Axis Bank Limited vs Treenath Vanijya Private Limited
2023 Latest Caselaw 1458 Cal/2

                   IN THE HIGH COURT AT CALCUTTA
                   (Ordinary Original Civil Jurisdiction)
                              ORIGINAL SIDE


Present:

The Hon'ble Justice Krishna Rao



                             IA No: GA 3 of 2023

                             In CS 144 of 2014


                             Axis Bank Limited
                                   Versus
                     Treenath Vanijya Private Limited



             Mr. Soumabho Ghosh
             Mr. Diptendu Acharjee
                                             ... For the Plaintiff.


             Mr. Ratnesh Kr. Rai
             Mr. Ankan Rai
             Mr. Sayantan Das
                                       ... For the Defendant.



Heard on                : 27.06.2023

Judgment on             : 03.07.2023

Krishna Rao, J.:


1.

The defendant has filed the present application being GA 3 of 2023

praying for extension of time to file written statement in CS No. 144 of

2014.

2. The plaintiff has filed the suit against the defendant for recovery of an

amount of Rs. 1,90,29,906.20/- along with interest @ 18% per annum.

The defendant had also filed a suit being CS No. 228 of 2014 praying

for a decree of possession, arrears of rent and mesne profit. Both the

parties have filed two separate interlocutory applications being GA

2496 of 2014 and GA 3257 of 2014 seeking interim relief. Both the

parties have preferred an appeal against the order passed by this

Court.By an order dated 7th November, 2014, the Hon'ble Appellate

Court directed the plaintiff to hand over the entire premises to the

plaintiff along with an amount of Rs. 59,90,464/-. The Appellate Court

had further directed the defendant to return an amount of Rs.

1,44,09,080/- being the security deposit to the plaintiff. The order

passed by the Appellate Authority has been duly complied with.

3. By an order dated 18th December, 2015 on the prayer made by the

Learned Counsel for the respective parties of both the suits, this Court

directed that the suit go out of the list for the time being with the

liberty to mention.

4. The Learned Advocate representing the defendant submits that as the

defendant was facing severe financial crisis and in the mean time, in

the month of October, 2016, the possession of the premises was also

taken over by the International Asset Reconstruction Company Private

Limited in terms of the provisions of Section 13 of the SARFAESI Act,

2002 and subsequently only on 17th October, 2018, the said Company

had issued no-dues certificate in favour of the defendant and

releasedthe charge over the demised immovable property after payment

of all dues by the defendant.

5. The Learned Counsel for the defendant submits that due to the

aforementioned financial crisis, the defendant was not able to take

appropriate step and thus written statement could not be filed within

the time prescribed under law. He submits that till the month of March,

2020, the plaintiff could not file written statement and in the mean

time Pandemic Covid-19 intervened and there was no occasion for the

defendant to take any step in the suit.

6. The Learned Counsel for the defendant submitted that on

normalization of the situation after Pandemic Covid-19, the defendant

contacted his erstwhile advocate on record for taking appropriate steps

in the suit but subsequently the defendant came to know that the

erstwhile advocate on record Mr. Pawan Kumar Jhunjhunwala is not

keeping well and was virtually indisposed and is not coming to Court

regularly.

7. The Learned Counsel for the defendant submits that thereafter the

defendant has taken a decision to change the advocate and had

contacted the present advocate on record on 2nd May, 2022 to proceed

with the matter.

8. The erstwhile advocate had handed over all the cause papers to the

defendant after six months and thereafter on 15th December, 2022, the

defendant had provided the papers to the present advocate on record

and after going through the papers, it was found that written statement

has not been filed and thereafter appropriate steps were taken after

getting proper instruction from the defendant for preparing written

statement.

9. Learned Advocate for the defendant submits that as the written

statement is ready and if this Court will allow the defendant to file

written statement, the defendant will file written statement within a

week.

10. Learned Advocate for the defendant has relied upon the following

judgments:

i. (2005) 4 SCC 480 (Kailash -vs- Nanhku & Ors.).

             ii.    (1998) 7 SCC 123 (N. Balakrishnan -vs- M.
                    Krishnamurthy).

iii. (1984) 4 SCC 66 (O.P. Kathpalia -vs- Lakhmir Singh (dead) & Ors.).

iv. (2018) 6 SCC 639 (Atcom Technologies Ltd. -vs-

Y.A. Chunawala & Company & Ors.).

