Delhi High Court
Ms Ambience Pvt. Ltd And Ors vs M/S Planet Advertising Pvt. Ltd. on 4 August, 2022
$~37
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 04.08.2022
+ FAO (COMM) 81/2021, CM APPLs.11909/2021, 15866/2021 and
17776/2022
MS AMBIENCE PVT. LTD AND ORS ......Appellants
Through: Ms Kittu Bajaj with Ms Upasana
Chandrashekharan, Advocates.
versus
M/S PLANET ADVERTISING PVT. LTD. ......Respondent
Through: Mr Kunal Kalra, Advocate.
CORAM:
HON'BLE MR JUSTICE RAJIV SHAKDHER
HON'BLE MS JUSTICE TARA VITASTA GANJU
[Physical Hearing/Hybrid Hearing (as per request)]
RAJIV SHAKDHER, J.: (ORAL)
1. This appeal is directed against order dated 19.02.2021 passed by the
Learned District Judge (Commercial Court-02) South District, Saket, New
Delhi.
2. The principal grievance of the appellants i.e., the original defendants,
before us, is that their defence was struck off via order dated 10.07.2019,
and the review application filed thereafter was also rejected via the
impugned order i.e., order dated 19.02.2021.
3. A perusal of the order dated 10.07.2019 shows that the Learned
District Judge treated the suit action filed by the respondent as a commercial
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suit action, under the Commercial Courts Act, 2015.
4. The record shows that the appellants/defendants were served in the
suit action, which was concededly filed as an ordinary suit, on 01.02.2019.
5. It is also not in dispute that the time for filing written statement was
accorded to the appellants/defendants on 20.03.2019.
5.1 The appellants/defendants, as is evident from the record, filed the
written statement on 10.07.2019.
6. The Learned District Judge via order dated 10.07.2019, directed that
the written statement filed by the appellants/defendants should be taken off
the record. The reasoning furnished by the Learned District Judge, in that
behalf, is contained in the following part of the order dated 10.07.2019:
"The defendants in the present case were served on 01.02.2019.
Another Counsel appeared for the defendants on 20.03.2019 and
sought time to file Written Statement on the ground of her in-
health. The defendants were directed to file Written Statement
within a week with copy to the other side. However, Written
Statement has been filed only today. No application has been
filed for seeking condonation of delay in filing the Written
Statement. The present suit involves commercial dispute. The
Commercial Courts Act, 2015 clearly provides that in
commercial suits, the defendants are obliged to file the Written
Statement within maximum 120 days. On expiry of 120 days from
date of service of summons, the defendant shall forfeit the right
to file Written Statement and court shall not allow the Written
Statement to be taken on record. The present Written Statement
has been filed beyond the period of 120 days and, therefore,
cannot be taken on record. The defence of the defendants is
ordered to be struck of."
7. As indicated above, the review application against the aforesaid order
was filed by the appellants/defendants, albeit, with a delay of 44 days.
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JAIN
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7.1. The review application came to be dismissed via the impugned order.
8. A perusal of the order dated 10.07.2019 shows that the Learned
District Judge, while noticing the fact that the written statement filed on
10.07.2019 was not accompanied by an application for condonation of
delay, proceeded to direct the removal of the written statement, on the
ground that the suit action instituted by the respondent was a commercial
action.
8.1. It is based on this understanding that the Learned District Judge
concluded that after the expiry of 120 days from the date of service of
summons, the appellants/defendants had forfeited the right to file a written
statement.
9. Mr Kunal Kalra, who appears on behalf of the respondent/plaintiff,
fairly concedes that the suit action was filed by the respondent/plaintiff as an
ordinary suit.
9.1 Mr Kalra says that this step was taken, as, at the relevant time, this
High Court had not issued the necessary notification for constituting a
Commercial Court in the concerned district.
9.2. This aspect of the matter has been noticed by the Learned District
Judge in the impugned order i.e., order dated 19.02.2021. The relevant
observations made by the Learned District Judge, in this behalf, are as
follows:
"It is further submitted that the present suit has been filed
on 12th September, 2018 and at that point of time,
Commercial Courts provisions were not applicable in
District Court. It is further submitted that after
communication dated 14 November, 2018 received from Ld.
Registrar General, Delhi High Court, the comprehensive
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standard operation procedure for commercial courts were
notified and followed by District Court pursuant to said
notification and thereafter the said notice was circulated by
the Ld. District & Sessions Judge (HQ) amongst the Judge
In-charges, Delhi Mediation Center etc. It is submitted that
since this suit has been filed prior to said notification,
therefore the implementation of those pre-institution
mediation procedures was followed subsequently. It is
further submitted that the contentions raised in the
application are afterthought as the defendants had put their
appearance and requested to file written statement on 20
March, 2019 and had never raised any objection
whatsoever till the present application had been moved
when the defence of defendants was struck of. It is further
submitted that as per the order sheets, the defendants had
been seeking time to file written statement, therefore, the
contentions made in the application are afterthought. It is
submitted that the contentions raised by the defendants does
not fall within the ambit of review. It is further submitted
that statement of truth on behalf of the plaintiff will be filed
during the course of the day as the same was not filed
earlier as the matter was before the Mediation Center. It is
further submitted that the judgment relied upon by the
learned counsel for the defendants are not applicable in the
present case as in both the cases, the suits had been filed
under the Commercial Courts but in the present case, the
suit has been filed as per the procedure prevailing at that
point of time in the court of Ld. ADJ and this Court has all
powers to issue notice and to adjudicate the matter.
