The Surat Textile Market ... vs Mohanbhai Duhilanomal Chhatwani
2021 Latest Caselaw 18736 Guj

    C/SCA/15376/2021                             CAV JUDGMENT DATED: 24/12/2021




               IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

        R/SPECIAL CIVIL APPLICATION NO. 15376 of 2021
FOR APPROVAL AND SIGNATURE:


HONOURABLE MR. JUSTICE N.V.ANJARIA

and

HONOURABLE MR. JUSTICE SANDEEP N. BHATT
==========================================================

1 Whether Reporters of Local Papers may be allowed Yes to see the judgment ?

2 To be referred to the Reporter or not ? Yes

3 Whether their Lordships wish to see the fair copy No of the judgment ?

4 Whether this case involves a substantial question No of law as to the interpretation of the Constitution of India or any order made thereunder ?

========================================================== THE SURAT TEXTILE MARKET CO-OPERATIVE SHOPS AND WAREHOUSES SOCIETY LIMITED Versus MOHANBHAI DUHILANOMAL CHHATWANI ========================================================== Appearance:

MR.NANDISH H THACKAR(7008) for the Respondent(s) No. 1 NOTICE SERVED(4) for the Respondent(s) No. 10,11,12,13,14,15,16,17,18,19,2,20,21,22,23,24,25,26,27,28,29,3,4,5,6,7,8,9 ========================================================== CORAM:HONOURABLE MR. JUSTICE N.V.ANJARIA and HONOURABLE MR. JUSTICE SANDEEP N. BHATT

Date : 24/12/2021

CAV JUDGMENT

(PER : HONOURABLE MR. JUSTICE N.V.ANJARIA)

Heard learned advocate Mr.Udit Vyas for the petitioner and learned advocate Mr.Nandish Thackar for the contesting

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respondent.

2. By order dated 23.7.2021, 3rd Additional Senior Civil Judge, Surat passed below Exhibit 19 in Commercial Suit No.478 of 2021, refused the permission to the petitioner- original defendant No.4 to file its written statement on the ground that the same was beyond the period of limitation. The respondent No.1- original plaintiff instituted Commercial Suit No.225 of 2020 for the relief of partition and dissolution of the partnership firm as also for declaration of permanent injunction.

3. The plaintiff on one hand and defendant Nos.2 and 3 on the other hand, were real brothers running the business in the name of M/s. Mohan Silk Corporation. The plaint contained several reliefs including dissolution of the partnership firm, distribution of shares of the petitioner Society held by the firm, declaration as regards ownership of the shop, seeking for damages and for injunction in respect of creating third party rights in the shop in question. It is not necessary to elaborate the suit controversy nor it is needed to mention the prayers in detail.

3.1 The suit in the present case was instituted on 3.2.2020. The summons of the suit was served to the applicant Society on 24.2.2020. The period of thirty days therefore would expire on 24.3.2020. The petitioner Society filed its written statement before the Court below on 5.11.2020. These dates are not in dispute.

3.2 Special provisions came to be engrafted in the statute with in regard to the proceedings of commercial suits including in respect of the limitation to file written statement. The Commercial Courts, Commercial Division and Commercial

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Appellate Division of High Courts Act, 2015 came into force on 23.10.2015 bringing certain amendments to the Code of Civil Procedure. In Order V, Rule 1, sub-rule (1), for the second Proviso, the following Proviso came to be substituted:

"Provided further that where the defendant fails to file the written statement within the said period of thirty days, he shall be allowed to file the written statement on such other days, as may be specified by the Court, for reasons to be recorded in writing and on payment of such costs as the court deems fit, but which shall not be later than one hundred twenty days from the date of service of summons and on expiry of one hundred and twenty days from the date of service of summons, the defendant shall forfeit the right to file the written statement and the court shall not allow the written statement to be taken on record."

3.2.1 Similarly in Order VIII Rule 1, new Proviso was inserted by way of substitution:

"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 written statement on such other day, as may be specified by the court, for reasons to be recorded in writing and on payment of such costs as the Court deems fit, but which shall not be later than one hundred and twenty days from the date of service of summons and on expiry of one hundred and twenty days from the date of service of summons, the defendant shall forfeit the right to file the written statement and the court shall not allow the written statement to be taken on record."

3.2.2 This was re-emphasized by re-inserting yet another proviso in Order VIII Rule 10 CPC, reading as under:-

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"Procedure when party fails to present written statement called for by Court.-

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, as the case may be, the Court shall pronounce judgment against him, or make such order in relation to the suit as it thinks fit and on pronouncement of such judgment a decree shall be drawn up.

