2019 (2) TMI 1658 - SC - Indian Laws

Late-filed written statement rejected; subsequent order set aside. Defendant's filing removed from record.

M/s Scg Contracts India Pvt. Ltd. Versus K.S. Chamankar Infrastructure Pvt. Ltd. & Ors.

The court held that the written statement filed beyond the 120-day period could not be accepted due to the mandatory nature of the amended provisions. ... Service of summons - relevant date for service of orders - HELD 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 VIII Rule 10 also adding that the Court has no further power to extend the time beyond this period of 120 days. Appeal allowed. Issues Involved:1. Timeliness of filing the written statement.2. Applicability of recent amendments to the Code of Civil Procedure.3. Interpretation of statutory provisions as mandatory or directory.4. Impact of res judicata on procedural orders.5. Inherent powers of the court under Section 151 of the Code of Civil Procedure.Detailed Analysis:Timeliness of Filing the Written StatementThe defendant was served with the summons on 14.07.2017, and the 120-day period to file the written statement expired on 11.11.2017. Despite this, the defendant filed a written statement on 15.12.2017, following the court's order dated 05.12.2017, which extended the time for filing the written statement subject to the payment of costs. The court noted that beyond 120 days, the defendant forfeits the right to file the written statement, and the court shall not allow it to be taken on record.Applicability of Recent Amendments to the Code of Civil ProcedureThe amendments to the Code of Civil Procedure, brought by the Commercial Courts Act, 2015, were emphasized. Specifically, Order V Rule 1 and Order VIII Rule 1 and 10 were amended to stipulate that the written statement must be filed within 120 days from the date of service of summons, beyond which the right to file is forfeited, and the court cannot extend this period.Interpretation of Statutory Provisions as Mandatory or DirectoryThe court discussed the mandatory nature of the amended provisions. It held that the consequence of forfeiting the right to file a written statement and the non-extension of time beyond 120 days indicate that the provisions are mandatory. Previous judgments, such as Bihar Rajya Bhumi Vikas Bank Samiti and Oku Tech Private Limited, supported this interpretation.Impact of Res Judicata on Procedural OrdersThe respondent argued that the order dated 05.12.2017 had attained finality and could only be challenged after the decree in the suit is passed. However, the court held that an erroneous decision on a statutory prohibition does not attract res judicata, as public policy contained in the statutory prohibition must be given effect to. This principle was supported by the judgment in Canara Bank vs. N.G. Subbaraya Setty.Inherent Powers of the Court under Section 151 of the Code of Civil ProcedureThe respondent argued that the court could use its inherent powers under Section 151 to prevent unjust consequences. However, the court held that clear, definite, and mandatory provisions of the Code cannot be circumvented by invoking inherent powers, as established in Manohar Lal Chopra vs. Rai Bahadur Rao Raja Seth Hiralal.ConclusionThe court concluded that the order dated 05.12.2017, which allowed the written statement to be filed beyond the 120-day period, could not be sustained due to the mandatory nature of the amended provisions. Consequently, the subsequent order dated 24.09.2018, which relied on the finality of the 05.12.2017 order, was also set aside. The appeal was allowed, and the written statement of Defendant No.1 was ordered to be taken off the record.