Traco Cable Co. Ltd. vs Elkey International Ltd.
2007 Latest Caselaw 2480 Del

JUDGMENT

Manmohan Sarin, J.

Page 0043

1. This Regular First Appeal is preferred by the appellant M/s. Traco Cable Co. Ltd. against the judgment and decree dated 18.1.2007 by which the suit of the respondent-plaintiff was decreed for Rs. 3,56,000/- with costs and pendente lite and future interest @ 6% per annum. The appellant also assails the dismissal of the application, moved under Section 148 CPC, vide order dated 20.1.2007 by which the appellant had sought extension of time up to 20.12.2006 for filing of the written statement. The application had been dismissed with costs of Rs. 500/- holding the same to be not maintainable after the passing of the judgment and decree.

2. The facts culminating in passing of the judgment and decree on 18.1.2007 under Order 8 Rule 10 CPC may be briefly noted.

(i) The respondent-plaintiff had filed a suit for recovery of Rs. 3,56,000/- being Civil Suit No. 242/2006, against the appellant-defendant, who is based in Cochin. The suit was filed in August, 2006.

(ii) The respondent-plaintiff is engaged in the manufacturing and trading of LDPE Blocks Sheathing Compound/MDPE and HDPE Insulation Compound of various types. The appellant-defendant used to purchase the above items from the plaintiff-respondent. The case of the respondent-plaintiff is that the appellant -defendant used to invite tenders and the plaintiff-respondent used to deposit earnest money with the defendant for the tenders. The respondent-plaintiff instituted the above suit for the refund of earnest money amounting to Rs. 3,56,000/-, which included the interest of Rs. 1,56,000/- @ 18% per annum. The appellant-defendant was served with the summons in the suit on 5.9.2006 and was thus, required to file the written statement within 30 days from the date of service. The Court directed that as the appellant-defendant was based in Cochin, the written statement be filed on 28.10.2006. On 28.10.2006, written statement was not filed by the respondent and time was granted up to 28.11.2006 to file the same subject to costs of Rs. 500/-. On 28.11.2006, costs of Rs. 500/- were paid and an application was filed seeking further adjournment for filing written statement. The Court considering the difficulty of the counsel in arriving in Delhi, granted time to file the written statement within a period of 90 days expiring on 5.12.2006 again on payment of Rs. 500/- as costs. The Court also directed that the file be taken up for admission-denial, replication etc. on 20.12.2006.

iii) The written statement was filed on 20.12.2006. As the Presiding Officer was on leave, Plaintiff's counsel did not receive a copy of the same. The case was put up on 23.12.2006. On 23.12.2006, an application was moved under Order 8 Rule 1 and 10 C.P.C. by the plaintiff-respondent. It is this application, which was allowed vide the impugned order dated 18.1.2007 and the suit was decreed as noted above.

Page 0044

iv) It is the appellant's case that on 3.12.2006, the clerk of appellant's counsel had gone to the Court to file the written statement on 3.12.2006. The Court clerk, it is stated, advised the clerk of appellant's counsel to file it on the date fixed after checking with the Presiding Officer. It was for this reason that the written statement, though prepared and signed by the counsel on 29.11.2006 in Cochin and sent to Delhi, could not be filed by 5.12.2006 and was tendered again on the date of the hearing, i.e. on 20.12.2006.

(v) Learned Additional District Judge disbelieved the above version of the appellant that the written statement had been tendered on the 3rd of December, 2006 through the counsel's clerk on the ground that no such plea had either been taken at the stage when written statement was placed on record on 20.12.2006 or at the stage when it was refused acceptance by counsel for the respondent/plaintiff. The Trial Court also noted that no affidavit of the clerk of appellant's counsel had been placed on record and till date, no reason or cause has been shown for non-submission of such facts to the Court of the return of the written statement by the Court clerk.

(vi) The Trial Court took a stringent view of the plea taken by the respondent and held that the litigant cannot be permitted to put the staff and the Court on the dock and thereafter, proceeded to decree the suit under Order 8 Rule 10 C.P.C. for a sum of Rs. 3,56,000/- with costs and pendente lite and future interest @ 6% holding that the amount of Rs. 3,56,000/- was based on the statement of account supported with bills.

3. We have heard learned Counsel for the appellant Mr. C.N. Sreekumar in support of the appeal. Learned Counsel has urged that there was really no occasion for the appellant to have taken up the plea regarding the written statement not being accepted on 3.12.2006 as the appellant was bonafide told that the same could be tendered on the next date and in fact, the appellant had so tendered. The said plea had been taken at the earliest opportunity in the reply filed to the application under Order 8 Rule 1 moved by the respondent-plaintiff. In the reply, the plea of the appellant regarding preparation and signature of the written statement in Cochin and tendering of the same on the 3rd of December, 2006 was duly stated. The application was supported by the affidavit of the counsel. Hence, there was no occasion to insist on the affidavit of the clerk of the counsel. Counsel urged that the very fact that the written statement had been prepared and signed in November, 2006 would demonstrate that there was no occasion for the appellant to delay the filing of the same to 20.12.2006.