Provided further that no Court shall make an order to extend the time provided under Rule 1 of this Order for filing of the written statement."

3.3 In SCG Contracts (India) Private Limited Vs. K.S. Chamankar Infrastructure Private Limited and Others, [(2019) 12 SCC 210], the Apex Court observed thus on the working of the above provisions, stating inter alia that further period of ninety days beyond thirty days, contemplated in the Proviso is a 'grace period'.

"A perusal of these provisions would show that ordinarily a written statement is to be filed within a period of 30 days. However, grace period of a further 90 days is granted which the Court may employ for reasons to be recorded in writing and payment of such costs as it deems fit to allow such written statement to come on record. What is of great importance is the fact that beyond 120 days from the date of service of summons, the defendant shall forfeit the right to file the written statement and the Court shall not allow the written statement to be taken on record. This is further buttressed by the proviso in Order VIII Rule 10 also adding that the Court has no further power to extend the time beyond this period of 120 days."

3.4 It is undisputedly stated that the suit in question was adjourned to 24.3.2020. On the said date, the suit was not listed.

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The interregnum period was barred by COVID-19 pandemic from 23.3.2020. The High Court issued direction restraining the function of all the courts in the district judiciary. The cases which were already fixed upto 31.3.2020 were ordered to be adjourned en block to subsequent dates. Even the Apex Court took the notice of the grieve situation which affected the affairs and course of litigation.

3.5 The Supreme Court took the suo motu cognizance about the extension of limitation passing order on 23.3.2020 in suo motu Writ Petition (Civil) No.3 of 2020 which order was as under.

"This Court has taken Suo Motu cognizance of the situation arising out of the challenge faced by the country on account of Covid-19 Virus and resultant difficulties that may be faced by litigants across the country in filing their petitions/applications/suits/ appeals/all other proceedings within the period of limitation prescribed under the general law of limitation or under Special Laws (both Central and/or State).

To obviate such difficulties and to ensure that lawyers/litigants do not have to come physically to file such 2 proceedings in respective Courts/Tribunals across the country including this Court, it is hereby ordered that a period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or Special Laws whether condonable or not shall stand extended w.e.f. 15th March 2020 till further order/s to be passed by this Court in present proceedings.

We are exercising this power under Article 142 read with Article 141 of the Constitution of India and declare that this order is a binding order within the meaning of Article 141 on all Courts/Tribunals and authorities.

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This order may be brought to the notice of all High Courts for being communicated to all subordinate Courts/Tribunals within their respective jurisdiction.

Issue notice to all the Registrars General of the High Courts, returnable in four weeks. "

3.6 The aforesaid order dated 23.3.2020 came to be extended from time to time. Resultantly, the period of limitation was extended. Finally, it culminated in order dated 8.3.2021, the Supreme Court observed therein with, though the pandemic had not finally ended, there was considerable improvement therefore the lockdown was lifted and the country had returned to normalcy. It was viewed that the court had become functional and order dated 23.3.2020 had served its purpose. Resultantly, in the said order dated 8.3.2021, final directions are issued by the Apex Court as under.

"1. In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.03.2020 till 14.03.2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.03.2020, if any, shall become available with effect from 15.03.2021.

2. In cases where the limitation would have expired during the period between 15.03.2020 till 14.03.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 15.03.2021. In the event the actual balance period of limitation remaining, with effect from 15.03.2021, is greater than 90 days, that longer period shall apply.

3. The period from 15.03.2020 till 14.03.2021 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015

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and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.

4. The Government of India shall amend the guidelines for containment zones, to state. "Regulated movement will be allowed for medical emergencies, provision of essential goods and services, and other necessary functions, such as, time bound applications, including for legal purposes, and educational and job-related requirements."

3.7 There was a second wave in the pandemic. The Miscellaneous Civil Application No.665 of 2021 in the aforesaid suo motu proceedings was filed which resulted into order dated 23.9.2021 whereby, the Supreme Court did not modify the contentions in order dated 8.3.2021, however, final directions were issued to provide that the period from 15.3.2020 till 2.10.2021, shall stand excluded and the balance period of limitation remaining as on 15.3.2021, if any, shall be available with effect from 3.10.2021.

3.8 The directions containing in paragraph No.8 of the aforesaid order are as under.

"8. Therefore, we dispose of the M.A. No.665 of 2021 with the following directions: -

I. In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.03.2020 till 02.10.2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.03.2020, if any, shall become available with effect from 03.10.2021.

