Introduction
In a decisive ruling emphasizing procedural discipline in commercial litigation, the Karnataka High Court dismissed a writ petition challenging the rejection of a belated written statement and counterclaim filed 137 days after service of summons. The judgment reaffirms the statutory deadline under Order VIII Rule 1 of the Civil Procedure Code (CPC), as amended for commercial disputes, and underscores that courts cannot condone delays beyond the 120-day ceiling, however sympathetic the circumstances.
1. Factual Background and Procedural History
The case originated in Commercial O.S. No. 65/2024 filed by M/s Graintec Industries seeking recovery of ₹23,97,327 from M/s Imagex Technologies India Pvt. Ltd. and its directors.
- 1 February 2024: Suit filed.
- 17 February 2024: Defendants served with summons.
- 6 March 2024: Defendants appeared and sought time.
- 3 April 2024: Counsel appeared and sought time to file written statement.
- 30 May 2024: Application under Section 148 and 151 CPC seeking extension of time allowed.
- 4 July 2024: Written statement and counterclaim filed.
- 19 October 2024: Trial court rejected the filing under Order VIII Rule 1 CPC for being filed 137 days post service.
Challenging this, the defendants approached the High Court under Article 227 of the Constitution.
2. Identification of Legal Issues
- Whether a written statement filed after the statutory 120-day limit under Order VIII Rule 1 (as applicable to commercial suits) can be accepted by the trial court.
- Whether procedural flexibility or equitable considerations permit relaxation of this deadline.
3. Arguments of the Parties
Petitioners (Defendants):
- Claimed procedural delays in obtaining documents prevented timely filing.
- Argued that procedural law should not defeat substantive rights.
- Cited Prakash Corporates v. Dee Vee Projects Ltd. [(2022) 5 SCC 112] to support flexible judicial approach.
- Contended delay was only of 17 days beyond 120-day ceiling, and the Court should have condoned it.
Respondents (Plaintiffs):
- Asserted that Order VIII Rule 1 (as amended by the Commercial Courts Act) is mandatory and time-bound.
- Emphasized that after 120 days from service of summons, the right to file a written statement stands forfeited.
- Argued that allowing written statements beyond this statutory period would render the amendment meaningless.
4. Court’s Analysis and Reasoning
Justice M. Nagaprasanna delivered a strict interpretation of procedural law, holding:
Statutory Limit of 120 Days is Mandatory
- Cited the text of Order VIII Rule 1 CPC (as amended) which mandates that after 120 days from the date of service of summons, the defendant shall forfeit the right to file a written statement.
- Emphasized that this is not a directory provision but a legislative command designed to ensure expeditious disposal of commercial disputes.
No Power to Extend Beyond 120 Days
- Held that no interpretive generosity or equity-based flexibility can override the clear statutory embargo.
- Noted that the High Court is equally bound by these limits and cannot exercise its writ jurisdiction to undo what the statute explicitly prohibits.
Prakash Corporates Case Distinguished
- The Court noted that Prakash Corporates involved procedural irregularities concerning Section 10 CPC (stay of suit proceedings), and did not relax the 120-day limitation under Order VIII Rule 1.
- Rejected the petitioners’ reliance on that judgment, holding it irrelevant to delay in written statement filing.
Final Finding
- The filing of the written statement on the 137th day was clearly beyond the permissible 120-day limit.
- The trial court’s rejection of the written statement and counterclaim was legally valid.
5. Final Conclusion and Holding
The High Court dismissed the writ petition, holding that:
- There was no procedural illegality or perversity in the trial court’s order.
- Courts are statutorily barred from accepting written statements filed beyond 120 days in commercial suits.
- Legislative discipline outweighs procedural equity in commercial litigation.
FAQs:
1. What is the time limit to file a written statement in a commercial suit?
Under Order VIII Rule 1 CPC (as amended for commercial disputes), a defendant must file the written statement within 30 days, extendable up to 120 days. Beyond this, the right is forfeited.
2. Can courts allow written statements after 120 days in commercial litigation?
No. Courts are barred from accepting written statements filed beyond 120 days from service of summons, as held in multiple judgments, including this Karnataka High Court decision.
3. Does procedural equity allow extension of time in commercial suits?
Not beyond 120 days. While procedural flexibility exists in other civil suits, commercial litigation is governed by stricter timelines under the Commercial Courts Act.
4. What happens if a defendant misses the 120-day deadline?
The right to file a written statement is lost permanently, and the court must proceed without considering the defendant’s version unless previously filed.
5. Can a counterclaim be filed after the 120-day period?
No. If the counterclaim is filed along with the written statement beyond 120 days, it too is barred from being taken on record.
Stay informed with insights that matter. Follow us for more updates on key legal developments.
Disclaimer
The content provided here is for general information only; it does not constitute legal advice. Reading them does not create a lawyer-client relationship, and Mahendra Bhavsar & Co. disclaims all liability for actions taken or omitted based on this content. Always obtain advice from qualified counsel for your specific circumstances. © Mahendra Bhavsar & Co.