11. Per contra, LearnedCounsel for the plaintiff submitted that time to file

written statement has expired long back and there is a delay of about 9

years for filing the written statement but the defendant has not

provided any explanation as to what prevented the defendant to file

written statement in the suit which was filed in the year 2014.

12. LearnedCounsel for the plaintiff submitted that the defendant had

participated in all the interlocutory proceedings and had also preferred

an appeal against the orders passed by this Court as per the order

passed by the Appellate Court, the defendant had received the premises

back as well as the security amount way back in the year, 2018 but

has not taken any step for filing written statement.

13. LearnedCounsel for the plaintiff submitted that from the month of May,

2022 till the filing of the instant application, the applicant has not

provided any explanation as to why the written statement was not filed

within the prescribed period atleast from May, 2022.

14. LearnedCounsel for the plaintiff submitted that the defendant was

active by taking possession of the premises and the premises was

handed over by the company to the defendant in the year 2018 itself

but from 2018 till March, 2020, the defendant has not taken any steps

in the present suit for filing written statement.

15. LearnedCounsel for the plaintiff submitted that no proper explanation

has been offered and as such no leave can be granted to the defendant

to file written statement after the long period of 9 years.

16. LearnedCounsel for the plaintiff relied upon the judgment reported in

(2018) 6 SCC 639 (Atcom Technologies Limited -vs- Y.A Chunawala

& Company & Ors.).

17. Heard the learned Counsel for the respective parties, perused the

materials on record and the judgments relied by the parties.

18. The CPC enacted in 1908 consolidated and amended the laws relating

to the procedure of the Courts of Civil Judicature. It has undergone

several amendments by several Acts of Central and State Legislatures.

Under Section 122 of CPC, the High Courts have power to amend by

rules, the procedure laid down in the Orders. In exercise of these

powers various amendments have been made in the Orders by various

High Courts. Amendments have also been made keeping in view

recommendations of Law Commission. Anxiety of Parliament as evident

from the amendments is to secure an early and expeditious disposal of

civil suits and proceedings without sacrificing the fairness of trial and

the principles of natural justice in-built in any sustainable procedure.

The Statement of Objects and Reasons for enacting Code of Civil

Procedure (Amendment) Act, 1976 (104 of 1976)(in short '1976

Amendment Act') highlights following basic considerations in enacting

the amendments:-

"(i) with the accepted principles of natural justice that a litigant should get a fair trial in accordance;

(ii) that every effort should be made to expedite the disposal of civil suits and proceedings, so that justice may not be delayed;

(iii) that the procedure should not be complicated and should, to the utmost extent possible, ensure fair deal to the poorer sections of the community who do not have the means to engage a pleader to defend their cases."

19. By the 1999 Amendment Act, the text of Order VIII, Rule 1 was sought

to be substituted in a manner that the power of Court to extend the

time for filing the written statement was so circumscribed as would not

permit the time being extended beyond 30 days from the date of service

of summons on the defendant. Due to resistance from the members of

the Bar against enforcing such and similar other provisions sought to

be introduced by way of amendment, the Amendment Act could not be

promptly notified for enforcement. The text of the provision in the

present form has been introduced by the Amendment Act with effect

from 01.07.2002. The purpose of such like amendments is stated in the

Statement of Objects and Reasons as "to reduce delay in the disposal of

civil cases".

20. The text of Order VIII, Rule 1, as it stands now, reads 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."

Order VIII, Rule 1 after the amendment casts an obligation on the

defendant to file the written statement within 30 days from the date of

service of summons on him and within the extended time falling within

90 days. The provision does not deal with the power of the court and

also does not specifically take away the power of the court to take the

written statement on record though filed beyond the time as provided

for. Further, the nature of the provision contained in Order VIII, Rule 1

is procedural. It is not a part of the substantive law. Substituted Order

VIII, Rule 1 intends to curb the mischief of unscrupulous defendants

adopting dilatory tactics, delaying the disposal of cases causing

inconvenience to the plaintiffs and petitioners approaching the court for

quick relief and also to the serious inconvenience of the court faced

with frequent prayers for adjournments. The object is to expedite the

hearing and not to scuttle the same. While justice delayed may amount

to justice denied, justice hurried may in some cases amount to justice

buried.

21. All the rules of procedure are hand made of justice. The language

employed by the draftsman of processual law may be liberal or

stringent, but the fact remains that the object of prescribing procedure

is to advance the cause of justice. In an adversarial system, no party

should ordinarily be denied the opportunity of participating in the

process of justice dispensation. Unless compelled by express and

specific language of the Statute, the provisions of the CPC or any other

procedural enactment ought not to be construed in a manner which

would leave the court helpless to meet extraordinary situations in the

ends of justice.

22. It is also to be noted that though the power of the Court under the

proviso appended to Rule 1 of Order VIII is circumscribed by the words

- "shall not be later than ninety days" but the consequences flowing

from non- extension of time are not specifically provided though they

may be read by necessary implication. Merely, because a provision of

law is couched in a negative language implying mandatory character,

the same is not without exceptions. The courts, when called upon to

interpret the nature of the provision, may, keeping in view the entire

context in which the provision came to be enacted, hold the same to be

directory though worded in the negative form.

23. Challenge to the Constitutional validity of the Amendment Act and

1999 Amendment Act was rejected by this Court in Salem Advocate

Bar Association, Tamil Nadu v. Union of India: AIR2003SC189.

However, to work out modalities in respect of certain provisions a

Committee was constituted. After receipt of Committee's report the

matter was considered by a three-Judge Bench in Salem Advocate

Bar Association, Tamil Nadu v. Union of India: AIR2005SC3353 .

As regards Order VIII Rule 1 Committee's report is as follows:

"The question is whether the Court has any power or jurisdiction to extend the period beyond 90 days. The maximum period of 90 days to file written statement has been provided but the consequences on failure to file written statement within the said period have not been provided for in Order VIII Rule 1. The point for consideration is whether the provision providing for maximum period of ninety days is mandatory and, therefore, the Court is altogether powerless to extend the time even in an exceptionally hard case.

It has been common practice for the parties to take long adjournments for filing written statements. The legislature with a view to curb this practice and to avoid unnecessary delay and adjournments, has provided for the maximum period within which the written statement is required to be filed. The mandatory or directory nature of Order VIII Rule 1 shall have to be determined by having regard to the object sought

to be achieved by the amendment. It is, thus, necessary to find out the intention of the legislature. The consequences which may follow and whether the same were intended by the legislature have also to be kept in view."

24. In Raza Buland Sugar Co. Ltd., Rampur v. The Municipal Board,

Rampur: [1965]1SCR970, a Constitution Bench of this Court held

that the question whether a particular provision is mandatory or

directory cannot be resolved by laying down any general rule and it

would depend upon the facts of each case and for that purpose the

object of the statute in making out the provision is the determining

factor. The purpose for which the provision has been made and its

nature, the intention of the legislature in making the provision, the

serious general inconvenience or injustice to persons resulting from

whether the provision is read one way or the other, the relation of the

particular provision to other provisions dealing with the same subject

and other considerations which may arise on the facts of a particular

case including the language of the provision, have all to be taken into

account in arriving at the conclusion whether a particular provision is

mandatory or directory.

25. In Sangram Singh v. Election Tribunal Kotah and Anr.:

[1955]2SCR1, considering the provisions of the Code dealing with the

trial of the suits, it was opined that:

"Now a code of procedure must be regarded as such. It is procedure, something designed to facilitate justice and further its ends: not a Penal enactment for punishment and penalties; not a

thing designed to trip people up. Too technical construction of sections that leaves no room for reasonable elasticity of interpretation should therefore be guarded against (provided always that justice is done to both sides) lest the very means designed for the furtherance of justice be used to frustrate it.

