2022 (2) TMI 1268 - SC - Indian Laws

Supreme Court extends filing deadline due to COVID-19 impact

Prakash Corporates Versus Dee Vee Projects Limited

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 ... Forfeiture of right of the Defendant to file the written statement stood with expiry of 120 days from the date of service of summons - proviso to Order VIII Rule 1 of the Code of Civil Procedure, 1908 - extension of the period of limitation prescribed under the general law of limitation or under any special law - Whether the opportunity of filing written statement in the subject suit has rightly been declined or the Appellant could be extended further relaxation in view of the orders passed and issued in the wake of COVID-19 pandemic? Time limit for filing written statement and consequences of default - HELD THAT:- By virtue of Section 16 thereof, the Commercial Court is to follow the provisions of Code of Civil Procedure as amended by the Act in the trial of a suit in respect to a Commercial dispute of a Specified Value. The relevant provisions contained in Order V Rule 1, Order VIII Rule 1 and Order VIII Rule 10 Code of Civil Procedure, have been reproduced hereinabove; and it is manifest that the said provisions not only envisage strict timelines for filing of written statement but even provide for consequences of default, while restricting the powers of the Court to extend the time for filing written statement beyond the period prescribed. 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 extend such time beyond 120 days from the date of service of summons. The question in the present case is, as to whether the said provisions and principles 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? In our view, the answer to this question cannot be in the affirmative for a variety of reasons. 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 is beyond cavil that if the prescribed period for any suit/appeal/application expires on day when the Court is considered 'closed', such proceedings may be instituted on the re-opening day. Significantly, the Explanation to Section 4 of the Limitation Act, 1963 makes it clear that a day when the Court may not as such be closed in physical sense, it would be 'deemed' to be closed, if during any part of its normal working hours, it remains closed on that day for any particular proceedings or work. The mandates of Rule 1(1) of Order V, Rule 1 of Order VIII as also Rule 10 of Order VIII, as applicable to the Commercial dispute of a Specified Value, do operate in the manner that after expiry of 120th day from the date of service of summons, the Defendant forfeits the right to submit his written statement and the Court cannot allow the same to be taken on record but, these provisions are intended to provide the consequences in relation to a Defendant who omits to perform his part in progress of the suit as envisaged by the Rules of procedure and are not intended to override all other provisions of Code of Civil Procedure like those of Section 10. These comments are necessitated for the reason that the Trial Court seems to have simply ignored the requirements of dealing with the pending applications with requisite expedition. The written statement already prepared and notarised by the Defendant-Appellant deserves to be taken on record and the Trial Court deserves to be directed to proceed with the matter in accordance with law - Appeal allowed. 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.