Messers Akb Textile Engineer vs Gupta Syntax Private Limited
2023 Latest Caselaw 3205 Guj

     C/SCA/2117/2023                             JUDGMENT DATED: 24/04/2023




           IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

             R/SPECIAL CIVIL APPLICATION NO. 2117 of 2023


FOR APPROVAL AND SIGNATURE:


HONOURABLE MR. JUSTICE ASHUTOSH SHASTRI

and
HONOURABLE MR. JUSTICE J. C. DOSHI

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

2     To be referred to the Reporter or not ?

3     Whether their Lordships wish to see the fair copy of
      the judgment ?

4     Whether this case involves a substantial question of
      law as to the interpretation of the Constitution of
      India or any order made thereunder ?

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                       MESSERS AKB TEXTILE ENGINEER
                                  Versus
                       GUPTA SYNTAX PRIVATE LIMITED
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Appearance:
RUPAAL V DAVE(8391) for the Petitioner(s) No. 1,2
MS ROMA I FIDELIS(3529) for the Respondent(s) No. 1
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    CORAM:HONOURABLE MR. JUSTICE ASHUTOSH SHASTRI
          and
          HONOURABLE MR. JUSTICE J. C. DOSHI

                             Date : 24/04/2023

                           ORAL JUDGMENT

(PER : HONOURABLE MR. JUSTICE J. C. DOSHI)

C/SCA/2117/2023 JUDGMENT DATED: 24/04/2023

1. In the facts and circumstances of the case and with the consent of learned advocates appearing for both the sides, this petition filed under Article 227 of the Constitution of India is taken up for hearing today.

2. By way of this petition, the petitioner has challenged common order passed below Exhs.15 and 17 in Commercial Civil Suit No.1561 of 2021, whereunder, learned City Civil Court No.8, Ahmedabad sitting in a jurisdiction of commercial Court under the Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (in short "Commercial Court Act") declined to extend the time period of filing the written statement.

3. Brief facts of the case are that the petitioner is doing the business of manufacturing digital screen matching system etc. Perusing its quotation, the respondent got ready to buy said machine from the petitioner for Rs.18,66,365/-. As a token, Rs.2,01,000/- was paid and thenafter, in intervals, total Rs.10,12,000/- was paid, whereas Rs.8,54,375/- is still to be paid on the ground that the machine purchased by the respondent from the petitioner was not working properly. Thereafter, without the consent of the petitioner, the respondent sold the machine to other unknown party for Rs.4,25,000/-. Therefore, the respondent had filed captioned commercial suit for recovery of Rs.10,12,000/- with interest. Thereafter, summons was duly served to the petitioner and vide Exh.15, he had put his appearance and preferred an application Exh.17. The advocate for the petitioner appeared on 25.10.2019 and

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sought time for filing reply and then on 11.2.2020 by courier, reply was sent to the advocate by the petitioners as matter was listed on 15.2.2020. But, as the petitioner being out of station and meanwhile, he felt sick, he could not file delay condonation application along with reply. Meanwhile, 120 days have expired. Thereafter, learned City Civil Court No.8, Ahmedabad common order passed below Exhs.15 and 17 in Commercial Civil Suit No.1561 of 2021 dismissed both the applications and therefore, present petition.

4. We have heard learned advocate Mr. RV Dave for the petitioner and learned advocate Ms. Roma Fidelis for the respondent.

5. Learned advocate Mr. Dave mainly argued that the learned trial Court has taken hyper-technical approach in dismissing the applications Exh.15 and 17, by which the defendant of the suit was denied permission to file written statement beyond 120 days from service of the summons. He would further submit that the learned trial Court erred in understanding the principal of substantial justice. If the defendant of the suit is not permitted to file written statement, it would prejudicially affect the defence of the defendant and in fact, the suit would go without the defence on record. He would further submit that before service of the summons, deadly Covid was just completed and it does not enable the defendant to file written statement within the stipulated time period. He would further submit that Hon'ble Apex Court in SMWP No.3 of 2020 has extended the time limit for filing written statement considering Covid 19 situation, which clearly applicable to the facts of the case, but learned Court

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below has ignored the same and therefore, he would submit that the learned trial Court, without taking into consideration the situation of deadly convid 19 prevalent just before service of the summons, erred in dismissing the application for extending the time period for filing written statement.

6. Upon such submission, learned advocate Mr. Dave submitted to allow this petition and to quash and set aside impugned common order and further to permit the present petitioner to file written statement in Commercial Civil Suit No.1561 of 2021.

7. To buttress his submission, learned advocate Mr. Dave has relied upon judgment of the hsc in case of Prakash Corporates Vs. Dee Vee Projects Limtied reported in 2022(5) SCC 112.

8. Per contra, learned advocate Ms. Roma Fidelis appearing for the respondent having taken this Court through various provisions of the Civil Procedure Code, 1908, which are amended consequent to the Commercial Courts Act and submitted that procedure has been tightened by this amendment of the Civil Procedure Code, 1908 and which have taken away discretion of the Court to permit filing of the written statement beyond 120 days. She would further submit that in view of Order VIII Rule 1 as amended by the Commercial Courts Act set down 30 days as a limitation for filing written statement from the date of service of the summons and further, 90 days is a grace period given to the defendant, in which the defendant can file the written statement after obtaining permission from the Court. In other words, further 90 days is available period, which can extend the limitation of filing the written statement by the concerned Court

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after recording reasons, but in any circumstances, the statutory period of 120 days has to be observed mandatorily for filing of the written statement. Once 120 days period after service of the summons is expired, right to file written statement in commercial suits is forfeited and no Court can extend the period of 120 days and permit to file written statement which can be taken on record.

9. Upon such submission, she would submit that the learned Commercial Court has not committed any error in rejecting applications Exh.15 and 17 by passing the impugned common order and therefore, she prays to dismiss this petition.

10. No other and further submissions have been canvassed by learned advocates for either parties.

11. Having heard learned advocates for both the sides, at the outset, we may refer to preamble of the Commercial Court Act, 2015, which reads as under:-

"An Act to provide for the constitution of Commercial Courts, Commercial Appellate Courts, Commercial Division and Commercial Appellate Division in the High Courts for adjudicating commercial disputes of specified value and matters connected therewith or incidental thereto."

It is also necessary to read the statement and objects and reasons of Commercial Court Act, which reads as under:-

"...6. It is proposed to introduce the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Bill, 2015 to replace the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Ordinance, 2015 which inter alia, provides for the following namely:- (i) constitution of the Commercial Courts at District level except for the territory over which any High Court is having ordinary original civil jurisdiction; (ii) constitution of the Commercial Divisions in those High Courts which are already

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exercising ordinary civil jurisdiction and they shall have territorial jurisdiction over such areas on which it has original jurisdiction; (iii) constitution of the Commercial Appellate Division in all the High Courts to hear the appeals against the Orders of the Commercial Courts and the Orders of the Commercial Division of the High Court; (iv) the minimum pecuniary jurisdiction of such Commercial Courts and Commercial Division is proposed as one crore rupees; and (v) to amend the Code of Civil Procedure, 1908 as applicable to the Commercial Courts and Commercial Divisions which shall prevail over the existing High Courts Rules and other provisions of the Code of Civil Procedure, 1908 so as to improve the efficiency and reduce delays in disposal of commercial cases. ........."

12. Thus, it is clear that object and purpose of the Commercial Court Act is to ensure that commercial cases are disposed of expeditiously, fairly and at reasonable cost to the litigant without being prey to the delay, which is highly noticed in the ordinary litigation. By section 16 of the Commercial Court Act, the provisions of the Civil Procedure Code, 1908 are amended and it shall apply in the trial of the suit in respect of a commercial dispute of a specified value. Section 16 of the Act reads as under:-

"16. Amendments to the Code of Civil Procedure, 1908 in its application to commercial disputes. - (1) The provisions of the Code of Civil Procedure, 1908 (5 of 1908) shall, in their application to any suit in respect of a commercial dispute of a Specified Value, stand amended in the manner as specified in the Schedule. (2) The Commercial Division and Commercial Court shall follow the provisions of the Code of Civil Procedure, 1908 (5 of 1908), as amended by this Act, in the trial of a suit in respect of a commercial dispute of a Specified Value. (3) Where any provision of any rule of the jurisdictional High Court or any amendment to the Code of Civil Procedure, 1908 (5 of 1908), by the State Government is in conflict with the provisions of the Code of Civil Procedure, 1908 (5 of 1908), as amended by this Act, the provisions of the Code of Civil Procedure as amended by this Act shall prevail".

