Suo Motu Limitation Extension Orders Applicable To Filing Of Written Statements In Commercial Suits : Supreme Court

The Supreme Court observed that its suo motu limitation extension orders applies in relation to the period prescribed for filing the written statement in commercial suits.

"The period envisaged finally in the order dated 23.09.2021 is required to be excluded in computing the period of limitation even for filing the written statement and even in cases where the delay is otherwise not condonable", the bench comprising Justices Dinesh Maheshwari and Vikram Nath said.

In this case, the Commercial Court (District Level), Nava Raipur, Chhattisgarh declined the prayer of the defendant for granting further time to file its written statement on the ground that in view of the proviso to Order VIII Rule 1 of the Code of Civil Procedure, 1908 , as substituted by the Commercial Courts Act, 2015 , such a right of the defendant to file the written statement stood forfeited with expiry of 120 days from the date of service of summons. [The suit was instituted on 21.12.2020 - The defendant was served with summons in the subject suit on 06.01.2021 - The defendant appeared before the Trial Court in response to the said summons on the date fixed, i.e., 18.01.2021 but filed an application under Section 10 read with Section 151 CPC for stay of suit proceedings on the ground that the proceedings between the parties were pending before the NCLT - 120th day from the date of service of summons expired on 06.05.2021.]

Referring to the orders passed by the Supreme  Court in Suo Motu Writ Petition (Civil) No. 3 of 2020, the appellant-defendant contended that, while computing the period of limitation prescribed under the general law or under special laws, the period between 15.03.2020 to 14.03.2021 would stand excluded; and on 27.04.2021, the suspension of limitation was further extended by the Court. Thus, it was contended that counting of limitation by the Trial Court without taking into consideration the period of lockdown was erroneous.On the other hand, the respondent-plaintiff contended that the orders passed in SMWP No. 3 of 2020, the extension of period of limitation commencing from 23.03.2020 to 02.10.2021 was for institution of suits or applications; and even when Section 12-A of the Act was brought within the purview of the extension of limitation period, there was no direction that the period to file the written statement before the Commercial Court would also be extended automatically, despite the defendant appearing and participating in the proceedings.

The court, referring to the relevant provisions contained in Order V Rule 1, Order VIII Rule 1 and Order VIII Rule 10 CPC regarding time limit for filing written statement and consequences of default, the court noted:

Tersely put, as per the mandate of the said provisions: (a) the defendant is under an obligation to file the written statement of his defence within 30 days of service of summons; (b) if he fails to file the written statement within the said period of 30 days, he may be allowed to file the written statement on such other day as the Court may specify for reasons to be recorded in writing and on payment of such costs as the Court may impose but this other day, in any case, cannot go beyond 120 days from the date of service of summons; (c) on expiry of 120th day from the date of service of summons, the defendant forfeits the right to file the written statement and no Court can make an order to 32 extend such time beyond 120 days from the date of service of summons.

The court said that the question therefore is whether the said provisions and principles (regarding mandatory timelines) are required to be applied irrespective of the operation and effect of other orders passed/issued by the Courts under the force of aberrant, abnormal and extraordinary circumstances? Referring to the orders regarding limitation extension, the bench observed:

"Having regard to the purpose for which this Court had exercised the plenary powers under Article 142 of the Constitution of India and issued necessary orders from time to time in SMWP No. 3 of 2020, we are clearly of the view that the period envisaged finally in the order dated 23.09.2021 is required to be excluded in computing the period of limitation even for filing the written statement and even in cases where the delay is otherwise not condonable. It gets perforce reiterated that the orders in SMWP No. 3 of 2020 were of extraordinary measures in extraordinary circumstances and their operation cannot be curtailed with reference to the ordinary operation of law."

"In other words, the orders passed by this Court on 23.03.2020, 06.05.2020, 10.07.2020, 27.04.2021 and 23.09.2021 in SMWP No. 3 of 2020 leave nothing to doubt that special and extraordinary measures were provided by this Court for advancing the cause of justice in the wake of challenges thrown by the pandemic; and their applicability cannot be denied in relation to the period prescribed for filing the written statement. It would be unrealistic and illogical to assume that while this Court has provided for exclusion of period for institution of the suit and therefore, a suit otherwise filed beyond limitation (if the limitation had expired between 15.03.2020 to 02.10.2021) could still be filed within 90 days from 03.10.2021 but the period for filing written statement, if expired during that period, has to operate against the defendant."

Observing thus, the court set aside the orders passed by the Trial Court and the High Court, and held that the written statement already prepared and notarised by the defendant-appellant deserves to be taken on record.

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