Karnataka High Court

M/S Schliff Maschinnen Fabrik vs Canara Bank on 27 March, 2025

Author: M.Nagaprasanna

Bench: M.Nagaprasanna

                                              -1-
                                                           NC: 2025:KHC:13078
                                                      WP No. 32236 of 2024




                        IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                           DATED THIS THE 27TH DAY OF MARCH, 2025

                                           BEFORE
                          THE HON'BLE MR JUSTICE M.NAGAPRASANNA
                          WRIT PETITION NO. 32236 OF 2024 (GM-DRT)
                   BETWEEN:

                   M/S. SCHLIFF MASCHINNEN FABRIK
                   NO.21/1, MAKARPURA INDUSTRIAL ESTATE
                   GIDC, MAKARPURA
                   VODODARA - 390 010
                   REPRESENTED BY ITS PROPRIETOR
                   SHASHISHEKHAR SHARMA,
                   S/O S.L. SHARMA
                   AGED ABOUT 54 YEARS.
                                                                ...PETITIONER
                   (BY SRI VASANTHA A.K., ADVOCATE)

                   AND:

                   1.    CANARA BANK
Digitally signed         NELAMANGALA BRANCH
by NAGAVENI
Location: High           B.H.ROAD, NELAMANGALA,
Court of                 BANGALORE RURAL DISTRICT - 562 123
Karnataka
                         BY ITS MANAGER
                         SMT. SABITHA S. SHETTY
                         W/O SHAILESH SHETTY
                         AGED ABOUT 50 YEARS.

                   2.    T.R.RAGHAVENDRA RAO
                         S/O T.R.RAMACHANDRA RAO
                         AGED ABOUT 50 YEARS,
                         PROPRIETOR VASISTA TECHNOLOGIES
                         NO.316, 4TH CROSS,
                                -2-
                                            NC: 2025:KHC:13078
                                         WP No. 32236 of 2024




    VIDYAMANYA NAGAR
    ANDRAHALLI MAIN ROAD,
    NEAR PEENYA 2ND STAGE,
    BENGALURU - 560 091.
                                               ...RESPONDENTS
(BY SRI VIGNESH S. SHETTY, ADVOCATE FOR R-1)

     THIS WRIT PETITION IS FILED UNDER ARTICLES 226 &
227 OF THE CONSTITUTION OF INDIA PRAYING TO SETTING
ASIDE THE ORDER DTD 9.08.2023 PASSED BY THE HON'BLE
DEBTS RECOVERY TRIBUNAL-II ON IA NO. 2786/2021 IN OA
NO. 1284/2019 VIDE ANNX-A


    THIS PETITION, COMING ON FOR PRELIMINARY
HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:


CORAM:    HON'BLE MR JUSTICE M.NAGAPRASANNA


                         ORAL ORDER

The petitioner is before this Court calling in question an

order dated 9-8-2023 by which, the application in IA No. 2786

of 2021 seeking to condone the delay in filing written statement

comes to be rejected in OA No.1284 of 2019.

2. The 1st respondent/Bank approaches the Debts

Recovery Tribunal-II in OA No.1284 of 2019 for recovery of

money from the defendants. The issue in the lis does not

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relate to the merit of the matter before the concerned Court.

The petitioner/the 2nd defendant in OA 1284 of 2019 does not

file his written statement as obtaining in section 19(5)(i) of the

Recovery of Debts and Bankruptcy Act, 1993 ('RDB Act' for

short). The petitioner had also preferred an application seeking

condonation of delay in IA 2786 of 2021 for having filed the

written statement beyond the period of limitation that is

prescribed under section 19(5)(i) of the RDB Act.

3. The Tribunal, in terms of the impugned order dated

09-08-2023, rejects the application for condonation of delay

and consequently filing of written statement gets forfeited on

such delay. The reason rendered by the Tribunal is in terms of

the mandate of the Statute, as obtaining in Section 19(5) of the

RDB Act, which mandates that the written statement and

counterclaim are required to be filed mandatorily within 30

days from the date of service of summons, another 15 days to

the maximum could be granted in exceptional or special

circumstances. The rejection of the application by the Tribunal

is what has driven the petitioner to this Court in the subject

petition.

