2021 (2) TMI 1363 - HC - Companies Law

Court denies extension for filing written statements in commercial suit, emphasizes 120-day deadline.

IL And FS Financial Services Ltd Versus Aditya Khaitan & Ors.

IL And FS Financial Services Ltd Versus Aditya Khaitan & Ors. - TMI Issues Involved:1. Extension of time to file written statements by defendants in a commercial suit.2. Applicability of the Supreme Court's orders on the suspension of limitation periods due to the COVID-19 pandemic.3. Interpretation of the provisions of the Commercial Courts Act, 2015, and the Code of Civil Procedure, 1908 regarding the filing of written statements.4. Consideration of previous judgments and their applicability to the current case.Issue-wise Detailed Analysis:1. Extension of Time to File Written Statements:Eight defendants in a commercial suit pending in the Commercial Division of the High Court applied for an extension of time to file their written statements. The suit was filed on August 30, 2019, and the writ of summons was issued on February 6, 2020. The defendants received the summons on February 7, 2020. According to Order V Rule 1 and Order VIII Rule 1 of the Code of Civil Procedure, 1908, as applicable to commercial suits, the initial 30-day period to file written statements expired on March 8, 2020, and the 120-day period expired on June 6, 2020. The defendants did not file their written statements within these periods and later applied for an extension in January 2021.2. Applicability of the Supreme Court's Orders on Suspension of Limitation Periods:The defendants argued that the period of limitation was suspended due to the Supreme Court's order dated March 23, 2020, in Suo Motu Writ Petition (C) No. 3 of 2020, which suspended the limitation period from March 15, 2020, due to the COVID-19 pandemic. They contended that this suspension should apply to their case, allowing them to file their written statements beyond the prescribed period.3. Interpretation of the Provisions of the Commercial Courts Act, 2015, and the Code of Civil Procedure, 1908:The second proviso to Order V Rule 1 and the proviso to Order VIII Rule 1, as amended by the Commercial Courts Act, 2015, prescribe an outer limit of 120 days for filing written statements from the date of service of summons. The court emphasized that this period is mandatory, and beyond 120 days, the defendant forfeits the right to file the written statement. The court referred to previous judgments, including SCG Contracts India Private Limited v. K.S. Chamankar Infrastructure Private Limited, which reinforced the mandatory nature of this period.4. Consideration of Previous Judgments and Their Applicability:The court considered several previous judgments to determine the applicability of the Supreme Court's orders and the mandatory nature of the 120-day period. The judgment in Siddha Real Estate Development Private Limited v. Golden Goenka Credit Private Limited was noted, which dealt with a similar issue and held that the 90-day period beyond the initial 30 days is an additional period, not an extension of the limitation period. The court also referred to Sagufa Ahmed v. Upper Assam Plywood Products Private Limited, which clarified that the Supreme Court's order dated March 23, 2020, extended only the period of limitation and not the period up to which delay can be condoned. The court further cited New India Assurance Company Limited v. Hilli Multipurpose Cold Storage Private Limited, which reiterated that the 120-day period for filing written statements in commercial suits is mandatory.Conclusion:The court concluded that the applications for extension of time to file written statements were not supported by sufficient grounds. The defendants did not exhibit promptness or provide adequate reasons for their delay. The court emphasized the mandatory nature of the 120-day period for filing written statements in commercial suits and dismissed the applications for extension of time without any order as to costs.