Case Note & Summary
The case involves a Notice of Motion filed by the defendants (applicants) in a commercial suit before the Bombay High Court, seeking to quash the order of the Prothonotary and Senior Master transferring the suit to the list of undefended suits due to failure to file a written statement within time, and to condone a delay of 231 days (or 313 days as argued by the plaintiff) in filing the written statement. The defendants are government corporations constituted under the Maharashtra Act No. XXV of 1997 for an irrigation project, with offices in Vidharbha. The writ of summons was served on 2nd November 2016. The defendants appointed a Mumbai advocate on 15th November 2016, but due to the voluminous nature of the plaint and the need to collect documents from various branch offices, they could not file the written statement within the prescribed period. The Prothonotary and Senior Master passed a conditional order on 3rd February 2017 directing the defendants to file the written statement by 8th March 2017, but when they failed to do so, the suit was transferred to the undefended list on 8th March 2017. The defendants filed a Chamber Order on 7th April 2017 seeking condonation of delay, which was dismissed on 14th August 2017 (uploaded later). The present Notice of Motion was filed on 11th October 2017. The defendants argued that the Bombay High Court Original Side Rules, 1980, being a special law, should prevail over the Commercial Courts Act, 2015, and that the delay should be condoned as they had a good case on merits and public money was involved. They relied on the decision in Iridium India Telecom Limited v. Motorola INC, which held that the Original Side Rules govern the procedure on the original side. The plaintiff opposed the motion, arguing that the Commercial Courts Act, 2015 is a special statute for commercial disputes and that the proviso to Order VIII Rule 1 CPC imposes a mandatory 120-day limit, beyond which the right to file a written statement is forfeited. The plaintiff also pointed out that the delay was actually 313 days, not 231 days, and that the defendants had not demonstrated bonafides by annexing a copy of the written statement. The court, after hearing both sides, held that the Commercial Courts Act, 2015 is a special statute for commercial disputes and overrides the Bombay High Court Original Side Rules. The proviso to Order VIII Rule 1 CPC, as amended by Section 16 of the Commercial Courts Act, 2015, is mandatory and does not permit any extension beyond 120 days from the date of service of summons. The Supreme Court's decision in SCG Contracts (India) Private Limited v. K.S. Chamankar Infrastructure Private Limited, (2019) 12 SCC 210, clearly holds that on expiry of 120 days, the defendant forfeits the right to file a written statement and the court must not allow it to be taken on record. The court rejected the defendants' arguments that the decision is prospective or does not apply to the Bombay High Court. Accordingly, the Notice of Motion was dismissed, and the order of the Prothonotary and Senior Master transferring the suit to the undefended list was upheld.
Headnote
A) Commercial Law - Written Statement - Time Limit - Section 16 of the Commercial Courts Act, 2015 read with Order VIII Rule 1 CPC - The proviso to Order VIII Rule 1 CPC, as amended by the Commercial Courts Act, 2015, imposes a mandatory outer limit of 120 days from service of summons for filing a written statement in commercial disputes, beyond which the right to file is forfeited and the court cannot allow the written statement to be taken on record. The Bombay High Court Original Side Rules, 1980, which previously allowed extension of time under Rule 265, are overridden by the special provision in the Commercial Courts Act, 2015, which is a special statute for commercial disputes. (Paras 9-10) B) Commercial Law - Applicability of SCG Contracts Judgment - The Supreme Court's decision in SCG Contracts (India) Private Limited v. K.S. Chamankar Infrastructure Private Limited, (2019) 12 SCC 210, which held that the 120-day limit is mandatory and applies to all commercial suits, is effective from the date of the judgment (12th February 2019) but the principle applies to pending matters as well, and the court must follow it. The argument that the decision is prospective or does not apply to the Bombay High Court due to its Letters Patent jurisdiction was rejected. (Para 8) C) Commercial Law - Condonation of Delay - Delay of 231/313 days in filing written statement - The defendants, a government corporation, failed to provide sufficient cause for the delay, citing internal coordination issues and change of advocates. The court held that the mandatory 120-day limit under the Commercial Courts Act, 2015 cannot be circumvented by seeking condonation of delay, and the written statement cannot be taken on record. (Paras 2-6, 9-10)
Issue of Consideration
Whether the delay of 231 days (or 313 days) in filing the written statement by the defendants in a commercial suit can be condoned, and whether the Bombay High Court Original Side Rules or the Commercial Courts Act, 2015 governs the time limit for filing written statements in commercial suits on the original side of the Bombay High Court.
Final Decision
The Notice of Motion is dismissed. The order of the Prothonotary and Senior Master transferring the suit to the list of undefended suits is upheld. The written statement cannot be taken on record as the 120-day limit under the Commercial Courts Act, 2015 has expired.
Law Points
- Commercial Courts Act
- 2015 is a special statute for commercial disputes
- Order VIII Rule 1 CPC proviso is mandatory
- 120-day limit for filing written statement cannot be extended
- Bombay High Court Original Side Rules yield to Commercial Courts Act
- SCG Contracts (India) Private Limited v. K.S. Chamankar Infrastructure Private Limited applies