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13. Multiple provisions of the Civil Procedure Code, 1908 have been amended by section 16 of the Commercial Court Act and thereby, it makes significant departure from the Civil Procedure Code, 1908. Order XIIIA - "Summary Judgment" has been inserted after order XII of the Civil Procedure Code, 1908. It contains the scope and classes of suits to which Order XIIIA applies, grounds for summary judgment, procedure to be followed, evidence for hearing of summary judgment, orders that may be made by Court in such proceedings for summary judgment, etc. The concept of the case management hearing has been inserted via adding Order XVA after Order XV. It provides for first Case Management Hearing; recording of oral evidence on a day-to-day basis; powers of the Court in a Case Management Hearing; adjournment of Case Management Hearing (Rule 7);

consequences of non-compliance with orders. Further in view of Order XX of the Civil Procedure Code, 1908, Rule 1 has been substituted that within ninety days of the conclusion of arguments, the Commercial Court/Commercial Division/Commercial Appellate Division to pronounce the judgment and copies thereof shall be issued to all the parties to the dispute through electronic mail or otherwise.

14. Various provisions of the Commercial Courts Act namely Case Management Hearing and other provisions makes the court to adopt a pro-active approach in resolving the commercial dispute. A new approach for carrying out case management and strict guidelines for completion of the process has been introduced so that the decision making process is not delayed.

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We may refer to various provisions of the Act and the Schedule bringing in amendments brought to the Civil Procedure Code, 1908 to deal with the commercial disputes, only to accentuate that the trial of the commercial dispute suits is put on fast track for disposal of the suits and is expected that the suit should be decided expeditiously and in a time bound manner. Thus, the intent of the legislature seems to be to have a procedure which expedites the disposal of commercial disputes and thus creates a positive environment for investment and development and make India an attractive place to do business.

15. In Ambalal Sarabhai Enterprises Ltd. Vs. K.S. Infraspace LLP and another reported in (2020) 15 SCC 585, the Hon'ble Apex Court has taken note of statement of objects and reasons of the Commercial Court Act, and held that the provisions of the Act require to be strictly construed. In concurring judgment authored by Justice R. Banumathi (as she then was) in para 21, the Hon'ble Apex Court has held as under:-

"21. A perusal of the Statement of Objects and Reasons of the Commercial Courts Act, 2015 and the various amendments to Civil Procedure Code and insertion of new rules to the Code applicable to suits of commercial disputes show that it has been enacted for the purpose of providing an early disposal of high value commercial disputes. A purposive interpretation of the Objects and Reasons and various amendments to Civil Procedure Code leaves no room for doubt that the provisions of the Act require to be strictly construed. If the provisions are given a liberal interpretation, the object behind constitution of Commercial Division of Courts, viz. putting the matter on fast track and speedy resolution of commercial disputes, will be defeated. If we take a closer look at the Statement of Objects and Reasons, words such as 'early' and 'speedy' have been incorporated and reiterated. The object shall be fulfilled only if the provisions of the Act are interpreted in a narrow sense and not hampered by the usual procedural delays plaguing our traditional legal system."

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16. We may also refer some special provisions which are related to the filing of the written statement, which came to be inserted in the Civil Procedure Code, 1908 with regard to trial of the commercial suit including in respect to limitation of filing the written statement, Firstly, let us look at the proviso to sub-rule (1) of rule 1 of Order V of the Code of Civil Procedure, 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."

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."

17. Another proviso in Order VIII Rule 10 of the Civil Procedure Code, 1908, has been added, which reads as under:-

"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

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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."

18. We may, with profit, refer findings of the Hon'ble Apex Court in case of SCG Contracts (India) Private Limited Vs. K.S.

Chamankar Infrastructure Private Limited and Others, [(2019) 12 SCC 210], wherein, the Hon'ble 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'.

19. On perusal of the provisions of law as well as judgment of SCG Contracts (India) Private Limited (supra), it makes evidently clear that in a commercial suit, ordinarily a written statement is to be filed within a period of 30 days.. However, 90 days period if granted is grace period, which can be granted by the concerned Court 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. However, once the time period of thirty to ninety days after service of the summons has expired, right of the defendant to file written statement is forfeited and the Court shall not allow the written statement to be taken on record. Proviso to Order VIII Rule 10 also buttress the said aspect.

20. In the case on hand, it is not disputed that the defendant was served the summons prior to 17.10.2019 and he appeared in the suit on 25.10.2019 and sought time to file the reply. However, within 30 days i.e. on or before 25.11.2019, he has not filed any reply. According to learned advocate Mr. Dave, the petitioner has sent his reply on 11.2.2020 by courier and the

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matter was listed before the Court on 15.2.2020. Admittedly, sending of the reply by courier is not a recognized mode of filing written statement. Even, otherwise, such reply was not filed within 120 days from the date of the service of summons. The learned trial Court has noted that summons of the suit was served on 17.10.2019 and when the written statement through courier service was sought to be submitted i.e. on 15.2.2020, it was beyond the prescribed time limit of 120 days and therefore, right of the defendant to file written statement was forfeited.

21. It has to be made clear that by amendment in the Civil Procedure Code, 1908, pursuant to Commercial Court Act, the time limit for filing written statement has been made stringent and it has been made mandatory to be adhered. The time limit as stated herein above, the Civil Procedure Code, 1908 provides 30 days for filing of the written statement from the date of service of the summons, which was to be followed in any circumstances. It is to be noted that the Court has no authority to re-write the provisions of the statute to extend such time limit. With profit, we may refer to case of Union of India Vs. Deokinandan Aggarwal reported in AIR 1992 SC 96, the Hon'ble Apex Court has held that the High Court has no authority to re- write the provisions of the statute. In para 14, the Hon'ble Apex Court held thus:-

"14. ....It is not the duty of the Court either to enlarge the scope of the legislation or the intention of the legislature when the language of the provision is plain and unambiguous. The Court cannot re- write, recast or reframe the legislation for the very good reason that it has no power to legislate. The power to legislate has not been conferred on the courts. The Court cannot

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add words to a statute or read words into it which are not there. Assuming there is a defect or an omission in the words used by the legislature the Court could not go to its aid to correct or make up the deficiency. Courts shall decide what the law is and not what it should be. The Court of course adopts a construction which will carry out the obvious intention of the legislature but could not legislate itself...."

21. Learned advocate Mr. Dave tried to take shelter of order passed by the Hon'ble Apex Court in SMWP 3 of 2020 to submit that in suo motu petition, the Hon'ble Apex Court has extended time limit for filing all the litigation. However, no such contention has ever been raised before the learned trial Court and thus, cannot be permitted to take in the petition filed under Article 227 of the Constitution of India. Secondly, the statutory period for filing the written statement has expired much prior to commencement of Covid 19 and in that facts and circumstances, reliance of judgment in case of SMWP No. 3 of 2020 is not available to the petitioner. In case of Prakash Corporates (supra), the Hon'ble Apex Court has taken into consideration the order passed in SMWP No.3 of 2020 and considering the fact of the particular case, the Court found that the said case fall within the time limit extended by the Hon'ble Apex Court in suo motu petition, and therefore, the Court permitted to file written statement beyond statutory period of 120 days. It is further submitted that in case of Prakash Corporate (supra), the Hon'ble Apex Court has also observed that in any case, filing of the written statement cannot go beyond 120 days from the date of service of the summons and on expiry of 120 th day from the date of service of the summons, the defendant forfeits the right to file written statement and no Court can make an order to extend

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such time beyond 120 days from the date of service of the summons. In this case, the Hon'ble Apex Court has also taken note of the judgment delivered by the Hon'ble Apex Court in case of SCG Contracts (India) Private Limited (supra) with the specific word that "this aspects were underscored by this Court in case of SCG Contracts (India) Private Limited (supra) in no uncertain terms." Thus, that judgment does not render any assistance to the petitioner.

22. The Division Bench of this Court in case of M/s Satyam Composites Pvt. Ltd. vs. Spig Cooling Towers India Pvt. Ltd reported in AIR Online 2021 Guj 2804 has considered the limitation extended by the Hon'ble Apex Court in suo motu writ petition due to pandemic of Covid 19 and thereafter, in para 5 held thus:-

"5. 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. 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 proceedings expire on 15.3.2020 or on subsequent date, the benefit of extending period would become available. If the limitation period for any purpose in given case expired on 14.3.2020 or before that date, the benefit of extension would not be available. The grace period would start after the expiry of actual limitation period. That period could be utilized by litigant for filing of written statement, provided the court is satisfied about the sufficient cause."

23. As noted herein above, in the case on hand, limitation for

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filing written statement has expired much earlier i.e. on 25.11.2019. Therefore, benefit of extension which was commenced on 15.3.2020 was not available to the petitioner.

24. Considering the above facts of the case, we do not find any merit in the present petition, more particularly, in limited jurisdiction envisaged under Article 227 of the Constitution of India. The learned trial Court has not committed any error in passing the impugned common order. Thus, present petition sans merit and is accordingly dismissed. Notice discharged. No costs.

(ASHUTOSH SHASTRI, J)

(J. C. DOSHI,J) SHEKHAR P. BARVE