II. In cases where the limitation would have

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expired during the period between 15.03.2020 till 02.10.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 03.10.2021. In the event the actual balance period of limitation remaining, with effect from 03.10.2021, is greater than 90 days, that longer period shall apply.

III. The period from 15.03.2020 till 02.10.2021 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of 5 proceedings.

IV The Government of India shall amend the guidelines for containment zones, to state. "Regulated movement will be allowed for medical emergencies, provision of essential goods and services, and other necessary functions, such as, time bound applications, including for legal purposes, and educational and job-related requirements."

3.9 In view of the above orders of the Supreme Court, the period from 15.3.2020 till 2.10.2021 was the period during which the limitation was extended, the balance period of limitation remaining on 15.3.2021 would become available to the litigant from 3.10.2021. In those cases, where the limitation expired within the aforesaid period, that is from 15.3.2020 to 2.10.2021, the uniform extension of ninety days was permitted. 3.9 The total position emerges by virtue of the above orders was that if in given case, limitation in respect of the filing of any proceedings was to expire on 15.3.2020 or thereafter, the period of such limitation stood extended as above. In other words, in the case where the limitation to do any act or to file any

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proceedings expire on 15.3.2020 or on subsequent date, the benefit of extending period would become available. In the present case the limitation to file the written statement if 24.3.2020 which was a date that fell after 15.3.2020. The limitation would therefore stand extended for filing written statement.

4. Learned advocate for the petitioner relied on the aforesaid orders to submit that the filing of written statement was within the extended period of limitation, therefore, ought to have been extended by the Commercial Court, learned advocate for the respondent submitted that by relying on certain orders of Supreme Court including in Suo Motu Writ (Civil) No.3 of 2020 with IA No.48411 of 2020, in re: Cognizance for Extension of Limitation, 2020 SCC Online SC 434, that the extension of limitation was specific and could not be applied in all cases. It was submitted that for instance, for the purpose of initiation of proceedings under the Arbitration and Conciliation Act, 1996 and under Section 138 of the Negotiable and Instrument Act, 1881, the extension was provided in the aforesaid order.

4.1 By placing reliance on another decision in Suo Motu Writ Petition (C) No.3 of 2020 with IAs Nos.48374-375, 48408, 48416 and others on 10.7.2020 for cognizance for extension of limitation, it was submitted that the requirement was provided to file the notice, pleadings, documents etc. simultaneously by e- mail on the same date therefore the defendant could have filed the written statement within the thirty days by mode of e-mail.

4.2 Yet another last submission was canvassed that the filing of written statement could not be considered as proceedings,

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therefore the extension of limitation would not apply. Disposing of the last submission, first the word 'proceedings' could not have been viewed or construed in narrow matter as sought to be canvassed on behalf of the respondent. In Babu Lal Vs. M/s. Hazari Lal Kishori Lal and Others, [(1982) 1 SCC 525] the Supreme Court had an occasion consider the group of words "at any stage of the proceedings" in proviso Sub section (2) of Section 22 of the Specific Relief Act, 1963, when the question was whether the word 'proceeding' would include 'execution proceeding', it was held that the execution was also a step in legal proceedings and step in judicial process, and that the Court had ample power to allow the amendment in the plaint at any stage of proceedings which would include the execution proceedings.

4.3 While holding as above, the Supreme Court explained the scope of word 'proceeding' which is relevant to be noticed.

"The word 'proceeding' is not defined in the Act.

Shorter Oxford Dictionary defines it as "carrying on of an action at law, a legal action or process, any act done by authority of a court of law; any step taken in a cause by either party". The term 'proceeding' is a very comprehensive term and generally speaking means a prescribed course of action for enforcing a legal right. It is not a technical expression with a definite meaning attached to it, but one the ambit of whose meaning will be governed by the statute. It indicates a prescribed mode in which judicial business is conducted. The word 'proceeding' in section 22 includes execution proceedings also. In Rameshwar Nath v. Uttar Pradesh Union Bank, [AIR 1956 All 586], such a view was taken. It is a term giving the widest freedom to a court of law so that it may do justice to the parties in. the case. Execution is a stage in the legal proceedings. It is a step in the judicial process. It makes a stage in litigation. It is a step in the ladder. In the journey of litigation there

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are various stages. "

(Para 17)