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4. Heard Sri Vasantha A K, learned counsel appearing for

petitioner and Sri Vignesh Shetty, learned counsel appearing

for respondent No.1/Bank.

5. The learned counsel appearing for the petitioner

submits that the limitation ought to have been extended at the

time when written statement was filed.

6. The learned counsel appearing for the 1st

respondent/Bank Sri Vignesh Shetty would vehemently refute

any indulgence being shown, as the mandate of the statute

cannot be given a go bye, by any reason projected, by the

petitioner. Therefore, he would seek dismissal of the petition,

on the ground that the evidence in the matter is over and the

Tribunal has kept the matter for its judgment.

7. The afore-narrated facts are not in dispute. The issue

lies in a narrow compass. Pursuant to the OA instituted by the

Bank; the notice is issued; the same is served upon the present

petitioner and vakalath is filed on 22-10-2020. Therefore, the

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limitation would get over within 30 days or at the maximum 45

days from 22-10-2020. The limitation for filing of the written

statement would commence from the date the paper book is

served on the petitioner which happens on 15-02-2021.

8. It is in public domain that the nation was under

complete lockdown from 25-3-2020. Owing to such lockdown,

the Apex Court by several orders extended the limitation

prescribed under every statute and the last of the extension

from time to time passed by the Apex Court was on

23.09.2021. In identical circumstance, where written

statement had not been filed within the limitation prescribed

before the Commercial Court, in a commercial suit under the

Commercial Courts Act, the Apex Court observing the situation

during the COVID period extended the limitation in the case of

ADITYA KHAITAN V. IL & FS FINANCIAL SERVICES LTD.,

reported in (2023) 9 SCC 570. It reads as under:

".... .... ....

22. A perusal of para 2.3 of the above order shows that this Court directed that the period from 15-3-

2020 till 14-3-2021 will stand excluded in computing:

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(a) the period prescribed under Sections 23(4) and 29-A of the Arbitration and Conciliation Act, 1996;

(b) Section 12-A of the Commercial Courts Act, 2015;

(c) provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881; and

(d) any other laws which prescribe period of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.

23. As would be clear from hereinabove, the very basis of the judgment in Sagufa Ahmed [Sagufa Ahmed v. Upper Assam Plywood Products (P) Ltd., (2021) 2 SCC 317 :

(2021) 2 SCC (Civ) 178] that under the 23-3-2020 [Cognizance for Extension of Limitation, In re, (2020) 19 SCC 10 : (2021) 3 SCC (Cri) 801] order, only the period of limitation has been extended and not the period up to which delay can be condoned, has been taken away by expanding the protection by excluding the period even for computing outer limits within which the court or tribunal can condone delay. This is an important subsequent aspect which has a great bearing in deciding the present controversy.

24.Prakash Corporates [Prakash Corporates v. Dee Vee Projects Ltd., (2022) 5 SCC 112 : (2022) 3 SCC (Civ) 121 : (2022) 2 SCC (Cri) 290 : (2022) 1 SCC (L&S) 771] also notices the fact that the order of 8- 3-2021 [Cognizance for Extension of Limitation, In re, (2021) 5 SCC 452 : (2021) 3 SCC (Civ) 40 :

(2021) 2 SCC (Cri) 615 : (2021) 2 SCC (L&S) 50] and subsequent orders also by a Bench of three Hon'ble Judges were not and could not have been available for the Bench which decided Sagufa Ahmed case [Sagufa Ahmed v. Upper Assam Plywood Products (P) Ltd., (2021) 2 SCC 317 :

(2021) 2 SCC (Civ) 178] since Sagufa Ahmed case [Sagufa Ahmed v. Upper Assam Plywood Products (P) Ltd., (2021) 2 SCC 317 : (2021) 2 SCC (Civ) 178] was decided on 18-9-2020. In Prakash