Next, there must be ever present to the mind the fact that our laws of procedure are grounded on a principle of natural justice which requires that men should not be condemned unheard, that decisions should not be reached behind their backs, that proceedings that affect their lives and property should not continue in their absence and that they should not be precluded from participating in them. Of course, there must be exceptions and where they are clearly defined they must be given effect to. But taken by and large, and subject to that proviso, our laws of procedure should be construed, wherever that is reasonably possible, in the light of that principle. "

26. In the case of Kailash v. Nanhku (supra)reported in (2005) 4 SCC

480, the Hon'ble Supreme Court held that :

"(iv) The purpose of providing the time schedule for filing the written statement under Order 8 Rule 1 CPC is to expedite and not to scuttle the hearing. The provision spells out a disability on the defendant. It does not impose an embargo on the power of the court to extend the time. Though the language of the proviso to Rule 1 Order 8 CPC is couched in negative form, it does not specify any penal consequences flowing from the non-compliance. The provision being in the domain of the procedural law, it has to be held directory and not mandatory. The power of the court to extend time for filing the written statement beyond the time schedule provided by Order 8 Rule 1 CPC is not completely taken away.

(v) Though Order 8 Rule 1 CPC is a part of procedural law and hence directory, keeping in view the need for expeditious trial of civil causes which persuaded Parliament to enact the

provision in its present form, it is held that ordinarily the time schedule contained in the provision is to be followed as a rule and departure therefrom would be by way of exception. A prayer for extension of time made by the defendant shall not be granted just as a matter of routine and merely for the asking, more so when the period of 90 days has expired. Extension of time may be allowed by way of an exception, for reasons to be assigned by the defendant and also be placed on record in writing, howsoever briefly, by the court on its being satisfied. Extension of time may be allowed if it is needed to be given for circumstances which are exceptional, occasioned by reasons beyond the control of the defendant and grave injustice would be occasioned if the time was not extended. Costs may be imposed and affidavit or documents in support of the grounds pleaded by the defendant for extension of time may be demanded, depending on the facts and circumstances of a given case."

27. Admittedly, writ of summons was served upon defendant in the year

2014 itself and had participated in the interlocutory proceedings but

had not filed the written statement. The plaintiff has filed the suit for

recovery of security amount and interest accrued therein but as per the

order passed by the Appellate Court, the defendant had returned the

security amount but the plaintiff is carrying with the suit with regard to

the interest. Simultaneously, the defendant has filed the suit for

recovery of possession, arrears of rent and mesne profit and as per the

order passed by the Appellate Court, the defendant had got possession

of the property as well as the arrears of rent but the defendant is

carrying the suit with respect of the mesne profit.

28. The parties were having claim and counter claim, the suit which the

defendant has filed, the plaintiff has already filed the written statement

in the suit but in the present suit, the defendant has not filed the

written statement. The main ground urged by the defendant for not

filing the written statement is the financial crisis faced by the plaintiff

i.e. initially, the plaintiff has neither paid the arrears of rent of the

premises in question and even after vacating some of the premises has

not handed over the possession of the premises and subsequently after

taking possession of the premises from the plaintiff, the possession of

the said premises was taken by the Company under the SARFEASI Act

in the year 2016 and till 2018, the premises was under the possession

of the company and after clear all the dues by the defendant, the

company has released the said property.

29. The defendant has also taken the shelter of the period of Covid-19 from

March, 2020 to November, 2021 and thereafter the defendant has met

with his erstwhile advocate on record and when the defendant found

that the learned advocate has not taken any steps, the defendant has

taken change of advocate and approached the present advocate.

30. Considering the reasons assigned by the defendant in support of prayer

for extension of time to file written statement, this Court finds that both

the parties have got the reliefs of main prayers but only contesting their

respective suit for mesne profit and for interest. It is the specific prayer

of the defendant that written statement is ready and will file within a

week if leave is granted by extending time by this Court.

31. In view of the above,I am of the opinion, one opportunity should be

given to the defendant to file written statement but subject to payment

of cost to the plaintiff. The defendant is granted leave to file written

statement within a week from date subject to payment of cost of Rs.

10,000/- to the plaintiff within 4(four) days from date.

32. G.A No. 3 of 2023 is thus disposed of.

(Krishna Rao, J.)