Case Note & Summary
The petitioners, M/s S.S. Nikade and Company (JV), a registered firm, filed a commercial suit on 02.02.2017 before the Commercial Court, Yavatmal, claiming damages and recovery of amounts for works done against the Vidarbha Irrigation Development Corporation and other respondents. After service, the defendant no.4 (respondent no.1) filed an application under Section 8 of the Arbitration and Conciliation Act, 1996 on 17.06.2017, seeking reference of the dispute to arbitration. On the same day, it also filed an application seeking postponement of filing the written statement until the Section 8 application was decided. The postponement application was rejected. The Section 8 application was decided on 03.10.2017 and rejected. Thereafter, on 25.10.2017, the defendant filed an application under Exhibit 30 seeking permission to file its written statement, stating that due to the pendency of the Section 8 application, the written statement could not be filed earlier. The plaintiffs opposed, arguing that more than 125 days had elapsed from the prescribed period. The trial court, by order dated 03.01.2018, allowed the application subject to costs of Rs. 1,000. The plaintiffs challenged this order in the High Court. The High Court held that the pendency of the application under Section 8 of the Arbitration Act constituted a sufficient cause for the delay, and the trial court had rightly exercised its discretion. The writ petition was dismissed, and the order of the trial court was upheld.
Headnote
A) Civil Procedure - Written Statement - Condonation of Delay - Order VIII Rule 1 CPC, Section 16 of Commercial Courts Act, 2015 - The plaintiffs filed a commercial suit for damages and recovery of amounts. The defendant filed an application under Section 8 of the Arbitration and Conciliation Act, 1996, and sought postponement of filing written statement. The application under Section 8 was rejected, and thereafter the defendant sought permission to file written statement beyond 120 days. The trial court allowed the same subject to costs. The High Court held that the pendency of the application under Section 8 of the Arbitration Act constituted a sufficient cause for the delay, and the trial court did not err in exercising its discretion to condone the delay. (Paras 2-6)
B) Commercial Courts Act - Written Statement - Time Limit - Section 16 of Commercial Courts Act, 2015 - The period of 120 days for filing written statement in a commercial suit is mandatory but not inflexible; the court has discretion to condone delay for sufficient cause. The pendency of an application under Section 8 of the Arbitration Act, which raises a jurisdictional issue, is a valid ground for delay. (Paras 4-6)
Issue of Consideration
Whether the trial court was justified in permitting the defendant to file its written statement beyond the period of 120 days prescribed under the Commercial Courts Act, 2015, on the ground that the defendant had filed an application under Section 8 of the Arbitration and Conciliation Act, 1996.
Final Decision
The High Court dismissed the writ petition, upholding the order of the trial court dated 03.01.2018 which permitted the defendant to file its written statement subject to costs of Rs. 1,000.
Law Points
- Order VIII Rule 1 CPC
- Section 16 of Commercial Courts Act
- 2015
- Section 8 of Arbitration and Conciliation Act
- 1996
- sufficient cause for delay
- condonation of delay in filing written statement
Case Details
2019 LawText (BOM) (10) 145
WRIT PETITION NO. 1888/2019
Shri K.S. Narwade for petitioners, Shri V.G. Palshikar for respondent nos.1 and 4, Shri A.V. Palshikar, Assistant Government Pleader for respondent nos.2,4,5 & 6
M/s S.S. Nikade and Company (JV) through its Partners Santosh Sambhashiv Nikade and Dnyaneshwar Vishwanath Gadbaile
Vidarbha Irrigation Development Corporation, Chief Engineer, Water Resources Department, Superintendent Engineer, Executive Engineer, Sub Divisional Engineer, Jr.Engineer/Section Engineer
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Nature of Litigation
Writ petition challenging order of Commercial Court permitting filing of written statement beyond prescribed period.
Remedy Sought
Petitioners sought to quash the order dated 03.01.2018 allowing the respondent to file written statement beyond 120 days.
Filing Reason
The trial court allowed the defendant to file written statement beyond the period of 120 days prescribed under the Commercial Courts Act, 2015, which the plaintiffs contended was impermissible.
Previous Decisions
The trial court by order dated 03.01.2018 allowed the application at Exhibit 30 subject to costs of Rs. 1,000.
Issues
Whether the trial court was justified in permitting the defendant to file its written statement beyond the period of 120 days prescribed under the Commercial Courts Act, 2015.
Whether the pendency of an application under Section 8 of the Arbitration and Conciliation Act, 1996 constitutes sufficient cause for delay in filing written statement.
Submissions/Arguments
Petitioners argued that more than 125 days had elapsed from the prescribed period and the defendant could not be permitted to file written statement.
Respondent argued that due to pendency of the application under Section 8 of the Arbitration Act, the written statement could not be filed earlier.
Ratio Decidendi
The pendency of an application under Section 8 of the Arbitration and Conciliation Act, 1996, which raises a jurisdictional issue, constitutes a sufficient cause for the delay in filing the written statement. The trial court has discretion under Order VIII Rule 1 CPC read with Section 16 of the Commercial Courts Act, 2015 to condone the delay for sufficient cause.
Judgment Excerpts
The plaintiffs filed suit on 02.02.2017 claiming damages as well as recovery of amounts on account of works done.
The trial Court by the impugned order dated 03.01.2018 permitted the defendant no.4 to file its written statement subject to costs of Rupees One Thousand.
In the present case, the defendant no.4 had filed an application under Section 8 of the said Act and the same was pending. The said application was decided on 03.10.2017. The application for filing written statement was moved on 25.10.2017. The pendency of the application under Section 8 of the said Act can be said to be a sufficient cause for not filing the written statement earlier.
Procedural History
The plaintiffs filed a commercial suit on 02.02.2017. The defendant no.4 was served and filed an application under Section 8 of the Arbitration Act on 17.06.2017, along with an application for postponement of filing written statement. The postponement application was rejected. The Section 8 application was rejected on 03.10.2017. On 25.10.2017, the defendant filed an application (Exhibit 30) seeking permission to file written statement. The trial court allowed it on 03.01.2018. The plaintiffs filed the present writ petition challenging that order.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 8
- Commercial Courts Act, 2015: Section 16
- Code of Civil Procedure, 1908: Order VIII Rule 1