NC: 2025:KHC:13078

Corporates [Prakash Corporates v. Dee Vee Projects Ltd., (2022) 5 SCC 112 : (2022) 3 SCC (Civ) 121 : (2022) 2 SCC (Cri) 290 : (2022) 1 SCC (L&S) 771] , though the period of 30 days for filing written statements expired on 5-2-2021 and the 120-day outer limit expired on 6-5-2021, written statements notarised on 7-7-2021 was directed to be taken on record. The Court in Prakash Corporates [Prakash Corporates v. Dee Vee Projects Ltd., (2022) 5 SCC 112 : (2022) 3 SCC (Civ) 121 : (2022) 2 SCC (Cri) 290 : (2022) 1 SCC (L&S) 771] relied on the orders of 23-3-2020 [Cognizance for Extension of Limitation, In re, (2020) 19 SCC 10 : (2021) 3 SCC (Cri) 801] , 8-3-2021 [Cognizance for Extension of Limitation, In re, (2021) 5 SCC 452 : (2021) 3 SCC (Civ) 40 : (2021) 2 SCC (Cri) 615 : (2021) 2 SCC (L&S) 50] , 27-4-2021 [Cognizance for Extension of Limitation, In re, (2021) 17 SCC 231 : 2021 SCC OnLine SC 373] and also noticed the order of 23-9-

2021 [Cognizance for Extension of Limitation, In re, (2021) 18 SCC 250 : 2021 SCC OnLine SC 947] while so ordering.

25. By virtue of Section 16 of the Commercial Courts Act, 2015 brought into force on 23-10-2015 some provisions of the Code of Civil Procedure, 1908 in its application to the commercial disputes were amended. The Schedule to the Commercial Courts Act amended Order 5 Rule 1(1), Order 8 Rule 1and Order 8 Rule 10 insofar as their applicability to commercial disputes was concerned. Order 8 Rule 1 reads as under:

Order 8 Rule 1

"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 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 twenty days from the date of service of summons and on expiry of one hundred twenty days from the date of service of summons, the defendant

NC: 2025:KHC:13078

shall forfeit the right to file the written statement and the court shall not allow the written statement to be taken on record."

26. As would be seen from the above, the outer limit within which the court or tribunal can condone the delay is 120 days from the date of summons.

27. As has been set out hereinabove, while summons was served on 7-2-2020, the 30 days' period expired on 8-3-2020 and the outer limit of 120 days expired on 6-6-2020. The application for taking on record the written statements and the extension of time was filed on 20-1-2021. Applying the orders of 8-3-2021 [Cognizance for Extension of Limitation, In re, (2021) 5 SCC 452 : (2021) 3 SCC (Civ) 40 : (2021) 2 SCC (Cri) 615 : (2021) 2 SCC (L&S) 50] and the orders [Cognizance for Extension of Limitation, In re, (2021) 17 SCC 231 : 2021 SCC OnLine SC 373] , [Cognizance for Extension of Limitation, In re, (2021) 18 SCC 250 : 2021 SCC OnLine SC 947] made thereafter and excluding the time stipulated therein, the applications filed by the applicants on 19-1-2021 are well within time. The judgment passed by the High Court, for the reasons set out hereinabove, needs to be set aside. The principle underlying the orders of this Court dated 8-3-2021 [Cognizance for Extension of Limitation, In re, (2021) 5 SCC 452 : (2021) 3 SCC (Civ) 40 :

(2021) 2 SCC (Cri) 615 : (2021) 2 SCC (L&S) 50] , 27-4-2021 [Cognizance for Extension of Limitation, In re, (2021) 17 SCC 231 : 2021 SCC OnLine SC 373] and 23-9-2021 [Cognizance for Extension of Limitation, In re, (2021) 18 SCC 250 : 2021 SCC OnLine SC 947] , in Cognizance for Extension of Limitation, In re, albeit those orders being passed, subsequent to the impugned order [IL & FS Financial Services Ltd. v. Aditya Khaitan, 2021 SCC OnLine Cal 4293] , would enure to the benefit of the applicants-defendants."

(Emphasis supplied)

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In the case at hand, the paper book was served upon the

petitioner on 15.02.2021. Therefore, even if 45 days is taken

as the period of limitation, it would undoubtedly come within

the extension of limitation granted by the Apex Court, which is

upto 23.09.2021. If the petitioner had filed his written

statement after the date fixed by the Apex Court as observed

hereinabove, it would be an altogether different circumstance.

9. Therefore, the impugned order of the concerned Court

would completely run counter to what the Apex Court has

directed and would become unsustainable. Notwithstanding