4. As regards the legal position regarding the power of the Court to extend the period mentioned in Order 8 Rule 1 C.P.C. beyond the 90 days period, it is no longer res integra. Notwithstanding the use of the word 'shall' in the said provision, it has been held that doctrine of harmonious construction is required to be applied to construe the provisions of Order 8 Rule 1 and Order 8 Rule 10 C.P.C. Court is given the discretion to pronounce or not to Page 0045 pronounce the judgment against the defendant even if written statement is not filed and instead pass such orders as it may think fit in relation to the suit. Court has the power and discretion to allow the defendant to file written statement even after expiry of a period of 90 days provided in Order 8 Rule 1 C.P.C. Reference in this connection may be made to Salem Advocate Bar Association, Tamil Nadu v. Union of India reported at wherein the Court observed as under:

The use of the word 'shall' in Order VIII Rule 1 by itself is not conclusive to determine whether the provision is mandatory or directory. We have to ascertain the object which is required to be served by this provision and its design and context in which it is enacted. The use of the word 'shall' is ordinarily indicative of mandatory nature of the provision but having regard to the context in which it is used or having regard to the intention of the legislation, the same can be construed as directory. The rule in question has to advance the cause of justice and not to defeat it. The rules of procedure are made to advance the cause of justice and not to defeat it. The rules of procedure are made to advance the cause of justice and not to defeat it. Construction of the rule or procedure which promotes justice and prevents miscarriage has to be preferred. The rules or procedure are hand-maid of justice and not its mistress. In the present context, the strict interpretation would defeat justice.

In construing this provision, support can also be had from Order VIII Rule 10 which provides that 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, the Court shall pronounce judgment against him, or make such other order in relation to the suit as it thinks fit. On failure to file written statement under this provision, the Court has been given the discretion either to pronounce judgment against the defendant or make such other order in relation to suit as it thinks fit. In the context of the provision, despite use of the word 'shall', the court has been given the discretion to pronounce or not to pronounce the judgment against the defendant even if written statement is not filed and instead pass such order as it may think fit in relation to the suit. In construing the provision of Order VIII Rule 1 and Rule 10, the doctrine of harmonious construction is required to be applied. The effect would be that under Rule 10 of Order VIII, the court in its discretion would have power to allow the defendant to file written statement even after expiry of period of 90 days provided in Order VIII Rule 1. There is no restriction in Order VIII Rule 10 that after expiry of ninety days, further time cannot be granted. The Court has wide power to 'make such order in relation to the suit as it thinks fit'. Clearly, therefore, the provision of Order VIII Rule 1 providing for upper limit of 90 days to file written statement is directory. Having said so, we wish to make it clear that the order extending time to file written statement cannot be made in routine. The time can be Page 0046 extended only in exceptionally hard cases. While extending time, it has to be borne in mind that the legislature has fixed the upper time limit of 90 days. The discretion of the Court to extend the time shall not be so frequently and routinely exercised so as to nullify the period fixed by Order VIII Rule 1.

5. It would be seen that time is not to be extended in a routine manner since the legislature has fixed the upper time limit of 90 days. The discretion of the Court to extend the time shall not be used frequently and routinely so as to nullify the period fixed. Reference may also be usefully made to Kailash v. Nanhku and Ors. reported at , J.M. Overseas v. Vijay Kumar Mangla reported at 2007 (138) DLT 156 Delhi, Lalit Chandra Raisurana v. Arun Raisurana reported at AIR 2005 Jharkhand 39 and Nachipeddi Ramaswamy v. P. Buchi Reddy reported at AIR 2003 Andhra Pradesh 409.

6. The question, therefore, to be considered is whether, the court in refusing to grant extension of time has exercised its discretion in a manner so as to result in miscarriage of justice. Learned Counsel for the appellant further submitted that even on merits, the appellant has strong defense as he had urged the suit to be barred by limitation. The suit related to recovery of Earnest Money Deposits given as far back as on 30.1.1997 and 10.7.2001. Even otherwise, it was urged that under Order 8 Rule 10 C.P.C., discretion is conferred on the Court, despite the written statement having not been filed, not to decree the suit and ask for the appellant to prove his case.

7. Leaving this argument aside, we are of the view that in the facts and circumstances, where the Court had granted time up to 5th December, 2006 for filing of the written statement and in reply to an application under Order 8 Rule 1 C.P.C. supported by the affidavit of a counsel, it is urged that the written statement was tendered on 3rd December 2006 and again on the date of hearing, it was a plea which was required to be considered by the Court and not summarily rejected on the basis that it amounted to putting the Court and its staff on the dock. Considering that the appellant/defendant was located in Cochin and the written statement is stated to have been prepared and verified as far back as on 28.11.2006 and the same had been attested by the Managing Partner of the Advocate Firm, there is merit in the plea of the appellant-defendant that it had nothing to gain by not filing of the same on the date fixed, i.e. prior to 5th December, 2006. There is also merit in the submission of the appellant that considering the averments made in the plaint and the objection regarding the suit being barred by limitation, this was a case where respondent should have been called upon to prove his case.

Page 0047

8. In view of the foregoing, we set aside the impugned orders dated 18.1.2007 and 20.1.2007 and direct that the extension of time for filing of the written statement by 20.12.2006, the date on which it was filed, be granted. In view of the foregoing, orders dated 18.1.2007 and 20.1.2007 are set aside and the case is remanded back to the Trial court for trial in accordance with law, on merits. The appeal stands allowed on the above terms. Parties to bear their own costs.