8 Rule 1 and 10 and not with respect to the amendment to the CPC in its application to commercial disputes vide Act 4 of 2016 in its application to any suit in respect of a commercial dispute of a specified value where the amended proviso in contradistinction to the amendment of 2002, clearly provides that where the Defendant fails to file the written statement within a 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 costs as the Court deems fit but which shall not be later than 120 days from the date of service of summons and on expiry of 120 days from the date of service of summons, the Defendant shall forfeit the right to file the written statement and the Court shall not allow the written statement to be taken on record. Therefore although there can be no doubt about the principles laid down in Iridium India Telecom Ltd. Vs. Motorola INC (supra), in my view the decision would not be applicable to the facts of this case as this is a suit in respect of a commercial dispute of specified value, which fact has not been disputed.

37.     Therefore, the Commercial Courts Act is a special statute for the purpose of providing for adjudicating commercial disputes of a specified value and the matters connected therewith and/or incidental thereto and applicable only to commercial disputes and commercial courts but not general law applicable to all disputes or all Courts.

38.     Ergo, considering settled law that between the special law and the general law, the special law will always prevail, I am of the view that the Commercial Courts Act will prevail over the Letters Patent and the High Court Original Side Rules, 1980 which prescribes the procedure for the original side of the High Court but not for Commercial Courts which is governed by the Commercial Courts Act.

39.     It has been argued that Rule 91 of the Bombay High Court (Original Side) Rules which permits, with the leave of the Court and Judge in Chambers, filing of written statement where the Defendant has failed to file written statement within the time fixed in the writ of summons has been deleted only on 23rd March, 2022, whereas the 120 days’ period ended much prior to that and even the chamber order was filed prior to that and even the decision on the chamber order is prior to the said deletion and therefore, this Court condone the delay and after setting aside orders dated 3rd February, 2017 and 8th March, 2017 as well as order dated 4th September, 2017 rejecting the Chamber Order seeking setting aside of the transfer of the suit to the list of undefended Suits, allow the filing of the written statement by the Defendant. I am afraid that the said argument of the Applicants does not hold any water. At the outset, the said Rule would not apply to the case of the Applicants in as much as the said Rule is clearly applicable to the case if the suit has not been set down as an undefended suit against the Defendant. The suit had already been transferred to the list of undefended Suits on 8th March, 2017. Therefore Rule 91 in my view would not be applicable to the facts of this case. Even the chamber order for setting aside the order dated 8th March, 2017 has been dismissed on 4th September, 2017, and the notice of motion had been filed on 11th October, 2017. Even otherwise, the amended proviso to Rule 1 of Order VIII has been inserted with retrospective effect from 23rd October, 2015, which is much prior to these dates and would apply to the facts of this case. Therefore, in my view, Rule 91 would not apply to the case of the Applicants. That therefore, the fact that the said Rule came to be deleted only on 24th March, 2022 would not be of any relevance or consequence. Moreover, Section 21 of the Commercial Courts Act clearly provides that the Commercial Courts Act has an overriding effect and it is by virtue of Section 16 of the Commercial Courts Act that the provisions of the CPC apply to the suit in respect of a commercial dispute of specified value, it not being disputed that the suit in question is a suit in respect of a commercial dispute of a specified value. Also as observed the Commercial Courts Act being a special statute would prevail over the High Court (Original Side) Rules / Letters Patent. Therefore, also not only Rule 91 would not apply but even Rule 265 of the Bombay High Court (Original Side) Rules which empowers the Court or a Judge in Chambers to enlarge or abridge the time will not be available to the Applicants.

40.     As noted above, in the case of M/s SCG Contracts India Pvt. Ltd. Vs. K. S. Chamankar Infrastructure Pvt. Ltd. And Ors.(supra), the Hon’ble Supreme Court while considering the amended proviso to Order 8 Rule 1 and 10 as applicable to suits relating to commercial disputes of a specified value under the Commercial Courts Act, has clearly observed that on expiry of 120 days from the date of service of summons on the Defendant, the Defendant shall forfeit the right to file the written statement and the Court must not allow the written statement to be taken on record and that as a consequence the written statement of the Defendant cannot be taken on record beyond this period. Proviso to Rule 1 of Order VIII clearly prohibits any enlargement of time for filing of written statement beyond 120 days and the same being a special provision applying to Commercial Courts will prevail over the Bombay High Court Original Side Rules, 1980 as well as the Letters Patent, which as observed earlier would be overridden by the provisions of the Commercial Courts Act.

41.     Further in view of the above discussion, the arguments of Mr. Palshikar, that the decision of the Hon’ble Supreme Court in the case of M/s SCG Contracts India Pvt. Ltd. Vs. K. S. Chamankar Infrastructure Pvt. Ltd. And Ors.(supra), arises from the decision of the Delhi High Court and does not consider the impact of the Letters Patent and the Bombay High Court (Original Side) Rules would not be relevant.

42.     Also the argument that the decision of the Hon’ble Supreme Court in the case of M/s SCG Contracts India Pvt. Ltd. Vs. K. S. Chamankar Infrastructure Pvt. Ltd. And Ors.(supra) has been rendered on 12th February, 2019 and that since the limitation and orders under consideration are prior to that date, the said decision would not apply to the facts of this case is only stated to be rejected as being without any substance as it is settled law that any decision of the Supreme Court, unless stated in the decision itself to be effective from a particular date, is effective as if it had always been the law of the land.

43.     It is not in dispute that the suit is a Commercial Summary Suit and the Commercial Courts Act is applicable to the suit. That being the case, in accordance with Section 16 of the Commercial Courts Act, the amended proviso to Rule 1 of Order VIII of the CPC which clearly provides that where the defendant fails to file the written statement within the said period of thirty days, he shall be allowed to file the same on such other day, as may be specified by the Court, for reasons to be recorded in writing and on payment of such costs as the Court deems fit but which shall not be later than 120 days from the date of service of summons and on the expiry of 120 days from the date of service of summons, the Defendant shall forfeit the right to file written statement and the Court shall not allow the written statement to be taken on record and the said interpretation having been settled by the Hon’ble Supreme Court in the case of M/s SCG Contracts India Pvt. Ltd. Vs. K. S. Chamankar Infrastructure Pvt. Ltd. And Ors.(supra), it would not be possible to condone the delay of 231 days or 313 days in filing the Written Statement on behalf of the Applicants who are the Defendants in the Commercial Suit.

44.     Once it has been held that the period of 120 days from the date of service of writ of summons is sacrosanct in the sense that this Court does not have power to extend the delay beyond 90 days from the service of writ of summons and the Court cannot allow the written statement to be taken on record, then it is not necessary to consider any argument on sufficient cause or on any explanation proffered by the Applicants explaining the reason for the admitted delay beyond this period or on the bonafides of the Applicants and obviously it would not matter if the Applicants are the State or the constituents of the State or performing functions or duties relating to public projects such as the irrigation project as in the facts of this case.

45.     No fault can therefore be found with the order dated 3rd February 2017, and the order dated 8th March 2017 transferring the suit against Defendants No.1 to 4 to the list of undefended suits for want of written statement as well as order dated 4th September 2017 of the learned Prothonotary and Senior Master rejecting the Chamber Order taken out for setting aside order dated 8th March 2017.

46.     Accordingly, Notice of Motion is hereby dismissed. The commercial suit to proceed as an undefended suit.

47.     It is made clear that if any observation(s) have been made herein on the merits of the suit, the same is only to decide the present Notice of Motion and not intended to influence the decision on the merits of the suit which shall be decided without being influenced by any such observation(s) on merit(s).