Madhya Pradesh High Court
Elhard Marketing Limited vs Universal Cables Limited on 12 February, 2024
Author: Sujoy Paul
Bench: Sujoy Paul
1
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
SHRI JUSTICE SUJOY PAUL
&
SHRI JUSTICE VIVEK JAIN
ON THE 12 th OF FEBRUARY, 2024
MISC. PETITION No. 301 of 2024
BETWEEN:-
ELHARD MARKETING LIMITED THROUGH ITS
AUTHORISED DIRECTOR A COMPANY WITHIN THE
MEANING OF THE COMPANIES ACT 2013 HAVING ITS
REGISTERED OFFICE AT 14 POLLOCK STREET POLICE
STATION HARE STREET KOLKATA (WEST BENGAL)
.....PETITIONER
(BY SHRI NAVNEET SHUKLA - ADVOCATE)
AND
UNIVERSAL CABLES LIMITED THROUGH ITS
AUTHORISED DIRECTOR A COMPANY WITHIN THE
MEANING OF THE COMPANIES ACT 2013 HAVING ITS
REGISTERED OFFICE AT PO BIRLA VIKAS SATNA
(MADHYA PRADESH)
.....RESPONDENT
(BY SHRI NARENDRA M. SHARMA WITH SHRI SAPAN USRETHE -
ADVOCATES)
This petition coming on for admission this day, Justice Vivek Jain
passed the following:
ORDER
The present petition has been filed challenging the order Annexure P/1
dated 15.12.2023 whereby the trial court has closed the right of the present
petitioner-defendant to file written statement.
2. Learned counsel for the petitioner submits that a suit has been filed
against the present petitioner by the present respondent before the Commercial
Court Rewa. It is stated that the present petitioner-defendant is located at
Kolkata (West Bengal) while the plaintiff- respondent is located at Satna (M.P.).
It is further stated by the learned counsel for the petitioner that the two places
are about 1000 kms. apart. The service of summons to the present petitioner
was effected on 19.09.2023. Learned counsel for the petitioner appeared before
the Commercial Court on 31.10.2023 and sought 35 days time to submit written
statement. The Court granted time for filing written statement and posted that
case for that purpose on 07.12.2023. On 07.12.2023, the present petitioner filed
an application before the Commercial court under Order 8 Rule 1 read with
order 17 rule 1 of Code of Civil Procedure. A copy of the said application is on
record as Annexure P/4. By pointing out the said application Annexure P/4,
learned counsel for the petitioner further submits that on 31.10.2023, the
petitioner-defendant had prayed 35 days time to file written statement and the
court has fixed the case for that purpose on 07.12.2023. However, as the
defendant is located at Kolkata (W.B.) and is not a local person-entity, hence
service of out-station counsel has been taken by the petitioner. Due to distance
between two places time is getting consumed to send the necessary documents
etc., to Rewa for the purpose of preparation of written statement. Due to huge
distance between two places further 28 days time was sought for filing written
statement. Learned counsel for the petitioner further submits that the court has
rejected the application vide order dated 15.12.2023 by recording that distance
between two places is not a valid ground to extend the time period for filing
written statement because in today's digital world, any document can be
transmitted digitally from one place to another. Thus, the request of the
defendant-petitioner seeking further time to file written statement does not seem
to be bona fide. Learned counsel for the petitioner further submits that
transmission of documents is not the only requirement to file written statement.
The documents have to be transmitted and thereafter, matter has to be
consulted with the counsel on the basis of documents. Learned counsel has to
study the documents and thereafter consult the party. Each one of these events
and steps cannot be undertaken digitally. Due to sheer distance between two
places the request for extension of time was bona fide. Learned counsel for the
petitioner further submits that even the written statement was tendered before
the Court on 14.12.2023 but the same was not taken on record.
3. It is also stated that the service of summons took place on 19.09.2023
and the complete set of documents was received on 31.10.2023. From the date
of receipt of complete set of documents, the written statement was being filed
within 45 days and even from the date of service of summons, the written
statement was being filed prior to 90 days.
4. It is further submitted that the statutory mandate as per the amendment
to Code of Civil Procedure carried out by the Commercial Courts Act 2015
contemplates that after expiry of 120 days from the date of service of summons
the right to file written statement is forfeited without any scope of relaxation.
However, between the period of 30 days to 120 days discretion is with the
Court to allow the defendant to file written statement for the reasons to be
recorded in writing and on payment of such cost as the cost may deem fit.
Learned counsel for the petitioner while referring to the impugned order dated
15.12.2023 submits that the Commercial Court has not adverted to any cogent
reasons to refuse taking written statement on record though the power was there
with the Court to take written statement on record as 120 days has not elapsed.
5 . Per contra, learned counsel for the respondent-plaintiff has opposed
the prayer. It is stated by the counsel for respondent that as per statutory
mandate, the time limit to file written statement is 30 days and the outer limit of
120 days cannot be demanded by the defendant as a mater of right. It is also
argued that the petitioner-defendant has filed to show any cogent reasons for
such a delay, hence ,the trial Court/ Commercial Court has not erred in passing
the impugned order dated 15.12.2023 and rightly closed the right of petitioner
to file written statement. It is also submitted by learned counsel for respondent
that the purpose of amendment to order V and order VIII of CPC as contained
in the Commercial Courts Act 2015, is to expedite the litigation concerning
Commercial dispute and thus the written statement beyond 30 days cannot be
taken on record.
6. Heard learned counsel for the parties and perused the record.
7. The relevant provision of Code of Civil Procedure as inserted by the
Commercial Court's Act are as under:-
"V(1) In its application to any suit in respect of a commercial dispute of a
Specified Value, in Order V, in rule 1 in sub-rule (1) for the second Proviso,
substitute the following proviso, namely-
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 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 shall
forfeit the right to file the written statement and the court shall not allow
the written statement to be taken on record."
"VIII (1) In its application to any suit in respect of a commercial dispute of a
Specified Value, in Order VIII, in rule 1, substitute the following proviso,
namely-
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 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 shall
forfeit the right to file the written statement and the court shall not allow
the written statement to be taken on record."
"VIII(10) In its application to any suit in respect of a commercial dispute of a
Specified Value, in Order VIII, in rule 10, inserted the following proviso,
namely-
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."
(emphasis supplied)
8. The effect of the aforesaid amendment was recently considered by the
Hon'ble Supreme Court in the case of SCG Contracts (India) Private
Limited Vs. K.S. Chamankar Infrastructure Private Limited and others
2019(12) SCC 210. Hon'ble Supreme Court in para 8 has held as under:-
"8. The Commercial Courts, Commercial Division and Commercial
Appellate Division of High Courts Act, 2015 came into force on 23-10-
2015 bringing in their wake certain amendments to the Code of Civil
Procedure. In Order 5 Rule 1, sub-rule (1), for the second proviso, the
following proviso was 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 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 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."
Equally, in Order 8 Rule 1, a new proviso was substituted as follows:
"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."
This was re-emphasised by re-inserting yet another proviso in Order 8
Rule 10 CPC, which reads as under:
"10. 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 the
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."
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 8 Rule 10
also adding that the court has no further power to extend the time beyond
this period of 120 days."
(emphasis supplied)
9. In more recent judgment in the case Prakash Corporates Vs. Dee
Vee Projects Limited 2022(5) SCC 112 The Hon'ble Supreme Court after
considering the provisions of Commercial Court's Act and the amendment
made to Orders V and VIII of CPC has held that the rules and procedure
initially intended to sub-serve the cause of justice and are not for punishment of
the parties in conduct of proceedings. It is further held that the provision in
order V and order VIII as inserted by Act of 2015 are intended to provide
consequences in relation to defendant to omit to perform his part to progress as
envisaged by Rule or procedure and are not intended to overwrite other
procedure of CPC. In the present case, it is not in dispute that while reckoning
the starting point from date of service of summon (19.09.2023) or from the date
of first appearance of the defendant when he stated to have received the entire
set of documents of plaint (31.10.2023), the defendant was seeking extension of
time to file written statement within the outer limit of 120 days and not beyond
that. Looking to the mandate of order V of CPC as inserted by the Act of 2015,
it is clear that mandatory forfeiture of right to file written statement shall take
place only on expiry of 120 days or not before them. In other words the power
of the court to extend the time limit ends on expiry of time limit of 120 days.
Before expiry of 120 days and after lapse of 30 days i.e. from 31st to 120th
day, the court is having power to extend the time limit for reasons to be
recorded and on payment of such costs as the Court deem fit.
10. In the present case, the defendant had come out with a plea that the
defendant is located at Kolkata and plaintiff is located at Satna (M.P.). The
Court is located at Rewa, which is near Satna. The distance between the two
places i.e. Kolkata to Rewa/Satna is stated to be around 1000 Kms. which is
not disputed. The defendant has pointed out practical difficulties in not being
able to prepare the written statement by 07.12.2023 which was the date fixed by
the trial court for that purpose. The defendant had brought on record that
documents have to be transmitted which is a time consuming process and
looking to the distance between the two places some more time may be granted
to file written statement which was still within 120 days. The trial court has
rejected the request by simple mentioning in the impugned order that the
documents can be transmitted electronically and digitally.
11. The preparation of written statement does not involve mere
transmission of documents. It is rightly pointed out by learned counsel for the
petitioner that documents have to be transmitted and thereafter, the counsel has
to study the documents and consult with the party on the basis of such
documents transmitted to the counsel. The party has to go down to other place
for consulting with the counsel on the basis of the documents transmitted to the
counsel. Thereafter, the stand to be taken in the case has to be decided and then
the written statement can be drafted. Signed pleadings have to sent physically.
Looking to the distance between two places it was certainly some time
consuming process and the inability of the defendant to file written statement
within the time limit of 37 days fixed by the Court cannot be said to be a willful
or delaying tactics of the defendant.
12. As held by the Hon'ble Supreme Court in the case of SALEM
Advocate Bar Association Vs. Union of India 2005 (6) SCC 344 rules or
procedure are the handmaid of justice and not its mistress. Construction of the
rule or procedure which promotes justice and prevents miscarriage has to be preferred..
13. As the impugned order when tested on the touch stone of statutory
provision, cannot be given stamp of approval, the trial court seems to have
adopted hyper technical approach in refusing the extent the time limit to file
written statement even within the time limit of 120 days as permissible under the
Act of 2015.
14. Resultantly, the order dated 15.12.2023 cannot be allowed to stand
and is hereby quashed. The trial court is directed to take the written statement
on record, if the same is tendered before the Court within a period of 15 days
from the date of this order.
15. With the aforesaid direction, petition stands allowed. No order as
to costs.
(SUJOY PAUL) (VIVEK JAIN)
JUDGE JUDGE
MISHRA
