Case Note & Summary
The Supreme Court allowed an appeal against two orders of the High Court that permitted the defendant to file a written statement beyond the statutory period of 120 days from service of summons. The suit was filed on 10.03.2017 claiming Rs. 6,94,63,114/-. The defendant was served on 14.07.2017, making the last date for filing a written statement 11.11.2017. The defendant filed an application under Order VII Rule 11 CPC, which was rejected on 05.12.2017. On that date, the Single Judge, noting that no one appeared for the plaintiff, granted the defendant seven days to file a written statement subject to payment of costs of Rs. 25,000/-. The written statement was filed on 15.12.2017, beyond the 120-day period. Subsequently, on 06.08.2018, the defendant filed an application seeking to have the written statement taken on record, which was allowed by another Single Judge on 24.09.2018, holding that the earlier order was final. The plaintiff appealed to the Supreme Court. The Court examined the amended provisions of Order V Rule 1, Order VIII Rules 1 and 10 CPC, introduced by the Commercial Courts Act, 2015, which mandate that a written statement must be filed within 30 days, extendable up to 120 days from service of summons, and beyond that the defendant forfeits the right to file and the court shall not allow it to be taken on record. The Court held that these provisions are mandatory, not directory, as they expressly provide for the consequence of forfeiture and prohibit further extension. The Court distinguished earlier judgments relied upon by the respondent, noting they dealt with the pre-amendment position. The Court also rejected the argument that the order of 05.12.2017 was final and could not be challenged, holding that it was an interlocutory order that remained sub judice. The Court further held that the inherent powers under Section 151 CPC cannot override a statutory prohibition. Consequently, the Court set aside the impugned orders and directed that the written statement filed on 15.12.2017 be not taken on record.
Headnote
A) Civil Procedure - Written Statement - Time Limit - Mandatory Nature - Order VIII Rules 1 and 10, Code of Civil Procedure, 1908, as amended by the Commercial Courts Act, 2015 - The amended provisions provide that a written statement must be filed within 30 days, extendable up to 120 days from service of summons on payment of costs and for reasons recorded in writing. Beyond 120 days, the defendant forfeits the right to file and the court shall not allow it to be taken on record. The proviso to Order VIII Rule 10 further prohibits any extension beyond 120 days. Held that these provisions are mandatory, not directory, as they expressly provide for the consequence of forfeiture and prohibit further extension. (Paras 8-11)
B) Civil Procedure - Res Judicata - Interlocutory Orders - Doctrine of res judicata does not apply to an interlocutory order that is contrary to a statutory prohibition, as the order remains sub judice until challenged. The order dated 05.12.2017 extending time beyond 120 days was not final and could be challenged in the present appeal. (Paras 15)
C) Civil Procedure - Inherent Powers - Section 151, Code of Civil Procedure, 1908 - The inherent powers of the court under Section 151 cannot be invoked to override a clear statutory prohibition, such as the mandatory time limit for filing a written statement under Order VIII Rule 1. (Para 16)
Issue of Consideration
Whether the amended provisions of Order VIII Rules 1 and 10 of the Code of Civil Procedure, 1908, as introduced by the Commercial Courts Act, 2015, are mandatory, and whether a court can extend the time for filing a written statement beyond 120 days from the date of service of summons.
Final Decision
The Supreme Court allowed the appeal, set aside the impugned orders dated 05.12.2017 and 24.09.2018 of the High Court, and directed that the written statement filed by the defendant on 15.12.2017 shall not be taken on record.
Law Points
- Amended Order VIII Rule 1 CPC is mandatory
- forfeiture of right to file written statement after 120 days
- court cannot extend time beyond 120 days
- doctrine of res judicata not applicable to interlocutory orders that are contrary to statute
- inherent powers under Section 151 cannot override statutory prohibition
Case Details
Civil Appeal No. 1638 of 2019 (Arising out of SLP (C) No. 103/2019)
M/S SCG Contracts India Pvt. Ltd.
K.S. Chamankar Infrastructure Pvt. Ltd. & Ors.
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Nature of Litigation
Civil appeal against orders of the High Court allowing the defendant to file a written statement beyond the statutory period of 120 days from service of summons.
Remedy Sought
The appellant (plaintiff) sought to set aside the orders dated 05.12.2017 and 24.09.2018 of the High Court, and to direct that the written statement filed on 15.12.2017 be not taken on record.
Filing Reason
The defendant failed to file a written statement within 120 days from service of summons as required under the amended provisions of the CPC, but the High Court extended the time and allowed the written statement to be taken on record.
Previous Decisions
The High Court on 05.12.2017 rejected the defendant's Order VII Rule 11 application and granted seven days' time to file a written statement subject to costs. On 24.09.2018, another Single Judge held that the earlier order was final and directed that the written statement be taken on record.
Issues
Whether the amended provisions of Order VIII Rules 1 and 10 CPC are mandatory, requiring forfeiture of the right to file a written statement after 120 days from service of summons.
Whether the order dated 05.12.2017 extending time for filing written statement beyond 120 days is final and binding, or can be challenged in the present appeal.
Whether the inherent powers of the court under Section 151 CPC can be invoked to override the statutory prohibition on extending time beyond 120 days.
Submissions/Arguments
Appellant: The amended provisions of Order VIII Rules 1 and 10 are mandatory, as held in State of Bihar vs. Bihar Rajya Bhumi Vikas Bank Samiti and Canara Bank vs. N.G. Subbaraya Setty. The consequence of non-filing within 120 days is forfeiture of the right to file, and the court has no power to extend time beyond that. The doctrine of res judicata cannot apply to an order that is contrary to a statutory prohibition.
Respondent: The order dated 05.12.2017 had attained finality and could only be challenged after the decree. The court's act should not prejudice the defendant. The filing of an Order VII Rule 11 application justified the delay. The inherent powers under Section 151 CPC can be invoked to prevent unjust consequences.
Ratio Decidendi
The amended provisions of Order VIII Rules 1 and 10 CPC, as introduced by the Commercial Courts Act, 2015, are mandatory. The defendant forfeits the right to file a written statement after 120 days from service of summons, and the court has no power to extend the time beyond that period. An interlocutory order that contravenes a statutory prohibition is not final and can be challenged. The inherent powers under Section 151 CPC cannot override a clear statutory mandate.
Judgment Excerpts
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.
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.
We are of the view that the view taken by the Delhi High Court in these judgments is correct in view of the fact that the consequence of forfeiting a right to file the written statement; non-extension of any further time; and the fact that the Court shall not allow the written statement to be taken on record all points to the fact that the earlier law on Order VIII Rule 1 on the filing of written statement under Order VIII Rule 1 has now been set at naught.
Procedural History
Suit filed on 10.03.2017. Defendant served on 14.07.2017. 120-day period expired on 11.11.2017. Defendant filed Order VII Rule 11 application, which was rejected on 05.12.2017. On that date, the Single Judge granted seven days' time to file written statement subject to costs. Written statement filed on 15.12.2017. On 06.08.2018, defendant filed application to take written statement on record. On 24.09.2018, another Single Judge allowed the application. Plaintiff filed SLP against both orders. Supreme Court granted leave and allowed the appeal.
Acts & Sections
- Code of Civil Procedure, 1908: Order V Rule 1, Order VIII Rule 1, Order VIII Rule 10, Order VII Rule 11, Section 151
- Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015:
