2022 (2) TMI 1268 - SC - Indian Laws

Supreme Court extends filing deadline due to COVID-19 impact

The Supreme Court allowed the Defendant-Appellant's written statement, notarized on 07.07.2021, to be considered despite the 120-day period expiring on ... Extension and exclusion of limitation period by orders in SMWP No. 3 of 2020 - forfeiture of right to file written statement on expiry of 120 days under proviso to Order V Rule 1 and proviso to Order VIII Rule 1 CPC as amended by the Commercial Courts Act, 2015 - dies non juridicus and Section 4 of the Limitation Act, 1963 - exercise of plenary powers under Article 142 to modify limitation rules during extraordinary circumstances - priority and immediate consideration of an application under Section 10 CPCExtension and exclusion of limitation period by orders in SMWP No. 3 of 2020 - forfeiture of right to file written statement on expiry of 120 days under proviso to Order V Rule 1 and proviso to Order VIII Rule 1 CPC as amended by the Commercial Courts Act, 2015 - Whether the period for filing the written statement stood forfeited on 06.05.2021 despite the orders passed in SMWP No. 3 of 2020 - HELD THAT: - The Court held that the orders in SMWP No. 3 of 2020 (as subsequently clarified and extended) were extraordinary measures enacted by this Court under Article 142 to obviate pandemic-related hardship, and that their legal effect is to exclude the period from 15.03.2020 (as subsequently extended by later orders) when computing limitation. Given those orders and their purpose, the time-limit for filing the written statement in the present Commercial Courts matter did not come to an end on 06.05.2021. The Court distinguished earlier decisions relied upon by the Respondent (including Sagufa Ahmed and S. Kasi) on factual and temporal grounds and noted supporting precedent where the Court had held that limitation for filing a written statement was deemed extended while SMWP No. 3 of 2020 remained in operation. Consequently, the mandatory forfeiture provision could not be applied so as to defeat the relief conferred by the COVID-19 orders in the circumstances of this case. [Paras 20, 21]Time for filing the written statement did not stand forfeited on 06.05.2021 in view of the exclusion/extension effected by SMWP No. 3 of 2020; the Trial Court's conclusion to the contrary was incorrect.Dies non juridicus and Section 4 of the Limitation Act, 1963 - administrative order curtailing court functioning - Whether the High Court's administrative order and curtailed functioning of subordinate courts rendered the relevant days non-juridical so as to affect the computation of the 120 day period - HELD THAT: - The Court found that the High Court's administrative order of limited/rotational and curtailed functioning (including reduced hours and restricted categories of urgent matters) meant that the subordinate Court in question was not functioning normally and that the period of such curtailed functioning should be treated as dies non juridicus for purposes of limitation. The Court relied on Section 4 of the Limitation Act and the Explanation thereto (a court deemed closed if part of its normal working hours it remains closed) to conclude that the administrative restrictions operating at the relevant time prevented the normal operation of the statutory timelines and reinforced the applicability of the exclusion/extension under SMWP No. 3 of 2020. [Paras 24, 25]The curtailed functioning under the High Court's administrative order rendered the period non-juridical for computation of limitation and could not be treated as a normal working period for the purpose of the 120 day rule.Priority and immediate consideration of an application under Section 10 CPC - procedural obligations to decide interlocutory applications affecting trial course - Whether the Trial Court committed procedural error in not taking up and deciding the pending application under Section 10 CPC before declining to allow the written statement - HELD THAT: - The Court observed that the appellant had filed an application under Section 10 CPC on first appearance seeking stay because parallel proceedings were pending before the NCLT. That application, together with the respondent's application for interim relief, had been listed for arguments but was not taken up when the Trial Court declined to permit filing of the written statement. The Court held that an application under Section 10, by its nature, required immediate consideration as its grant would preclude further trial steps; therefore the Trial Court erred in not dealing with the pending interlocutory applications with expedition and in failing to consider them contemporaneously with the question of filing the written statement. [Paras 26]The Trial Court erred in procedure by not deciding the Section 10 application (and the pending interlocutory applications) before refusing the opportunity to file the written statement.Taking written statement on record and directions to proceed in accordance with law - What remedial relief should follow from the errors found in the impugned orders - HELD THAT: - In consequence of the findings that the time for filing the written statement was not forfeited and that the Trial Court committed procedural error by not deciding the pending applications, the Court directed that the written statement notarised on 07.07.2021 be taken on record. The Court set aside the orders of the Trial Court and the High Court declining the opportunity to file the written statement and ordered the Trial Court to proceed with the suit in accordance with law and to deal with the pending applications without further delay. [Paras 27, 28]Impugned orders set aside; the notarised written statement dated 07.07.2021 to be taken on record and the Trial Court to proceed and dispose of pending applications in accordance with law.Final Conclusion: The appeal is allowed. The Supreme Court held that the COVID 19 orders in SMWP No. 3 of 2020 (as extended and clarified) excluded/extended the relevant period for computing limitation and, together with the High Court's administrative curtailment of court functioning, precluded forfeiture of the right to file the written statement on 06.05.2021. The orders of the Trial Court and High Court refusing further time are set aside; the notarised written statement dated 07.07.2021 is to be taken on record and the Trial Court is directed to proceed with the suit and decide the pending interlocutory applications without delay. Issues Involved:1. Whether the Defendant-Appellant forfeited the right to file a written statement after the expiry of 120 days from the date of service of summons.2. Whether the orders passed by the Supreme Court in Suo Motu Writ Petition (Civil) No. 3 of 2020 extended the period for filing the written statement.3. The impact of the administrative order issued by the High Court of Chhattisgarh on the functioning of the Trial Court.4. The procedural error by the Trial Court in not considering the application under Section 10 CPC for stay of suit proceedings.Issue-wise Detailed Analysis:1. Forfeiture of Right to File Written Statement:The Defendant-Appellant was required to file the written statement within 30 days from the date of service of summons, with a maximum extendable period of 120 days as per Order VIII Rule 1 of the Code of Civil Procedure, 1908, as amended by the Commercial Courts Act, 2015. The Trial Court found that the Defendant-Appellant had forfeited this right as the 120-day period expired on 06.05.2021. This decision was upheld by the High Court, which noted that the limitation provided in the enactment cannot be extended by any Court.2. Extension of Period for Filing Written Statement:The Defendant-Appellant argued that the orders passed by the Supreme Court in Suo Motu Writ Petition (Civil) No. 3 of 2020 extended the period of limitation due to the COVID-19 pandemic. The Supreme Court had issued several orders extending the period of limitation for all judicial and quasi-judicial proceedings from 15.03.2020 until further orders. The Court concluded that these orders applied to the period for filing written statements, and thus, the 120-day period did not conclusively end on 06.05.2021.3. Impact of Administrative Order by High Court:The High Court of Chhattisgarh issued an administrative order on 05.04.2021 for curtailed functioning of the Courts due to the COVID-19 pandemic. The Trial Court adjourned the matter on 15.04.2021 to 22.06.2021, considering this administrative order. The Supreme Court noted that during the operation of this order, the Court could not have been considered functioning normally, and the period should be considered as dies non juridicus (non-judicial days). Therefore, the period for filing the written statement should not have been considered to have expired on 06.05.2021.4. Procedural Error by the Trial Court:The Defendant-Appellant had filed an application under Section 10 CPC for stay of suit proceedings on the ground that related proceedings were pending before the NCLT. The Trial Court did not consider this application and instead focused on the written statement issue. The Supreme Court emphasized that the Trial Court should have considered this application before proceeding further, as it could have impacted the continuation of the suit.Conclusion:The Supreme Court set aside the orders of the Trial Court and the High Court, allowing the written statement notarized by the Defendant-Appellant on 07.07.2021 to be taken on record. The Trial Court was directed to proceed with the suit in accordance with law and to deal with the pending applications without further delay.