Case Note & Summary
The Petitioner, M/s. Milagre Homes LLP, filed a Commercial Suit seeking specific performance of a Development Agreement dated 2nd December 2023 against the Respondent, M/s. Santa Monica Star LLP. The Respondent was served on 5th December 2024 and was required to file its written statement within 30 days, i.e., by 4th January 2025. Instead, the Respondent filed an application under Order VII Rule 11 CPC for rejection of the plaint. The Respondent eventually filed its written statement on 2nd April 2025, which was the 118th day from service. The Petitioner argued that the written statement was filed beyond the initial 30-day period and that the Respondent had not filed any application for condonation of delay. The Commercial Court, by an order dated 22nd April 2025, took the written statement on record without any accompanying condonation application and without recording any reasons. The Petitioner challenged this order by way of a writ petition before the High Court of Bombay at Goa. The Petitioner contended that the Commercial Court acted mechanically and in violation of the mandatory procedural requirements under the Code of Civil Procedure, 1908 as amended by the Commercial Courts Act, 2015. The Respondent argued that the written statement was filed within the statutory period of 120 days and that an application for extension of time had been filed, though not decided. The Respondent further argued that a separate condonation application was unnecessary and merely a technicality. The High Court, after hearing both sides, held that the Commercial Court's order was unsustainable. The Court observed that the Respondent had not filed any application for condonation of delay, and the application for extension of time had not been decided. The Court emphasized that the Commercial Court must strictly adhere to the statutory timeline and procedural requirements under the Commercial Courts Act, 2015. The impugned order was cryptic and non-speaking, failing to record any reasons. The High Court allowed the writ petition, set aside the impugned order, and directed the Commercial Court to decide the Respondent's application for extension of time afresh, after giving an opportunity of hearing to both parties, and to pass a reasoned order in accordance with law.
Headnote
A) Commercial Law - Written Statement - Mandatory Timeline - Section 16 of Commercial Courts Act, 2015 read with Order VIII Rule 1 CPC - The Commercial Court took the Respondent's written statement on record on the 118th day from service, without any application for condonation of delay and without recording reasons. The Petitioner challenged this as a mechanical and non-speaking order. Held that the Commercial Court must strictly adhere to the statutory timeline and procedural requirements; taking a written statement on record without a condonation application and without reasons is unsustainable (Paras 1-7). B) Commercial Law - Extension of Time - Condonation of Delay - Order VIII Rule 1 CPC - The Respondent filed an application for extension of time but no orders were passed on it, and no separate condonation application was filed. The Respondent argued that the acceptance of the written statement implied extension. Held that a separate application for condonation of delay is mandatory when the written statement is filed beyond 30 days but within 120 days, and the court must pass a reasoned order (Paras 3-7). C) Commercial Law - Non-Speaking Order - Validity - The impugned order was cryptic and non-speaking, failing to record any reasons for accepting the written statement. Held that such an order is without jurisdiction and violates the objective of the Commercial Courts Act, 2015 (Paras 3-7).
Issue of Consideration
Whether the Commercial Court could take the Respondent's written statement on record without an accompanying application for condonation of delay, and whether the order was valid when passed without recording reasons.
Final Decision
The High Court allowed the writ petition, set aside the impugned order dated 22nd April 2025, and directed the Commercial Court to decide the Respondent's application for extension of time afresh, after giving an opportunity of hearing to both parties, and to pass a reasoned order in accordance with law.
Law Points
- Commercial Courts Act
- 2015
- Order VIII Rule 1 CPC
- Order VIII Rule 10 CPC
- Section 16 of Commercial Courts Act
- mandatory timeline for filing written statement
- condonation of delay
- non-speaking order
- extension of time without condonation application