4.4 In the Black's Law Dictionary, the word 'proceedings' is defined to mention that it is a word used to express the business done in the courts. The word is more comprehensive than the word 'action' and it includes all the steps taken or measures adopted in the prosecution or defence of an action, including the pleadings. It is further mentioned that as applied to actions the term 'proceeding' may include- (1) the institution of the action; (2) the appearance of the defendant; (3) all ancillary or provisional steps, such as arrest, attachment of property, garnishment, injunction, writ of ne exeat; (4) the pleadings; (5) the taking of testimony before trial; (6) all motions made in the action; (7) the trial; (8) the judgment; (9) the execution; (10) proceedings supplementary to execution, in code practice; (11) the taking of the appeal or writ of error; (12) the remittitur, or sending back of the record to the lower court from the appellate or reviewing court; (13) the enforcement of the judgment, or a new trial, as may be directed by the court of last resort. Therefore, a stage in the defence is included in the proceedings and the pleadings when filed is also a proceedings. They all are proceedings acted upon in the court of law.

4.5 The Delhi High Court in M/s. Ex-Servicemen Enterprises (P) Limited Vs. Sumey Singh, (AIR 1976 Delhi

56) expressed on the term 'proceedings'. The term 'proceedings' is described as wide and comprehensive. The 'proceedings' generally means the prescribed course of action for enforceable and legal right. It is not technical expression when definite meaning attached to it. The ambit of the word 'proceedings' will have reference and will be governed by the statute. The word

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'proceedings' indicates, "a prescribed mode in which judicial process is conducted".

5. Thus, the word 'proceedings' is inclusive concept in the judicial process. The proceedings is viewed as every step which may be acted upon in the judicial process. Filing of pleadings is also part of proceedings, since it is a stage in litigation. In the journey of litigation between the parties, filing of written statement is also a stage in the prescribed procedure. It has to be undoubtedly viewed as 'proceedings'. The limitation period extended by the Supreme Court as per the above orders would apply to the time limit prescribed in the Proviso to Order VIII Rule 1, CPC as applicable to the Commercial Suits, for the purpose of filing written statement also.

6. Yet another lame submission was made that the orders of the Supreme Court extending the limitation is applied to the initiation of proceedings only and not in respect of the filing of written statement. The aforementioned order of the Apex Court dated 23.3.2020 itself is clear when it is read closely. The suo motu cognizance was taken for extension about the limitation to obviate the difficulties of the litigant faced on account of COVID- 19 virus and since the lawyers and parties were not required to come physically to file such proceedings which included "petitions / applications / suits / appeals / all other proceedings", the limitation period was extended.

6.1 The words "all other proceedings" would go to show that the extension of limitation covered every stage in litigation which may be required to be taken within the statutorily described limitation period. It cannot be construed to mean only the initiation of litigation or commencement of proceedings.

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Taking such a view would only defeat the very purpose and object of the order of the Supreme Court providing for extension for the period of limitation.

7. Recapitulating to the relevant dates, the summons was served on the applicant applicant- deponent on 24.2.2020. The period of thirty days expired on 23.4.2020. The Apex Court passed order on 23.3.2020 extending the period of limitation with effect from 15.3.2020, therefore, the expiry of thirty days for filing the written statement in the instant case fell within the commencement of the extending period of limitation. In the final order dated 8.3.2021 in direction No.3 the Supreme Court provided that the period from 15.03.2020 till 14.03.2021 shall also stand excluded in computing the periods prescribed under the statutes mentioned. The contention could not be accepted that the extension of limitation period by the Supreme Court was statute specific. It applied to all the 'proceedings' in the judicial process where the time limit, that is limitation, is prescribed by law.

8. The written statement was filed on 5.11.2020, therefore, it was within the limitation. The Commercial Court while passing the impugned order in not accepting the written statement on record misdirected itself in stating that the Supreme Court extended the limitation only in respect of Section 12 of the Commercial Courts Act. It was also erroneous to reason by the court below that since the written statement was filed beyond one hundred twenty days, the Court did not have power to accept the same.

9. As held above, the filing of written statement by the defendant was within the extended period of limitation

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commencing from 15.3.2020, as the last date for filing the same was 24.3.2020. It fell after the aforesaid date, that is 15.3.2020, from which the Apex Court extended the limitation period. The filing of written statement therefore ought to have been treated within limitation and was required to be accepted by the Commercial Court.

10. For the discussion supplied and the reasons recorded above, the impugned order dated 23.7.2021 of learned 3 rd Additional Senior Civil Judge, Surat, below Exhibit 19 in Commercial Suit No.478 of 2021, is hereby set aside. The Court is directed to take on record the written statement filed by the defendant.

11. The present application is allowed.

(N.V.ANJARIA, J)

(SANDEEP N. BHATT,J) Manshi