It is submitted that the contention of the learned counsel for
defendants that order of issuing summons to the defendants
by the Ld. Predecessor of this Court vide order dated 25 th
January, 2019 was erroneous is absolutely incorrect. It is
submitted that defendants have not challenged the said
order in any court of law and same has attained the finality
and further the said contention has not been taken in the
application for review. It is further submitted that the suit
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has been filed in a proper manner in accordance with law
and the procedure prevailing at that time in District Court."
10. Clearly, the suit, in first instance, was treated as an ordinary suit, and
therefore in our view, mid-way, the Learned District Judge could not have
changed track and treated it as a commercial suit without, thereby, in a
sense, depriving the appellants/defendants from seeking condonation of
delay in filing the written statement.
10.1. We have put this aspect to Mr Kalra.
11. Mr Kalra informs us that although an opportunity to cross-examine
the respondent/plaintiff's witnesses was granted, the same was not availed
by the appellants/defendants.
11.1. Mr Kalra also informs us, that the suit is at the stage of final hearing.
12. Ms Upasana Chandrashekharan, who appears on behalf of the
appellants/defendants, says that without having an opportunity to file a
written statement, cross-examination of the respondent/plaintiff's witnesses
will have very little impact.
13. Having considered the matter, and especially, given the fact that there
is only one witness to be examined, we have put to Mr Kalra as to whether
the respondent/plaintiff would be agreeable to an opportunity being given to
the appellants/defendants to file a written statement, within a defined
timeline, and thereafter, subject the suit action to trial.
13.1 Mr Kalra has agreed to the suggestion made by the Court.
14. Accordingly, the appellants/defendants are granted ten (10) days to
file the written statement; commencing today.
14.1. A copy of the written statement will be furnished to Mr Kalra.
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14.2. The respondent/plaintiff will file its replication, within one week from
the date of service of the written statement.
14.3. Once pleadings are completed, the Learned District Judge will have
liberty to call upon the parties to address him, as to whether further issues
need to be framed.
14.4. The Learned District Judge will fix a date for that purpose, which
would be in close proximity with the date when the pleadings stand
completed.
14.5. Thereafter, the respondent/plaintiff will be given an opportunity to
file, if necessary, an additional affidavit of evidence of its witnesses.
14.6. In view of the directions passed hereinabove, the Learned District
Judge will fix a date for enabling the cross-examination of the witnesses
tendered by the respondent/plaintiff.
14.7. Immediately upon the completion of cross-examination of the
witnesses tendered by the respondent/plaintiff, the appellants/defendants
will file an affidavit of evidence of their witnesses; For this purpose, no
more than two weeks will be granted by the Learned District Judge.
14.8. Once copies of affidavits of evidence of the witnesses are filed, the
Learned District Judge will fix a date for cross-examination of the witnesses
tendered by the appellants/defendants.
14.9. Upon completion of the exercise concerning the recording of
testimony of witnesses on both sides, the Learned District Judge will fix a
date for final arguments.
14.10. The entire exercise will be completed by the Learned District Judge
by 30.11.2022.
15. If the appellants/defendants breach the directions issued hereinabove,
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or the timelines fixed by the Learned District Judge, suitable directions will
be issued by the Learned District Judge so that the end date fixed by us (in
paragraph 14.10, above) is scrupulously adhered to.
16. Before we conclude, we are constrained to record that despite the
direction issued by us on 11.04.2022, while dealing with CM No.
17776/2022, concerning the presence of Mr Amit Ghelot, he is not present
in Court.
17. To be noted, the aforesaid application was moved on behalf of the
Interim Resolution Professional (IRP) i.e., one Mr Sandeep Chandana. In the
connected matter i.e., FAO (COMM) 87/2022, which is also listed on our
board today, we have indicated as to why the presence of the IRP is no
longer necessary.
17.1. Briefly, the IRP's role has come to an end on account of the order
passed by National Company Law Appellate Tribunal (NCLAT) dated
02.08.2022, passed in Company Appeal (AT) (Ins) No. 06/2021.
18. Ms Kittu Bajaj and Ms Chandrashekharan, who appear on behalf of
the appellants/defendants, submit that Mr Amit Ghelot has taken ill, and
therefore, is unable to remain present in Court.
19. Furthermore, on being queried, Ms Bajaj says that Mr Amit Ghelot is
only an authorized signatory of the appellant no.1-company.
19.1 This is contrary to the affidavit filed along with the appeal, which
clearly states that Mr Amit Ghelot is the Director and one of the authorized
representatives of the appellant no.1-company.
19.2. Ms Bajaj says that this is a typographical error.
20. According to us, the Mr Gehlot has signed the affidavit, and there is
no material before us to conclude otherwise.
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JAIN
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20.1. The conduct of the appellants/defendants is disconcerting, in
particular that of Mr Amit Ghelot.
20.2. Furthermore, having regard to the fact that the respondent/plaintiff's
suit action has been delayed for the reasons which are attributable to the
appellants/defendants, we are inclined to impose costs of Rs. 1,00,000/- on
them.
20.3. Costs will be paid to the respondent/plaintiff, within ten days from
today.
21. The Registry will ensure compliance of the directions issued by us
hereinabove.
22. The matter will be listed before the concerned Registrar for
compliance, on 22.08.2022.
22.1. In case there is no compliance, the Registry will list the matter in
Court.
23. The appeal is disposed of in the aforesaid terms.
24. Consequently, pending applications shall also stand closed.
RAJIV SHAKDHER, J
TARA VITASTA GANJU, J
AUGUST 4, 2022 / tr
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Signature Not Verified
Digitally Signed By:ATUL
JAIN
Signing Date:06.08.2022
14:58:03
