Written statement Mandatory under commercial court

120 day Statutory Period for filing Written Statement 'Mandatory' under the Commercial Courts Act: Supreme Court Holds

The Hon'ble Supreme Court of India, vide its landmark judgment in the case of M/s SCG Contracts India Pvt. Ltd. V/s. K.S. Chamankar Infrastructure Pvt. Ltd. & Ors. (Civil Appeal No. 1638 of 2019 arising out of S.L.P (C) No. 103/2019) held that the 120-day deadline to file the written statement in Commercial Suits is mandatory, thereby, leaving no room for courts to exercise their discretion to relax the same.

“By this landmark judgment of the Supreme Court of India, it is now mandatory for a Defendant in a Commercial Suit to file its written statement within 120 days (including extension/s) from the date of service of summons failing which the Defendant shall forfeit its right to do so. Despite the aforesaid Amendments carried out in the C.P.C, courts were at their discretion, allowing a written statement to be filed beyond 120 days. This judgment leaves no room for the courts to exercise their discretion and relax the deadline of 120 days (including extension/s) and is a positive step towards expediting the litigation process in India. ”

The Supreme Court has observed that proviso added to the Code of Civil Procedure by Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015, is mandatory and no written statement can be taken on record in commercial suits, if it is not filed within 120 days from the date of service of summons of the Suit.

FACTS

A Suit was filed before the Delhi High Court on 10th March 2017 by the Appellant for a claim amounting to Rs. 6,93,63,114/-.The summons in the Suit was served upon the Respondent on 14th July 2017. Accordingly, the Respondent had time to file its written statement (including extension/s) on or before 11th November 2017, which is when the statutory period of 120 days to do so expired.In the meanwhile, however, an application under Order VII Rule 11 was filed for the Plaint to be rejected in its entirety. The said application came to be rejected vide an Order dated 5th December 2017 ("First Impugned Order"). In the absence of the Appellant and on a request made by the Respondent's counsel, the Hon'ble Court extended the time limit for filing the written statement in the matter to 15th December 2017, subject to payment of Rs. 25,000/- to the Appellant. Accordingly, the Respondent filed its written statement on 15th December 2017.Thereafter, the First Impugned Order was challenged by the Appellant, stating that the written statement could not be taken on record considering the fact that 120 days had lapsed from the date of service of summons of the Suit. Vide Order dated 24th September 2018 ("Second Impugned Order"), the Learned Single Judge upheld the First Impugned Order, on the grounds that the First Impugned Order had attained finality and that even though the provisions of law may provide otherwise, the written statement must be taken on record.In light of the aforesaid circumstances, the Appellant filed a Special Leave Petition ("S.L.P") against the Impugned Orders.