Suo Motu Orders Extending Limitation Apply Also To Delay Which Could Have Been Condoned : Supreme Court

A Bench comprising Justices M.R. Shah and B.V. Nagarathna dismissed the appeal filed challenging the order of the Madras High Court which condoned delay in filing of written statements within the excluded period of 15.03.2020 to 14.03.2021 and held -

"Having heard the learned counsel for the respective parties, we are of the opinion that, in the facts and circumstances of the case, the High Court has not committed any error in extending the period of limitation in filing the written statement and consequently taking on record the written statement filed on behalf of the respondent-original defendant."

Factual Background

In a patent infringement suit filed by Centaur Pharmaceuticals Pvt. Ltd. and Kibow Biotech Inc., the defendants, Stanford Laboratories Pvt. Ltd. and La Renon Health Care Pvt. Ltd. had filed applications before the Madras High Court seeking condonation of delay in filing of their written statements. As per Order VIII Rule 1 of the Civil Procedure Code, a written statement can be filed within 30 days from the date of receipt of suit summons. However, the court has discretion to grant another 90 days to file the written statement upon the defendant providing cogent reasons for the same.

The 30 day period for written statement for Standford had expired on 22.02.2020 and La Renon had expired on 09.02.2020( both dates before the Supreme Court passed the suo motu order for limitation extension on 23.03.2020).

Stanford Laboratories' upper limit with condonation of delay had expired on 23.05.2020. It e-filed its written statement on 14.07.2020. La Renon Health Care's upper limit had expired on 10.05.2020 and it filed its written statement on 14.07.2020.

 The issue was whether the extended period of 90 days for filing written statement will fall within the suo motu extension of limitation ordered by the Supreme Court.

Contentions raised by the parties before Madras High Court

The Senior Counsel appearing for the defendants placed reliance on the suo moto order of the Supreme Court dated23.03.2020 and 08.03.2021 in In Re: Cognizance for extension of Limitation, SMW (Civil) No. 3 of 2020, and the notification issued by the Madras High Court dated 13.07.2020. He emphasised that the Supreme Court had categorically excluded the period from 15.03.2020 till 14.03.2021 in computing the period of limitation in its order dated 08.03.2021.

Relying on SCG Contracts (India) Ltd. v. K.S. Chamankar Infrastructure Pvt. Ltd. (2019) 12 SCC 210, the Counsel appearing on behalf of the plaintiffs argued that the limitation prescribed under the Order VIII Rule 1 of C.P.C ought to be strictly followed for suits filed under the Commercial Courts Act, 2015. It was further contended that the original limitation of 30 days expired for Standard Laboratories on 22.02.2020 and for La Renon Health Care on 09.02.2020, which was before the Supreme Court had passed orders in the Suo moto petition to exclude the period of limitation from 15.03.2020. He cited Sagufa Ahmed And Ors. v. Upper Assam PlywoodProducts Pvt Limited And Ors. (2021) 2 SCC 317 to argue that order dated 23.03.2020 passed by Supreme Court in the Suo Moto Petition extended the period of limitation and not the period upto which delay can be condoned in exercise of discretion conferred by the statute.

Decision of Madras High Court

On perusal of the order passed by the Supreme Court on 08.03.2021, while disposing of SWM (Civil) No. 3 of 2020, the Madras High Court was convinced that the benefit of exclusion of the period from 15.03.2020 to 14.03.2021 ought to have been provided for calculation of limitation for filing the written statements. On 08.03.2020, the Supreme Court had passed directions as reproduced hereinbelow -

1. In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.03.2020 till 14.03.2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.03.2020, if any, shall become available with effect from 15.03.2021.
2. In cases where the limitation would have expired during the period between 15.03.2020 till 14.03.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 15.03.2021. In the event the actual balance period of limitation remaining, with effect from 15.03.2021, is greater than 90 days, that longer period shall apply.
3. The period from 15.03.2020 till 14.03.2021 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.

However, the High Court had imposed a cost of Rs. 50,000 on Stanford Laboratories and La Renon Health Careto be paid to the plaintiffs, failing which they would forfeit the right to file a written statement.

While affirming the decision of the High Court, the Apex Court observed that after the order dated 23.03.2020 was passed, the relaxation in the limitation period was extended from time to time and was ultimately extended upto October, 2021.

Case Title: Centaur Pharmaceuticals Pvt. Ltd. And Anr. v. Stanford Laboratories Pvt. Ltd. SLP(C) No. 17298 of 2021

Citation : 2022 LiveLaw (SC) 26

Counsel for Petitioner: Advocates Mr. Vineet Subramani, Ms. Liz Mathew, Mr. Navneet R., Ms. Sonali Jain, Ms. Vasudha Jain

Counsel for Respondents: Senior Advocate, Mr. Maninder Singh; Advocates, Mr. Prabhas Bajaj, Mr. Gaurav Sharma, Ms. Bitika Sharma, Mr. Luv Virmani, Ms. Aadya Chawla, Mr. Pranav Saigal, Mr. Adarsh Ramanujan, Mr. Gaurav Sharma, Ms. Bitika Sharma, Mr. Luv Virmani, Ms. Aadya Chawla

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